Former United States President Donald Trump was a useful bogeyman for Europe. His successor, Joe Biden, is proving much trickier — a friend who says all the right things but leaves you in the lurch when it counts.
At each new perceived slight, the Europeans express shock, frustration and dismay: How could Washington fail to consult its allies, or at the very least inform them of its plans? Meanwhile, the American response is always some variant of: Terribly sorry, we didn’t even think of that.
The underlying dynamic is one of polite indifference. Despite Washington’s renewed commitment to NATO and massive outlay of arms and funds to help Ukraine defend itself against Russia, the U.S. remains steadfastly focused on what most perceive to be its main existential challenge: China.
In that equation, Europe is often an afterthought. It’s just that many on this side of the Atlantic have failed to get the message — or draw conclusions of what it means for the bloc’s future — instead preferring to act out a script of outrage and remonstrance.
A current example is the blooming transatlantic argument over Biden’s IRA.
Months in the making, painstakingly hashed out on Capitol Hill, the legislation represents Washington’s best bipartisan effort thus far to decarbonize its economy and prepare for decoupling from China. The bill flags $369 billion for energy and climate programs, including billions in taxpayer-funded subsidies for the production of electric vehicles inside the U.S.
It just so happens that it’s a potential disaster for Europe.
Bruised and confused
Amid an energy crisis that has large parts of the European Union economy staring into an abyss, French President Emmanuel Macron has led the charge against Biden’s IRA, accusing Washington of maintaining a “double standard” on energy and trade. He’s called for Europe to respond in kind by rolling out its own subsidy plan, prompting a visit from U.S. Trade Representative Katherine Tai to an EU trade ministers’ meeting in Prague on October 31.
But rather than try to cajole them with concessions, Tai invited them to get on board the China train by rolling out their own subsidies — which isn’t what the Europeans wanted to hear.
According to an EU diplomat who spoke to POLITICO ahead of a trade ministers’ meeting on Friday, members of the bloc still hope that Biden will send the IRA back to Congress for resizing, a prospect U.S. officials say is about as likely as canceling Thanksgiving.
The result is that Europe is now back in familiar territory: Bruised, confused and scrambling for a response while failing to formulate its own cohesive strategy to contend with China. And instead of receiving solidarity from Washington in a time of war, they feel the U.S. has maneuvered itself into a perfect position to suck investment out of Europe.
The outlines of an EU response to the IRA did start to take shape earlier this week, when Paris and Berlin — only recently back on speaking terms after a falling out — jointly called for an EU plan to subsidize domestic industries.
But that plan is likely weeks, even months, away from becoming a reality. And even if all 27 EU countries manage to strike a deal, their leaders will be hard-pressed to inject anywhere near as much money into it as Washington has earmarked, as most EU countries are still howling in pain over the high price of gas — much of which they now import from liquid natural gas terminals in Texas.
Again, Biden’s America is looking after its interests while the EU’s left to groan about missed signals, hurt feelings and unfair practices.
The tragedy for Europe is that this is happening at a time when transatlantic relations are meant to be at an all-time high. Biden’s election, followed by the war in Ukraine and Washington’s massive investment in shoring up NATO’s eastern flank, was meant to signal the U.S.’s decisive return to the European sphere.
But what the Europeans are discovering is that the Ukraine war is just one facet of the U.S.’s larger strategic duel with China, which will always take precedence over EU interests.
That was true under Trump, and it remains true under his successor. It’s just that the message is delivered in a different style.
In the long run, Biden’s polite indifference may prove more deadly.
Jamie Dettmer is opinion editor at POLITICO Europe.
LVIV, Ukraine — Inna missed her father’s funeral.
The grieving 36-year-old Ukrainian lawyer learned of his death as she and her two young daughters — one aged seven, the other five — boarded a flight from Heathrow Airport in London to Poland.
It was at the mist-shrouded railway station at Przemyśl, 16 kilometers from the Poland-Ukraine border, that her plan to pay her graveside respects unraveled, as salvoes of Russian missiles slammed into Ukraine’s power grid, also impacting Inna’s hometown of Vinnytsia.
The barrage on the country’s energy infrastructure — the worst it’s experienced since October 10 — not only threw major cities and small villages into darkness and cold, but it’s also wreaked havoc on Ukraine’s railways, grinding trains to a halt and leaving them powerless at stations.
Away from the front lines of battle, this is what Russian President Vladimir Putin’s war on Ukraine looks like — a slight, dignified blond-haired woman, with two young children in tow, trying to mourn her father and reach her 72-year-old mother to comfort her.
Knowing the journey back home would be arduous, Inna had tried to persuade her daughters to stay in Clapham, south London, where the three have been living with an English family for the past six months. “They have been very kind to us,” she explained.
Inna’s studying business administration now. Her daughters are in school. “Six months ago, they knew no English; it was hard at first for them,” she told me. Now, the kids chatter away in English, with the elder explaining her favorite thing to do at school is drawing; and the younger chiming in to announce she loves swimming.
But that calm, predictable life they’ve been living in England seemed far away right now.
The girls had insisted on accompanying their mother to Ukraine because they wanted to see their grandparents … and their cats. “When is the train coming?” the oldest demanded several times.
And as the night drew in, and the cold settled along the crowded platform at Przemyśl’s train station, other flagging, bundled-up kids started asking the same question, while parents — mainly mothers — tried to work out how to complete their journeys across the border.
As they did so and debated their options, a Polish policewoman insisted that smoking wasn’t allowed on the platform, and volunteers wearing orange or yellow vests offered hot tea, apples and fruit juice. Still, there was no sign of the scheduled train, and no information about it either.
While we waited on the platform, through the windows of a small apartment block across the road, Polish families could be seen glued to their television sets — no doubt absorbing the news that a missile had hit a grain silo in a Polish village just 100 kilometers north of Przemyśl.
As the news added to the disquiet among the Ukrainians at the station, the worry became palpable up and down the platform. Daryna, a dark-haired, middle-aged woman, was heading to see her 21-year-old son. “I’ve been living in Scotland with my daughter,” she said. “But he’s studying in Kyiv, and I want to make sure he’s OK.”
Some families are attempting to return to Ukraine to visit or mourn with family, but Russian attacks on the country’s infrastructure left many asking “When is the train coming?” | Paula Bronstein/Getty Images
“Going home now is like being transported from the normal to the abnormal,” she added.
Galina, the director of a small clothing company, was impatient to see her 10-year-old daughter, whom she left in the care of her grandmother in Kyiv while making a quick business trip to Poland. She kept texting them to make sure they were safe, but reassuring replies didn’t assuage her, as both she and the others kept scrolling on social media for news about their hometowns — Kharkiv, Chernihiv, Khmelnytskyi, Zhytomyr, Poltava, Rivne and Lviv, all affected by the nationwide missile bombardment.
My destination, Lviv, was badly impacted by the recent blasts. Several explosions were heard from the city on Tuesday, prompting Mayor Andriy Sadovyi to warn on his Telegram channel that everyone should “stay in shelter!” However, many won’t have received that message, as neither the internet nor the cellular networks were working in parts of the city. Officials said missiles and drones caused severe damage to the power grid and energy infrastructure, despite reports of successful missile interceptions too.
Some 95 kilometers from Przemyśl, Lviv was cold and damp when we arrived shortly after dawn on Wednesday. After giving up on the train, we’d crossed the border by foot and cadged a lift to the city.
As we made our way there, the city was largely without power, the traffic lights weren’t working, and the air raid sirens were clamoring. The only lights we could see were from buildings equipped with generators.
At my hotel, the manager, Andriy, told me it takes 37 gallons of diesel an hour to keep the electricity flowing, but he cautioned the water might not be that hot. “When the all-clear sounds, we will serve breakfast for another hour,” he added helpfully.
By the time I finished breakfast, electric trains were already up and running again in Lviv, less than a day after the city’s generation and transmission infrastructure was hit, and by evening, the lights were on all across the city — yet further testament to Ukrainian resilience, improvisation and refusal to be cowed.
And elsewhere, too, electrical engineers — the new heroes of Ukrainian resistance — managed to patch up the damage to get trains running and homes lit. “We had a blackout yesterday [Tuesday],” friends in Ternopil, a two-hour drive east of Lviv, told me by text. “The whole city was without electricity and water for several hours. But eventually everything returned to normal,” they added.
But with winter approaching and Russia planning to seemingly try to wear down Ukrainian resistance not so much on the battlefield but by targeting its civilian energy and water infrastructure, there are questions about how the country can ride out the pummeling.
In July and August, tens of thousands of Ukrainians who fled overseas started returning home. Manned by a colorful variety of NGOs and charities at the border crossings into Poland, the tent camps thus became largely redundant as the refugee flood leaving Ukraine turned to a trickle, and the tents eventually came down. But now they may well be needed again.
“A lot of Ukrainians will leave if there’s no heat and no electricity,” predicted Inna. She’s now in a quandary, torn between planning for a life in England — if she can get her mother a visa — or seeing her future in Ukraine.
“I was a property lawyer in Odesa, I had a good life, and things were going well. But that’s all lost,” she said, trailing off, lost in her thoughts.
The European Commission is exploring legal options to confiscate Russian state and private assets as a way to pay for Ukraine’s reconstruction, according to a document seen by POLITICO.
The goal would be “identifying ways to strengthen the tracing, identification, freezing and management of assets as preliminary steps for potential confiscation,” according to the document.
The potential bounty would consist of nearly $300 billion frozen Russian central bank assets, as well as assets and revenues of individuals and entities on the EU’s sanctions list. The idea was floated already in May, and is supported by Kyiv, as well as Poland, the Baltics and Slovakia. EU leaders in October tasked the Commission to look into legal options to seize Russian assets currently frozen under sanctions.
But the conundrum is that there’s currently no legal mechanism to confiscate Russian assets — as pointed out by U.S. Treasury Secretary Janet Yellen back in May. It would need to be created.
“There may be a path for the EU to validly confiscate frozen assets under international law, but it is likely a narrow, a long and an untested path,” said Jan Dunin-Wasowicz, a lawyer at Hughes Hubbard & Reed.
That isn’t deterring the Commission from looking into it.
With regards to private assets belonging to sanctioned people or entities, Brussels is readying proposals to make sanctions evasion an EU crime, a step which would facilitate their confiscation — but only in case of a criminal conviction. Even then, the EU would need to argue each case in court, likely having to litigate for years.
That’s because a lot of these assets would be considered foreign investments, which enjoy protection against expropriation without compensation and a right to fair and equitable treatment under international treaties that Russia has with a lot of EU countries.
