European Markets, Euro Tumble As Russia Fans Energy Crisis

Euro notes and coins with an electricity bill are seen on an Electric hobs.  (Photo by Jonathan Raa/NurPhoto)
Euro notes and coins with an electricity bill are seen on an Electric hobs. (Photo by Jonathan Raa/NurPhoto)

 

European markets tumbled Monday and the euro hit a fresh 20-year low on growing fears about an energy crisis after Russia said it would not restart gas flows to the continent, while traders are also preparing for another interest rate hike this week.

The selling came after a mixed day in Asia, where the positive vibes from a US jobs report were offset by growing fears about the European outlook as well as Chinese Covid lockdowns and geopolitical tensions.

Paris, Frankfurt and London all sank sharply at the open after Russia’s Gazprom said it would not restart gas supplies to Europe, citing problems with a pipeline.

The announcement came the same day as the G7 nations said they would work to quickly implement a price cap on Russian oil exports, a move that would starve the Kremlin of critical revenue for its war effort.

The news ramped up an energy crisis in the continent caused by sanctions on Moscow for its invasion of Ukraine in February.

It has sent shockwaves through the eurozone economy and fanned expectations it will sink into recession, while sending the euro tanking to a 20-year low against the dollar. The single currency hit a nadir of $0.9878 at one point.

“Russia’s ongoing weaponisation of energy supplies continues to increase downside risks for European economies and the euro,” said Lee Hardman, currency analyst at financial services group MUFG.

The issue has given the European Central Bank a huge headache. It is forced to lift interest rates as it struggles to contain runaway inflation.

Policymakers are due to announce a second straight lift at its meeting this week, with some observers betting on a 0.75 percentage point rise.

“The outlook is poor for Europe. It started to get choppy at the tail end of last week, and it is almost certainly going to get worse,” Gordon Shannon, of TwentyFour Asset Management, said.

“The ECB had only just started to catch up with the Fed in terms of hiking rates, but if we are going into a prolonged recession, I think this slows down their attempts.”

The move offset a broadly positive payrolls report showing US employment growth moderating and unemployment ticking higher, easing pressure on the Federal Reserve to sharply lift interest rates.

In response to the figures, traders lowered their expectations for a third successive three-quarter point hike this month, with many now predicting 50 basis points.

“The increase in the participation rate and a softening in average hourly earnings may be a tentative sign that intense labour market tightness is starting to ease slightly,” said National Australia Bank’s Tapas Strickland.

He added that it “eases some of the fears stemming from other indicators such as job openings. Markets interpreted the print as lessening the chances of a 75 basis point hike”.

Still, the dollar continued to strengthen across the board, holding above 140 yen — a 24-year high — while the pound was on in on its way to hitting levels not seen since 1985.

However, all three main indexes in New York reversed their gains after the Gazprom announcement.

And in Asia on Monday, Hong Kong was the biggest loser, with tech firms hit by reports that the United States was considering imposing fresh limits on investments in Chinese firms.

Tokyo, Seoul, Taipei, Manila, Bangkok and Wellington also fell but there were gains in Shanghai, Sydney, Mumbai Singapore and Jakarta.

The Gazprom move helped lift oil prices Monday, with buying also supported by talk that OPEC and other major producers are considering cutting output at their meeting later Monday.

Investors were also dealing with more bad news out of China, where tens of millions of people across several cities have been thrown into lockdown as part of officials’ zero-Covid strategy.

The measures follow an extended shutdown in Shanghai earlier in the year that battered the world’s number two economy.

Observers said Chinese authorities were unlikely to budge ahead of a key Communist Party meeting in October, where Xi Jinping is expected to be handed a third five-year term as president.

“Following this, it is unclear whether China will start to pivot away from its zero-Covid policy,” said NAB’s Strickland.

“For as long as the policy exists, any stimulus measures are unlikely to gain traction, amid a challenging time for the Chinese property market and the economy in general.”

