Putin Vows Victory as Zelenskiy Urges Pressure

(Bloomberg) — Russian President Vladimir Putin said his forces can’t be defeated “on the battlefield.” Ukrainian President Volodymyr Zelenskiy said that Moscow’s offensive is intensifying with the approach of Feb. 24, the invasion’s one-year mark, urging allies to “increase global pressure” on Moscow.

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Top US and Ukrainian officials spoke by phone about the situation on the front lines and Russia’s possible next steps. Poland’s prime minister outlined to a German newspaper a potential plan by Russian to surround Ukraine on multiple fronts, including from Belarus in the north, where Kremlin troops have been amassing for weeks.

European Commission President Ursula von der Leyen and a large delegation of commissioners were in Kyiv for meetings ahead of Friday’s EU-Ukraine summit. The talks included a potential tenth package of sanctions against Russia.

(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)

Key Developments

  • As Russia Gears Up for New Push, Ukraine Waits for More Weapons

  • Norway Set to Tap Its Oil Wealth to Finance War Aid for Ukraine

  • US Envoy Vows to Isolate Russia at the UN, Condemns Wagner Group

  • Swiss Stash of Leopard Tanks Spurs Debate on How to Help Ukraine

  • Putin’s War Machine Helps Keep Russian Industry Humming

On the Ground

Two Russіan strikes on Kramatorsk in the Donetsk region)on Thursday destroyed a dozen residences, a children’s clinic, a school and garages, killing three and injuring at least 17 people, the Ukrainian General staff said in an emailed statement. More then 15 rocket salvo attacks were carried out on civilian targets in the settlement of Komyshany in the Kherson region, injuring four people including a 5-year-old child. Russian troops continued on offense along the Lyman-Bakhmut-Avdiyivka axis, though suffering heavy losses.

(All times CET)

Zelenskiy Says Russia Will Mount New Attacks From Territories It Holds (10:27 p.m.)

Ukraine’s President Zelenskiy predicted Russia will mount new aggression from land it controls as it seeks options to change the course of the war.

Russia’s strategic defeat is already clear, Zelenskiy said in his evening address, but it still has resources for offensive action.

“We should speak with one voice to the world regarding defense supplies and noticeably increase global pressure on Russia every month,” Zelenskiy said, adding that Ukraine won’t leave any aggressive action unanswered.

Scholz Says He Keeps Talking to Putin — About Withdrawing Russian Troops (7:47 p.m.)

German Chancellor Olaf Scholz said he will continue talking to Putin to hammer home the message that the only way to end the war is withdrawing Russian troops.

“Russia must realize that it will not get away with its intention to take parts of the Ukrainian territory by force, and that it must withdraw troops to make a fair peace between the two countries possible,” Scholz told citizens during a town hall meeting.

He defended his decision to send more and heavier weapons to Ukraine, including infantry fighting vehicles and battle tanks, adding that he would continue acting in lockstep with allies such as the US.

Ukraine Signs Single-Market Program with EU (6:40 p.m.)

“Today, we’ve signed with Ukraine its association to the Single Market Programme,” the European Commission said in a tweet after a joint meeting in Kyiv with the Ukrainian cabinet, saying it will “provide Ukraine with support to businesses.”

Ukraine to Start Leopard Tank Training Next Week (5:40 p.m.)

Ukrainian troops will start training on German-made Leopard 2 tanks next week, according to a person familiar with the matter.

Berlin announced last month it would provide Ukraine with the tanks, along with other allies, after weeks of talks and debate.

Germany is also working to put together a Leopard battalion and is continuing to provide support for other equipment it has provided, including air defense systems and anti-aircraft Gepard tanks, the person said. The Financial Times earlier reported the timing of the training.

Putin Rallies Russians for Victory in Ukraine (4:25 p.m.)

Putin commemorated Russia’s World War II victory at Stalingrad by trying to rally domestic support for his invasion of Ukraine.

“Those who expect to win a victory against Russia on the battlefield don’t understand that modern-day war with Russia will turn out totally differently for them,” he said at a concert on Thursday in Volgograd, which had been temporarily renamed Stalingrad for the commemoration of the 80th anniversary of the defeat of Nazi forces there. “We aren’t sending tanks to their borders but we have the means to fight back and they won’t be limited to armor. Everyone should understand this.”

Read more: Putin Vows Ukraine Victory as He Hails WWII Stalingrad Triumph

Von der Leyen Praises Ukraine’s Efforts to Fight Graft (3:30 p.m.)

Ukraine continues to make “impressive progress” to meet pre-conditions that include anti-corruption measures to start talks on the EU membership, von der Leyen said in Kyiv.

