Ukraine Latest: US Unveils Package of Powerful Offensive Weapons
(Bloomberg) -- Russia said its troops stopped fighting in Ukraine at noon Moscow time under President Vladimir Putin’s order of a 36-hour cease-fire for the Orthodox Christmas holiday. Kyiv dismissed the offer as a ploy. Air-raid sirens rang out across the country shortly after the deadline, Ukraine said, as Russian jets took off from air bases in Belarus. The alerts were later canceled without incident.
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Russia’s embassy in Berlin condemned Thursday’s move by the US and Germany to send armored combat vehicles, including the Marder, and a Patriot missile defense system to Ukraine. Ukrainian President Volodymyr Zelenskiy spoke Friday with German Chancellor Olaf Scholz.
The Biden administration unveiled its latest package of weapons for Ukraine, including powerful, offensive equipment previously withheld. Meantime, Russia plans to wrest more money from some commodity producers and state companies and trim non-defense spending, according to a government order seen by Bloomberg News.
(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)
Key Developments
Russia Says It Starts Brief Ukraine Cease-Fire That Kyiv Scorned
Russia Looks to Press Big Firms for More Cash as War Costs Mount
Germany to Send Combat Vehicles to Ukraine by End of March
US, Germany to Send Ukraine Armored Vehicles in Major Upgrade
McCarthy’s Emerging Speaker Deal Tees Up $75 Billion Defense Cut
On the Ground
Ahead of their planned cease-fire, Kremlin forces continued limited counterattacks to regain lost positions along the Svatove-Kreminna line. Russian forces claimed that Ukrainian troops continued counteroffensive operations in the area. Ukraine’s military reportedly conducted a successful counterattack as Russian forces continued offensive operations around Bakhmut and west of Donetsk City.
(All times CET)
US Adds Offensive Weapons for Ukraine in $2.85 Billion Package (8:44 p.m.)
The Biden administration announced a $2.85 billion package of military hardware to Ukraine, supplying the sort of powerful weapons that it had previously withheld.
The package includes 50 Bradley Fighting Vehicles, as previously indicated, but also — for the first time — the Paladin self-propelled howitzer artillery system. The weaponry additionally includes surface-to-air missiles, armored personnel carriers and ammunition. It marks a major step forward in what the US has been willing to give Ukraine.
Read More: US Adds Offensive Weapons for Ukraine in $2.85 Billion Package
Ukraine’s Currency Reserves Gain (8:32 p.m.)
Ukraine’s foreign-exchange reserves ticked up to $28.5 billion as of Jan. 1, according to preliminary data posted on the Ukrainian National Bank’s website. Reserves increased by 1.9% compared with November, thanks to inflows from “international partners,” the central bank said. The influx exceeded sales by the NBU through interventions to maintain the fixed exchange rate, the statement said.
US House Speaker Deal May Include Defense Spending Cut (6:06 p.m.)
The emerging deal Kevin McCarthy is discussing to make him speaker of the US House would propose a roughly $75 billion cut in defense spending at a time the US is intent on backing Ukraine against the Russian invasion and grows more wary of China’s stepped up aggression toward Taiwan.
Read more: McCarthy’s Emerging Speaker Deal Tees Up $75 Billion Defense Cut
Zelenskiy Tells US Senators Russian Cease-Fire is Manipulation (5:22 p.m.)
Ukraine’s president told US senators Jack Reed and Angus King that he sees Russia’s ceasefire as manipulation used as a cover for its true military plans, according to a statement.
Zelenskiy briefed the lawmakers about Ukraine’s weapons needs, especially on strengthening missile defense. Reed, a Democrat from Rhode Island, chairs the Senate Armed Services Committee. King of Maine, an independent who caucuses with Democrats, is also on the panel.
Russia Condemns New German Arms Commitment (4:45 p.m.)
The Russian embassy in Berlin condemned Germany’s decision to supply Ukraine with combat vehicles and a Patriot air-defense system, saying the move “will seriously affect German-Russian relations” and calling it “a further step towards escalation of the conflict.”
“It is particularly cynical that this decision was taken shortly before the Orthodox Christmas holiday, which is highly revered in the Christian world, and against the backdrop of the cease-fire unilaterally declared by the Russian president,” the embassy said in a statement on its website.
Germany aims to deliver around 40 combat vehicles and a Patriot air-defense system to Ukraine by the end of March as part of an effort to help the government in Kyiv in the event fighting intensifies in the spring.
Read more: Germany Aims to Send Combat Vehicles to Ukraine by End of March
France Says Putin’s Cease-Fire Doesn’t Fool Anyone (2:30 p.m.)
