head-spinning energy bills this winter ratcheted up this week after Gazprom, Russia’s state-owned energy company, declared it would not resume the flow of natural gas through its Nord Stream 1 pipeline until Europe lifted Ukraine-related sanctions.

Daily average electricity prices in Western Europe have reached record levels, according to Rystad Energy, surging past 600 euros ($599) per megawatt-hour in Germany and €700 in France, with peak-hour rates as high as €1,500.

In the Czech Republic, roughly 70,000 angry protesters, many with links to far-right groups, gathered in Wenceslas Square in Prague this past weekend to demonstrate against soaring energy bills.

The German, French and Finnish governments have already stepped in to save domestic power companies from bankruptcy. Even so, Uniper, which is based in Germany and one of Europe’s largest natural gas buyers and suppliers, said last week that it was losing more than €100 million a day because of the rise in prices.

International Monetary Fund this week to issue a proposal to reform the European Union’s framework for government public spending and deficits.

caps blunt the incentive to reduce energy consumption — the chief goal in a world of shortages.

Central banks in the West are expected to keep raising interest rates to make borrowing more expensive and force down inflation. On Thursday, the European Central Bank raised interest rates by three-quarters of a point, matching its biggest increase ever. The U.S. Federal Reserve is likely to do the same when it meets this month. The Bank of England has taken a similar position.

The worry is that the vigorous push to bring down prices will plunge economies into recessions. Higher interest rates alone won’t bring down the price of oil and gas — except by crashing economies so much that demand is severely reduced. Many analysts are already predicting a recession in Germany, Italy and the rest of the eurozone before the end of the year. For poor and emerging countries, higher interest rates mean more debt and less money to spend on the most vulnerable.

“I think we’re living through the biggest development disaster in history, with more people being pushed more quickly into dire poverty than has every happened before,” said Mr. Goldin, the Oxford professor. “It’s a particularly perilous time for the world economy.”

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Analysis: East Europe’s party is over as double-digit inflation bites

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ESZTERGOM, Hungary, Aug 5 (Reuters) – In the weeks that followed Russia’s invasion of Ukraine, western Europe’s big economies began to falter. But further east it was still boom-time thanks to double-digit wage hikes and generous state handouts in some countries.

Not any more.

A sharp slowdown in retail sales and plunging confidence indicators show that the cost of living crisis has caught up with Europe’s eastern wing, where people now face a harsh reality check as stubborn double-digit inflation erodes their incomes while food price rises top 15%-22% and energy costs soar.

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As household consumption takes a hit, analysts are downgrading their GDP forecasts and the risk of a Europe-wide recession looms.

Families have started to tighten their belts. Poles are taking shorter holidays, Czechs are saving on restaurant bills while some seek second jobs, and in Hungary – where food inflation alone was an annual 22.1% in June – people are cutting down on grocery bills and purchases of consumer durables as a slide in the forint currency pushes up import prices.

“I went into the bakery one day and a loaf of bread cost 550 forints. I go in the next day and it costs 650. For God’s sake!”, exclaimed Lajos, a 73-year-old man shopping at a market in the northern city of Esztergom on the Danube river.

Standing by his bicycle, grey-bearded Lajos, who did not give his family name, said the surge in food prices had consumed some of his monthly pension and he would not be able to pay higher utility bills, which will rise after the government last month scrapped price caps for what it called higher-usage households.

So he is making his own plans.

“I can heat with gas but also wood … as I have a tile-stove. So with my wife we will move into one room, heat up the stove, put on some warm sweaters and watch TV like that.”

Across Hungary, retail sales growth (HURETY=ECI) slowed to an annual 4.5% in June from 10.9% in May, with furniture and electronic goods sales down by 4.3%, suggesting the impact of huge tax breaks and fiscal transfers from Prime Minister Viktor Orban’s government before April’s elections has now faded.

Polish retail sales growth also slowed to an annual 3.2% in June from 8.2% in May, while Czech adjusted retail sales excluding cars and motorcycles dropped by 6.0% year-on-year in June after a fall of 6.6% in May, data showed on Friday.

“Households have reacted to the rising cost of living in a meaningful way, and the consumption of things has started to slow,” said Peter Virovacz, an analyst at ING in Budapest.

According to a survey by the National Bank of Hungary on Friday, commercial banks expect demand for loans to decline and credit conditions to tighten in the second half.

BELT-TIGHTENING

The slowdown in domestic demand, rising interest rates, government spending cuts and companies’ rising costs look set to dampen economic growth in Central Europe in the second half of this year and slow them down sharply in 2023.

Citigroup said Hungary’s economy could grow by close to 5% in 2022 but that there were downside risks to its 1% forecast for next year.

“The risk of prolonged high energy prices keeping inflation in double-digit territory even in 2023 and our updated Euro Area in-house forecasts point towards downside risks,” it said.

The Hungarian central bank still projects 2.0%-3.0% growth for 2023, and it will release new forecasts in September.

The Polish economy is expected to grow by 3.8% this year and 3.2% in 2023, according to government projections.

The Czech central bank, the first to call a halt to its rate-hike cycle on Thursday, predicts recession at the turn of the year as it sees the economy contracting 0.4% in the fourth quarter of 2022 and 1% in the first quarter of 2023.