Key figures at around 0810 GMT

Frankfurt – DAX: DOWN 2.9 percent at 12,674.36

Paris – CAC 40: DOWN 2.0 percent at 6,046.66

EURO STOXX 50: DOWN 2.3 percent at 3,463.47

London – FTSE 100: DOWN 0.8 percent at 7,221.53

Tokyo – Nikkei 225: DOWN 0.1 percent at 27,619.61 (close)

Hong Kong – Hang Seng Index: DOWN 1.2 percent at 19,225.70 (close)

Shanghai – Composite: UP 0.4 percent at 3,199.91 (close)

Dollar/yen: UP at 140.57 yen from 140.16 yen on Friday

Euro/dollar: DOWN at $0.9911 from $0.9957

Pound/dollar: DOWN at $1.1479 from $1.1515

Euro/pound: DOWN at 86.34 pence from 86.45 pence

West Texas Intermediate: UP 2.4 percent at $88.91 per barrel

Brent North Sea crude: UP 2.5 percent at $95.35 per barrel

New York – Dow: DOWN 1.1 percent at 31,318.44 (close)

EU Ready If Russia Turns Off Gas Supplies – Commissioner

 In this file photo taken on August 30, 2022 facilities to receive and distribute natural gas are pictured on the grounds of gas transport and pipeline network operator Gascade in Lubmin, northeastern Germany, close to the border with Poland - the industrial infrastructure includes a receiving and distribution station for the Nord Stream 1 pipeline and is also the place. (Photo by Odd ANDERSEN / AFP)
In this file photo taken on August 30, 2022 facilities to receive and distribute natural gas are pictured on the grounds of gas transport and pipeline network operator Gascade in Lubmin, northeastern Germany, close to the border with Poland – the industrial infrastructure includes a receiving and distribution station for the Nord Stream 1 pipeline and is also the place. (Photo by Odd ANDERSEN / AFP)

 

EU Economy Commissioner Paolo Gentiloni said Saturday that the European Union was “well prepared” in the event of a total halt in Russian gas deliveries, thanks to storage capacity and energy-saving measures.

“We are well prepared to resist Russia’s extreme use of the gas weapon,” he told reporters on the sidelines of an economic forum organised by The European House – Ambrosetti.

“We are not afraid of Putin’s decisions, we are asking the Russians to respect contracts, but if they don’t, we are ready to react,” he said.

Russian gas giant Gazprom said Friday that the Nord Stream pipeline linking Russia to northern Germany, which was due to resume service Saturday after a three-day interruption for maintenance operations, would be “completely” stopped until a turbine is repaired.

Moscow was reacting to a decision announced Friday by the G7 countries to target Russia’s energy windfall by agreeing to cap the price of its oil.

European Commission chief Ursula von der Leyen said Friday that “it would be time” to put a ceiling on the price of gas imported via the pipeline from Russia, backing a measure advocated by Italian Prime Minister Mario Draghi.

In the European Union, “gas storage is currently at about 80 percent, thanks to the diversification of supplies,” even if the situation varies from one country to another, Gentiloni said.

He said Brussels had “done a lot in recent months” but “today it is possible to do more”.

The aim is to “pursue the strategy of a united Europe that works against the invasion of Ukraine using economic weapons,” he explained.

“We are not participating in the war, we are not participating in the military escalation,” he said.

“We are supporting Ukraine. We have to do it now more effectively.”

Atiku Meets EU Diplomats In Abuja, Shares Vision For Nigeria

Atiku Abubakar met with EU diplomats on September 1, 2022.
Atiku Abubakar met with EU diplomats on September 1, 2022.

 

Presidential candidate of the Peoples Democratic Party, Atiku Abubakar, on Thursday met with various European Union ambassadors to Nigeria at the EU secretariat in Abuja.

In a statement, Atiku said he had a “robust discussion” with the diplomats, with “focus on the next phase for Nigeria politically and the success of the 2023 election, amongst others.”

“Not only is unity in Nigeria critical, but partnership with the EU is necessary for Nigeria to reach its full potential,” Atiku added.

READ ALSO: Ayu Should Fulfil Resignation Promise Made In 2021 –PDP Chieftain

“In addition, I shared my vision of a greater Nigeria and gave them an insight into my socio-economic and political agenda for our country.

