Glembert
KN. A group of foreign bondholders have taken steps to force Ukraine to begin repaying its debts as soon as next year, the Wall Street Journal reported. If they succeed, Kiev could hemorrhage $500 million every year on interest payments alone.
The group, which includes investment giants Blackrock and Pimco, granted Kiev a two-year debt holiday in 2022, gambling that the conflict with Russia would have concluded by now.
With no end to the fighting in sight, the lenders have now hired lawyers at Weil Gotshal & Manges and bankers from PJT Partners to meet with Ukrainian officials and strike a deal whereby Ukraine would resume making interest payments next year in exchange for having a significant chunk of its debt written off, anonymous sources told the Wall Street Journal.
The group holds around a fifth of Ukraine’s $20 billion in outstanding Eurobonds, the newspaper reported. While this figure represents a fraction of Ukraine’s total external debt of $161.5 billion, servicing the interest on these bonds would cost the country $500 million annually, the bondholders said.
Should the bondholders fail to strike a deal with Kiev by August, Ukraine could default. This would damage the country’s credit rating and restrict its ability to borrow even more money in the future.
According to the newspaper, Ukrainian officials are hoping that the US and other Western governments will take its side during talks with the bondholders. However, a group of these countries have already offered Ukraine a debt holiday on around $4 billion worth of loans until 2027, and are reportedly concerned that any deal with the bondholders would see private lenders being repaid before them.
Ukraine already relies on foreign aid to keep government departments open and state employees paid. The country’s military is almost entirely dependent on foreign funding; officials in Kiev and the West were predicting imminent defeat until the US Congress approved a foreign aid bill last month which included $61 billion for Ukraine and US government agencies involved in the conflict.
The bill provides almost $14 billion to Ukraine for the purchase of weapons, and includes $9 billion in new “forgivable loans.”
According to the Wall Street Journal, some bondholders have suggested that the US and EU could use frozen Russian assets to pay off Ukraine’s debts. While around $300 billion in assets belonging to the Russian central bank have been frozen in American and European banks since 2022, the US only passed legislation allowing for their seizure last month, and no similar legal mechanism exists in Europe, where the vast majority of these assets are held.
The International Monetary Fund (IMF) and European Central Bank (ECB) have both urged governments not to steal this money, with ECB chief Christine Lagarde warning last month that doing so would risk “breaking the international order that you want to protect.”
Kiev could request that Western troops be deployed on its soil if it deems the situation on the battlefield to have become bad enough, a senior Ukrainian lawmaker has said.
In an interview with French broadcaster LCI, Aleksey Goncharenko, who represents Odessa in the Ukrainian parliament, thanked French President Emmanuel Macron for not ruling out sending Western military to his country.
The French leader earlier suggested that this issue could be put up for consideration on two conditions, first, “if the Russians were to break through the front lines [and, second,] if there were a Ukrainian request.”
Describing Macron’s remarks as a “very good signal” to Russia, Goncharenko noted that foreign troops in Ukraine could be tasked with training Kiev’s military and performing other missions without engaging Moscow’s forces head-on.
When asked whether Ukraine would ask the West for direct assistance if Russian troops were to approach Kharkov or Kiev, the MP said he did not rule out any scenarios. “Yes, I think it is possible… If the frontline situation shows us that Ukraine cannot stop [Russian President Vladimir] Putin alone without European military support and troops, this is absolutely possible,” he said, voicing the hope that such a drastic measure wouldn’t be necessary.
He also stressed that it would be in the EU’s interest to heed the appeal for assistance that he described, as it would be easier to stop Moscow with Ukraine than without it.
Emmanuel Macron said that he supported “strategic ambiguity” towards Russia, which, he said, is aimed at deterring Moscow. According to the French president, his stance on potential Western military action in Ukraine was in line with this approach.
However, UK Foreign Secretary David Cameron has voiced skepticism about the idea, warning that NATO troops in Ukraine “could be a dangerous escalation.” This sentiment was echoed by Italian Defense Minister Guido Crosetto and by Hungarian Foreign Minister Peter Szijjarto, while Slovakia’s Prime Minister Robert Fico recalled that NATO has no justification to send troops to Ukraine, because Kiev is not a member of the bloc.
