Ukraine Latest: Donors Pledge $6.5 Billion; Germany Eyes Gas Ban

(Bloomberg) -- International donors gathered in Warsaw Thursday pledged a total $6.5 billion in humanitarian aid for Ukraine as it seeks to evacuate civilians trapped by more than two months of fighting. 

Ursula von der Leyen, president of the European Commission, announced 200 million euros ($211.44 million) in support for displaced people in Ukraine. France pledged a further $300 million at the conference. President Volodymyr Zelenskiy also launched a global fundraising site. 

The support comes as Russia announced a three-day daytime cease-fire in the vicinity of Mariupol’s Azovstal steel plant to allow for further evacuations. Ukrainian officials say Russia has continued to attack soldiers that remain holed up there, including with new air bombardments. 

Separately, Germany said it expected the European Union to turn its sights to Russian gas once the phased ban on oil imports is in place.  

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

Key Developments

• EU Squeezes Hard on Russia, Sweeping In Oil, Bank, Business 
• Oil Steadies Before OPEC+ Meet After Surging on EU Russian Ban
• Russia Finds New Use for Nord Stream 2 as Europe Shuns Its Gas
• Russia Fallout Hits $7 Billion for European Banks Pulling Back
• ‘I Don’t Want to Sell to an Oligarch’: A CEO on Exiting Russia

All times CET:

Germany Sees Gas as EU’s Next Target (3:45 p.m.)

Germany expects the EU to turn its sights on Russian gas once a phased-in ban on Russian oil imports has been agreed, according to Chancellor Olaf Scholz’s top economic adviser.

“We’ve reduced our dependence on Russian coal almost to zero,” Joerg Kukies said at an event in Berlin. “We are in the process as we speak of negotiating an embargo of Russian oil by the end of the year,” he added. “And what’s up next? Gas!”

Germany Pushes to Boost Anti-Putin Alliance (3 p.m.)

Germany will do whatever it takes to keep the Group of Seven-led international alliance united against Russia over its war in Ukraine, according to Chancellor Olaf Scholz.

Russia’s act of aggression has given rise to “unprecedented close coordination” among democratic nations and Germany wants to use its G-7 presidency to strengthen cooperation even further, Scholz told a conference in Berlin. He has invited the leaders of India, Indonesia, South Africa and Senegal to the G-7 summit in Bavaria at the end of June, part of efforts to forge a broader international alliance against Moscow.

Russia Finds New Use for Nord Stream 2 (2:48 p.m.)

Russia’s Gazprom has drawn up a new future for its Nord Stream 2 gas pipeline, the contentious supply link with Germany put on hold by Russia’s invasion of Ukraine. 

The gas producer plans to use the project’s onshore facilities in Russia to expand supplies to customers in the northwest of the country, Gazprom said in a statement. However, the new use means only one of Nord Stream 2’s twin pipelines would be immediately available for supplies to the European Union if the bloc reconsiders its opposition to the project. 

Gazprom’s statement comes as Europe doubles down on efforts to wean itself off Russian supplies, which last year accounted for roughly 40% of all gas consumed on the continent. 

Germany Clears Air With Zelenskiy (2:40 p.m.)

German President Frank-Walter Steinmeier spoke by phone with Zelenskiy on Thursday and “cleared up past irritations” during what both sides agreed was a “very important and very good” conversation, according to Steinmeier’s office.

Chancellor Olaf Scholz has criticized Zelenskiy and his government for blocking a planned visit by Steinmeier to Kyiv last month, in what was interpreted in Germany as a snub to the head of state. Steinmeier, a former foreign minister, has come under fire for his past policies of rapprochement with Russia, which he has admitted were misguided. 

Thursday’s call could clear the way for Scholz to visit the Ukrainian capital. Zelenskiy said on Twitter the call was “good” and “constructive” and he expected German support for Ukraine to be intensified.

Police Exhume Two Bodies Near Kyiv (2:39 p.m.)

Ukraine’s police exhumed the bodies of two young men in a village near Kyiv, they said on their Facebook page. They said the men were shot while in a vehicle and run over by a tank. There was no immediate comment from Russia, which has denied accusations that it has executed Ukrainians.

European Bank’s Russia Hit -- $7 Billion (1:43 p.m.) 

European banks are counting the rising cost of Russia’s invasion of Ukraine as they prepare for a wave of defaults that several fear will spread to the wider economy.

Led by Italy’s UniCredit SpA, the industry has ratcheted up the amount of cash set aside to cover doubtful loans by the most in over a year. Alongside trading losses, writedowns and costs to exit the country, European lenders have so far flagged a hit of about $7 billion -- with the potential for more to come.

Ukraine Begins Counterattacks Near Kharkiv (1:40 p.m.)

Ukrainian forces have shifted to counterattacks in areas near Kharkiv and Izyum while Russia has resumed missile attacks on key supply lines, Ukraine’s Commander-in-Chief Valeriy Zaluzhnyi said.

Zaluzhnyi told General Mark Milley, chairman of the U.S. Joint Chiefs of Staff, in a telephone conversation that Russian missiles have targeted routes that provide military and technical assistance to Ukraine, according to a post on Facebook. 

He repeated Ukraine’s call for the U.S. to provide his country with advanced missile defense systems. 

EU Pledges 200 Million Euros to Ukraine (12:59 p.m.)

The European Union pledged an additional aid package of 200 million euros for displaced people in Ukraine, as international donors met at a conference in Warsaw.