“On its part, the EU assured of technical support to Nigeria, primarily to the The Independent National Electoral Commission (INEC) and the observation and monitoring of the elections.”

2022 Sees Record Europe Wildfire Destruction – EU

Austrian firefighters help to extinguish a fire in a forest of South Gironde, near Belin-Beliet on August 13, 2022 as they assist on the wildfire in southwestern France.  AFP

 

Europe’s blistering summer may not be over yet but 2022 is already breaking records, with nearly 660,000 hectares ravaged since January, according to the EU’s satellite monitoring service.

And while countries in the Mediterranean have normally been the main seats of fires in Europe, this year, this year, other countries are also suffering heavily.

Fires this year have forced people to flee their homes, destroyed buildings and burned forests in EU countries including Austria, Croatia, France, Greece, Italy, Portugal and Spain.

Some 659,541 hectares (1.6 million acres) have been destroyed so far, data from the European Forest Fire Information System (EFFIS) showed, setting a record at this point in the year since data collection began in 2006.

Europe has suffered a series of heatwaves, forest fires and historic drought that experts say are being driven by human-induced climate change.

They warn more frequent and longer heatwaves are on the way.

For nearly two weeks last month, thousands of firefighters struggled to put out Slovenia’s largest wildfire in its modern history.

But the worst-affected country has been Spain, where fire has destroyed 244,924 hectares, according to EFFIS data, followed by Romania (150,528 hectares) and Portugal (77,292 hectares).

The EFFIS uses satellite data from the EU’s Copernicus Atmosphere Monitoring Service (CAMS).

The data comes after CAMS said Friday that 2022 was a record year for wildfire activity in southwestern Europe and warned that a large proportion of western Europe was now in “extreme fire danger”.

“On 2022, it is already a record year, just below 2017,” EFFIS coordinator Jesus San-Miguel said. In 2017, 420,913 hectares burned by August 13, rising to 988,087 hectares by the end of the year.

“The situation in terms of drought and extremely high temperatures has affected all Europe this year and the overall situation in the region is worrying, while we are still in the middle of the fire season,” he said.

Since 2010 there had been a trend towards more fires in central and northern Europe, with fires in countries that “normally do not experience fires in their territory”, he added.

“The overall fire season in the EU is really driven mainly by countries in the Mediterranean region, except in years like this one, in which fires also happen in central and northern regions,” he added.

EU Presidency Mulls Visa Ban For All Russians

A Czech and a European Union flags flies at the Czech embassy in Moscow on April 19, 2021. Dimitar DILKOFF / AFP
A Czech and a European Union flags flies at the Czech embassy in Moscow on April 19, 2021. Dimitar DILKOFF / AFP

 

The Czech Republic, which holds the rotating EU presidency, said Friday that a blanket ban on visas for all Russian travellers could be the bloc’s next sanction on Moscow.

“The flat halting of Russian visas by all EU member states could be another very effective sanction,” Czech Foreign Minister Jan Lipavsky said in a statement obtained by AFP.

He said he would propose the idea at an informal meeting of EU foreign ministers in Prague at the end of August.

“In a time of Russian aggression, which the Kremlin keeps on escalating, there cannot be talks about common tourism for Russian citizens,” said Lipavsky.

READ ALSO: 13 Killed In Russian Strikes Near Nuclear Plant

The EU has so far come up with six sanction packages against Russia.

Ukrainian President Volodymyr Zelensky called on the West to ban all Russian travellers in an interview with the Washington Post this week, saying Russians should “live in their own world until they change their philosophy”.

The Czech Republic stopped issuing visas for ordinary Russians on February 25, a day after Russia invaded Ukraine.

But Russian tourists are still flowing into Europe through Finland.

Once they enter the visa-free Schengen zone, the Russians — including spies — are free to travel across most of Europe.

Finland’s Foreign Minister Pekka Haavisto last week introduced a plan to limit tourist visas for Russians.

Kaja Kallas, the prime minister of Estonia which also borders Russia, called on the EU to stop issuing visas to Russians earlier this week.

“Visiting Europe is a privilege, not a human right,” she said in a tweet on Tuesday.

Lipavsky said the move would send “a very clear and straightforward signal to the Russian society”.