“I am comforted to see that your anti-corruption bodies are on alert and effective in detecting corruption cases,” Von der Leyen told Zelenskiy in Kyiv. She also praised Zelenskiy “on reacting so rapidly at the political level to make sure that the fight against corruption is delivering tangible results.”

Ukraine Widens Dragnet as Pressure Mounts to Tackle Corruption

EU to Create Prosecution Office for War Crimes Evidence (1:20 p.m.)

The EU will help set up an international center for the prosecution of the crime of aggression in the Hague, as the bloc seeks to hold Russia accountable for its actions in Ukraine, von der Leyen said. The center will help coordinate the collection of evidence, she told reporters in Kyiv, adding that it will be embedded in a joint investigative team with Eurojust, an agency that facilitates EU judicial cooperation.

Politicians and legal experts haven’t yet been able to agree on the idea of a special international court to investigate crimes of “aggression” that von der Leyen touted last year.

EU Weighs Prosecution Office to Help Punish Russian War Crimes

Russia, Belarus Train to Use Civilian Airfields for Fighter Jets (1:15 p.m.)

Joint Russia-Belarus air force drills which began Feb. 16 are now over, Belarusian Defense Ministry said on Telegram.

The war games were used to test deploying Russian and Belarusian fighter jets on civilian air fields in both countries, commander of the Belarusian air force Andrey Lukyanovich said in a video statement on Defense Ministry Telegram channel. “This allows to significantly improve survivability of our air force component,” Lukyanovich said.

EU Estimates Russia Loses €160 Million a Day from Oil Price Cap (1 p.m.)

Von der Leyen said the bloc’s price cap on Russian oil exports is costing Russia about €160 million ($176 million) a day, as the bloc looks to extend the mechanism to cover Moscow’s petroleum products.

The EU and G-7 countries aim to have the 10th package of sanctions against Russia by Feb. 24 — exactly one year since the Russian invasion. “We are making Putin pay for his atrocious war,” she said at a joint press conference with Zelenskiy in Kyiv.

She used a visit to Kyiv, accompanied by more than a dozen of her fellow commissioners, to pledge continued support for Ukraine, even as fears of new Russian offensive mount. “Our presence in Kyiv today gives a very clear signal,” she said. “We will stand up for Ukraine as we stand up for the fundamental rights and respect of international law.”

Russia Halts Biometric Passport Issuances on Chip Shortage (11:31 a.m.)

Russia temporarily suspended the issue of new biometric passports because of a shortage of the microchips used in the documents.

State-run printer Goznak blamed higher-than-usual demand for 10-year passports, adding that the producer of the components is expanding output. Once that process is complete, the printer will need another month to resume issuing the passports. For the moment, only five-year passports produced without the chips will be are available.

Hundreds of thousands of Russians fled the country in 2022 after the Kremlin announced a mobilization for its war in Ukraine. At the same time, the US and its allies have sought to restrict Russia’s access to microchips that could be used for military purposes.

Ukraine, US Commanders Discuss Russia’s Likely Moves (11 a.m.)

Ukrainian army chief Valeriy Zaluzhnyi and presidential chief of staff Andriy Yermak spoke by phone with General Mark Milley, chairman of the US Joint Chiefs of Staff, and National Security Adviser Jack Sullivan, according to a posting on the presidential website.

The men discussed the situation on Ukraine’s front lines and possible Russian moves in the near future. It comes at at a time many are convinced Moscow is preparing a major new offensive almost a year into the conflict.

Power Situation Gradually Improving, Ukrenergo Says (10:45 a.m.)

The power deficit in Ukraine somewhat narrowed and the country’s generation is now covering about 80% of its need for electricity, grid operator Ukrenergo said on Telegram.

Ukrenergo said it increased the limits of available power in all regions. Two sub-stations in eastern and central Ukraine damaged by recent missile attacks have been repaired and are being readied for reconnection to grid, which may allow Ukrenergo to put some production units at thermal plants back into operation.

Shmyhal, EU’s Borrell Discuss Sanctions, Aid (10:45 a.m.)

Ukrainian PM Denys Shmyhal met with Josep Borrell, the EU’s foreign policy chief, who’s one of over a dozen top European officials in Kyiv.

“Before the start of the Ukraine-EU summit, we talked about the 10th package of sanctions, military and other aid to Ukraine”, Shmyhal said on Twitter.

Austria Boots Four Russian Diplomats (9 a.m.)

Austria expelled four Russian diplomats due to what its foreign ministry called activities incompatible with their mandate. Two officials were accredited at Russia’s embassy to Austria; the other two worked at its mission to the United Nations in Vienna.