The confiscating authority would also need to draw a clear link between the property owner and the conflict in Ukraine.
“To ensure proportionality, you would need to look at who are the owners, what did they do, et cetera,” said Stephan Schill, professor of international and economic law and governance at the University of Amsterdam.
With regards to frozen foreign reserves of the central bank, the largest money pot, the EU executive writes in the document that “these are generally considered to be covered by immunity,” with a footnote pointing to a U.N. convention on jurisdictional immunities of foreign states and their property, which is however not yet in force.
“From an international law perspective, it’s pretty clear that without Russia’s consent you can’t use Russian central bank assets,” said Schill.
As for assets of Russian-owned state enterprises, the paper notes that these wouldn’t be “in principle” covered by such convention, but grabbing them may raise problems linked to the confiscation of private assets, “in addition to the need to demonstrate a sufficient connection to the Russian state.”
The EU is also mulling an “exit tax” on the assets or proceeds from assets of sanctioned individuals that want to transfer their property out of the EU. This could run into legal problems of its own, as it would target a specific group of individuals — which runs counter to non-discrimination provisions in international law — and they in turn could invoke the human right to property as a defence.
To Schill’s knowledge, there is no recent and valid precedent for any of these options.
“The EU and member states are trying to introduce new criminal law,” he said.
The EU is under immense pressure to cap the price of imported natural gas to contain energy costs — but many of the companies making a fortune selling cheap U.S. gas to the Continent at eye-watering markups are European.
The liquefied natural gas (LNG) loaded on to tankers at U.S. ports costs nearly four times more on the other side of the Atlantic, largely due to the market disruption caused by a near-total loss of Russian deliveries following the invasion of Ukraine.
The European Commission has come under fierce pressure to sketch out a gas price cap plan, but some countries, led by Germany, worry such a measure could prompt shippers to send gas cargoes elsewhere. The Commission is also reluctant, and its proposal issued Tuesday sets such demanding requirements that they weren’t met even during this summer’s price emergency.
But a large part of the trade is in European hands, according to America’s biggest LNG exporter.
“Ninety percent of everything we produce is sold to third parties, and most of our customers are utilities — the Enels, the Endesas, the Naturgys, the Centricas and the Engies of the world,” said Corey Grindal, executive vice president for worldwide trading at Cheniere Energy, rattling off the names of big-name European energy providers.
Cheniere, which this year saw 70 percent of its exported LNG sail to Europe, sells its gas on a fix-priced scheme based on the American benchmark price, dubbed Henry Hub, which is currently at about $6 per million British thermal units.
On average, the price across all Cheniere contracts is 115 percent of Henry Hub plus $3, Grindal said. That works out to about €33 per megawatt-hour. For comparison, the current EU benchmark rate, dubbed TTF, is €119 per MWh.
It’s a big markup for whoever is reselling those LNG cargoes into Europe’s wholesale market, profiting from fears that there may not be enough gas to last the winter.
Despite fears that any EU cap will send gas to higher bidders in Asia and result in bloc-wide shortages, Grindal gave a resounding “no” when asked if a cap would have any impact on how Cheniere does business with European companies.
“Our balance sheet is underpinned by those long-term contracts,” he added.
Translation: If buyers choose to trade their precious cargoes away for higher profits beyond Europe once they receive them, that’s their decision.
Blame game
“The United States is a producer of cheap gas that they are selling us at a high price … I don’t think that’s friendly,” said French President Emmanuel Macron | Ludovic Marin/AFP via Getty Images
The difference between U.S. and EU gas prices hasn’t gone unnoticed by European politicians — but most of the finger-pointing has been at American producers rather than the resellers closer to home.
“In today’s geopolitical context, among countries that support Ukraine there are two categories being created in the gas market: those who are paying dearly and those who are selling at very high prices,” French President Emmanuel Macron told a group of industrial players last week. “The United States is a producer of cheap gas that they are selling us at a high price … I don’t think that’s friendly.”
Macron’s dig conveniently ignored that the largest European holder of long-term U.S. gas contracts is none other than France’s own TotalEnergies.
At the company’s latest earnings call last month, TotalEnergies CFO Jean-Pierre Sbraire trumpeted the fact that the firm’s access to more than 10 million tons of U.S. LNG annually “is a huge advantage for our traders, who can arbitrage between the U.S. and Europe.”
“And now, given the price of LNG, each cargo represents something like $80 million, even $100 million. So, when we are able reroute or to arbitrage between the different markets, of course, it’s a very efficient way to maximize the value coming from that business,” Sbaire added. “Cash flow generation of this order of magnitude marks the start of a new era for the company.”
Spain’s Naturgy — which has some 5 million tons of U.S. LNG a year from Cheniere under contract — has also earned nearly five times more trading gas so far this year compared with 2021 thanks to “the increased spread between [Henry Hub] and TTF,” it wrote in its half-year report.
Long-term contracts with the U.S. weren’t always so profitable. In fact, from 2016 to at least 2018, buyers were mostly losing money on the fixed deals, leading some to sell them off.
In 2019 Spain’s Iberdrola, for example, pawned off its 20-year Cheniere contract to Asian trader Pavilion Energy, which is now benefiting from selling into a high-priced global market.
In the U.K, Centrica tried — and failed — to sell off its LNG portfolio in 2020 when government-ordered lockdowns drove real-time prices through the floor. That included a 20-year fixed Cheniere contract set to run through 2038.
Now that real-time prices have shot back up, Centrica — part of Shell-owned British Gas — is reaping the rewards and eagerly snapping up more long-term contracts, most recently a 15-year deal with U.S. LNG exporter Delfin beginning in 2026.
“This is a really important profit stream for us,” Centrica CFO Chris O’Shea told investors on a Friday trading update call.
Unlike some producers — for example in the Middle East — which restrict the final destination of the LNG to consumers in Asia and prevent it being sold onward at a higher price, American gas changes ownership the minute it’s loaded onto a ship and comes with no strings attached.
That leaves buyers free to redirect the precious supply wherever it’s most profitable — sometimes at the expense of their downstream clients, if it’s cheaper to break those pre-existing domestic delivery commitments.
“We can only control what we can control,” said Cheniere’s Grindal. “U.S. LNG is destination-free.”
But as far as getting it on the ship at previously agreed prices, “our focus is being that reliable supplier, being committed to the obligations that we’ve made to our customers, and we’re committed to doing everything that we can to help the EU in this situation.”
BALI, Indonesia — Ukraine’s President Volodymyr Zelenskyy on Tuesday called on G20 leaders not to offer his country any peace deal that would compromise its independence from Russia, amid recently renewed contact between Washington and Moscow over the future of the war.
Zelenskyy appeared at the Bali summit via videolink at the invitation of the Indonesian hosts, just days after Ukraine liberated Kherson from invading Russian forces — a feat he compared to the D-Day landing of allied troops in Normandy, a key turning point of World War II.
“For Ukraine, this liberation operation of our defense forces is reminiscent of many battles of the past, which became turning points in the wars of the past,” Zelenskyy said in his speech to world leaders, among them U.S. President Joe Biden — and, according to a Western diplomat, Russian Foreign Minister Sergey Lavrov. “It is like, for example, D-Day — the landing of the allies in Normandy.”
Pointedly addressing his comments to the “dear G19” — the leaders of the Group of 20, with a snub to Russia — Zelenskyy warned against making Ukraine weaker than it was before Russian President Vladimir Putin launched the full-scale invasion in February.
“I want this aggressive Russian war to end justly and on the basis of the U.N. Charter and international law,” Zelenskyy said in his speech, the content of which was leaked to POLITICO. “Ukraine should not be offered to conclude compromises with its conscience, sovereignty, territory and independence. We respect the rules and we are people of our word.”
Russian President Vladimir Putin was invited to the summit in Bali but last week decided not to attend, sending Lavrov instead.
In his speech on Tuesday, Zelenskyy rejected any negotiations like those Kyiv held with Moscow in previous years, after Russia invaded and annexed Crimea in 2014, before seizing, via proxies, territory in the Donbas region of eastern Ukraine.
“Apparently, one cannot trust Russia’s words, and there will be no Minsk 3, which Russia would violate immediately after signing,” Zelenskyy said, referring to the Minsk 1 and 2 agreements, signed in 2014 and 2015 and mediated by the leaders of France and Germany in the so-called Normandy Format, which were intended to bring an end to the war at that time.
Zelenskyy’s speech to the G20 came on the same day Chinese President Xi Jinping asked his French counterpart Emmanuel Macron to work toward negotiated peace for Ukraine.
According to the Chinese state media Xinhua, Xi “emphasized that China’s position on the Ukrainian crisis is clear and consistent, advocating ceasefire, cessation of war and peace talks. The international community should create conditions for this, and China will continue to play a constructive role in its own way.”
Nevertheless, Zelenskyy thanked countries including China for rejecting Russia’s threats to use nuclear weapons.
Slamming the “crazy threats of nuclear weapons,” the Ukrainian president added: “There are and cannot be any excuses for nuclear blackmail. And I thank you, dear G19, for making this clear.”
Bill Burns, the head of the Central Intelligence Agency, met his Russian counterpart Sergei Naryshkin in Turkey on Monday and warned Moscow against using nuclear weapons, according to the White House.
BALI, Indonesia — Rishi Sunak will invite Xi Jinping to collaborate more closely on global challenges in the first meeting between a British prime minister and Chinese president in nearly five years.
Sunak and Xi will hold a bilateral meeting Wednesday on the margins of the G20 leaders’ summit in Bali.
Ahead of the meeting — confirmed only 24 hours before it was due to take place — Downing Street insisted it was “clear-eyed in how we approach our relationship with China.”
The prime minister’s spokesman said there was a need “for China and the U.K. to establish a frank and constructive relationship,” but stressed that “the challenges posed by China are systemic” and “long-term.”
The two leaders are likely to discuss the war in Ukraine, energy security and climate change among other issues, No. 10 said.
Theresa May was the last prime minister to meet Xi, during a visit to Beijing in January 2018, at a time when Downing Street was still referring to the “golden era” of relations supposedly ushered in by David Cameron and George Osborne.
U.K.-China relations have worsened in the wake of China’s crackdown on democratic freedoms in Hong Kong, the oppression of the Uyghur Muslim minority of Xinjiang province, and concerns about the security implications of allowing Chinese companies to build critical national infrastructure in the U.K.
News of the meeting comes after Sunak softened his language on China and suggested he was abandoning plans to declare the country a “threat” as part of a major review of British foreign policy.
In response to questioning from POLITICO during the trip, Sunak described China as “a systemic challenge” but stressed that dialogue with Beijing was essential to tackling global challenges such as climate change.