It will show that “the Western world does not tolerate the Russian regime’s aggression and hateful rhetoric aimed at free, democratic countries that pose no threat to Russia,” he added.

AFP

EU To Cut Russian Gas Use As Missiles Strike Ukraine

A logo for the European Union

 

The European Union agreed to reduce gas consumption to break its dependence on Russia Tuesday, as missile strikes on Ukraine’s Black Sea coast cast doubt on a grain export deal.

The effort to help Germany wean itself off Russian gas for the winter came as Turkey announced a meeting in Russia next week between Turkish President Recep Tayyip Erdogan and his Russian counterpart Vladimir Putin.

Erdogan wants Turkey — on good terms with both Moscow and Kyiv — at the centre of diplomatic efforts to halt the five-month war, just as the EU took another big step to cut ties to Moscow.

The EU gas use cut, approved by energy ministers in Brussels, was hailed as an effective response to Russia’s manipulation of its energy wealth as an economic weapon.

The plan nominally commits EU countries to reduce their gas use by 15 percent during the winter, although exceptions were carved out for some countries and Hungary rejected the deal as “useless”.

“We have made a huge step towards securing gas supplies for our citizens and economies for the upcoming winter,” said Czech industry minister Jozef Sikela, whose country holds the rotating EU presidency.

“I know the decision was not easy, but I think at the end, everybody understands that this sacrifice is necessary,” he added.

Hungary was the only country to oppose the plan, which passed on a majority vote, further isolating Budapest as the only member state reluctant to go further against Russia.

“This is an unjustifiable, useless, unenforceable and harmful proposal that completely ignores national interests,” said Hungarian Foreign Minister Peter Szijjarto.

The deal “serves purely communication purposes, and aims to save the credibility of some Western European politicians”, he added.

– German ‘mistake’ –

Germany, the EU’s economic powerhouse, is hugely dependent on Russian gas. Berlin takes a major share of the 40 percent of EU gas imports that came from Russia last year.

“It is true that Germany, with its dependence on Russian gas, has made a strategic mistake but our government is working… to correct this,” German Economy Minister Robert Habeck said.

The plan asks member states to voluntarily reduce gas use by 15 percent — based on a five-year average for the months in question — starting next month and over the subsequent winter through March.

The target will be adapted to the situation of each country, taking into account their level of stocks and whether or not they have pipelines to share gas.

Exceptions were given for island states like Ireland, Cyprus and Malta and to Spain or Portugal, which have limited links to the interconnected gas supply grid.

Baltic countries will be exempted if their electricity connections with Russia’s grid were to be cut.

In the final proposal, EU member countries also rewrote an earlier European Commission plan to give Brussels — rather than the member states — the power to impose gas use cuts in an emergency.

The regulation now foresees the possibility to trigger a “Union alert” that would make the target mandatory, but the decision would lie with member states, a statement said.

The EU deal landed a day after Gazprom said it is cutting daily gas deliveries intended for Europe to about 20 percent of capacity from Wednesday.

Gazprom claimed technical reasons for choking off supply, but EU Energy Commissioner Kadri Simson dismissed this claim.

“This is a politically motivated step and we have to be ready for that and exactly for that reason the pre-emptive reduction of our gas demand is a wise strategy,” she said.

The extent of Russia’s split with the West over Ukraine was also underlined by Moscow’s announcement that it would quit the International Space Station after 2024.

Until now space exploration was one of the few areas where cooperation between Russia, the United States and its allies had not been wrecked by tensions over Ukraine and elsewhere.

The decision to leave the ISS programme “has been made”, Roscosmos chief Yury Borisov told Putin.

– ‘Difficult’ winter –

Meanwhile, fighting continued in Ukraine. Kyiv said Russian forces launched multiple missile strikes at targets on the Black Sea coast near the southern port city of Odessa and in Mykolaiv.

The attacks come days after Russian strikes hit Odessa called into question a breakthrough deal to resume exports of grain from Ukraine, that have been disrupted by Moscow’s invasion.

Rescuers were working on the ground near Odessa where “residential buildings” near the coast were hit in the strikes, Ukraine’s southern military command said on Facebook.

