(Bloomberg) — A video call between the European Union and Prime Minister Viktor Orban to discuss proposed sanctions on Russian oil imports that Hungary is resisting was postponed, while the Hungarian leader spoke with French President Emmanuel Macron on energy issues.
The EU approved the release of 600 million euros ($634 million) in aid for Ukraine as it considers issuing joint debt to finance the country’s long-term reconstruction, which may end up costing hundreds of billions of euros. Ukraine’s economy is expected to contract by almost a third this year as the Russian invasion drags on, according to a new forecast.
The German and Dutch foreign ministers visited Kyiv for meetings. Ukrainian forces pulled out of a strategic city in the Luhansk region after two months of fighting. A key committee in Finland’s parliament backed NATO membership.
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Zelenskiy Urges Slovakia to Back Russian Oil Ban (1:57 p.m.)
Ukrainian President Volodymyr Zelenskiy urged Slovak lawmakers to back the EU’s proposed ban on purchasing oil from Russia as the government in Bratislava tries to negotiate a three-year exemption with the bloc because of its heavy dependence on Russian crude.
Zelenskiy thanked Slovakia for supplying his military with weapons but said that the EU’s sixth package of sanctions was also vital for Ukraine’s defense. “If they will be weaker, it will be harder for us. We need this sixth package.” Zelenskiy told lawmakers in a video speech. “We understand it will be hard for you, but banning oil is important.”
Finnish Parliament Committee Says Country Should Join NATO (12:25 p.m.)
Finland should join the North Atlantic Treaty Organization to best ensure the security of all Finns, according to the parliament’s defense committee, as the nation prepares to decide on an application within days.
Russia’s invasion of Ukraine galvanized public support for joining the military alliance. Finland is, along with Sweden, considering NATO membership and giving up its non-alignment that stretches back to before the cold war.
EU Approves Release of 600 Million Euros for Ukraine (12:08 p.m.)
The EU has approved the release of 600 million euros to help Ukraine with its urgent financial needs, according to bloc officials who asked not to be identified. The money is part of the EU’s 1.2 billion euro emergency assistance package adopted by the bloc early this year.
The European Commission is expected to complete the process Wednesday and the funds could be transferred in the coming days, according to one of the officials.
Ukrainian Troops Retreat From Popasna in Luhansk Region (12:06 p.m.)
Ukrainian troops retreated from Popasna in the Luhansk region to more fortified positions, the area’s Governor Serhiy Haiday said in statement on Facebook.
Fighting over the city, which is near the border between the Luhansk and Donetsk regions and occupies strategic heights, was ongoing over the last two months.
German, Dutch Foreign Ministers Visit Kyiv (12:00 p.m.)
German Foreign Minister Annalena Baerbock and her Dutch counterpart Wopke Hoekstra traveled to Kyiv Tuesday where they will hold meetings with Ukrainian government officials.
Baerbock visited the town of Bucha near the capital, which is the site of alleged Russian atrocities against civilians, while Hoekstra was in the Kyiv suburb of Irpin, where he viewed bombed-out houses and buildings. “These acts cannot go unpunished,” he said in a tweet. “The Netherlands is committed to establish the truth and achieve justice.”
Macron Speaks With Orban on Energy Security (11:48 a.m.)
Orban spoke about energy security on Tuesday with Macron, whose country holds the EU’s rotating presidency, an aide to the Hungarian leader said, as diplomacy over potential sanctions on Russian oil continues.
A video call between Orban, European Commission President Ursula von der Leyen and Hungary’s neighbors won’t be held Tuesday, according to a spokesman for the bloc. He didn’t immediately explain why the call, which was announced the previous day, was delayed.
The EU’s sixth sanctions package would ban crude oil shipments over the next six months and refined fuels by early January, but Hungary has threatened to veto the measures due to its reliance on Russian energy imports. Orban and von der Leyen made progress in talks over the issue Monday but failed to reach a breakthrough, according to both sides.
German Investor Confidence Stabilizes (11:16 a.m.)
Investor confidence in Germany’s pandemic rebound improved but remained deeply negative as the war in Ukraine darkens the outlook for Europe’s largest economy.
The ZEW institute’s gauge of expectations rose to -34.3 in May from -41 the previous month, defying expectations for a third straight deterioration. Germany’s economy is feeling the effects of Putin’s invasion in large part due to its high dependence on Russian energy imports.
Ikea Still Buying Russian Wood Despite Pledge, Newspaper Says (10:18 a.m.)
Ikea is continuing to source wood from Russia despite making a public promise to halt trade with the country following the war in Ukraine, Sweden’s tabloid Aftonbladet reported, citing internal email exchanges between Ikea’s purchasing managers.
In early March, the Swedish retailer said it was pausing operations in Russia and Belarus, including all exports and imports with those countries. Ikea representatives didn’t immediately respond to a request for comment.
Mazda Halted Russian Plant, Nikkei Reports (10:08 a.m.)
Mazda Motor Corp. halted production at its Vladivostok joint venture with Sollers in late April after it previously stopped exporting parts to Russia, Nikkei reported, citing the company.
Russia’s auto sector has been among the hardest hit domestic industries from sanctions as parts supplies have dried up. Volkswagen AG, BMW AG, Ford Motor Co. and every Japanese car company with production in the country have suspended operations there.
Oil Extends Slump as EU Softens Sanctions Proposals (8:34 a.m.)
Oil extended its biggest drop in more than five weeks after the European Union softened its proposed sanctions on Russian crude exports and as economic growth concerns weighed on sentiment.
West Texas Intermediate futures fell below $103 a barrel in Asian trading after sliding around 6% on Monday. The bloc will scrap a proposed ban on EU-owned vessels transporting Russian crude after objections from members including Greece.
Independent Russian Media Turns to Crypto for Funding (8:10 a.m.)
Meduza, a prominent independent Russian-language news site, is soliciting donations via cryptocurrencies as President Vladimir Putin’s crackdown on the press and western sanctions made raising money in Russia impossible.
The site lost about a third of traffic after the Kremlin blocked its content in Russia and was forced to become creative in its fundraising to keep the lights on. Data show that Meduza’s Bitcoin and Ether wallets listed on its website held crypto worth around $230,000 at current prices.
Munich Re Writes Down $740 Million Over War (7:56 a.m.)
Munich Re wrote down Russian and Ukrainian bonds in its investment portfolio and warned that the war poses “considerable uncertainty” to its outlook.
The German reinsurer cut the value of the securities by almost 700 million euros ($740 million) in the first quarter and recorded about 100 million euros in costs related to the conflict.
Putin’s invasion has forced a series of financial hits among reinsurers, in part because of Russia’s move to effectively impound planes leased from foreign lessors. Swiss Re said earlier this month that it had set aside $283 million in reserves related to the war during the first quarter, and Hannover Re made additional provisions for possible losses in the low triple-digit million-euro range in the period.
Ukraine’s Economy to Shrink 30% This Year: EBRD (7:10 a.m.)
That forecast is more than previously expected and in a scenario where the war ends this year, the European Bank for Reconstruction and Development said.
Russia’s invasion has upended trade in energy, agricultural commodities and fertilizers and disrupted supply chains, resulting in slower growth across eastern Europe.