Speaking to Sky News Tuesday, the PM said: “I think our approach to China is one that is very similar to our allies, whether that’s America, Australia and Canada — all countries that I’m talking about exactly this issue with while we’re here at the G20 summit.”
Sunak’s spokesman said Tuesday that the prime minister would “obviously raise the human rights record with President Xi” at the meeting.
But he added: “Equally, none of the issues that we are discussing at the G20 — be it the global economy, Ukraine, climate change, global health — none of them can be addressed without coordinated action by the world’s major economies, and of course that includes China.”
Xi has already held bilateral talks with various leaders during the summit | Kevin Frayer/Getty Images
Xi has already held bilateral talks with U.S. President Joe Biden, French President Emmanuel Macron and Australian Prime Minister Anthony Albanese among other leaders during the summit.
In addition to the talks with Xi, Sunak will also hold meetings with Biden, Albanese, Indian Prime Minister Narendra Modi, Japanese Prime Minister Fumio Kishida and Indonesian President Joko Widodo.
Iain Duncan Smith, the former Tory leader and co-chair of the Inter-Parliamentary Alliance on China, warned that the U.K. was “drifting into appeasement” with Xi.
“I am worried that the present prime minister, when he meets Xi Jinping, will be perceived as weak because it now looks like we’re drifting into appeasement with China, which is a disaster as it was in the 1930s and so it will be now,” he said. “They’re a threat to our values, they’re a threat to economic stability.”
Bob Seely, another Tory MP and member of the Inter-Parliamentary Alliance on China, added: “We need to talk to nations, especially those that may challenge our values and stability, but it is dangerous to normalize relations when they are not normal.”
But Alicia Kearns, chair of the Commons foreign affairs select committee and a member of the China Research Group, welcomed Sunak’s meeting with Xi. “It is important they meet to prevent miscalculations,” she said. “We cannot simply cut off China, we must work to create the space for dialogue, challenge and cooperation.”
Western officials welcomed Russia’s retreat from the Ukrainian city of Kherson, labeled a “big moment” by the White House and “another strategic failure” for Moscow by the U.K.
Ukrainian troops on Friday entered Kherson, the only provincial capital to be taken by Russia in its invasion. The Russian Defense Ministry confirmed in a video that Moscow’s troops had been withdrawn from the Ukrainian city and other territories on the western bank of the Dnipro River, in a huge blow to President Vladimir Putin’s war effort.
“It has broader strategic implications as well,” U.S. National Security Adviser Jake Sullivan said, “because being able to push the Russians across the river means that the longer-term threat to places like Odesa and the Black Sea coastline are reduced from where they were before.”
“And so this is a big moment. And it’s certainly not the end of the line, but it’s a big moment,” the top White House official told reporters while flying to a Southeast Asian summit in Cambodia, according to a readout published online.
French President Emmanuel Macron called it a “critical step towards the restoration of [Ukraine’s] sovereign rights.”
U.K. Defense Secretary Ben Wallace said Russia’s retreat “marks another strategic failure for them. In February, Russia failed to take any of its major objectives except Kherson,” according to a statement.
The Ukrainian military said it was overseeing “stabilization measures” around Kherson to make sure it was safe, the Associated Press reported on Saturday. Kyiv was making speedy but cautious efforts to make the city liveable after months of occupation, as one official described it as “a humanitarian catastrophe,” the news outlet said.
“We will restore all conditions of normal life – as much as possible,” Ukrainian President Volodymyr Zelenskyy said in his nightly address. “Our defenders are immediately followed by policemen, sappers, rescuers, energy workers,” he said. “Medicine, communications, social services are returning.’
Roman Holovnya, an adviser to Kherson’s mayor, said humanitarian aid and supplies had begun to arrive, but that many residents still lacked water, medicine, food and electricity, the AP reported.
“The occupiers and collaborators did everything possible so that those people who remained in the city suffered as much as possible over those days, weeks, months of waiting” for Ukraine’s forces to arrive, Holovnya said. “Water supplies are practically nonexistent,” he said.
“I am moved to tears to witness freedom returning to Kherson,” Estonian Prime Minister Kaja Kallas tweeted on Saturday. “Ukrainians hugging their soldiers, and blue and yellow flags raised.”
Ukrainian Foreign Minister Dmytro Kuleba on Saturday said that the “war goes on” after the Ukrainian army’s success. Ahead of a meeting with U.S. Secretary of State Antony Blinken in Cambodia, Kuleba also thanked Washington for helping Kyiv against Moscow’s invasion.
“It’s only together that we will be able to prevail and to kick Russia out of Ukraine. We are on the way. This is coming, and our victory will be our joint victory — victory of all peace-loving nations across the world,” Kuleba said.
Russian Foreign Minister Sergei Lavrov on Sunday accused Western leaders of looking to militarize Southeast Asia to contain Moscow and Beijing’s interests in the region.
“The United States and its NATO allies are trying to master this space,” Lavrov told reporters in Cambodia.
He was speaking at a press conference at the end of the Association of Southeast Asian Nations (ASEAN) summit in Phnom Penh, and ahead of the G20 summit in Bali later this week.
Lavrov is representing Moscow at the G20 meeting in Indonesia after the Kremlin said Russian President Vladimir Putin is too busy to attend.
Lavrov said the U.S.’s Indo-Pacific strategy, which President Joe Biden was promoting at the ASEAN summit, ignored “inclusive structures” of regional cooperation and would lead to “the militarization of this region with an obvious focus on containing China, and containing Russian interests in the Asia-Pacific,” Reuters reported.
On Saturday, Biden pledged at the ASEAN summit to help stand against China’s growing dominance in the region, saying: “We’ll build an Indo-Pacific that is free and open, stable and prosperous, resilient and secure.”
Russia has been seeking closer ties with Asia since Western sanctions following Moscow’s invasion of Ukraine.
BALI, Indonesia — Senior Indonesian politicians are calling on Western leaders to make concessions on how far to go in criticizing Russia over the war in Ukraine in a last-ditch effort to avoid leaving the G20 summit later this week without a joint declaration, three diplomats with knowledge of the ongoing negotiations told POLITICO.
According to these diplomats, U.S., European, Australian, Canadian and Japanese officials are among those under pressure from Indonesian counterparts, all the way up to President Joko Widodo, to show “flexibility” and consider using less tough rhetoric in order for Moscow — represented at the Bali summit by Foreign Minister Sergei Lavrov — to say yes to a communiqué at the end of the gathering.
Widodo “considers it a personal success” if a G20 declaration could be reached, one of the officials said, adding that the Indonesian leader has lamented repeatedly that he is chairing the “most difficult” G20 summit ever.
He is also seeking to avoid kicking Russia out and making it the G19, which the G8 did in the wake of Moscow’s annexation of Ukraine’s Crimea in 2014.
One possibility would be to focus squarely on the aspect of “upholding international law.” If adopted, that would be much more coded wording than what’s been used by the G7, which has repeatedly condemned Russian President Vladimir Putin’s war on Ukraine.
The latest G7 statement, following this month’s meeting of foreign ministers from the group, criticized Moscow for “its war of aggression against Ukraine” and called for Russia to withdraw. “We condemn Russia’s recent escalation, including its attacks against civilians and civilian infrastructure,” it said. The G7 countries also blasted “Russia’s irresponsible nuclear rhetoric,” according to the Nov. 4 statement.
“Obviously we can’t be as tough as we do it in G7 when you need the Russians, Chinese and Saudis to agree,” a Western diplomat said, referring to the larger G20 grouping. “The question is how much we need to delete.”
China, Saudi Arabia, India and Brazil, four of the fellow G20 countries, are described as “sitting on the fence” over the issue.
Beijing, in particular, would find it impossible to accept any direct criticism of Russia. Chinese President Xi Jinping, who will be attending the G20 summit personally, has so far only made an effort to show disapproval of any threats of using nuclear weapons, without attributing such threats to Moscow.
Another issue for Widodo is the likely lack of a family photo for the two-day summit that starts on Tuesday. According to convention, all the G20 leaders would line up and take a group picture to show solidarity. This time, however, Western leaders have hesitation about being in the same frame as Lavrov, a key aide to Putin, whom U.S. President Joe Biden has called a “killer.”
Widodo is described as “interested” in assessing fellow leaders’ opinions on having such a family photo.
Much of his lobbying has taken place in Cambodia, where he’s attending the East Asia Summit. Also in Cambodia were Biden, European Council President Charles Michel, Canada’s Justin Trudeau and Australia’s Anthony Albanese. Russia’s Lavrov and Chinese Premier Li Keqiang were also in Phnom Penh.
Indonesian President Joko Widodo has urged Western countries for more “flexibility” | Sonny Tumbelaka/AFP via Getty Images
Speaking in Cambodia, Albanese confirmed to reporters that officials are still negotiating over the wording a G20 final communiqué.
“You know the way that these conferences work. We’ve just got through an East Asia Summit, an ASEAN meeting and a range of other summits. So we’re waiting to see what happens, but I go into the G20 with a great deal of confidence,” Albanese said.
Lavrov criticized Washington for stirring up confrontation in Asia. “There is a clear trend on militarization of the region through coordination of efforts of local U.S. allies such Australia, New Zealand, Japan with NATO enlargement,” he said.
Opinions expressed by Entrepreneur contributors are their own.
In July, world leaders agreed to impose extra import tariffs on Russia during the G7 Summit, but the impact has been felt in other countries, including the U.S., with trade reduced by an estimated 62%, according to an analysis of the economic consequences of war. Russia’s war with Ukraine, and the subsequent trade sanctions placed on Russia, have impacted many businesses that rely on overseas trade. Now, businesses with overseas suppliers need to prepare for the uncertainty of trade tensions, tariffs and even the potential for embargos as the war escalates.
Just look at Shell. When they ceased operation and use of any Russian properties or partnerships for their oil production, they certainly felt the impact. Shell, like many other energy companies, had to fill the void left after they their relationship ended with Russian energy. Ultimately, this led to a rise in oil and gas prices across the world. This isn’t something felt only by big business, though, as everyone deals with the impact of tariffs either directly or indirectly.
If your business is facing tariffs, trade sanctions or the effects of war, here are some strategies to plan against the potential threat it could pose to your business internationally.
Up until June of this year, the U.S.’s whiskey industry experienced lean times while exporting to the U.K. and EU, as Trump-era disputes over steel and aluminum trade resulted in steep tariffs on American whiskey. The whiskey companies had to monitor their profit margins and the number of tariffs their profits could take.