In the east, Kramatorsk’s mayor Oleksandr Goncharenko said he was worried about how tens of thousands of mostly elderly residents would cope in the coming months without any gas to keep them warm.

“This winter will be very difficult,” he said.

He said that Ukrainian forces would have to push the Russians back at least 20 kilometres (12 miles) to be able to make repairs to broken gas pipes.

He called for more long-range weapons from Western allies to help repel the enemy.

AFP

EU Adopts Embargo On Russian Gold, Hits Sberbank

A logo for the European Union

 

EU countries on Wednesday targeted Russian gold exports and froze assets at Russia’s largest bank in an update to the sanctions imposed to punish Moscow for its invasion of Ukraine.

“The main goal is to align with G7 partners, reinforce the implementation and close the loopholes where necessary,” the Czech government, which holds the EU’s rotating presidency, tweeted.

The EU has so far approved six packages of sanctions on Russia. The last one passed in June imposed a ban on most Russian oil imports.

As she proposed the measures to member states last week, EU commission president Ursula von der Leyen said the measures would help enforce earlier sanctions more effectively and extend them until January 2023.

“Moscow must continue to pay a high price for its aggression,” she added.

The embargo on gold imports fulfils a decision agreed by the world’s most industrialised nations at a G7 meeting in late June in which EU-members Germany, France and Italy took part.

The sanctions will also freeze the assets of Russian bank Sberbank and add several personalities and entities to its blacklist.

The measures also unblock assets at Russian banks linked to trade in food and fertiliser in an effort to respond to Moscow allegations that the sanctions are causing a food crisis.

This was a “commitment that sanctions won’t endanger the food and energy security around the world,” the Czech government said.

Crucial shipments across the Black Sea have been blocked both by Russian warships and mines Kyiv has laid to avert a feared amphibious assault.

The food shortages have raised the risk of famine for tens of millions of people in poorer nations, particularly in Africa, where leaders have complained to the EU about the banking sanctions.

AFP

12 Killed In Russian Strikes In Central Ukraine Ahead Of EU Talks


ARIS MESSINIS / AFP

 

Russian missiles struck the city of Vinnytsia in central Ukraine on Thursday, killing at least 12 people in what President Volodymyr Zelensky called “an open act of terrorism“.

Ukraine’s emergency services said there were “12 dead, including one baby, and 25 wounded” and dozens of rescue workers were fighting to put out a large blaze sparked by the strikes.

The news came as EU foreign and justice ministers prepared to meet in The Hague for a conference on alleged Russian war crimes.

Zelensky said he would be addressing the meeting via video call and Ukrainian Foreign Minister Dmytro Kuleba is set to attend.

“Every day, Russia kills civilians, kills Ukrainian children, carries out missile attacks on the civilian facilities where there is no military target. What is this, if not an open act of terrorism?” the Ukraine leader said in a statement on social media.

 War crimes tribunal?

Zelensky has vowed to hold Moscow to account and has called for a special war crimes tribunal to be set up in the Netherlands.

The International Criminal Court in The Hague opened an investigation into possible war crimes in Ukraine just days after Moscow’s forces invaded and it dispatched dozens of investigators to the country to gather evidence.

Its prosecutor Karim Khan also later visited Bucha, a town outside Kyiv where AFP journalists discovered 20 bodies in civilian clothing lying in a street, and where officials later said hundreds of other people had been killed.

Russia invaded Ukraine on February 24 and the conflict has raged since then, killing thousands of people, destroying cities and forcing millions to flee their homes.

In recent weeks, Russian strikes in central Ukraine away from frontlines in the east and the south have become relatively rare.

But the war has raged around cities like Mykolaiv in southern Ukraine near the Black Sea which the presidency said was hit by a “massive missile strike” earlier on Thursday.

“Two schools, transport infrastructure and a hotel were damaged,” the presidency said in its morning military update.

The skeletal insides of one building gutted by the strikes were visible in images distributed by local officials, with municipal workers clearing bricks and rubble-strewn after the attack.