A French foreign ministry spokesperson said Russia’s 36-hour unilateral cease-fire is an attempt by Moscow to hide its responsibility for relentless bombardments of Ukraine’s civilians and critical infrastructure.
Russia has shown during the conflict, now it its 11th month, that it doesn’t want peace, the official said, repeating a call for a full withdrawal of Moscow’s troops from Ukraine.
Kyiv to Start Talks on EU Accession Under Swedish Presidency (1:45 p.m.)
Ukraine expects to start negotiations on the country’s accession to the European Union — a process likely to take years - under Sweden’s presidency of the European Council, which started this month, Zelenskiy said during an online meeting with Swedish Prime Minister Ulf Kristersson.
“This is a powerful motivator for our army and a common desire of our society. We believe that it will be a strong incentive for unity within the EU,” Zelenskiy said in a statement posted on the presidential website.
Zelenskiy Speaks With Japanese PM (12:41 p.m.)
Volodymyr Zelenskiy thanked Japan for “powerful generators and transformers” as Ukraine attempts to keep the lights and heat on after more than two months of regular, widespread Russian missile attacks on energy infrastructure.
Russia Says It Starts Ukraine Christmas Cease-Fire as Planned (12:24 p.m.)
Russia said its troops stopped fighting in Ukraine at noon Moscow under President Vladimir Putin’s order of a 36-hour cease-fire for the Orthodox Christmas holiday. Kyiv dismissed the offer as a ploy.
Air-raid sirens sounded across the country shortly after the deadline, Ukraine said.
Russia’s Defense Ministry said its forces had stopped firing across the entire front line but accused Ukraine’s continuing to fight. Earlier, Russian military officials had said they would continue to fight if fired on or if Ukraine’s forces pushed to advance.
Read more: Russia Says It Starts Brief Ukraine Cease-Fire That Kyiv Scorned
Clocks Starts on Putin’s Ukraine Cease-Fire That Kyiv Scorned (11:31 a.m.)
Russian state television said the order had gone into effect as scheduled, but there was no official confirmation from the Defense Ministry or the Kremlin.
In the hours leading up to the deadline, fighting continued unabated, with each side accusing the other of strikes. Earlier, Russian military officials had said they would continue to fight if fired on or if Ukraine’s forces pushed to advance.
Russia Looks to Squeeze Big Firms for Cash (8:20 a.m.)
Russia plans to wrest more money from some commodity producers and state companies and trim non-defense spending as the costs of the invasion of Ukraine mount.
Proposals include higher dividends from state companies and a “one-time payment” by fertilizer and coal producers, under instructions issued to officials by Prime Minister Mikhail Mishustin in mid-December.
The document, a copy of which was seen by Bloomberg News, calls the effort part of “revenue mobilization.” It also orders 175 billion rubles ($2.4 billion) in extra spending to resettle 100,000 people from Kherson to Russia.
Putin’s Pause Aimed at Regrouping, ISW Says (8 a.m.)
Putin could have been seeking to secure a 36-hour pause for Kremlin troops “to afford them the ability to rest, recoup, and reorient to relaunch offensive operations in critical sectors of the front,” said military analysts at the Institute for the Study of War in a daily update.
“Such a pause would disproportionately benefit Russian troops and begin to deprive Ukraine of the initiative,” ISW said.
Putin, who “cannot reasonably expect Ukraine to meet the terms of this suddenly declared cease-fire,” is reprising a tactic to frame Ukraine as unaccommodating and unwilling to take the necessary steps toward negotiations, the US-based group said.
German Regulator Upbeat on Gas Supply (7 a.m.)
The head of Germany’s network regulator said the agency is “very optimistic” about the country’s gas supply this winter as lower consumption due to warmer weather helps offset the impact of halted exports from Russia. Germany’s new LNG terminals are also helping.
A gas shortage this winter is unlikely, though a risk remains, BNetzA President Klaus Mueller said in an interview with public broadcaster ARD. “The more gas we have in storage facilities at the beginning of the year, the less stress and cost we will face in filling them again for next winter,” he added.
Zelenskiy Ridicules Cease-Fire Offer, Praises New Weapons (9:29 p.m.)
The Ukrainian president joined allies in the West in ridiculing Putin’s cease-fire announcement.
“Now they want to use the Christmas as cover to halt offensive of our boys in Donbas at least for a while and redeploy their military vehicles, ammunition and mobilized closer to our position,” Zelenskiy said in a statement. “What will that bring? Just more casualties.”
In a tweet, he praised Germany’s decision to send armored fighting vehicles and a Patriot missile defense system, saying that “Germany is making a crucial contribution in intercepting of all Russia’s missiles.”
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