(Bloomberg) — Vladimir Putin escalated his seven-month old war in Ukraine with a partial mobilization and vowed to annex territory as the White House said the Russian president’s move is a “sign he’s struggling.”
Most Read from Bloomberg
A top official in US President Joe Biden’s administration said the declaration showed Putin is on the “back foot” with military setbacks in northeastern Ukraine. German Chancellor Olaf Scholz called the announcement an “act of desperation.”
Russian Defense Minister Sergei Shoigu said that as many as 300,000 troops would be called up as part of a gradual process. The Kremlin is set to stage hastily-organized referendums on absorbing four occupied regions in eastern and southern Ukraine as soon as this weekend.
(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)
Key Developments
-
Putin Mobilizes More Troops, Renews Nuclear Threat Over Ukraine
-
Havens Advance, Euro Drops as Putin Steps Up War: Markets Wrap
-
Russian Stocks Tumble to Lowest Since Invasion on Mobilization
-
European Gas Jumps on Winter Risks as Putin Steps Up Ukraine War
-
Germany Nationalizes Uniper to Avert Energy Sector Collapse
-
Europe’s Deepening Energy Crisis Pushes Bill to $500 Billion
On the Ground
Russian shelling damaged infrastructure in more than 50 settlements, including Bakhmut, Zaporizhzhia and Nikopol, with Russian forces also trying to hit a thermal power plant near the city of Slovyansk in the eastern Donetsk region, the Ukrainian General Staff said in its morning update. Ukrainian troops pushed back Russian attacks near nine settlements, according to the statement. Russia shelled the Zaporizhzhia nuclear power plant overnight, causing damage at one of the power units, the Ukrainian nuclear operator Energoatom said on Telegram. Russia hit residential buildings in Ukraine’s second largest city Kharkiv with missiles overnight, Unian reported citing local authorities. Russian forces pounded the dam at the Pechenihy water reservoir in the Kharkiv region, and local authorities warned of a risk of “catastrophic flooding of territories,” Unian said.
(All times CET)
Zelenskiy Doubts Putin Will Deploy Nuclear Arsenal: Bild (2:25 p.m.)
Ukrainian President Volodymyr Zelenskiy expressed doubt that Russia will use nuclear weapons in its war against Ukraine. “I don’t believe he’ll deploy these weapons. I don’t believe the world will allow him to deploy these weapons,” Zelenskiy told Germany’s Bild newspaper. Putin sees that his troops “are simply walking away,” he said.
US Administration Says Putin’s Move Shows He’s ‘Struggling’ (2:22 p.m.)
Putin’s mobilization is “definitely a sign he’s struggling,” US National Security Council spokesman John Kirby told ABC’s “Good Morning America” on Wednesday.
“He feels like he’s on his back foot” in northeastern Ukraine, where Kyiv’s troops have pressed back Russian forces in a counteroffensive, Kirby said. He condemned Russia’s “sham referendums” and Putin’s renewal of a nuclear threat.
“We’re monitoring as best we can their strategic posture so that, if we have to, we can alter ours. We’ve seen no indication that that’s required right now,” Kirby said.
Scholz Calls Kremlin Call-Up an ‘Act of Desperation’ (2:15 p.m.)
The German leader, speaking during the United Nations General Assembly, said that the Kremlin “cannot win this criminal war,” and said the source of the escalation lies with Putin’s blunder in invading Russia’s neighbor.
“With the latest decision, Putin and Russia are only making things much worse,” Scholz told reporters in New York. “He completely misjudged the situation from the start and underestimated both the spirit of resistance of the Ukrainians and also the determination and unity of Ukraine’s friends.”
Gold, Nickel Rise as Putin’s Move Raises Tension (2:03 p.m.)
Gold advanced as investors looked for havens after Putin announced the partial mobilization. Nickel moved higher amid heightened anxiety about Moscow’s exports.
Bullion climbed, despite gains in the dollar, on the back of Putin’s vow to use all means necessary to defend Russia. Earlier in the day, the precious metal had been steady near a two-year low, as traders braced for another hefty interest-rate hike by the US Federal Reserve.
