Blinken Says Meeting With Lavrov Is Canceled: Ukraine Update
European Union ambassadors will meet to discuss a plan for sanctions on Russia.
(Bloomberg) -- President Joe Biden said the U.S. would impose a first wave of sanctions on Russia and is shifting American forces already based in Europe, and a meeting between the top U.S. and Russian diplomats was canceled. Biden’s announcement followed earlier sanctions after the European Union and the U.K. set out an initial set of limited penalties targeting Moscow.
The measures follow a dramatic escalation of tensions triggered by President Vladimir Putin’s recognition of two self-proclaimed republics in eastern Ukraine, a move that effectively killed eight years of diplomacy. Russia’s upper house on Tuesday gave the green light to Putin to deploy troops to the separatist-held regions.
The rapid series of events -- including Germany’s halting of the Nord Stream 2 pipeline project -- caps weeks of brinkmanship, with the Kremlin insisting it has no plans for a full-scale invasion. The U.S. issued a series of warnings, citing intelligence, that Russia could invade, incite an event as a pretext to take military action, or launch cyberattacks.
Key Developments
- Nord Stream 2 Is Put on Hold as Germany Rebukes Putin on Ukraine
- Why the Minsk Accords Failed to Bring Ukraine Peace: QuickTake
- Ukraine Crisis Ripples Through World Markets From Stocks to Gold
- Here’s What Western Allies Hit in First Wave of Russia Sanctions
- U.K. Sanctions Russian Billionaires and Banks U.S. Hit Years Ago
All times CET:
Australia Joins in Imposing Sanctions (4:30 a.m.)
Australian Prime Minister Scott Morrison announced sanctions on Wednesday against Russian individuals and banks in reaction to Moscow’s decision to move troops into eastern Ukraine.
Describing Russia’s troop deployments as “unacceptable,” Morrison said financial and travel bans would be placed on top Russian officials, as well as banks linked to the state and military. Tough new measures would also be applied to the two regions of Donetsk and Luhansk.
“Australians always stand up to bullies and we will be standing up to Russia, along with all of our partners, like-mindeds and all of those who believe it is absolutely unacceptable that Russia could invade its neighbor,” he said.
Japan’s Kishida Unveils Penalties (4:30 a.m.)
Japanese Prime Minister Fumio Kishida announced sanctions after his government condemned Russia’s recognition of the self-proclaimed republics within Ukraine’s borders as a contravention of international law.
Japan will halt visas for people who have connections to Donetsk and Luhansk, and freeze their assets. It will also ban trade with the breakaway republics and prohibit Russia from issuing or distributing new sovereign debt in Japan.
Kishida said details would be finalized quickly, adding he was prepared to add more sanctions in coordination with the Group of Seven if the situation worsens.
U.S. Seeks to Reassure Energy Markets (1:28 a.m.)
Global energy markets can expect a limited effect from additional U.S. sanctions against Russia over its actions in Ukraine, according to a senior U.S. State Department official.
The official, who was granted anonymity to discuss a sensitive matter, told reporters on Tuesday that the goal was to inflict economic damage on Russia without upsetting the energy markets.
The U.S. and its European allies began imposing additional sanctions against Russia on Tuesday after Putin recognized two self-proclaimed republics in eastern Ukraine and Russia’s upper house gave the green light to Putin to deploy troops to separatist-held regions. Moscow continues to deny U.S. claims that it is preparing to invade Ukraine.
Oil pared gains following Biden’s speech after the U.S appeared to hold back from unleashing the most severe sanctions against Russia.
Ukraine Power Plant Damaged After Shelling (11:55 p.m.)
A power plant in eastern Ukraine suffered damage from a fire that started during “constant shelling,” cutting heat and electricity to thousands of people, according to DTEK Energy.
The facility in the Luhansk region, which is close to the contact line between Ukrainian army and Russia-backed separatists, is the biggest local producer of electricity.
The town of Shchastya, where the power plant is located, spent hours without electricity, with at least 11,500 people have been affected. Nearby locations also faced power cuts. While some power has been restored by a back-up line, there’s still not enough electricity to supply all households, DTEK said.
