Kyiv says US precision rocket launchers arrive

The Kremlin said a peace deal with Ukraine isn’t possible until Kyiv accepts all its demands — leaving conditions at a stalemate as Russia’s invasion nears the four-month mark. Precision artillery systems have arrived in Ukraine from the US.

The timeline for Ukraine to achieve EU membership will hinge on the country’s ability to enact reforms, as well as the course of the war, a top aide to President Volodymyr Zelensky said. A formal move by European Union leaders to grant candidate status to Kyiv after intense lobbying is expected to come at the bloc’s summit in Brussels starting Thursday. 

German Economy Minister Robert Habeck will trigger the second stage of the country’s three-phase gas-emergency plan later on Thursday, according to a person familiar with the plan.  

Key Developments

• Spain’s Big Defence Push Hinges on Creating a National Champion
• Germany a Step Closer to Gas Rationing With Heightened Alert
• Russia Faces Fresh Bond Deadline With Possible Default Days Away
• Megayachts Running Low on Safe Harbors as Russia Sanctions Bite
• Europe Industries Cut Gas Use as Continent Saves Fuel for Winter
• Cold Winter Could Push Europe Towards Gas Supply Shortages

On the Ground

Ukrainian air defence downed two cruise missiles targeting Odesa on Thursday, the city council said on Telegram. Three cruise missiles launched from occupied Kherson targeted the city of Mykolayiv, hitting industrial and social infrastructure and injuring one person.” Heavy explosions” were heard in the southern seaport, its mayor said. A day earlier Mykolayiv faced a large-scale rocket attack. “A threat of artillery shelling has been announced in the city,” the mayor wrote on his Telegram account, urging residents to go to shelters “immediately.” Russian troops seized two more villages south of Lysychansk, in Luhansk, a stronghold Kyiv relies on in its defence in that area. 

US Long-Range Rocket Launchers Arrive in Ukraine

US high mobility artillery rocket systems, or HIMARS, have arrived in Ukraine, Defence Minister Oleksii Reznikov said in a tweet. 

The delivery is part of an effort to provide heavy weapons to Ukraine to counter Russia’s firepower. President Joe Biden promised the HIMARS as part of an announcement of new military aid this month. 

HIMARS have a “recognised and proven range up to 300 kilometres” (186 miles) according to their manufacturer, Lockheed Martin. 

Zelensky Calls on Israel to Do More

The Ukrainian president said he regretted Israel’s reluctance to join sanctions against Russia in a video address to The Hebrew University of Jerusalem community. While thanking Israel for medical aid, Zelensky said there was a lack of support to help Ukraine defend itself. Israel has significant ties with both Russia and Ukraine, and its government has been adopting a neutral stance since Putin’s invasion.

Kremlin Says Peace Possible if Kyiv Accepts Demands

Russia is ready to agree to a peace deal with Ukraine if it accepts all of Moscow’s demands, President Vladimir Putin’s spokesperson said. “As far as the peace plan is concerned, it’s only possible after Ukraine fulfils all the conditions of the Russian side,” Dmitry Peskov told reporters on a conference call on Thursday, Interfax reported.

Negotiations between Russia and Ukraine on a ceasefire and peace deal have been effectively frozen since April. In addition to demanding that Kyiv give up its ambitions to join NATO and declare its neutrality, Russia wants to keep territory it’s captured since its February invasion of the neighbouring state.

EU Council President Expects Ukraine Candidacy Status

Charles Michel is “confident” that European leaders will grant Ukraine and Moldova EU candidacy status today. “This is a decisive moment for the European Union,” the president of the European Council told reporters in Brussels before the start of a two-day summit. “Today’s decisions will impact our future, our stability, security and prosperity.”

Europe’s Offshore Wind Industry in Major Ramp-Up

Dutch power grid operator TenneT Holding BV has launched a tender to build the infrastructure that will speed the construction of North Sea wind farms as Europe looks to cut its dependence on Russian energy imports.