Kremlin spokesman Dmitry Peskov called Macron’s statement “very important and very dangerous,” describing it as further testament to Paris’ direct involvement in the conflict. Russian Foreign Ministry spokeswoman Maria Zakharova has also warned that “nothing will remain” of NATO forces if they are deployed in Ukraine.
In recent weeks, the Russian military has reported a steady advance, capturing numerous settlements in Donbass, with Defense Minister Sergey Shoigu recently declaring that Moscow is in full control of the situation on the battlefield.
Moscow will retaliate against British targets in Ukraine or elsewhere if Kiev uses UK-provided missiles to strike Russian territory, the Foreign Ministry told London’s ambassador on Monday.
Ambassador Nigel Casey was summoned to the ministry following remarks by British Foreign Secretary David Cameron to Reuters that Ukraine has the right to use long-range missiles sent by the UK to strike deep inside Russia.
”Casey was warned that the response to Ukrainian strikes using British weapons on Russian territory could be any British military facilities and equipment on the territory of Ukraine and beyond,” the Russian Foreign Ministry said in a statement following the meeting.
The US and its allies had previously qualified their deliveries of long-range weapons to Kiev by saying they could only be used on territories that Ukraine claims as its own – Crimea, the People’s Republics of Donetsk and Lugansk, and Kherson and Zaporozhye Regions.
According to the Russian Foreign Ministry, Cameron’s statements to the contrary “de facto recognized his country as a party to the conflict.”
Russia understands Cameron’s comments as “evidence of a serious escalation and confirmation of London’s increasing involvement in military operations on the side of Kiev,” the ministry added.
Casey was urged to “think about the inevitable catastrophic consequences of such hostile steps from London and to immediately refute in the most decisive and unequivocal manner the bellicose provocative statements of the head of the Foreign Office.”
Russian Defense Ministry announced an exercise to test the deployment of tactical nuclear weapons. President Vladimir Putin ordered the drills after “provocative statements and threats” by Western officials, the military said.
Moscow hopes the drills will “cool down the ‘hot heads’ in Western capitals and help them understand the possible catastrophic consequences of the strategic risks they generate,” as well as “keep them from both assisting the Kiev regime in its terrorist actions and being drawn into a direct armed confrontation with Russia,” the Foreign Ministry said in a follow-up statement.
French Ambassador Pierre Levy was also summoned to the Foreign Ministry. Moscow has not yet disclosed the details of the meeting.
Hungary has no intention of extraditing Ukrainian citizens, as Kiev intensifies efforts to mobilize more troops for the army, Deputy Prime Minister Zsolt Semjen has said.
In recent weeks, the Ukrainian government has attempted to pressure its citizens who left the country, particularly those living in the EU, to return home, including by asking the bloc’s authorities to support this effort. Many EU members, however, have been reluctant to cooperate.
Semjen told Hungarian broadcaster ATV that Budapest “would not extradite refugees to Ukraine.” “We do not investigate whether, according to the Ukrainians, the person is conscripted or not. Based on basic humanity, we will not allow them to be sent to their deaths.”
In an effort to force Ukrainians of fighting age to return home, Ukrainian consulates abroad last month announced the “temporary suspension” of services to men between the ages of 18 and 60, who can no longer receive any necessary documents until they return home. A Washington Post report last week suggested that many Ukrainians living in the West are angered by the new policy, saying they feel they are being treated like traitors and potential prey for conscription officials.
Kiev has also tried to enlist EU officials to help solve its manpower problem. But even staunch supporters of Ukraine such as Poland and Germany have refused to hand over refugees, vowing to protect their rights.
According to Eurostat, 4.3 million Ukrainians were living in the EU as of January 2024, of which around 860,000 are men of fighting age.
In recent months, Ukraine has also stepped up efforts to compensate for losses on the battlefield by increasing its mobilization drive within the country. Last month, President Vladimir Zelensky signed two bills into law, one lowering the draft age for men from 27 to 25, and another significantly simplifying the draft process.
French President Emmanuel Macron and European Commission President Ursula von der Leyen have urged Chinese leader Xi Jinping to limit his country’s cooperation with Russia in light of the Ukraine conflict.
Coordination with Beijing on “major crises,” including Ukraine and the Middle East, is “absolutely decisive,” Macron said at the beginning of trilateral talks at the Elysee Palace in Paris.