Fighting in Ukraine has focused on the industrial Donbas region in the east, but Kyiv’s troops have been pressing a grinding counter-offensive in the south to retake Kherson.

The presidency added — without elaborating — that residents along the southern front in the Kherson region were reporting an “increase in equipment and the number of Russian troops.”

 ‘Total victory’

In east Ukraine, Moscow-backed troops said they were closing in on their next target.

“Siversk is under our operational control, which means that the enemy can be hit by our aimed fire all over the area,” a pro-Moscow rebel official, Daniil Bezsonov, was cited as saying by Russian state-run news agency TASS.

At a Ukrainian trench position along the eastern frontline, a 25-year-old soldier who goes by the nom de guerre Moryak was working to fortify defences.

“We hide when they shell, we dig when it’s calm,” he told AFP journalists.

A fellow combatant in their trench dismissed the idea Ukraine and Russian forces could reach an agreement to halt the fighting, explaining their goal was: “Total victory”.

High-stakes grain talks

Several rounds of negotiations to end the fighting at the beginning of the conflict fell through, but delegations from Kyiv and Moscow met in Istanbul this week to discuss unblocking Ukraine’s grain exports.

The high-stakes meeting involving UN and Turkish officials in Istanbul broke up after slightly more than three hours with an agreement to meet again in Turkey next week.

“The success of this story is needed not only for our state but also — without exaggeration — for the entire world,” Zelensky said in his evening address Wednesday after the talks.

The conflict in Ukraine has pushed up grain prices and Europe is suffering from sky-rocketing energy bills stemming from sanctions on Russia and Moscow’s move to limit gas flows to Europe.

US Treasury Secretary Janet Yellen said Thursday that Russia’s war in Ukraine posed the “greatest challenge” to the global economy, as G20 ministers prepare to start talks in Indonesia.

-AFP

EU Gives Croatia Green Light To Join Euro In 2023

 

EU finance ministers on Tuesday gave Croatia the final green light to adopt the euro single currency on January 1, 2023.

“I would like to congratulate my counterpart, Zdravko Maric, and the whole of Croatia for becoming the 20th country to join the euro area,” said Zbynek Stanjura, the finance minister of the Czech Republic, which holds the EU’s rotating presidency.

Croatia’s switch from the kuna to the euro in 2023 will come less than a decade after the former Yugoslav republic joined the European Union and will set a new milestone in the bloc’s further integration.

“This is a time for celebration… and an act of conviction,” said Christine Lagarde, the head of the European Central Bank at a signing ceremony in Brussels.

“The whole of Croatia decided and was convinced of the value of joining the euro and the euro area,” she added.

In adopting the legal texts necessary for the historic move, the ministers officially set the euro at 7.53450 Croatian kuna.

The newest member joins the group at a difficult moment with the euro hovering close to parity with the US dollar, a symptom of a looming cost-of-living crisis in the eurozone economy.

“We’re all facing very strong challenges these days, but obviously with coordinated policies and measures I think we can cope with these challenges,” said Maric as he arrived to meet his counterparts in Brussels.

To join the euro, Croatia met the strict conditions, including keeping inflation in the same range as its EU peers, as well as embracing sound public spending.

Croatia expressed willingness to adopt the single currency upon joining the EU in 2013, and the decision to allow Zagreb’s entry comes as the euro has just celebrated its 20th anniversary.

On January 1, 2002, millions of Europeans in 12 countries gave up the lira, franc, deutsche mark and drachma for euro bills and coins.

They have since been joined by seven other countries: Slovenia in 2007, Cyprus and Malta in 2008, Slovakia in 2009, Estonia in 2011, Latvia in 2014 and finally Lithuania in 2015.

– ‘Tangible benefits’ –

Bulgaria is the next county in line to join the euro, and has stated its willingness to adopt it as of January 1, 2024.

However, eurozone members are worried about the long-term stability of the Bulgarian economy and Sofia has yet to garner the same political support as Croatia.

EU governments are wary of repeating the mistakes of the euro’s early days when countries such as Greece were rushed into the single currency with shaky finances, setting the stage for the eurozone debt crisis.