The company plans to enter agreements worth as much as 30 billion euros ($31.7 billion), a sign that Europe is following through on plans to rapidly ramp up renewable power. 

Europe’s Top Economies Slow Significantly

Growth in Germany and France slowed sharply as manufacturers suffered from a dearth of demand, increasingly strained supply chains and surging prices.

Reports on Thursday signalled that, for now, economic activity is still being supported to some extent by workloads built up earlier in the year. But the range of challenges confronting the world economy has led to worries that a recession is on the horizon.

European stocks fell on Thursday, with miners and energy firms leading the decliners in the Stoxx Europe 600 Index. 

Germany’s a Step Closer to Gas Rationing

German Economy Minister Robert Habeck will trigger the second stage of the country’s three-phase gas-emergency plan later on Thursday, moving Europe’s biggest economy to the “alarm” level following steep cuts in supplies from Russia, according to a person familiar with the plan.

The heightened alert gives the government the option of enacting legislation to allow energy companies to pass on cost increases to homes and businesses, while some coal-fired power plants could also be reactivated to help minimise gas consumption. The third and highest “emergency” level would involve state control over distribution. 

Ukraine’s EU Membership Timeline Depends on War, Reform

Kyiv sees “positive trends” for Ukraine to get EU candidate status, Zelensky’s deputy chief of staff, Ihor Zhovkva, said in an interview on Bloomberg Television as the bloc’s summit kicks off. 

“Ukraine should become a candidate country for EU membership and then move further on the path to the integration with the European Union,” Zhovkva said. He warned that negotiations might be tough and difficult. While much depends on the course of the war, the pace of reforms will also be critical, he said. 

Zhovkva said Moscow would need to withdraw its troops to the lines of Feb. 23 to resume diplomatic talks. There are no talks planned between Ukraine’s Zelensky and Russian President Vladimir Putin.

Russia Faces Fresh Bond Deadline

Another pressing Russian bond deadline looms Sunday night on previously missed payments from late May. Those funds — about $100 million of bond coupons — are stuck due to international sanctions and the grace period to find a solution expires at the end of June 26. At that point, Russia will effectively be in default, unless it somehow gets payments through to sufficient holders of the debt.

Billions of dollars of energy revenue pour into Kremlin coffers each week but the country has failed to meet the deadlines because mounting sanctions are cutting off avenues to transfer the cash.

Megayachts Running Low on Safe Harbors

Russian tycoons are running out of places to park their floating palaces, four months after their country’s invasion of Ukraine. The US and Europe are going after their superyachts, villas and other assets because of their ties to Russian President Vladimir Putin. Already, more than a dozen boats worth more than $2.25 billion have been seized by the US, EU nations and willing allies — such as Fiji.

Fearful of having their yachts seized, owners have sent them to a small number of locales still considered friendly — allowing the vessels to dock or hang around unbothered — including Dubai in the United Arab Emirates, Turkey and the Maldives, according to Spire Global Inc., a data and analytics firm that uses satellite technology to track maritime activity. 

Von der Leyen Praises Ukraine Before Council Decision

Ukraine implemented about 70% of EU rules, norms and standards, European Commission Ursula von der Leyen said in a speech in the European parliament. She praised the “immense progress that Ukraine’s democracy has achieved,” but emphasised that more work is needed to fight corruption and loosen the grip of oligarchs on the Ukrainian economy. 

Expressing her support for Kyiv’s EU candidacy status, von der Leyen said that “it is now up to the European Council to decide, and live up to the historic responsibility we are confronted with.”  

Germany Plans Conference to Set Up Ukraine Marshall Plan

Chancellor Olaf Scholz said Germany and the EU will jointly host an international conference with donors and experts later this year to discuss a multibillion-euro reconstruction plan for Ukraine.

“We have to agree on this — also with the advice of experts and scientists — how such a Marshall Plan for Ukraine can look like, how we co-ordinate it internationally, how we will decide together on which investments help Ukraine to move forward the most quickly on its European path,” Scholz told lawmakers in Berlin.  

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