For international businesses experiencing periods of higher tariffs, it requires analyzing what costs can be absorbed and covered, and what sorts of belt-tightening and cost-cutting could help mitigate the impact of tariffs and to offset their cost on your business. While cutting costs can help improve profit margins, the negative effects of the tariff still exist, but at least consumers won’t see a drastic increase in price of your product. It’s all a matter of how much your business can stand to lose in profit margin and remain profitable domestically and abroad or if it can at all.
Pass the cost onto the consumer
On the other hand, a business always has the option to raise its prices to offset the tariffs’ impact on its bottom line. With that, however, comes the risk that customers may no longer want to buy your product.
Harvard Business Review emphasized that risk can be offset, though, if your business has an honest approach to explaining why it’s raising its prices. Communication is key. Leveling with your customers and being honest regarding the realistic implications of a trade war go a long way.
Transferring the risk by insuring against it is another option. Risks from tariffs can, in many cases, be included in Business Interruption Due to Legislative insurance. However, the trade-related risk is ever-evolving and complex, which can make it difficult and costly to insure in the third-party commercial insurance market. This is where captive insurance can be an option.
Captive policies often have fewer policy exclusions than commercial insurance policies. Captive insurance also negates the perceived sunk cost of paying insurance for a risk that doesn’t materialize.
For example, insuring against tariff risk for 10 years without any losses to tariffs occurring over the course of those 10 years would equate to money out the door. Outside of the comfort of knowing you’re insured, the business really has nothing to show for the premiums paid over that decade.
With captive insurance, however, your business can retain profits when claims aren’t paid. Thus, allowing for a build-up of cash reserves and benefiting the balance sheet of your business. This makes captive insurance a very effective tool especially in times like now where many businesses have been left scrambling after the sweeping sanctions against Russia and high inflation.
Decide whether to exit a market or category completely or find a supplier not subject to tariffs
Tariffs cut both ways, even though they exist to operate as barriers to prevent competing foreign products and businesses from damaging domestic industries. Just look to the specific industry of washing machines as tariffs introduced by the U.S. during the Trump presidency resulted in washer prices rising by almost 12%, according to economists at the University of Chicago and Federal Reserve.
This resulted in domestic business owners being left having to pay their own domestic government tariffs for buying the products instead of the country they imported them from. As you can imagine, this has implications for international business owners as well, especially in industries like agriculture where the World Trade Organization cites 100% of products as having a tariff.
For the businesses and consumers that needed those washers, they were left paying the increased price for them instead of China or other countries targeted by U.S. tariffs. According to UCLA Anderson Review, additional studies have also concluded that the trade war hurt U.S. consumers and companies more than it did China.
The example illustrates why having an international supplier that isn’t affected by the sanctions or tariffs faced by your company or products from your country is very important. This option is, however, mostly reserved for businesses that can afford to move major portions of their supply chain to other countries — making this option limited to few businesses. Partnering with a business in a country without the same tariffs or sanctions is also an option, but again, has many logistical complexities few businesses are prepared for.
Although there are immediate implications concerning the sanctions against Russia that can potentially decimate a supply chain, it’s crucial for businesses to keep in mind that the impact will also be felt long-term. Trade wars typically slow economic growth. Thus, it behooves businesses to start now and conduct a risk assessment in relation to both the sanctions and the potential for an economic slowdown. Even if your business isn’t impacted now, it could be in the future.
Russia on Wednesday said it would pull troops out of the southern Ukrainian city of Kherson, which it captured in the early days of the war — a new humiliation for Vladimir Putin.
Russia’s commander in Ukraine, General Sergei Surovikin, said on Russian state TV that it was no longer possible to keep supplying the city, situated on the banks of the Dnipro River.
The retreat is a fresh blow to Moscow, as Kherson was the only regional capital Russian troops captured since the Kremlin’s full-scale invasion began in February. It was one of four Ukrainian regions illegally annexed by the Russian president in late September. At the time, Putin said that the Ukrainians living in those regions “are becoming our citizens forever.”
In a sign of the political disarray in Moscow, foreign ministry spokesperson Maria Zakharova said Wednesday that Russia was willing to hold talks with Kyiv.
“We are still open to negotiations. We have never refused to have them. We are ready to negotiate, of course, taking into account the realities that are emerging at the moment,” she said, according to the TASS news agency.
That’s a huge comedown from demands made by the Kremlin early in the war, which would only countenance Ukraine’s total surrender.
But with Ukraine’s military scoring successes across the country, Kyiv is setting tough conditions for talks.
Russia’s “resources are close to the limit. Hence hysterical requests for a break,” said Mykhailo Podolyak, an adviser to President Volodymyr Zelenskyy’s office.
Zelenskyy said this week that Kyiv was open to negotiations, but that Russia would have to agree to: “Restoration of territorial integrity, respect for the U.N. Charter, compensation for all damages caused by the war, punishment of every war criminal and guarantees that this will not happen again.”
For now, Russia is continuing to fight.
Sergei Shoigu, Russia’s defense minister, ordered the troop withdrawal across the Dnipro on Wednesday.
“Start with the withdrawal of troops and take all measures to ensure the safe transfer of personnel, weapons and equipment across the Dnipro River,” Shoigu ordered Surovikin, according to TASS.
The move is the latest in a series of stunning defeats for the Russian military.
It was forced to retreat from Kyiv and northern Ukraine six months ago after meeting fierce resistance in the initial invasion launched on February 24. Ukrainian forces then swept through Russian defenders around the country’s second city of Kharkiv in September.
Russian troops on the western bank of the Dnipro in Kherson came under growing pressure after the Ukrainian military, equipped with Western rockets and artillery, cut most of the bridges across the wide river, forcing the Russians to supply their forces by ferry boats.
“We will save, most importantly, the lives of our servicemen and the combat effectiveness of the group of troops in general. It is futile to keep it on the right bank in a limited area,” said Surovikin, who headed Russia’s bloody intervention in the Syrian civil war.
Last week, Ukrainian Lieutenant General Mykhailo Zabrodskyi told the Ukrainian parliament that any Russian withdrawal from the bridgehead near the city of Kherson is, “in principle, logical and even rational for them.”
In recent days, Russia has been calling for the evacuation of civilians from Kherson, and social media shows that its flag is coming down from buildings across the city.
On Wednesday, the Russian-installed authorities said that the pro-Moscow deputy head of the Kherson region Kirill Stremousov had been killed in a road accident.
Analysts say that Russia has been building defensive works on the eastern side of the Dnipro, aimed at halting the next stage of a Ukrainian counter-offensive.
However, Ukrainian authorities are cautious that the news of the retreat may be a trap.
“We see no signs that Russia is leaving Kherson without a fight,” Podolyak said.
Speaking on a visit to London, NATO chief Jens Stoltenberg told reporters: “We’ve seen the announcement but will of course will wait and see what actually happens on the ground. It is encouraging to see how the brave Ukrainian forces are able to liberate more Ukrainian territory.”
There is mounting anxiety about what Tuesday’s American midterm elections may mean for Ukraine and U.S. support for the country, amid fears that a Republican surge could weaken American backing for Kyiv.
Ukrainian officials and lawmakers are scrutinizing the opinion polls and parsing the comments of their counterparts.
“We hope that for our sake that we don’t become a victim to the partisan debate that’s unfolding right now in the U.S.,” Ivanna Klympush-Tsintsadze, a former Ukrainian deputy prime minister and now opposition lawmaker, told POLITICO. “That’s the fear, because we are very much seriously dependent on not only American support, but also on the U.S. leadership in terms of keeping up the common effort of other nations.”
House Minority Leader Kevin McCarthy, the potential next speaker if the Republicans prevail, said last month that there would be no “blank check” for Ukraine if the House comes back under Republican control. The Biden administration has tried to assuage concerns about the government’s commitment to supporting Ukraine in its fight against Russian President Vladimir Putin’s invasion, but populist Republican sentiment in Congress is urging less support for Kyiv and more attention on U.S. domestic problems.
“I’m worried about the Trump wing of the GOP,” said Mia Willard, a Ukrainian-American living and working in Kyiv. “I have recently read about Rep. Marjorie Taylor Greene’s promise that ‘not another penny will go to Ukraine’ if Republicans retake control of Congress.”
According to the latest poll data, the Republicans are favored to take over the House and possibly the Senate in Tuesday’s voting.
“I do hope that regardless of the election results,” said Willard, “there will be a continued bipartisan consensus on supporting Ukraine amid Russia’s genocide of the Ukrainian people, which I cannot call anything but a genocide after firsthand witnessing Russia’s war crimes in the now de-occupied territories,” said Willard, who is a researcher at the International Centre for Policy Studies in the Ukrainian capital.
Former Ukrainian Foreign Minister Pavlo Klimkin is confident that U.S. military and financial support for his country will continue after the midterms. “I don’t see a critical number of people among the Republicans calling for cuts in aid,” he told POLITICO. At the same time, Klimkin acknowledged that the procedure for congressional consideration of Ukraine aid may become more complex.
Klimkin said he believes that the U.S. stance toward Ukraine is “critical” for Washington beyond the Ukrainian conflict — “not only with respect to Russia, but also to how the U.S. will be perceived by China.”
Voters line up outside the Cuyahoga County Board of Elections center in Cleveland, Ohio | Dustin Franz/AFP via Getty Images
For Ukraine, Klimkin said the “real risk” is the debate taking place in Washington on both sides of the aisle about the fact that “the United States is giving much more than all of Europe” to Kyiv’s war effort.
According to the Kiel Institute of the World Economy, the U.S. has brought its total commitments in military, financial and humanitarian aid to over €52 billion, while EU countries and institutions have collectively reached just over €29 billion.
“The U.S. is now committing nearly twice as much as all EU countries and institutions combined. This is a meager showing for the bigger European countries, especially since many of their pledges are arriving in Ukraine with long delays,” said Christoph Trebesch, head of the team compiling the Kiel Institute’s Ukraine support tracker.
Europe’s stance
If the Republicans prevail in Tuesday’s vote, the anxiety is also that without U.S. leadership, Ukraine would slip down the policy agenda of Europe, too, depriving Ukraine of the backing the country needs for “victory over the Russian monster,” Klympush-Tsintsadze said.
If the worst happened and U.S. support weakens following the midterms, Klympush-Tsintsadze said she has some hopes that Europe would still stand firm. She has detected in Europe “much more sobriety in the assessment of what Russia is and what it can do, and I hope there would be enough voices there in Europe, too, to ensure there’s no weakening of support,” she said.
Others are less sanguine about how stout and reliable the Europeans would be without Washington goading and galvanizing.Several officials and lawmakers pointed to the Balkan wars of the 1990s and how the Clinton administration stood back, arguing the Europeans should take the lead only to have to intervene diplomatically and militarily later.