Kuleba Says Ukraine Will Defend ‘Every Inch’ of Territory (11:20 p.m.)
Ukraine’s Foreign Minister Dmytro Kuleba said at a news conference in Washington that his nation’s “Plan A” is “to utilize every tool of diplomacy to deter Russia and prevent further escalation.”
“And if that fails, ‘Plan B’ is to fight for every inch of our land. And every city and every village. To fight until we win, of course.”
Blinken Says Lavrov Meeting Canceled (10:54 p.m.)
Secretary of State Antony Blinken said a planned meeting Thursday with Russian Foreign Minister Sergei Lavrov in Geneva has been canceled over Moscow’s moves to recognize separatist regions in eastern Ukraine.
“Now that we see the invasion is beginning and Russia has made clear its wholesale rejection of diplomacy, it does not make sense to go forward with that meeting at this time,” Blinken said at a news conference alongside Ukraine’s foreign minister. “We will not allow Russia to claim the pretense of diplomacy at the same time it accelerates its march down the path of conflict and war.”
The U.S. sanctions won praise from Kuleba, who said it is time to “hit Russia’s economy now and hit it hard.”
Zelenskiy Calls Up Some Reservists (10:00 p.m.)
Ukraine President Volodymyr Zelenskiy said he signed an order to call up reservists to “raise army readiness for any possible changes in the real-time situation.”
“There is no need for a general mobilization as of now,” Zelenskiy said Tuesday night in an address to the nation, before adding that “we need to quickly fill the ranks of the army”
U.S. Moves F-35s, Anti-Tank Choppers East (9:50 p.m.)
Following Biden’s speech, Defense Secretary Lloyd Austin ordered some U.S. forces already in Europe to temporarily deploy farther east to bolster NATO allies closer to the Russian border, according to an official.
The movement includes: Eight F-35 jets from Germany to NATO’s eastern flank; an 800-personnel infantry battalion shifting from Italy to the Baltic region; and 32 AH-64 anti-tank helicopters moving from Germany and Greece to the Baltics and Poland.
Russia’s Vnesheconombank, Promsvyazbank Hit by U.S. (9:19 p.m.)
The U.S. Treasury Department “will impose full blocking sanctions on two large state-owned Russian financial institutions that provide key services crucial to financing the Kremlin and the Russian military: Vnesheconombank, or VEB.RF, and Promsvyazbank and their subsidiaries,” the National Security Council said in a statement.
The U.S. said the banks hold more than $80 billion in assets and finance the Russian defense sector and economic development.
Nevertheless, the impact of the move may be limited given the decision was widely expected and isn’t as severe as the “massive” sanctions promised by the Biden administration over a full-scale attack on Ukraine. Biden suggested this was just the “first tranche” in penalties that go beyond what the U.S. imposed after Russia annexed Crimea in 2014.
Oil Pares Gains as Big Banks Escape Sanctions (8:40 p.m.)
Crude oil futures in New York pared gains following Biden’s announcement of limited sanctions against Russia for its recognition of Ukraine’s separatist regions, while U.S. stocks bounced off session lows. The S&P 500 index was down 1.4% at 2:43 p.m. in New York.
“This is incremental,” said Brian O’Toole a senior fellow at the Atlantic Council who previously worked in the U.S. Treasury Department’s sanctions unit. “While the action will have economic impact and is an escalation, it falls short of massive economic pain.”
While Biden said in his White House speech that “this is the beginning of a Russian invasion of Ukraine,” he held off on the most drastic sanctions, calling today’s move the “first tranche” of penalties facing Moscow.
Biden Announces Sanctions, Calls Putin’s Moves an Invasion (8:23 p.m.)
Biden said the U.S. is imposing sanctions targeting Russia’s sale of sovereign debt abroad and on the country’s “elites and their family members.” In addition, he said he’s shifting American forces in Europe to help bolster Estonia, Latvia and Lithuania and warned more sanctions could be coming.
“Russia will pay an even steeper price if it continues its aggression, including additional sanctions,” Biden said in an address from the White House, adding that he thinks Putin’s latest remarks about separatist-held regions a sign that the Russian leader isn’t interested in diplomacy.