A militarily neutral nation and hub for international organizations, Austria has expelled fewer Russian diplomats than most European Union member states since the start of the war.

EU to Announce Another Assistance Package (9:09 a.m.)

The EU will announce a further €400 million ($440 million) assistance package to Ukraine to support its reform process, Budget Commissioner Johannes Hahn said in Brussels on Thursday.

The bloc will soon propose to extend suspension of all tariffs and trade defense measures on Ukrainian imports as well to suspend Ukraine’s financial contributions for participating in EU programs for as long as the country’s financial challenges remain, he added.

Russian Stocks Extend 2023 Advance, Trails Other EMs (8:44 a.m.)

Russia’s equity benchmark rose for a fifth consecutive session on Thursday as the rising price of gold helped mining stocks, while investors digested strong manufacturing data from earlier this week.

The MOEX Russia Index climbed 0.4%, taking its gains so far in 2023 to 4%. That still trails the 9.6% year-to-date rally for the MSCI Emerging Markets Index.

Swiss Stash of Leopard Tanks Spurs Debate (8:30 a.m.)

Shipping weapons directly to the battlefield is out of the question for Switzerland. But mainstream politicians are now calling for a stash of almost 100 mothballed Leopard 2 battle tanks to be sold for a nominal fee to Poland, Slovakia and the Czech Republic, replacing the tanks that their governments plan to send to Ukraine.

On Thursday, Swiss MPs will debate a bill gaining some traction in parliament that would allow Germany, Spain and Denmark to ship Swiss-made ammunition to the front as well.

Read more: Swiss Stash of Leopard Tanks Spurs Debate on How to Help Ukraine

Von der Leyen in Kyiv With 15 EC Commissioners (8:20 a.m.)

The European Commission president and 15 commissioners arrived in Kyiv ahead of Ukraine-EU summit on Friday. “We are here together to show that the EU stands by Ukraine as firmly as ever,” von der Leyen said on Twitter. It’s her fourth visit since Russia’s invasion started.

The delegation, among them Executive Vice-Presidents Margrethe Vestager and Valdis Dombrovskis and EU’s foreign affairs chief Josep Borrell, will hold meetings with Ukrainian officials on the outlook for reconstruction and the country’s path to EU membership, according to a statement.

Russia Has Undermined Its Position as Arms Exporter, UK Says (7 a.m.)

Russia’s role as a reliable arms exporter is highly likely being undermined by its invasion of Ukraine and international sanctions, the UK defense ministry said.

“When faced with conflicting demands, Russia will almost certainly prioritize deploying newly produced weapons with its own forces in Ukraine over supplying export partners,” the ministry said in a Twitter thread.

A shortage of components is likely affecting the production of armored vehicles, attack helicopters, and air defence systems, the UK added.

Russian Offensive Intensifies Before One-Year Mark, Zelenskiy Says (12 a.m.)

The situation “is becoming even more severe” for Ukraine’s forces in the nation’s east because Russia wants something to show its people as war approaches the one-year mark on Feb. 24, Zelenskiy said in his regular nightly address on Wednesday.

Ukraine’s president said he had “several operational meetings” with military officials on Wednesday. “There is a certain increase in the occupiers’ offensive actions at the front,” he added.

Earlier in the week Zelenskiy said Russian efforts are “constantly intensifying. Every day there are either new groups of career military, or an increase in the number of Wagner militants.”

US Envoy Vows to Isolate Russia at UN, Condemns Wagner Group (7 p.m.)

US Ambassador to the United Nations Linda Thomas-Greenfield said the Biden administration is working to isolate President Vladimir Putin’s government at the global body but acknowledged the challenge inherent in Russia holding a veto-wielding seat on the Security Council.

Thomas-Greenfield singled out the Wagner Group, the private mercenary army that has fought for Putin’s forces in Ukraine, over its actions in Ukraine and on the African continent. She said the US would look for new ways to counter the group’s impact in Ukraine and Africa, where it’s providing security to several governments.

Read the full story here.

US Official Says Nations Don’t Want to Depend on Russian Arms (6:45 p.m.)

The US is being approached by countries who want to diversify away from Russian weapons in part because of their poor performance in Ukraine, Jessica Lewis, assistant secretary of state for political and military affairs, said.

“We’re actually having countries come to us and saying, ‘Hey, we’re looking to diversify because of the Ukraine war, not just because of Russia’s actions but also because we’re seeing, you know, challenges with how the Russian equipment is operating,” Lewis told reporters, without naming such nations.

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