“We in Ukraine have been watching closely the developments in the USA and what configuration the Congress will have after the midterm elections,” said Iuliia Osmolovska, chair of the Transatlantic Dialogue Center and a senior fellow at GLOBSEC, a global think-tank headquartered in Bratislava.
A local resident rides a bicycle on a street in Izyum, eastern Ukraine on September 14, 2022 | Juan Barreto/AFP via Getty Images)
“This might impact the existing determination of the U.S. political establishment to continue supporting Ukraine, foremost militarily. Especially given voices from some Republicans that call for freezing the support to Ukraine,” she said.
But Osmolovska remains hopeful, noting that “Ukraine has been enjoying bipartisan support in the war with Russia since the very first days of the invasion in February this year.” She also believes President Joe Biden would have wiggle room to act more independently when it comes to military assistance to Ukraine without seeking approval from Congress thanks to legislation already on the books.
But she doesn’t exclude “the risk of some exhaustion” from allies, arguing that Ukraine needs to redouble diplomacy efforts to prevent that from happening. What needs to be stressed, she said, is that “our Western partners only benefit from enabling Ukraine to defeat Russia as soon as possible” — as a protracted conflict is in no one’s interest.
“There’s a feeling in the air that we’re winning in the war, although it is far from over,” said Glib Dovgych, a software engineer in Kyiv.
“If the flow of money and equipment goes down, it won’t mean our defeat, but it will mean a much longer war with much higher human losses. And since many other allies are looking at the U.S. in their decisions to provide support to us, if the U.S. decreases the scale of their help, other countries like Germany, France and Italy would probably follow suit,” Dovgych said.
Yaroslav Azhnyuk, president and co-founder of Petcube, a technology company that develops smart devices for pets, says “it’s obvious that opinions on how to end Russia’s war on Ukraine are being used for internal political competition within the U.S.”
He worries about the influence on American political opinion also of U.S.-based entrepreneurs and investors, mentioning David Sacks, Elon Musk and Chamath Palihapitiya, among others. “They have publicly shared concerning views, saying that Ukraine should cede Crimea to Russia, or that the U.S. should stop supporting Ukraine to avoid a global nuclear war.”
Azhnyuk added: “I get it, nukes are scary. But what happens in the next 5-10 years after Ukraine cedes any piece of its territory or the conflict is frozen. Such a scenario would signal to the whole world that nuclear terrorism works.”
Mykhailo Podolyak, an adviser to the office of Ukrainian President Volodymyr Zelenskyy, said that regardless of the results of the U.S. midterms, Kyiv is “confident” that bipartisan support for Ukraine will remain in both chambers of the Congress. Both the Republicans and Democrats have voiced their solidarity with Ukraine, and this stance would remain “a reflection of the will of the American people,” he said.
The Ukrainian side counts on America’s leadership in important issues of defense assistance, in particular in expanding the capacity of the Ukrainian air defense system, financial support, strengthening sanctions against Moscow, and recognizing Russia as a state sponsor of terrorism, Podolyak told POLITICO.
And this isn’t just about Ukraine, said Klympush-Tsintsadze, the former deputy premier.
“Too many things in the world depend on this war,” she said. “It’s not only about restoring our territorial integrity. It’s not only about our freedom and our chance for the future, our survival as a nation and our survival as a country — it will have drastic consequences for the geopolitics of the world,” Klympush-Tsintsadze said.
Elon Musk has some new super fans: Russia, China and the Islamic State.
After the world’s richest man bought Twitter for $44 billion last month, officials and journalists linked to Russia and China — and even some jihadists — urged him to lift restrictions on their use of the platform.
So far, their pleas have fallen on deaf ears. But the repeated requests — including from high-profile figures like Maria Zakharova, the spokesperson for Russia’s foreign ministry — are part of efforts by these individuals to use Musk’s takeover as a chance to make a comeback on Twitter.
Right-wing extremist groups in the West have already heralded Musk’s ownership as a signal that they can post hate-filled and potentially illegal content online with little, or no, resistance.
Now, Russian and Chinese state-backed Twitter accounts have taken up the same free speech argument, demanding the platform reinstate them, remove labels that identify these accounts as linked to Beijing or Moscow, and allow them to post more freely, including on hot-button topics like the war in Ukraine.
“They are doing this to jump on the bandwagon now that the right-wing community are putting pressure on Musk,” said Felix Kartte, a senior adviser at Reset, a technology accountability lobbying group. “They are pushing it because everyone else is pushing Musk, too.”
A representative for Twitter did not respond to a request for comment. The company has previously said its policies regarding online hate content have not changed since Musk’s takeover.
The pressure is a crucial early test of Musk’s willingness to police his new platform. Fears are already mounting that under his leadership, Twitter could be reshaped to make it a more toxic place for political debate — and potentially even incite an increase in violent extremism or foreign interference within Western democracies.
The resurgence of interest from the state-backed and jihadist accounts comes as Twitter undergoes a fundamental shift under Musk. The South African-born billionaire laid off half of the company’s employees on Friday, including many in senior public policy and content moderation roles.
After Vladimir Putin’s forces invaded Ukraine, the European Union imposed sanctions banning content from the likes of Russia’s RT and Sputnik, a move that forced Twitter to adopt its own restrictions, which it expanded beyond the borders of the 27-country bloc. Now senior figures at RT — and Kremlin officials — are demanding Musk lift those measures.
Margarita Simonyan, RT’s editor-in-chief, and other prominent RT journalists, messaged Musk in the days before and after the acquisition to urge him to end the so-called shadow bans against their state-affiliated news organization. Those restrictions include RT’s content not appearing when people search on Twitter.
“Elon @elonmusk, since you’re all for free speech, maybe unban RT and Sputnik accounts and take the shadow ban off mine as well?” Simonyan wrote on Twitter.
George Galloway, a former British politician who now hosts a show on RT, called on Musk to remove the “Russia state-affiliated media” label that had been placed on his account.
Chinese accounts also jumped on the bandwagon. While Beijing blocks Twitter for its domestic audience, the country’s officials and state media have repeatedly used the platform to spread propaganda and attack other users who criticize the Chinese Communist Party.
In August 2020, Twitter began labeling these accounts as state-affiliated, and since then, there has been a significant drop in engagement, including likes and shares, of those accounts, according to an analysis by the China Media Project, a research group at the University of Hong Kong.
Ever since Musk bought Twitter, Chinese officials and state-backed journalists have been urging him to live by his free speech beliefs. He must “remove all those McCarthyist discriminatory” policies for Chinese accounts, according to a Twitter post from Chen Weihua, the European bureau chief of the state-run China Daily newspaper.
“Can you please free the warning to Chinese media to give us a better and pleasant experience? Thank you,” added Zhang Heqing, an official in the Chinese embassy in Pakistan in response to Musk when he said Twitter would become a bastion for free speech.
It’s not just authoritarian governments. Islamic State supporters are also pushing to get back on the platform.
Within jihadist online communities, Musk’s takeover of Twitter has been welcomed as an opportunity to return.
Before 2015, Islamic State-related accounts had posted indiscriminately, including videos and images of beheadings and other acts of violence. Over the last seven years, Twitter’s content moderation tools had forced such activity to go underground.
Yet the number of Islamic State-affiliated accounts on Twitter has seen a sharp rise, compared to the previous 11-day period before Musk’s acquisition on October 27. The activity includes jihadist-supporting accounts likening the global clampdown they face to Musk’s own statements that both the left and right of politics are attacking him. In the last week, Islamic State-related Twitter users have also held so-called Twitter Spaces, or online voice conversations, with at least one of the sessions called “The Islamic Caliphate is remaining and expanding.”
Yoel Roth, Twitter’s head of safety and integrity, said the company’s policies toward hateful content and so-called online trolls have not changed since Musk’s takeover. Twitter’s “core moderation capabilities” have not been hampered by the recent layoffs, which saw about 15 percent of Twitter’s global trust and safety team fired, Roth added.
Not everyone is convinced. “Through the changing of the guard, it seems as if Islamic State accounts have gotten more brazen,” according to Moustafa Ayad, executive director for Africa, the Middle East and Asia at the Institute for Strategic Dialogue, a think tank that tracks online extremism. “If you make others feel like the group is back, it ultimately creates a sense of relief, or that it’s alright to post again as the Islamic State.”
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KYIV — There’s a nuclear threat hanging over Ukraine.
The atomic saber rattling by the Kremlin ranges from President Vladimir Putin’s threat to defend illegally annexed Ukrainian territory “by all means available,” to increasingly unhinged comments from former President Dmitry Medvedev and Moscow’s (false) hints that Ukraine is developing a nuclear “dirty bomb” — something Ukrainian President Volodymyr Zelenskyy has warned might be Russia preparing for a so-called false flag attack.
For many Ukrainians, these are far from empty words and the country is getting ready.
The Serhiy Prytula Charity Foundation in downtown Kyiv has one bomb shelter in the carpark below the building to protect staff from conventional Russian attacks and another to be used in case of a nuclear attack.
“The second shelter is equipped accordingly. It has a supply of medicines, food, drinking and distilled water, flashlights and batteries,” said TV star Serhiy Prytula, who heads the eponymous foundation.
“[Predicting the actions of] the Russian military and political leadership is always difficult if you use normal logic. We have been very unfortunate to have this neighbor. This is why anything connected to a nuclear threat should be taken very seriously, as a real threat, and prepare accordingly,” he said.
The language coming out of Moscow is worrying.
Earlier this month, Medvedev, who now serves as deputy chairman of the Russian Security Council, warned that Kyiv’s aim to recapture all of its lost territory “is a threat to the existence of our state and of a dismemberment of today’s Russia,” something he said was a “direct reason” to implement Russia’s nuclear deterrent.
The Russian military is on the back foot in Ukraine and setting off a nuclear weapon could be seen as a desperate measure by the Kremlin to force a halt in the war.
Kyiv’s reaction to Medvedev was swift.
An Ukrainian Emergency Ministry rescuer attends an exercise in the city of Zaporizhzhia on August 17, 2022, in case of a possible nuclear incident at the Zaporizhzhia nuclear power plant | Dimitar Dilkoff/AFP via Getty Images
Oleksiy Danilov, secretary of Ukraine’s National Security and Defense Council, branded his nuclear threats “an act of suicide,” saying: “Russia will finally turn into enemy No. 1 for the whole world.”
Even Russia’s ally China is warning about the danger of using nuclear weapons. Last week, Chinese leader Xi Jinping said: “Nuclear weapons cannot be used, a nuclear war cannot be waged.”
