Russia eyes ways to bolster arms production

The European Union will propose 1 billion euros in short-term financial relief for Kyiv’s urgent cash needs. Russia is easing labour rules in a bid to boost arms production in the face of Western sanctions. 

Russian missiles struck an apartment building and a recreation centre near the Black Sea port of Odesa early Friday, killing at least 21 people and injuring dozens more after Moscow’s forces withdrew from a strategic island about 100 miles to the south.  

Ukrainian President Volodymyr Zelensky used his nightly address to praise the departure of Russian forces from Snake Island. Moscow painted it as a gesture towards easing grain shipments in the southern waterway, but Kyiv said they were forced out by Ukrainian shelling. 

Key Developments

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• Putin’s Swoop on Key Gas Plant Could Force Foreign Partners Out
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• Ukraine Considering Debt Restructuring as Payments Loom

On the Ground

As the largest-scale military operation in Europe since World War 2 continues in its fifth month, Russia kept up its push to capture Ukraine’s Donetsk and Luhansk regions. Kremlin forces are closing in on Lysychansk, Ukraine’s last major foothold in Luhansk. Russian missiles also struck the northeastern city of Kharkiv and Mykolayiv on the Black Sea overnight. Near Odesa, a Russian missile hit a nine-storey apartment building at 1am, with the Associated Press reporting at least 21 dead. Another missile killed at least four people at a recreation centre early Friday. There was no comment from Russia on the deaths. 

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Russian Missile Attacks Kill 21: AP

Russian missile attacks on a residential building on Friday left at least 21 people dead near Odesa, the Associated Press reported. Kyiv said three missiles hit the building and a campsite, the AP said.

US Details Additional $820 Million in Security Aid

The Pentagon said the latest batch of security assistance for Ukraine includes two National Advanced Surface-to-Air Missile Systems, four counter-artillery radars and up to 150,000 rounds of 155mm artillery ammunition.

“The US continues to work with its allies and partners to provide Ukraine with capabilities to meet its evolving battlefield requirements,” the Pentagon said in a statement.

The $820 million in additional support, first announced by President Joe Biden in Madrid on Thursday, will bring total US security assistance to Ukraine to $6.9 billion since Russia’s invasion in late February, according to the statement.

Two More Britons Charged by Russia-Backed Separatists, Tass Reports

Officials in the breakaway Donetsk People’s Republic in Ukraine said two Britons have been charged as mercenaries, naming them as Dylan Healy and Andrew Hill, according to Russia’s state-run Tass news service. The pair face the same charges as two other British men, Shaun Pinner and Aiden Aslin, and Moroccan Brahim Saadoun, who were sentenced to death last month in the separatist region, Tass reported, citing the Donetsk News Agency. 

Healy was one of two Britons captured by Russian forces in Ukraine while working as aid volunteers, Sky News reported in April. Hill was shown on Russian television in April after apparently being captured.

Ukraine Makes ‘Major Filing’ at ICJ, Kuleba Says

Ukraine’s government has made a “major filing” to the International Court of Justice in The Hague in support of its claim that Russia violated the post-WWII Genocide Convention, Foreign Minister Dmytro Kuleba said on Twitter. 

Moscow justified its “aggression with a false pretext of a ‘genocide’ that never was,” Kuleba said. 

Zelensky Meets With Norway’s PM

Norwegian Prime Minister Jonas Gahr Store met with President Volodymyr Zelensky in Kyiv on Friday after visiting the heavily damaged Chernihiv region in Ukraine’s north. 

The Nordic nation will support Ukraine with a total of 1 billion euros in 2022 and 2023, Gahr Store told journalists, between humanitarian aid, support for reconstruction, and donations in support of Ukraine’s right to defend itself.

Norway has so far donated an air defence system, artillery vehicles, anti-tank weapons and other equipment to Ukraine and has contributed to a UK-led weapons fund. 

EU to Propose 1 Billion Euros in Support for Ukraine

The European Union will propose 1 billion-euros ($1.04 billion) in short-term financial relief for Ukraine to address urgent cash needs, as Germany continues to hold up talks on a larger package, said people familiar with the matter.

EU officials prepared the option on after the European Commission, the bloc’s executive arm, failed to secure Berlin’s blessing for a package that would entail 8.8 billion euros in loans. 

Russia to Ease Labor, Other Rules To Boost Arms Industry

Russia’s government would ease labour and other regulations to allow defence companies to repair weapons and produce goods for the military under a new draft law submitted to parliament. 

Citing the “short-term increased need to repair weapons and military equipment and ensure supplies” amid sanctions imposed by the US and its allies, the document would give the government the power to impose “special measures,” including night shifts and overtime work, if needed.

The war effort “requires the temporary concentration of efforts in certain sectors of the economy,” the document says. Officials have said Moscow has adequate weapons supplies, but Western governments have claimed that supplies of some are running short as the campaign drags on.

High-Priced Wheat Faces Moment of Truth

The global wheat market, with values pushed higher by Russia’s invasion of key producer and exporter Ukraine, will soon be confronted by harvests rolling in across the northern hemisphere. 

Attention now turns to how the war will affect the new season’s shipments, and how well other countries can plug gaps in supplies. 

Modi, Putin Discuss Energy, Food Security

Russia “remains a reliable producer and supplier of grain, fertilisers and energy,” including to India, Putin told Prime Minister Narendra Modi on Friday, according to a Kremlin readout. 

On a phone call the pair “exchanged ideas on how bilateral trade in agricultural goods, fertilisers and pharma products could be encouraged further,” an Indian press statement said. They also discussed decisions taken during Putin’s visit to India in December. India has sharply boosted purchases of fuel from Russia since the invasion of Ukraine began, emerging as a key lifeline for Moscow. 

Russian Ambassador to Sofia Asks Kremlin to Shut Embassy

Russia’s envoy to Bulgaria said she’ll raise the issue of shutting the mission in the Balkan country with the Russian leadership after the government in Sofia refused to withdraw a decision to expel 70 diplomats and embassy officials. 

War Cited as Euro-Zone Inflation Hits Record

Euro-area inflation surged to a fresh record in June, rising a higher than expected 8.6% year on year. 

The European Central Bank blames Europe’s woes on a post-lockdown spike in energy costs that snowballed when Russia attacked Ukraine. While that relentless advance in prices has broadened, a gauge of underlying inflation, excluding energy and food, inched down in June.

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