Like euro-adopting citizens before them, many Croatians fear the introduction of the euro will lead to a hike in prices — in particular that businesses will round up prices when they convert from the kuna.

EU commission executive vice president Valdis Dombrovskis insisted that joining the euro “will bring tangible economic benefits” for Croatia.

Using the euro “will make it easier and more attractive to invest in your country. It will lower barriers for businesses and remove currency exchange costs,” he added.

EU Braces For Migrants Spurred By Food Crisis

Migrants aboard a Guradia di Finanza and Navy military vessel are tranferred from the so-called migrant “Hotspot” operational processing facility on the southern Italian Island of Lampedusa, south of Sicily, to another center, on July 11, 2022. (Photo by Alessandro SERRANO / AFP)

 

The EU must brace for new waves of migrants forced to uproot because of the food crisis aggravated by the war in Ukraine, the bloc’s border agency chief warned Monday.

While Ukrainian refugees were being handled well, “we have to prepare also for refugees coming from other areas because of the food security,” the interim executive director of the Frontex agency, Aija Kalnaja said.

She noted in particular that “grain transport from Ukraine is hampered, and that will create waves of migration”.

Kalnaja was speaking as she arrived in Prague for a meeting of EU interior ministers that had been expanded to also include the ministers from non-EU countries Ukraine and Moldova.

Ukraine is one of the biggest grain exporters in the world. But that production and dispatch have been severely hobbled by Russia’s invasion.

Around 20 million tonnes of grain from last year’s harvest are blocked in Ukrainian ports on the Black Sea.

The situation has sent prices for certain foods and cooking oils soaring on world markets, with parts of Africa and the Middle East bearing the brunt.

Moscow has said it would allow Ukrainian freighters to leave the ports if Ukraine demined the coastal areas — something Kyiv refuses to do because of how vulnerable it would leave it to seaborne Russian assaults.

The head of UNHCR, Filippo Grandi, warned in June that unless the growing food crisis caused by Russia was quickly resolved, the number of displaced people globally would swell well beyond the record 100 million already counted.

Russia’s war, which started February 24, has already provoked the biggest refugee outflow since World War II, prompting the EU to offer fleeing Ukrainians temporary protection.

According to the UN, the 27-nation European Union is hosting 5.6 million Ukrainian refugees.

Poland has the biggest number, 1.2 million, while the Czech Republic has 400,000, the largest proportion on a per capita basis.

Frontex says that the outflow of Ukrainians has diminished in recent weeks, and the EU’s home affairs commissioner Ylva Johansson said the flows between Ukraine and the bloc have now returned to pre-war levels.

She added that many of the Ukrainians in the EU were expected to make decisions on whether or not to return to their country in the next couple of months, before school resumes after the summer break.

AFP

Ukraine Reels From Deadly Russian Strikes, EU Braces For Gas Cuts

Rescuers clear the scene after a building was partially destroyed as a result of Russian missile hit on a four-storey residential building in Chasiv Yar, Bakhmut District, eastern Ukraine, on July 10, 2022. (Photo by MIGUEL MEDINA / AFP)

 

Ukraine said Monday Russian forces were preparing to scale up an offensive on key cities in the eastern Donbas region as three people died in rocket strikes on Kharkiv, the country’s second-largest city.

The attacks in Kharkiv in northeastern Ukraine came as Europe braced for deeper cuts in gas supplies from Russia.

Kharkiv regional chief Oleg Synyegubov said Russian fire targeted “civilian facilities — a shopping centre and civilian residences.”

“Thirty-one people were hospitalized including two children who are four and 16 years old. The victims are suffering primarily from shrapnel-related injuries. Three people died,” he said in a statement.

In eastern Ukraine — the focal point for a grinding Russian offensive — 20 people died over the weekend in strikes on the town of Chasiv Yar in the Donetsk region, Ukrainian officials said.

The emergency services said they had managed to establish verbal contact with two people trapped under the remains of a residential building.

“Everyone who gives orders for such strikes, everyone who carries them out targeting our ordinary cities, residential areas, kills absolutely deliberately,” President Volodymyr Zelensky said late Sunday, vowing the perpetrators would be brought to justice.