U.S. President Joe Biden told Putin that it would be an “incredibly serious mistake” to use a tactical nuclear weapon in Ukraine.
Brace brace
Those international warnings aren’t stopping Ukrainians from prepping for the worst.
The authorities in the Kyiv region have hundreds of shelters that could be used in case of nuclear attack.
“The past eight months have taught us that anything can happen. As an official, I am preparing for the worst-case scenario, but I hope that everything will be fine,” Oleksii Kuleba, head of the capital region’s military administration, told local media.
Kuleba said the shelters are below ground, have ventilation, two entrances, and by November 15 should be equipped with radio sets — which Ukrainian authorities believe might be the only means of communications after a nuclear attack.
Ukraine’s government bodies have also recently published detailed instructions — informed by the country’s experience with the 1986 Chernobyl nuclear disaster — on what to do in case of a nuclear strike.
Secretary of the National security and defence council of Ukraine Oleksiy Danilov | Sergei Supinsky/AFP via Getty Images
“The use of nuclear weapons against Ukraine is considered unlikely, and the main purpose of these threats is to scare Ukrainians and the world and force us to make concessions, and our partners to weaken their support for Ukraine,” say the instructions, which then add: “At the same time, Ukrainians must have an action plan in case of any emergency situations: the use of nuclear weapons, a ‘dirty bomb’ or in the event of an accident at a nuclear power plant.”
The instructions detail everything from not looking at the blast — “when you notice a flash in the sky (or its reflection), in no case look in that direction” — to covering your ears to prevent damage from a shock wave and removing clothing that has been exposed to radiation. “Run for cover as soon as you can get back on your feet and when the blast wave from the use of nuclear weapons has passed,” they say.
In early October, the capital city’s administration said the city has enough potassium iodide pills — medicine to help prevent the absorption of radioactive iodine by the thyroid gland — to distribute to medical facilities and family doctors “in case of a radiation threat or a radiation emergency.”
“If evacuation is necessary, potassium iodide will be distributed at evacuation points to members of the population who were exposed to the radiation zone, in accordance with the recommendations of medical professionals,” the administration added.
Meanwhile, many Kyiv residents are taking their own preventive measures.
Kristina Riabchyna, a sustainable stylist living in Kyiv and originally from Donetsk, has bought iodine tablets from a local pharmacy.
“I really want to believe that there won’t be a nuclear attack. But unfortunately, we have this insufferable neighbor, so we have no choice but to believe that this absurd thing might actually be possible,” she said.
“Buying potassium iodide was probably a way of coping with the fear,” Riabchyna added. “What I mean is, I have done what I can at this stage, for my safety and for my loved ones, I haven’t ignored the danger and this means I can carry on living my life. But it goes without saying that I understand that this isn’t a countermeasure that will save us if this threat becomes reality.”
Mykhailo, 49, and his mother in a school’s bomb shelter where they have stayed for nearly two months on June 4, 2022 in Velyka Novosilka, Ukraine | Anastasia Vlasova/Getty Images
Foreigners in Kyiv are taking similar measures.
In recent weeks, staff working for an EU-funded project — they asked that the project not be identified — received thorough instructions on what to do in case of a nuclear attack or the use of a dirty bomb — a conventional bomb laced with radioactive material.
“Nuclear explosions can cause significant damage and casualties from blast, heat, and radiation but there are steps you can take to try to mitigate against the impact,” the instructions said, recommending that, “If warned of an imminent attack, immediately get inside the nearest building, ideally under ground, and move away from windows.”
The instructions go on to explain how to wash off radioactive fallout, how an electromagnetic pulse can damage electronic equipment and listen for advice on possible evacuation.
If the attack is a tactical nuclear strike on the frontlines far from Kyiv, then, “The only plan of action for our Kyiv-based staff in such a case is to jump into cars and to be on the border [with Poland] within a couple of hours,” said an EU national with the program, speaking on condition of not being identified.
Ukrainian troops on the front lines have been given potassium iodine tablets and also received training on what to do in the event of a nuclear attack — although spokespeople from the defense ministry and the military would not specify what those instructions were.
For Prytula, the charity boss, the danger of a nuclear attack won’t end soon.
“The threat of a nuclear weapon being used against Ukraine, or indeed any other country in the world, will be real as long as the Russian Federation exists,” he said.
LIVERPOOL, England — On the long picket line outside the gates of Liverpool’s Peel Port, rain-soaked dock workers warm themselves with cups of tea as they listen to 1980s pop.
Dozens of buses, cars and trucks honk in solidarity as they pass.
Dockers’ strikes are not new to Liverpool, nor is depravation. But this latest walk-out at Britain’s fourth-largest port is part of something much bigger, a great wave of public and private sector strikes taking place across the U.K. Railways, postal services, law courts and garbage collections are among the many public services grinding to a halt.
The immediate cause of the discontent, as elsewhere, is the rising cost of living. Inflation in the United Kingdom breached the 10 percent mark this year, with wages failing to keep pace.
But the U.K.’s economic woes long predate the current crisis. For more than a decade, Britain has been beset by weak economic growth, anaemic productivity, and stagnant private and public sector investment. Since 2016, its political leadership has been in a state of Brexit-induced flux.
Half a century after U.S. Secretary of State Henry Kissinger looked at the U.K.’s 1970s economic malaise and declared that “Britain is a tragedy,” the United Kingdom is heading to be the sick man of Europe once again.
The immediate cause of Liverpool dockers’ discontent that brought them to strike is the rising cost of living. | Christopher Furlong/Getty Images
Here in Liverpool, the “scars run very deep,” said Paul Turking, a dock worker in his late 30s. British voters, he added, have “been misled” by politicians’ promises to “level up” the country by investing heavily in regional economies. Conservatives “will promise you the world and then pull the carpet out from under your feet,” he complained.
“There’s no middle class no more,” said John Delij, a Peel Port veteran of 15 years. He sees the cost-of-living crisis and economic stagnation whittling away the middle rung of the economic ladder.
“How many billionaires do we have?” Delij asked, wondering how Britain could be the sixth-largest economy in the world with a record number of billionaires when food bank use is 35 percent above its pre-pandemic level. “The workers put money back into the economy,” he said.
What would they do if they were in charge? “Invest in affordable housing,” said Turking. “Housing and jobs.”
Falling behind
The British economy has been struck by particular turbulence over recent weeks. The cost of government borrowing soared in the wake of former PM Liz Truss’ disastrous mini-budget on September 23, with the U.K.’s central bank forced to step in and steady the bond markets.
But while the swift installation of Rishi Sunak, the former chancellor, as prime minister seems to have restored a modicum of calm, the economic backdrop remains bleak. Spending and welfare cuts are coming. Taxes are certain to rise. And the underlying problems cut deep.
U.K. productivity growth since the financial crisis has trailed that of comparator nations such as the U.S., France and Germany. As such, people’s median incomes also lag behind neighboring countries over the same period. Only Russia is forecast to have worse economic growth among the G20 nations in 2023.
In 1976, the U.K. — facing stagflation, a global energy crisis, a current account deficit and labor unrest — had to be bailed out by the International Monetary Fund. It feels far-fetched, but today some are warning it could happen again.
The U.K. is spluttering its way through an illness brought about in part through a series of self-inflicted wounds that have undermined the basic pillars of any economy: confidence and stability.
The political and economic malaise is such that it has prompted unwanted comparisons with countries whose misfortunes Britain once watched amusedly from afar.
“The existential risk to the U.K. … is not that we’re suddenly going to go off an economic cliff, or that the country’s going to descend into civil war or whatever,” said Jonathan Portes, professor of economics at King’s College London. “It’s that we will become like Italy.”
Portes, of course, does not mean a country blessed with good weather and fine food — but an economy hobbled by persistently low growth, caught in a dysfunctional political loop that lurches between “corrupt and incompetent right-wing populists” and “well-intentioned technocrats who can’t actually seem to turn the ship around.”
“That’s not the future that we want in the U.K,” he said.
Reviving the U.K.’s flatlining economy will not happen overnight. As Italy’s experience demonstrates, it’s one thing to diagnose an illness — another to cure it.
Experts speak of an unbalanced model heavily reliant upon Britain’s services sector and beset with low productivity, a result of years of underinvestment and a flexible labor market which delivers low unemployment but often insecure and low-paid work.
“We’re not investing in skills; businesses aren’t investing,” said Xiaowei Xu, senior research economist at the Institute for Fiscal Studies. “It’s not that surprising that we’re not getting productivity growth.”
But any attempt to address the country’s ailments will require its economic stewards to understand their underlying causes — and those stretch back at least to the first truly global crisis of the 21st century.
Crash and burn
The 2008 financial crisis hammered economies around the world, and the U.K. was no exception. Its economy shrunk by more than 6 percent between the first quarter of 2008 and the second quarter of 2009. Five years passed before it returned to its pre-recession size.
For Britain, the crisis in fact began in September 2007, a year before the collapse of Lehman Brothers, when wobbles in the U.S. subprime mortgage market sparked a run on the British bank Northern Rock.
The U.K. discovered it was particularly vulnerable to such a shock. Over the second half of the 20th century, its manufacturing base had largely eroded as its services sector expanded, with financial and professional services and real estate among the key drivers. As the Bank of England put it: “The interconnectedness of global finance meant that the U.K. financial system had become dangerously exposed to the fall-out from the U.S. sub-prime mortgage market.”
The crisis was a “big shock to the U.K.’s broad economic model,” said John Springford, from the Centre for European Reform. Productivity took an immediate hit as exports of financial services plunged. It never fully recovered.
“Productivity before the crash was basically, ‘Can we create lots and lots of debt and generate lots and lots of income on the back of this? Can we invent collateralized debt obligations and trade them in vast volumes?’” said James Meadway, director of the Progressive Economy Forum and a former adviser to Labour’s left-wing former shadow chancellor, John McDonnell.
A post-crash clampdown on City practises had an obvious impact.
“This is a major part of the British economy, so if it’s suddenly not performing the way it used to — for good reasons — things overall are going to look a bit shaky,” Meadway added.
The shock did not contain itself to the economy. In a pattern that would be repeated, and accentuated, in the coming years, it sent shuddering waves through the country’s political system, too.
The 2010 election was fought on how to best repair Britain’s broken economy. In 2009, the U.K. had the second-highest budget deficit in the G7, trailing only the U.S., according to the U.K. government’s own fiscal watchdog, the Office for Budget Responsibility (OBR).