Ursula von der Leyen, head of the European Commission, announced the bloc’s new funding, recalling that last month a pledging event raised 9.1 billion euros for Ukrainians inside and outside the country.

“We know that more will be needed,” von der Leyen said. “And we will continue to stand up for Ukraine.”

Germany Eyes LNG to Cut Russian Gas (11:51 a.m.)

Germany signed contracts to charter four floating terminals to import liquefied natural gas in partnership with utilities RWE AG and Uniper SE as it races to reduce its energy dependence on Russia.

Shipping companies Hoegh LNG and Dynagas will each provide two of the LNG terminals -- which each have the capacity to convert 5 billion cubic meters of the super-cooled gas per year -- and RWE and Uniper will operate them, the economy ministry said Thursday in an emailed statement.

European countries are seeking to rapidly diversify their energy supplies to punish Russia over its invasion of Ukraine. 

Zelenskiy Says Ukraine Launches ‘United24’ Initiative (11:16 a.m.)

Kyiv has launched a global initiative, “United24,” that in the first instance will be an online platform to raise funds for Ukraine from anywhere in the world. 

“Together we have the potential to stop the war that Russia has started, and to rebuild what Russia has destroyed,” President Volodymyr Zelenskiy said in an English-language video posted on Twitter. All money raised will be transferred to Ukraine’s national bank and allocated to the relevant ministries, he said.  

Zelenskiy announced the project in a speech to the U.S. Congress in March, saying its goal was to “respond to the outbreak of any war within 24 hours.” 

Lukashenko Says Belarus Doing ‘Everything’ to End War (10:32 a.m.)

Belarus’ president said he’s doing “everything” to end the war in Ukraine. “Thanks to yours truly, me that is, negotiations between Ukraine and Russia have begun,” Alexander Lukashenko told the Associated Press in an interview. 

Meanwhile, the U.K. in an intelligence update on Thursday said Belarusian forces “have been observed deploying from garrison to the field, for exercises.” 

“Russia will likely seek to inflate the threat posed to Ukraine by these exercises in order to fix Ukrainian forces in the north, preventing them from being committed to the battle for the Donbas,” the U.K. said. 

Italy’s Unicredit Takes $2 Billion Charge on Russia (10:30 am.) 

Milan-based bank UniCredit SpA took charges totaling 1.85 billion euros ($2 billion) on its business in Russia, with Chief Executive Officer Andrea Orcel saying the actions mean the bank is covered in the event of a pull-out from the country. 

“Our conservative approach will allow UniCredit to have zero impact on capital under any possible worst-case scenario from Russia exit,” Orcel said.  

Slovakia Says It Needs Through 2025 for Russia Oil Ban (8:49 a.m.)

Slovakia backs a proposed European Union embargo on Russian oil imports but needs until the end of 2025 to implement it, said Economy Minister Richard Sulik.

Sulik told German radio that the government in Bratislava, and its counterparts in the Czech Republic and Hungary, “want to maintain EU unity” but need the extra time because of their heavy reliance on Russian oil.

Germany’s Factory Orders Plummet on War Pressure (8:30 a.m.)

German factory orders fell more than anticipated after Russia’s invasion of Ukraine darkened the prospects for Europe’s largest economy economy by adding to inflation pressure and disrupting global supply chains.

The heightened uncertainty related to the war in Ukraine “is reflected in significantly more restrained demand, especially from non-euro area countries,” Germany’s Economy Ministry said in a separate statement. “The outlook for the coming months is currently muted.”

ECB’s Panetta Says Europe’s Economy ‘de Facto Stagnating’ (8:19 a.m.)

With war on its doorstep and energy prices high, European Central Bank Executive Board Member Fabio Panetta said economic expansion in the euro area has almost ground to a halt. 

“The major economies are suffering -- GDP growth has slowed in Spain, halted in France and contracted in Italy,” Panetta told La Stampa in an interview published Thursday. “In Germany growth momentum is low and has been weakening since the end of February, which is the point when everything changed.” 

Shell Profits Highest in Decade Despite Russia Charge (8:17 a.m.)

The oil supermajor Shell Plc posted its highest quarterly earnings in more than a decade, as the company was buoyed by high oil and gas prices despite taking a $3.9 billion accounting charge on its planned exit from Russia.

The majors, with the exception of Chevron Corp., have written off a combined $37 billion as they sever ties with the Kremlin after its invasion of Ukraine.

Separately, BMW AG said quarterly earnings rose 12% even as the war in Ukraine and Covid-lockdowns in China disrupted the automaker’s supply chain.

U.S. Gives Security Promises to Sweden, Finland (8:08 a.m.) 

Sweden and Finland are starting to win assurances of help if threatened by Russia in the interim period between an expected application to join defense alliance NATO and an eventual entry to the bloc. 

The Nordic countries, which began to seriously consider joining NATO after Russia’s invasion of Ukraine, have worried of an insecure “gray period” before full membership unlocks its security guarantees. 

The U.S. is “ready to provide various forms of security assurances” to both countries, Swedish Foreign Minister Ann Linde said after talks in Washington with U.S. Secretary of State Antony Blinken. 

Oil Advances Before OPEC+ Meet After Surging on EU Russian Ban (6:12 a.m.)

Oil steadied ahead of an OPEC+ meeting on supply after surging on the European Union’s plan for a phased ban on Russian crude. 

The EU plans to ban Russian oil over the next six months and refined fuels by the end of the year, to increase pressure on Vladimir Putin over his invasion of Ukraine. The bloc is also targeting insurers in a move that could dramatically impair Moscow’s ability to ship oil around the world.

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