Russian defence ministry spokesman Igor Konashenkov claimed Monday meanwhile that “more than 300” Ukrainian combatants had been killed in a Russian strike near Chasiv Yar without giving a date.

– ‘No safe place’ –

Having fought long battles to capture areas of the eastern Lugansk region, Russian troops are now turning their focus to Donetsk as they look to take control of the whole Donbas.

The region was under persistent shelling with authorities reporting nearly 50 attacks on infrastructure, but Russian ground attacks were all but paused, the Ukrainian army said Monday.

It warned, however, that Russian troops were likely planning to launch some of their heaviest attacks yet in the Donetsk region.

“There are signs of enemy units preparing to intensify combat operations in the direction of Kramatorsk and Bakhmut,” it said, referring to two main cities still under Ukrainian control.

Moscow’s slow but steady grind into the east — despite fierce Ukrainian resistance emboldened by recent deliveries of Western-supplied artillery — contrasts with their failure to capture the capital Kyiv at the start of the invasion.

In Bucha, a town outside Kyiv, 36-year-old web designer Maxim was sitting around a table with his family outside his home, where just three months ago, Russian soldiers were rummaging through his home and sleeping in his children’s bedroom.

“In this atmosphere, I feel like nothing can happen and that life is normal,” he said.

“But we know there’s a war and there’s no place safe in Ukraine right now.”

Western weapons — in particular, precision, long-range artillery — are “already changing the course of the war,” said Secretary of the National Security and Defense Council, Oleksiy Danilov.

He credited the weapons with bringing “demoralization, demilitarization, and de-occupation” of Russian-held territory.

Observers of the conflict have reported long-range strikes on Russian ammunition and weapons depots dozens of kilometres behind the front line.

– Gas worries –

Still, the repercussions of the conflict were being felt Monday in western Europe as Russian gas giant Gazprom began more than a week of routine maintenance on its Nord Stream 1 pipeline.

Germany and other European countries cast a worried eye on energy supplies after Italy’s Eni and Austria’s OMV said Gazprom was further reducing the supply of gas.

Eni said flows were dropping to 21 million cubic meters (741 million cubic feet) per day, down from a recent average of about 32 million, while OMV said it would see a 70-percent reduction.

Following Russia’s invasion of Ukraine in February, Germany suspended certification of a second pipeline, Nord Stream 2, as fears grew over Europe’s massive dependence on Russian gas.

The Russian and Belarusian leaders meanwhile discussed Monday possible joint measures against neighbouring Lithuania over its “illegal” transit restrictions affecting Moscow’s exclave of Kaliningrad, the Kremlin said.

The Baltic country last month began to restrict transit of EU-sanctioned goods into Kaliningrad, a Russian region sandwiched between NATO members Lithuania and Poland, infuriating Moscow.

AFP

Euro Hits 20-Year Low Against Dollar On Recession Risk

A picture taken on June 29, 2021 in Paris shows a passport next to a mobile phone whose screen bears a EU Digital Covid certificate. (Photo by Olivier MORIN / AFP)

 

 

The European single currency sank Tuesday to its lowest level against the dollar since 2002 as data pointed to a growing recession risk in the eurozone.

The euro also dived as investors eyed aggressive interest rate hikes by the US Federal Reserve in its fight against inflation, in contrast with the European Central Bank which plans more modest increases.

Just before 0900 GMT, the shared eurozone unit tumbled to $1.0306, threatening a push towards dollar parity for the first time since the euro’s creation in 1999.

Economic growth in the eurozone floundered in June, a key survey showed Tuesday, hit by soaring inflation.

S&P Global’s closely-watched monthly purchasing managers’ index (PMI), which measures corporate confidence, fell to 52.0 in June from 54.8 in May.

The reading, which was a 16-month low, however remains above the 50-point level signalling expansion.

“Growing fears of a recession are hammering the euro lower, whilst the dollar is soaring on bets that the Fed will keep hiking rates aggressively to tame inflation,” City Index analyst Fiona Cincotta told AFP.

“Today’s PMI data from Europe have highlighted the risk of slowing growth at the end of the second quarter and raise the prospect of a contraction in activity in the coming months.”