The Conservative manifesto declared “our economy is overwhelmed by debt,” and promised to close the U.K.’s mounting budget deficit in five years with sharp public sector cuts. The incumbent Labour government responded by pledging to halve the deficit by 2014 with “deeper and tougher” cuts in public spending than the significant reductions overseen by former Conservative Prime Minister Margaret Thatcher in the 1980s.
The election returned a hung parliament, with the Conservatives entering into a coalition with the Liberal Democrats. The age of austerity was ushered in.
Austerity nation
Defenders of then-Chancellor George Osborne’s austerity program insist it saved Britain from the sort of market-led calamity witnessed this fall, and put the U.K. economy in a condition to weather subsequent global crises such as the COVID-19 pandemic and the fallout from the war in Ukraine.
“That hard work made policies like furlough and the energy price cap possible,” said Rupert Harrison, one of Osborne’s closest Treasury advisers.
Pointing to the brutal market response to Truss’ freewheeling economic plans, Harrison praised the “wisdom” of the coalition in prioritizing tackling the U.K.’s debt-GDP ratio. “You never know when you will be vulnerable to a loss of credibility,” he noted.
But Osborne’s detractors argue austerity — which saw deep cuts to community services such as libraries and adult social care; courts and prisons services; road maintenance; the police and so much more — also stripped away much of the U.K.’s social fabric, causing lasting and profound economic damage. A recent study claimed austerity was responsible for hundreds of thousands of excess deaths.
Under Osborne’s plan, three-quarters of the fiscal consolidation was to be delivered by spending cuts. With the exception of the National Health Service, schools and aid spending, all government budgets were slashed; public sector pay was frozen; taxes (mainly VAT) rose.
But while the government came close to delivering its fiscal tightening target for 2014-15, “the persistent underperformance of productivity and real GDP over that period meant the deficit remained higher than initially expected,” the OBR said. By his own measure, Osborne had failed, and was forced to push back his deficit-elimination target further. Austerity would have to continue into the second half of the 2010s.
Many economists contend that the fiscal belt-tightening sucked demand out of the economy and worsened Britain’s productivity crisis by stifling investment. “That certainly did hit U.K. growth and did some permanent damage,” said King’s College London’s Portes.
“If that investment isn’t there, other people start to find it less attractive to open businesses,” former Labour aide Meadway added. “If your railways aren’t actually very good … it does add up to a problem for businesses.”
A 2015 study found U.K. productivity, as measured by GDP per hour worked, was now lower than in the rest of the G7 by a whopping 18 percentage points.
“Frankly, nobody knows the whole answer,” Osborne said of Britain’s productivity conundrum in May 2015. “But what I do know is that I’d much rather have the productivity challenge than the challenge of mass unemployment.”
‘Jobs miracle’
Rising employment was indeed a signature achievement of the coalition years. Unemployment dropped below 6 percent across the U.K. by the end of the parliament in 2015, with just Germany and Austria achieving a lower rate of joblessness among the then-28 EU states. Real-term wages, however, took nearly a decade to recover to pre-crisis levels.
Economists like Meadway contend that the rise in employment came with a price, courtesy of Britain’s famously flexible labor market. He points to a Sports Direct warehouse in the East Midlands, where a 2015 Guardian investigation revealed the predominantly immigrant workforce was paid illegally low wages, while the working conditions were such that the facility was nicknamed “the gulag.”
The warehouse, it emerged, was built on a former coal mine, and for Meadway the symbolism neatly charts the U.K.’s move away from traditional heavy industry toward more precarious service sector employment. “It’s not a secure job anymore,” he said. “Once you have a very flexible labor market, the pressure on employers to pay more and the capacity for workers to bargain for more is very much reduced.”
Throughout the period, the Bank of England — the U.K.’s central bank — kept interest rates low and pursued a policy of quantitative easing. “That tends to distort what happens in the economy,” argued Meadway. QE, he said, is a “good [way of] getting money into the hands of people who already have quite a lot” and “doesn’t do much for people who depend on wage income.”
Meanwhile — whether necessary or not — the U.K.’s austerity policies undoubtedly worsened a decades-long trend of underinvestment in skills and research and development (Britain lags only Italy in the G7 on R&D spending). At British schools, there was a 9 percent real terms fall in per-pupil spending between 2009 and 2019, according to the Institute for Fiscal Studies’ Xu. “As countries get richer, usually you start spending more on education,” Xu noted.
Two senior ministers in the coalition government — David Gauke, who served in the Treasury throughout Osborne’s tenure, and ex-Lib Dem Business Secretary Vince Cable — have both accepted that the government might have focused more on higher taxation and less on cuts to public spending. But both also insisted the U.K had ultimately been correct to prioritize putting its public finances on a sounder footing.
It was February 2018 before Britain finally achieved Osborne’s goal of eliminating the deficit on its day-to-day budget.
Austerity was coming to an end, at last. But Osborne had already left the Treasury, 18 months earlier — swept away along with Cameron in the wake of a seismic national uprising.
***
David Cameron had won the 2015 election outright, despite — or perhaps because of — the stringent spending cuts his coalition government had overseen, more of which had been pledged in his 2015 manifesto. Also promised, of course, was a public vote on Britain’s EU membership.
The reasons for the leave vote that followed were many and complex — but few doubt that years of underinvestment in poorer parts of the U.K. were among them.
Regardless, the 2016 EU referendum triggered a period of political acrimony and turbulence not seen in Westminster for generations. With no pre-agreed model of what Brexit should actually entail, the U.K.’s future relationship with the EU became the subject of heated and protracted debate. After years of wrangling, Britain finally left the bloc at the end of January 2020, severing ties in a more profound way than many had envisaged.
While the twin crises of COVID and Ukraine have muddled the picture, most economists agree Brexit has already had a significant impact on the U.K. economy. The size of Britain’s trade flows relative to GDP has fallen further than other G7 countries, business investment growth trails the likes of Japan, South Korea and Italy, and the OBR has stuck by its March 2020 prediction that Brexit would reduce productivity and U.K. GDP by 4 percent.
Perhaps more significantly, Brexit has ushered in a period of political instability. As prime ministers come and go (the U.K. is now on its fifth since 2016), economic programs get neglected, or overturned. Overseas investors look on with trepidation.
“The evidence that the referendum outcome, and the kind of uncertainty and change in policy that it created, have led to low investment and low growth in the U.K. is fairly compelling,” said professor Stephen Millard, deputy director at the National Institute of Economic and Social Research.
Beyond the instability, the broader impact of the vote to leave remains contentious.
Portes argued — as many Remain supporters also do — that much harm was done by the decision to leave the EU’s single market. “It’s the facts, not the uncertainty that in my view is responsible for most of the damage,” he said.
Brexit supporters dismiss such claims.
“It’s difficult statistically to find much significant effect of Brexit on anything,” said professor Patrick Minford, founder member of Economists for Brexit. “There’s so much else going on, so much volatility.”
Minford, an economist favored by ex-PM Truss, acknowledged that “Brexit is disruptive in the short run, so it’s perfectly possible that you would get some short-run disruption.” But he added: “It was a long-term policy decision.”
Where next?
Plenty of economists can rattle off possible solutions, although actually delivering them has thus far evaded Britain’s political class. “It’s increasing investment, having more of a focus on the long-term, it’s having economic strategies that you set out and actually commit to over time,” says the IFS’ Xu. “As far as possible, it’s creating more certainty over economic policy.”
But in seeking to bring stability after the brief but chaotic Truss era, new U.K. Chancellor Jeremy Hunt has signaled a fresh period of austerity is on the way to plug the latest hole in the nation’s finances. Leveling Up Secretary Michael Gove told Times Radio that while, ideally, you wouldn’t want to reduce long-term capital investments, he was sure some spending on big projects “will be cut.”
This could be bad news for many of the U.K.’s long-awaited infrastructure schemes such as the HS2 high-speed rail line, which has been in the works for almost 15 years and already faces a familiar mix of local resistance, vested interests, and a sclerotic planning system.
“We have a real problem in the sense that the only way to really durably raise productivity growth for this country is for investments to pick up,” said Springford, from the Centre for European Reform. “And the headwinds to that are quite significant.”
For dock workers at Liverpool’s Peel Port, the prospect of a fresh round of austerity amid a cost-of-living crisis is too much to bear. “Workers all over this country need to stand up for themselves and join a union,” insisted Delij.
For him, it’s all about priorities — and the arguments still echo back to the great crash of 15 years ago. “They bailed the bankers out in 2007,” he said, “and can’t bail hungry people out now.”
Russia will resume its cooperation with a diplomatic agreement brokered by Turkey and the United Nations to facilitate the export of Ukrainian foodstuffs, its defense ministry said Wednesday.
The U-turn came after talks on Tuesday between Russian President Vladimir Putin and his Turkish counterpart Recep Tayyip Erdoğan.
Moscow on Saturday suspended its involvement in the agreement that has allowed Ukraine to ship some 10 million tons of foodstuffs onto the world market, helping to allay a global food affordability crisis.
“The Russian Federation believes that the guarantees received at this time are adequate and resumes implementation of the agreement,” Russia’s defense ministry said on Telegram.
The statement makes clear that Russia wanted guarantees Ukraine would not use the corridor to launch attacks on its navy, and it alleges that this is what happened in the drone strike against its fleet at the Black Sea port of Sevastopol in Crimea last weekend.
Ukraine has rejected that and the U.N. has said no ships were traveling through the corridor at the time the attack took place.
Erdoğan also said that Russia would resume cooperation, having held talks with Putin, according to Reuters. Erdoğan added that shipments would now flow Wednesday, despite a previous plan not to transport any food until Thursday.
Amir Mahmoud Abdulla, the U.N. coordinator of the Black Sea grain initiative, said he welcomed Russia’s decision to return to the deal. “Grateful for the Turkish facilitation. Looking forward to working again with all parties in the Initiative,” he tweeted.
Even though Russia had said it could no longer guarantee the security of the corridor, Turkey, the U.N. and Ukraine kept the deal working Monday and Tuesday, merely informing Russia of their operations.
The deal, signed by the four sides in Istanbul in July, will need to be renewed around November 19. Ukraine, the U.N. and Turkey have been pressing for a much longer extension, while Russia has wanted to improve the situation for its own food and fertilizer exports.
Wilhelmine Preussen contributed reporting.
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Claims that former U.K. Prime Minister Liz Truss’ mobile phone was hacked by foreign agents while she was serving as foreign secretary must be “urgently investigated,” the opposition Labour Party said.
Private messages exchanged between Truss’ personal phone and foreign officials — including detailed discussions about arms shipments to Ukraine — are thought to have been intercepted by foreign agents, the Mail on Sunday reported, citing security sources.