The goal of the meeting is to express “both our shared positions and our concerns, to try to overcome them, because the future of our continent will very clearly also depend on our ability to develop balanced relations with China,” he said.
In his opening remarks, Xi said that in the current “period of turbulence and change” globally “two important forces in the world, China and Europe should… continuously make new contributions to world peace and development.” Beijing approaches its ties with the EU from “a strategic and long-term perspective,” hoping that they will help both sides “thrive,” the Chinese leader, who will also visit Hungary and Serbia as part of his European tour, added.
Von der Leyen said that Brussels and Paris are counting on Beijing to “use all its influence on Russia” to stop the conflict with Ukraine. The EU chief also said that she and Macron urged Xi to make “more efforts to limit the delivery to Russia of dual-use equipment.”
The US and its European allies claim that Chinese-made circuitry, aircraft parts, and machine tools have been helping Moscow boost its military industrial capacity.
US Secretary of State Antony Blinken, who visited Beijing in late April, warned that Washington was ready to introduce more sanctions against China if it does not stop sales of dual-use goods to Russia.
However, a few days later the Chinese Foreign Ministry insisted that China’s right to economic cooperation with Russia or any other country “should not be interfered with or disrupted.”
Kremlin Press Secretary Dmitry Peskov said that Beijing is a “close partner” of Moscow and that it is going to keep boosting relations with China further.
In an article for the French paper Le Figaro, Xi stressed that China was “neither a party to nor a participant” in the conflict between Russia and Ukraine, but that it was willing to work with the international community to find a diplomatic solution to the crisis.
The German Foreign Ministry is temporarily recalling Ambassador Alexander Lambsdorff from Moscow, its spokesperson announced.
The senior diplomat will hold consultations before returning to Russia, according to the statement. The move comes after Berlin accused the Kremlin of being behind a hacking attack targeting senior members of the Social Democratic Party (SPD) of Chancellor Olaf Scholz.
The German government claims that a group named ‘АРТ28’ is a front for the Russian Foreign Intelligence Service, and used a vulnerability in Microsoft Outlook software to spy on the party’s leadership. It described the hack as part of a prolonged campaign targeting various entities in Germany, and claimed that it had identified the culprit in conjunction with NATO and EU partners.
”Cyberattacks on political parties, state institutions and critical infrastructure are a threat to our democracy, our national security and our free society,” the German embassy in Moscow said in a statement.
The Russian embassy in Berlin confirmed receiving a demarche from the German Foreign Ministry over the alleged cyberespionage. It said the accusations were “lacking evidence” and an “unfriendly act aimed at inciting anti-Russian sentiment” in the country.
In March, already tense Russian-German relations suffered a blow when a leaked recording of discussions between senior German military officers was published by Russian media. The tape highlighted Berlin’s involvement in the Ukraine conflict and included a debate on how the possible role of German troops in a proposed attack on Crimea using Taurus cruise missiles could be concealed from the public.
Scholz had publicly refused to provide the weapons, stating that unlike the UK and France, Germany was not prepared to send military personnel to prepare such strikes. German generals on the leaked recording were exploring ways to nudge the chancellor towards allowing such arms supplies.
Accusations that Russian agents are plotting acts of sabotage across Europe are “not serious,” Kremlin spokesperson Dmitry Peskov told reporters on Monday.
Peskov was commenting on a report in the Financial Times on Sunday, which claimed Moscow is planning “violent acts of sabotage” across the continent, either directly or via proxies. The attacks would include covert bombings, arson, and damage to EU infrastructure, the outlet said, citing European intelligence agencies.
Peskov dismissed the article as “another unfounded accusation” against Russia, adding that similar, equally groundless claims are becoming more and more frequent.
In April, the head of German domestic intelligence, Thomas Haldenwang, claimed the risk of acts of sabotage had “significantly increased.”
“Russia now seems comfortable carrying out operations on European soil [with] a high potential for damage,” he told a security conference hosted by his agency.
Haldenwang’s accusations came after two men were arrested in Germany on suspicion of planning to sabotage local military infrastructure and of “working for Russia.” At least one of the suspects allegedly had contact with the Russian intelligence service, according to the German Prosecutor General’s Office.
Moscow has dismissed claims about Russian involvement in sabotage plots as “absurd and ridiculous.” It described the incident in Germany a “blatant provocation” aimed at stirring up Russophobia and spy hysteria.