Top EU Diplomat Urges Sanctions Against ‘Oligarchs’ (7:21 p.m.)
Josep Borrell, the EU’s foreign policy chief, urged the bloc to broaden its proposals for sanctions against Moscow to also target “oligarchs” who back or benefit from the Russian administration.
“I am ready to put on the table, as I did today, a suggestion to enlarge the listing criteria to capture those who provide support or benefit from the Russian government, I mean the oligarchs in plain language,” Borrell told reporters in Paris after EU foreign ministers approved a separate package of sanctions of Russia over Ukraine.
Russia Says Pulling Diplomatic Staff Out of Ukraine (6:52 p.m.)
Moscow is withdrawing diplomats and other embassy personnel from Ukraine to “protect their lives and safety,” the Foreign Ministry said in a statement late Tuesday. The ministry said Russia’s embassy in Kyiv and consulates in Odessa, Lviv, and Kharkiv have faced repeated property attacks since 2014, following the pro-Western revolution and the Kremlin’s annexation of Crimea.
It comes also after Ukrainian President Volodymyr Zelenskiy said he’d received a request from his Foreign Ministry to consider breaking off diplomatic relations with Russia.
France Says Meeting Nixed With Russian Foreign Minister (6:45 pm.)
Foreign affairs minister Jean-Yves Le Drian called off a planned meeting on Friday in Paris with Russian counterpart Sergei Lavrov, which had been arranged before Putin announced his recognition of separatists in eastern Ukraine.
Putin Says No Plan to Send Troops to Separatist Areas Now (6:35 p.m.)
The Russian president said he’s not deploying troops right now to the separatists in eastern Ukraine, though he may decide to, and declared that Russia recognizes claims by the self-proclaimed Donetsk and Luhansk People’s Republics to territory currently under Ukrainian government control.
It’s for the separatists to reach agreement with the government in Kyiv, which controls about 70% of the disputed territory, on the borders between them, Putin said.
Putin added the Minsk peace accords intended to resolve the conflict “no longer exist” following the recognition decision. They were “killed long before yesterday’s recognition,” he said. Ukraine has said in turn that Minsk is no longer central to its own discussions on security and territory integrity.
Ukraine Still Seeks More Weapons From West (5:50 p.m.)
Ukraine will be seeking further shipments of weapons from the U.K. and U.S., Foreign Minister Minister Dmytro Kuleba said in Washington in a briefing with reporters at the embassy.
“Ukraine is not a member of any security alliance and has no security guarantees,” so it can only rely on its diplomacy and its military, the minister said. “We will mobilize the entire world” for support.
Some Western nations have sent in defensive weapons in recent weeks to bolster the military, but have also made clear they would not deploy troops to fight in the event of a conflict with Russia.
NATO Chief Says Russia Still Planning ‘Full-Scale Attack’ (5:08 p.m.)
Jens Stoltenberg, NATO’s secretary general, told reporters in Brussels that Russia is still preparing for a “full-scale attack on Ukraine,” despite Moscow’s repeated denials that it plans to do so.
Russia’s Senate Approves Donbas Troop Deployment (5:00 p.m. CET)
The upper house of Russia’s parliament unanimously approved a request from Putin to authorize the use of troops in the separatist territories Moscow just recognized.
The vote removes the last legal formality for Putin to send troops to Ukraine’s Donbas region, where Russia has financially and militarily supported the self-styled republics since their formation in 2014. The authorization motion leaves the details of size, timing and mission for the deployment up to the president. Speaker Valentina Matvienko said the troops would be “peacekeepers” who would “bring peace to the Donbas and end the bloody civil war.”
Biden to Address Ukraine Situation from White House (5:01 p.m.)
The U.S. president will address the situation in Ukraine Tuesday at 1 p.m. Washington time, with the U.S. expected to unveil new sanctions targeting Russia.
The president will speak a day after signing an executive order prohibiting U.S. investment, trade, and financing in the separatist-held regions in eastern Ukraine. The financial penalties announced Tuesday are expected to fall short of the sweeping sanctions Biden and other Western leaders have pledged if Russian forces push into Ukrainian territory that was not previously occupied.