Belarus Has No Plans to Follow Suit With Mobilization (1:47 p.m.)
Russian-allied Belarus won’t follow Putin’s example, with Aleksandr Volfovich, the state secretary of the nation’s Security Council, saying the mobilization “does not apply to us.”
“The people of Belarus and the country are mobilized as it is,” Volfovich said, according to state-owned news agency Belta. The Belarusian official had just met with his Russian counterpart, Nikolai Patrushev, Belta reported.
Estonia Will Bar Return of Russians Fighting in Ukraine (12:45 p.m.)
Estonia will not stop Russian residents from fighting in Ukraine, but they won’t be welcome back in the Baltic nation, the Estonian public broadcaster cited the country’s Interior Ministry as saying.
“People with a conscience probably don’t need to be told this, but I’ll say it again – don’t go,” Estonian Foreign Ministry spokesman Mihkel Tamm said in an email. A country of 1.3 million people, Estonia is home to over 80,000 Russian citizens.
Putin Using Nuclear Threat in ‘Arsenal of Terror,’ EU Official Says (12:40 p.m.)
Putin is using the nuclear threat as part of his “arsenal of terror,” EU spokesman Peter Stano told reporters, when asked about the risk of the president using nuclear weapons to defend annexed territories after his address.
“It shows very clearly to what extent he’s willing to go to advance and continue this illegal and unjustified invasion against Ukraine,” Stano said, adding that any use of such weapons would not only affect the local region but all of Ukraine as well as Europe and Asia.
Josep Borrell, the EU’s foreign policy chief, will soon propose a sixth tranche of EU weapons financing, which currently amounts to 2.5 billion euros ($2.5 billion), Stano said, adding this was currently under discussion among the bloc’s member states.
Poland, Lithuania Urge More Aid in Response to Mobilization (11:30 a.m.)
Polish Prime Minister Mateusz Morawiecki said NATO countries should increase their financial and military aid to Ukraine in response to Putin’s declaration of a partial mobilization. Speaking on the sidelines of military exercises with US and UK troops in Nowa Deba, southern Poland, Morawiecki said he will seek support from leaders in Western Europe for additional supplies to Kyiv.
Lithuanian Defense Minister Arvydas Anusauskas urged “a continuous flow of advanced military equipment to help the nation defend itself from genocide.”
The situation on the Finnish-Russian border remains calm and no troop movements have been detected, Finnish Defense Minister Antti Kaikkonen said. Finland’s defense forces remain prepared and there’s no immediate military threat, said the minister, whose country guards 1,300 kilometers (800 miles) of the border with Russia. Finland and Sweden are in the process of joining NATO.
War Cost $34.6B in Damage to Ukraine’s Environment: Minister (11:20 a.m.)
The cost of the damage to Ukraine’s environment caused by the war is now estimated at almost 1.3 trillion hryvnia (34.6 billion dollars), Environment Minister Ruslan Strilets said on television. This is only a preliminary estimate which does not include all the possible consequences of pollution and the destruction of infrastructure, nor damage to the Black and Azov seas which hasn’t yet been assessed.
Navalny Slams Mobilization Order at Court Hearing (11:10 a.m.)
Jailed opposition leader Alexey Navalny slammed Putin’s mobilization order during a court hearing, accusing the president of expanding the war to maintain his grip on power.
“Putin is tormenting a neighboring country, killing people there, and now he is throwing a huge number of Russian citizens into the meat grinder of war,” Navalny said in a video posted by his organization. “It was a crime, and now it has become a crime of a much larger scale.”
Lithuania Puts Reaction Force on High Alert (10:50 a.m.)
Lithuanian Defense Minister Anusauskas said the Baltic nation is putting its Rapid Reaction Force on high alert to prevent any provocation from Russia after Putin’s address. “As Russia’s military mobilization will also take place near our borders, in the Kaliningrad region, Lithuania cannot just watch,” Anusauskas said in a Twitter post.