The upcoming Swiss-hosted peace conference on Moscow’s conflict with Kiev is a “parody of negotiations” in which Ukrainian President Vladimir Zelensky will be promoted, Russian Foreign Minister Sergey Lavrov has stated.
In an interview with Bosnian broadcaster ATV released, he claimed that Bern is “lying” about its willingness to invite Russia to the upcoming summit scheduled for June 15 at the Burgenstock Resort near Lucerne.
“When our Swiss colleagues declare their desire to invite Russia to the first conference, they are lying,” Lavrov said, adding that Moscow will not participate in any events that promote Zelensky’s “peace formula.”
He added that Russia is “seriously” open to negotiations; however, they must be based on the current “realities.”
Zelensky’s roadmap to resolve the crisis, which he has been promoting since 2022, calls for a complete withdrawal of Russian forces from all territories Ukraine considers its own, for Moscow to pay reparations, and for a war crimes tribunal. Russia has rejected the proposals as “unrealistic” and a sign of Kiev’s unwillingness to seek a diplomatic solution to the conflict.
The West will “play a parody of negotiations” at the Swiss-proposed summit, Lavrov said, adding that Russia “has no one to talk to” about the settlement of the Ukraine conflict because no one is ready for a “serious” dialogue among US and EU leadership.
He added that the ‘peace plan’ on which the summit will be centered contains “an openly illusory and Russophobic essence.”
Moscow has not ruled out engagement with Kiev, but has signaled that it has no intention of attending the Swiss event even if offered an invitation.
The delegations invited to the summit include members of the G7, G20, BRICS, the EU, international organizations, and two religious representatives, according to Switzerland.
Although Bern is “convinced” that a peace process without Russia is “unthinkable,” Moscow has not been invited “at this stage,” the Swiss Foreign Ministry announced last week.
In April, Russian President Vladimir Putin mocked the planned conference, saying Moscow is ready for a diplomatic solution but that holding negotiations without it is “nonsense.” Russia has said it is willing to resolve the Ukraine conflict peacefully but will not accept a deal that ignores its national interests.
The US may have to deploy troops to Ukraine if Kiev suffers a complete collapse against Russia, House Minority Leader Hakeem Jeffries has warned.
In an interview with CBS News released, the senior Democratic lawmaker suggested that if Kiev cannot win the war with Russia using billions if dollars worth of US military aid, Washington could potentially have to intervene directly in the conflict.
“We can’t let Ukraine fall because if it does, then there’s a significant likelihood that America will have to get into the conflict – not simply with our money, but with our servicewomen and our servicemen,” Jeffries said.
This stance, however, contradicts the long-standing policy of US President Joe Biden, who reiterated last month that he was “determined” not to send American troops to Ukraine.
He noted that Kiev had so far not requested direct military intervention from Washington, expressing the belief that it could win the conflict with Russia if the US “stand[s] with Ukraine and provide[s] the weapons it needs to defend itself.”
Meanwhile, Jeffries claimed that US efforts to support Ukraine, including pushing a new $61 billion assistance package through Congress, had been stymied by what he called a “pro-Putin faction” within the Republican Party.
He singled out Republican Congresswoman Marjorie Taylor Greene, who has called for funds to be used for domestic needs, rather than sent to Ukraine. Greene has insisted she “does not have any sympathy for… Russia” and that she is “only loyal to a single country: the United States of America.”
Jeffries’ comments about possible US intervention come after French President Emmanuel Macron refused to rule out sending Western troops to Ukraine. Last week, he suggested that Western nations “would legitimately have to ask [them]selves” whether they should deploy their militaries to the embattled country “if the Russians were to break through the front lines, [and] if there were a Ukrainian request.” Macron has further insisted that rhetoric of “strategic ambiguity” could project strength and deter Russia.
In response, Russian Foreign Minister Sergey Lavrov suggested the French leader was “breathing caveman Russophobia” in the hope of using this sentiment to become the de-facto leader of the EU.
Kremlin spokesman Dmitry Peskov warned in late February that the deployment of NATO troops to Ukraine would make a direct conflict between Russia and the US-led military bloc “inevitable.”
In the meantime, the Russian military has reported steady progress on the battlefield, capturing several settlements in Donbass in recent weeks.