U.S. Equities Decline as Markets Weigh Risks (4:56 p.m.)
U.S. equities slipped on Tuesday as investors weighed the potential damage from sanctions on Russia after Putin’s moves. The S&P 500 and Nasdaq 100 were both lower after a trading holiday on Monday. The Stoxx 600 Index fell as much as 2% before paring back losses to trade higher. And a flight to havens eased, as benchmark Treasury yields rose to trade at 1.94%.
In Russia, state lenders VTB Bank PJSC and Sberbank PJSC flipped to gains after they weren’t mentioned in proposed EU and separate U.K. sanctions. That helped the benchmark stock index erase losses after its worst day since March 2014. The ruble rebounded from a steep decline as the price of Brent crude oil climbed to almost 8,000 rubles, the highest level since at least the start of the century.
U.S. Returns State Department Staff to Ukraine (4:11 p.m.)
State Department officials from the U.S. embassy in Ukraine who spent last night in Poland are returning to the western city of Lviv, according to two senior department officials. Staff are commuting between the two countries, one of the officials said.
The U.S. moved personnel to Poland on Monday on concern that security conditions could deteriorate after Putin’s decree recognizing the separatist territories in the eastern part of Ukraine. The U.S. had already relocated its embassy to Lviv from the capital Kyiv.
Hungary’s Orban Tells Zelenskiy He Backs Ukraine’s Sovereignty (2:17 p.m.)
Hungarian Prime Minister Viktor Orban assured President Volodymyr Zelenskiy that he backs Ukraine’s sovereignty and territorial integrity, MTI state news service reported.
Orban, who is considered Putin’s closest EU ally, told Zelenskiy in a phone call on Tuesday that Hungary will support joint efforts from the bloc to respond to Moscow’s moves against Ukraine, MTI reported, citing Orban’s press chief, Bertalan Havasi. Hungary will also shift some troops to the frontier with Ukraine to bolster border defense and prepare for humanitarian aid, MTI said.
Putin Says He Doesn’t Seek to Restore Russian Empire (2:05 p.m.)
The Russian president sought to reassure neighboring leaders he isn’t plotting to restore the Russian empire, hours after his late-night speech describing Ukraine as the artificial creation of Bolshevik revolutionaries on Moscow’s former imperial land.
“We see and foresaw, one might say, speculation on this topic -- on the topic that Russia is going to restore the empire within the imperial borders,” Putin said during talks with Azerbaijani President Ilham Aliyev. “This is absolutely not true.”
While Putin insists Russia respects other ex-Soviet republics, and has formed the Eurasian Economic Union with Belarus, Armenia, Kazakhstan and Kyrgyzstan, the Kremlin recognized two breakaway regions of Georgia as independent after a 2008 war with its neighbor and annexed Crimea from Ukraine in 2014. It also maintains peacekeeping troops in a breakaway pro-Russian region of Moldova.
U.S. Discussing Whether Blinken-Lavrov Meeting Proceeds (1:54 p.m.)
The U.S. is discussing with its partners and allies whether a meeting between Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov scheduled for Thursday in Geneva will go ahead as planned, Deputy National Security Advisor Jon Finer said on MSNBC.
“I’ll leave it to the State Department to determine whether or not that meeting goes forward. But regardless, Russia is taking significant steps away from diplomacy, we’re not going to be the ones that close the door. But all signs are not encouraging about the path they seem to be choosing.”
Johnson Says U.K. to Target Banks, Assets in Package of Measures (1:40 p.m.)
Prime Minister Boris Johnson said the U.K. would target five banks and freeze the assets of Gennady Timchenko, Boris Rotenberg and his nephew Igor Rotenberg.
The impact of the measures may be limited as all but one of the targets have been subject to U.S. sanctions for several years. Johnson targeted Bank Rossiya, sanctioned by the U.S. Treasury since 2014, and state-owned defense sector lender Promsvyazbank. The other lenders, also already subject to U.S. restrictions, were small Crimea-linked lenders Genbank, the Black Sea Development and Reconstruction Bank and IS Bank.
EU Proposes Initial Russian Sanctions Package (1:38 p.m.)