The newspaper claimed that the hack was uncovered during this summer’s Conservative leadership campaign, but that details were suppressed by then-Prime Minister Boris Johnson and Cabinet Secretary Simon Case, the U.K.’s most senior civil servant. Russia was suspected to be behind the hack, the report said.
Labour’s shadow home secretary, Yvette Cooper, said the allegations were “extremely serious.”
“There are immensely important national security issues raised by an attack like this by a hostile state,” Cooper said in a statement.
“There are also serious security questions around why and how this information has been leaked or released right now which must also be urgently investigated,” she said. “It is essential that all of these security issues are investigated and addressed at the very highest level.”
Speaking to Sky News’ Sophy Ridge on Sunday program, U.K. Housing Secretary Michael Gove did not deny the hack took place but insisted “very robust protocols” were in place to ensure the security of governmental communications.
“I don’t know the full details of what security breach, if any, took place,” Gove said. “I’m sure that the right protocols were followed. I’m sure that more information, as appropriate, will be released.”
Citing allies of Truss, the Mail on Sunday reported that the former foreign secretary had been worried that revelations about the hack would compromise her bid to become prime minister, with one claiming she “had trouble sleeping” until it was confirmed that news of the alleged security breach would not be disclosed by the government.
The Russian government said it suspended indefinitely a months-old deal allowing grain shipments to leave Ukraine’s ports, citing an attack on a base in occupied Crimea as the reason.
According to a statement issued Saturday by Russia’s foreign ministry, Moscow “suspends participation” for an “indefinite period” in a deal brokered by the U.N. to make sure agricultural products made in Ukraine can reach global markets.
The deal is considered critical to global food security given Ukraine’s role as a major producer of grain, which is then normally shipped via the Black Sea to markets worldwide, especially in Africa and the Middle East.
“The Russian side cannot guarantee the safety of civilian dry cargo ships,” the foreign ministry said, citing an alleged drone attack by Ukraine on the port at Sevastopol in Crimea in the early hours of Saturday morning.
Ukrainian Foreign Minister Dmytro Kuleba said in a tweet that Moscow was using a “false pretext to block the grain corridor.”
The Russian ministry statement repeated claims made earlier in the day that British experts had supported Ukraine in the attack on Crimea, with Moscow also accusing U.K. forces of being behind explosions that critically damaged the Nord Stream gas pipeline without providing supporting evidence. London denied the claims.
Ukrainian President Volodymyr Zelenskyy’s chief of staff, Andriy Yermak, accused Russia of “blackmail” and “fictitious terror attacks.”
The export deal, dubbed the Black Sea Grain Initiative, was supposed to run until November 19 when all sides would have needed to agree to extend it. The agreement enabled Ukraine to restart exports of grain and fertilizer via the Black Sea, which had been stalled when Russia invaded the country in late February.
Since the U.N.-backed grain deal was signed in Turkey on July 22, several million tons of wheat, corn, sunflower products and other grains have been shipped out of Ukraine.
The U.N. said it was “in touch with the Russian authorities” regarding the suspension of the agreement.
“It is vital that all parties refrain from any action that would imperil the Black Sea Grain Initiative which is a critical humanitarian effort,” Stéphane Dujarric, spokesman for U.N. Secretary-General António Guterres, said in a statement.
Nahal Toosi contributed reporting from Washington.
The British Navy stands accused by the Russian government, without evidence, of blowing up the Nord Stream natural gas pipeline under the Baltic Sea, a claim the U.K. rejected as “false.”
“According to available information, representatives … of the British Navy took part in the planning, provision and implementation of a terrorist attack in the Baltic Sea on September 26 this year — blowing up the Nord Stream 1 and Nord Stream 2 gas pipelines,” the Russian Defense Ministry said on Saturday, according to media reports.
The accusation did not include any further information or evidence to support claims of state sabotage. The Russian government also said that U.K. operatives helped plan a drone attack on its fleet at the Black Sea port of Sevastopol in Crimea on Saturday.
The U.K. Defense Ministry quickly denied Moscow’s claim.
“To detract from their disastrous handling of the illegal invasion of Ukraine, the Russian Ministry of Defense is resorting to peddling false claims of an epic scale,” the British ministry said in a tweet. “This invented story says more about arguments going on inside the Russian government than it does about the West.”
Russia had already blamed the West in general terms for undersea explosions that damaged the Nord Stream pipes last month. Those blasts have likely rendered the energy infrastructure unusable, according to the German government.
An investigation by Danish and Swedish authorities is ongoing into the explosions, which took place inside the two countries’ exclusive economic zones close to the Baltic Sea island of Bornholm.
Russia had already stopped gas transit through the pipeline sparking concerns earlier this year that it would use gas supply to blackmail Europe as its brutal war on Ukraine continues.
While the first phase of Nord Stream had been operating for nearly 11 years, the second phase of the project — dubbed Nord Stream 2 — had not yet been brought into commercial operation.
NATO Secretary-General Jens Stoltenberg has a message for U.S. Republicans making election promises to slash Ukraine’s support: That will only empower China.
Stoltenberg pushed his point in an expansive interview with POLITICO this week, in which the military alliance’s chief made the case for a long-term American presence in Europe and a widespread boost in defense spending.
“The presence of the United States — but also Canada — in Europe, is essential for the strength and the credibility of that transatlantic bond,” Stoltenberg said.
Yet anxiety is coursing through policy circles that a more reticent U.S. may be on the horizon. The upcoming U.S. midterm elections could tip control of Congress toward the Republicans, empowering an ascendant, MAGA-friendly Republican cohort that has been pressing to cut back U.S. President Joe Biden’s world-leading military aid to Ukraine.
Stoltenberg warned that Kyiv’s recent battlefield gains would not have been possible without NATO allies’ support. And he appealed to the more strident anti-China sentiment that runs through both major U.S. political parties.
A victorious Russia, he said, would “be bad for all of us in Europe and North America, in the whole of NATO, because that will send a message to authoritarian leaders — not only Putin but also China — that by the use of brutal military force they can achieve their goals.”
Stoltenberg, however, expressed optimism that the U.S. would not soon vanish from Europe — or from Ukraine. Indeed, a contingent of more establishment Republicans has supported Biden’s repeated requests to send money and arms to Ukraine.
“I’m confident,” the NATO chief said, “that also after midterms, there will still be a clear majority in the Congress — in the House and in the Senate — for continued significant support to Ukraine.”
Difficult decisions ahead
The charged debate is the product of a troubling reality: Russia’s war in Ukraine appears likely to drag on for months as budgets tighten and economies wane.
In Washington, that discussion is intensifying ahead of elections slated for November 8. And a chorus of conservatives is increasingly reluctant to spend vast sums on aid to Ukraine. Since the war began, the U.S. has pledged to give Ukraine more than $17 billion in security assistance, well above what Europe has collectively committed.
Stoltenberg said that he is confident Washington will continue aiding Ukraine “partly because if [Russian President Vladimir] Putin wins in Ukraine, that will be a catastrophe for the Ukrainians.”
A Ukraine soldier fires a US-made MK-19 automatic grenade launcher towards Russian positions at a front line near Toretsk in the Donetsk region of Ukraine | Dave Clark / AFP via Getty Images
But he also stressed the China connection at a moment when Beijing is top of mind for many American policymakers — including some of the same conservatives raising questions about the volume of assistance to Ukraine.
The Biden administration recently described China as “America’s most consequential geopolitical challenge” in its national security strategy.
And the document explicitly ranks China above Russia in the longer term: “Russia poses an immediate and ongoing threat to the regional security order in Europe and it is a source of disruption and instability globally but it lacks the across the spectrum capabilities of” China.
Still, the collision of Russia’s long war in Ukraine, domestic U.S. political pressures and the growing focus on Beijing are reinvigorating a long-standing burden-sharing debate within NATO.
In 2014, NATO allies agreed to “aim to move towards” spending 2 percent of their economic output on defense by 2024. With that deadline looming — and the recognition that military threats only seem to be rising — leaders are grappling with what comes next. Will they raise the target number? Will they word the spending goals differently?
“I expect that NATO allies will at the summit in Vilnius next year make a clear commitment to invest more in defense,” Stoltenberg said while noting that “it’s a bit too early to say” what precise language NATO allies will agree to.
NATO allies themselves have taken varying approaches to China, with some still adopting a much softer line than Washington.
Stoltenberg acknowledged these divergences. But he argued the alliance had made progress on confronting Beijing, emphasizing NATO’s decision earlier this summer to explicitly label China a challenge in its long-term strategy document.
It is “important for NATO allies to stand together and to address the consequences of the rise of China — and that we agree on, and that’s exactly what we are doing,” he said.
Yet while allies have agreed to “address” China’s rise, they haven’t figured out who should foot the bill for those efforts. Some U.S. lawmakers, academics and experts are advocating for Europe to take the lead in managing local security challenges so the U.S. can focus more on the Indo-Pacific.
Daniel Hamilton, a U.S. State Department official during the 1990s NATO enlargement wave, dubs it “greater European strategic responsibility.” This approach, added Hamilton, now a senior fellow at Johns Hopkins University, would involve European allies providing, within 10 years, “half of the forces and capabilities” needed “for deterrence and collective defense against Russia.”
European allies, some experts argue, are simply too comfortable in their reliance on Washington.
“European members of NATO have over-promised and under-delivered for decades,” said Harvard University professor Stephen Walt, a leading international affairs scholar. Europeans, he said, “will not make a sustained effort to rebuild their own defense capabilities if they can count on the United States to rush to their aid at the first sign of trouble.”
Over the next decade, Walt added, “Europe should take primary responsibility for its own defense, while the United States focuses on Asia and shifts from being Europe’s ‘first responder’ to being its ‘ally of last resort.’”
Stoltenberg pushed back against such a strict division of labor.
Decoupling North America from Europe “is not a good model, because that will reduce the strength, the credibility of the bond between North America and Europe.”
He did, however, lean on NATO’s European allies — which will include most of the Continent west of Russia once Finland and Sweden’s memberships are approved — to keep upping their defense spending.
“I strongly believe that European allies should do more,” he said, adding that he has been “pushing hard” on the topic. “The good news,” he noted, “is that all allies and also European allies have increased and are now investing more.”
Still, simple math shows that Europe is not close to being self-sustaining on defense.
“The reality is that 80 percent of NATO’s defense expenditures come from non-EU allies,” Stoltenberg said. The alliance’s ocean-spanning, multi-continent layout also “makes it clear that you need a transatlantic bond and you need non-EU allies to protect Europe.”
“But most of all,” Stoltenberg stressed, “this is about politics — I don’t believe in Europe alone, I don’t believe in North America alone.”