The Kaliningrad exclave, a former German territory that was seized by the Soviet Union in World War II and which is now sandwiched between NATO members Lithuania and Poland, leaves its population cut off from Russia’s main territory.
Wheat’s Back at Pre-Grain Deal Levels as Russia Steps Up War (10:36 a.m.)
Wheat climbed to a two-month high after Putin’s announcement, escalating the conflict and adding further uncertainty over Black Sea grain supply.
Prices have been increasingly at the mercy of remarks from Putin in recent weeks, as he also criticized a grain pact signed in late July that resumed seaborne shipments from Ukraine. Wheat futures are now back at levels seen before the deal was struck and the escalation raises questions over whether the accord will be extended beyond its initial 120-day run, with the agreement about halfway through.
Germany Raids Properties Linked to Oligarch Usmanov (10:30 a.m.)
German authorities are conducting nationwide raids of properties linked to Alisher Usmanov and as part of a probe against the sanctioned Russian billionaire.
Two dozen sites in the states of Bavaria, Baden-Wuerttemberg, Schleswig-Holstein and Hamburg are being searched, Munich prosecutors said in statement. They’re probing Russian citizens who are on the sanctions list. While no names where disclosed, one of the targets is Usmanov, a person familiar with the matter said.
China Calls for ‘Dialog and Consultation’ (10:20 a.m.)
“China’s position on the Ukraine crisis is consistent and clear,” Foreign Ministry spokesman Wang Wenbin said at a regular press briefing in Beijing. “We call on all parties to have dialog and consultation to end the fighting and find a way to address the legitimate security concerns of all parties. We hope the international community can create the space and conditions for this to happen.”
Germany Says Mobilization ‘Bad and Misguided’ (9 a.m.)
Germany’s vice chancellor condemned Putin’s decision to order a partial mobilization and said the government in Berlin will discuss “how to react” to what he called Russia’s latest “escalation.”
“This is another bad and misguided step,” Robert Habeck, who is also the economy minister, told reporters in Berlin. “For me and for the federal government it’s in any case clear that we will continue to fully support Ukraine at this difficult time.”
Oil Jumps on News of Partial Mobilization (8:50 a.m.)
Oil prices spiked after Putin’s announcement. Brent rose as high as $92.57 a barrel in the London morning, a gain of about $1.75 from where it was before the news. The escalation adds another layer of uncertainty about Russian oil output because the west has already taken multiple measures targeting the Kremlin’s revenues from petroleum sales — and any further steps could impact the nation’s supply.
Putin Says US, Allies Seeking to ‘Destroy’ Russia (8:20 a.m.)
The Russian President said in his televised address Wednesday that Russia is fighting the full might of the North Atlantic Treaty Organization. The US and its allies, he said, are seeking to “destroy” Russia.
“We will definitely use all means available” to defend Russian territory,” Putin said. “That’s not a bluff.” The partial mobilization will mean that reservists will be drafted into military service, Putin said, starting immediately.
Germany Nationalizes Uniper to Avert Energy Collapse (8 a.m.)
Germany said it will nationalize Uniper SE in a historic move to rescue the country’s largest gas importer and avert a collapse of the energy sector in Europe’s biggest economy.
Chancellor Olaf Scholz’s ruling coalition is determined to ensure Uniper’s survival in coming months, when the energy crunch could worsen as temperatures fall heading into winter.
Zelenskiy Says Fighting Initiative Belongs to Ukraine (7:50 a.m.)
The situation on the front line “clearly indicates” that the initiative belongs to Ukraine in its war against Russia, Zelenskiy said in his regular nightly address to the nation Tuesday. He vowed more support for Ukraine’s army and intelligence service, “for everyone who is gradually restoring our territorial integrity,” according to his statement.
“Our positions do not change because of the noise or any announcements somewhere,” Zelenskiy said referring to a forthcoming address by Putin. “And we enjoy the full support of our partners in this.”
Most Read from Bloomberg Businessweek
©2022 Bloomberg L.P.