The EU proposed an initial package of sanctions on Russia for its moves in Ukraine, targeting those behind the decision, as well as banks that finance Russian operations in the territories, the bloc said in a statement. The EU will also “target the ability of the Russian state and government to access the EU’s capital and financial markets and services,” it said. Member states need to formally approve the steps for them to take effect.
“The EU has prepared and stands ready to adopt additional measures at a later stage if needed in the light of further developments,” European Commission President Ursula von der Leyen and Council President Charles Michel said in a statement.
Finland’s Niinisto Says Putin Sowing Confusion (1:12 p.m.)
Finland’s president, Sauli Niinisto, told reporters in Helsinki that the situation between Russia and Ukraine was moving quickly and was unpredictable. Niinisto is a key conduit between Moscow and the West who spoke at length with Putin last month.
“It may be that the seemingly irrational is actually rational -- so it’s acting consciously very irrationally to create confusion,” he said of Russia’s recent actions.
He suggested Putin may have decided to move now to recognize the separatist territories because doing so could have been even more complicated down the line. “The Russians have now decided to resolve one way or another the situation in Ukraine which has lasted more than seven years. We can guess the reasons why, but one reason may be that Russia has noticed that Ukraine is getting stronger year by year.”
Russia ‘Geopolitically Unreliable’: German Economy Minister (1:12 p.m.)
Germany needs to reduce its “one-sided” dependence on Russian gas, Economy Minister Robert Habeck said, adding that Kremlin officials had shown themselves to be “geopolitically unreliable” or “playing a calculated game.”
He confirmed that the supply security report prepared by his ministry that is part of the Nord Stream 2 certification process has been withdrawn and a new assessment will be made. As long as this process is ongoing, the pipeline cannot go on line, Habeck said at a news conference. The report looks at whether the pipeline could represent a threat to Germany’s energy security. Russian gas accounts for about 55% of Germany’s consumption.
EU Diplomats Push Sanctions Against More Than 360 Russians (12:40 p.m.)
The EU is considering sanctions against 351 lawmakers of the Russian state Duma who voted for recognizing separatist regions in eastern Ukraine, according to EU diplomats who declined to be named on confidential preparations. Another 11 Russians who proposed the recognition would also be targeted.
EU ambassadors also backed targeting commanders of forces that Putin has ordered into the area, the diplomats said. All member states backed the sanctions, they said, but Hungary offered a note of caution. The package has yet to be finalized and needs to be formally approved by member states.
The bloc also discussed targeting two Russian banks, and the financing of Russia’s sovereign debt, with the aim of stopping European institutions buying new Russian bonds or taking part in debt refinancing on the secondary market, one of the diplomats said.
Russia Sends Mixed Signals on Separatist Borders (12:26 p.m.)
Russian officials sent mixed signals Tuesday on just how big the self-declared separatist republics it’s recognizing are, raising the possibility of more conflict with Ukraine along the line of contact that now divides them.
Kremlin spokesman Dmitry Peskov said Russia is recognizing the borders where “the republics exist and were declared.” But after being pressed by reporters about whether that included territory lost by the separatists to Ukrainian forces after the republics were formed in 2014, he declined further comment. A few minutes later, he said they would be recognized in the borders “in which the republics were declared.” Meanwhile, Deputy Foreign Minister Andrey Rudenko was quoted by Tass as saying Russia recognizes the republics in the borders in which they currently exercise authority.
At present, separatists control only about 30% of the Donetsk and Luhansk Oblasts, or provinces, but they’ve claimed the entire territories at times. Ukrainian military forces have maintained a tense cease-fire across the line of contact with the separatists since a truce took hold in 2015, though both sides reported a surge in breaches in recent days.
Scholz Says Situation Changed on Nord Stream 2 (12:15 p.m.)
Scholz said that he has directed the Economy Ministry to withdraw a report on security of supply that is needed for the certification process of the Nord Stream 2 pipeline to move forward.
“That sounds technical but it’s the necessary administrative step so that no certification of the pipeline can happen right now,” Scholz told reporters in Berlin. “Without this certification Nord Stream 2 cannot go into operation.”
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