“Our base scenario includes a mild recession – a technical recession – we have two quarters in a row with a quarterly decline there… That would be a healthy recession, which also allows for cutting inflation,” Governor Ales Michl said.

While the summer is still expected to see a boom in the tourism sector, Poles have started to save on trips according to travel website Noclegi.pl.

“We can see that what characterizes this season is the shortening of trips, on average by one day, and postponing the booking until the last moment,” said Natalia Jaworska, an expert at Noclegi.pl. Poles have also begun to save on food.

Data from various restaurant payment services, like Sodexo, have shown falling spending in restaurants in the Czech Republic as well. The STEM polling agency’s latest survey in June found 80% of Czech households were cutting back or limiting their purchases because of fast-rising energy bills.

Czech consumer confidence hit a new low in July, according to the statistics office’s monthly survey, while a survey by think-tank GKI showed the Hungarian consumer confidence index in July plunged to its lowest level since April 2020 during the first wave of the COVID-19 pandemic.

Martin Hulovec, a 43-year-old Czech film producer, said he was not worried about his income right now, but he was less optimistic about the future.

“The hard times have not arrived yet for me to deal with it immediately… but it will come,” Hulovec said.

“I will certainly seek more energy savings… I will definitely not buy new stuff for the kids, clothing or sport equipment. You can find that secondhand for half the price.”

And he too will be switching on the heating less when winter comes.

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Reporting and writing by Krisztina Than, Addditional repoting by Jason Hovet and Robert Muller in Prague, and Anna Wlodarczak-Semczuk in Warsaw, Editing by Hugh Lawson

Our Standards: The Thomson Reuters Trust Principles.

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Gaps in Arms Supplies to Ukraine Point to Countries’ Divergent Strategies

His words infuriated the Ukrainians as well as the Central Europeans, who want Russia weakened and Mr. Putin humiliated.

For Pierre Vimont, a former French ambassador to Washington and former senior E.U. official, European countries are divided into three rough camps.

There are those like Britain, Poland and the Baltics looking to isolate Mr. Putin and the Russians, too, for being complicit in the war; those like Belgium, the Czech Republic and the Netherlands revisiting the idea of Cold War containment, talking of constraints; and those countries, like France, Germany, Hungary and Italy, “who hope at some point for an opportunity to launch a new dialogue with Russia, not immediately, but to be ready.”

The divisions will remain, Mr. Vimont said. “There is not much appetite for a Russian strategy.”

If there is to be one, Washington must lead it, but seems as confused as everyone else. “No one has a real idea of how to handle this situation now,” Mr. Speck said. Unlike in 2014, when Germany organized the Minsk process to stop the war then, he said, “there is no one driving a diplomatic process.”

As the war settles into a protracted artillery battle with little terrain won or lost, the threat that Russia will attack Western European countries is rapidly fading, said Claudia Major, a defense expert with the German Institute for International and Security Affairs.

That is leading to a certain complacency, coupled with the growing economic impact of sanctions on higher inflation and lower growth.

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German Brewers Face ‘Unprecedented’ Beer Bottle Shortage

Stefan Fritsche, who runs a centuries-old German brewery in Neuzelle, near the Polish border, has seen his natural gas bill jump a startling 400 percent over the past year. His electricity bill has increased 300 percent. And he’s paying more for barley than ever before.

But the soaring inflation for energy and grains in the wake of the Ukraine war is no match for the biggest challenge facing Mr. Fritsche’s brewery, Klosterbrauerei Neuzelle, and others like it across Germany: a severe shortage of beer bottles.

The problem is “unprecedented,” Mr. Fritsche said. “The price of bottles has exploded.”

The issue is not so much a lack of bottles. Germany’s roughly 1,500 breweries have up to four billion returnable glass bottles in circulation — about 48 for every man, woman and child.

recycling, it comes with one major problem: getting people to return their empties.

Dragging a crate — or several — of empty glass bottles back to a store can be a hassle, even if it means getting back the deposit fee. So people tend to let them stack up, in the basements of their homes or on the balconies of their apartments, biding their time until they are running out of either space or spare cash.

“It is deadly for small brewers,” Mr. Fritsche said. The brewery he runs sells 80 percent of its beer in bottles. (In 2003, a recycling law was expanded to focus on reducing waste in the beverage industry, meaning most beer sold for the domestic market is in returnable bottles, not cans.)

annual survey by Kirin, the Japanese brewer. (The United States ranked 17th.) But on the whole, Germans are cutting back. Since the Federal Statistics Office began keeping records in 1993 — a year after Mr. Fritsche’s family took over the brewery in Neuzelle — national consumption of beer has dropped nearly 24 percent, as people embrace a wider diversity of soft drinks.

Lockdowns surrounding the coronavirus over the past two years also contributed to the trend, as bars remained closed and sporting and cultural events were canceled.

The difficult environment makes management of the breweries all the more important. Mr. Fritsche said he had relied for decades on a combination of tradition and creativity.

A willingness to push the boundaries and think around the corner is essential to surviving in a tougher business environment, he said. For example, the brewery has a bottle of its signature product, Schwarzer Abt, or Black Abbot, that has been blessed by Pope Francis. The bottle is now dipped into each fresh batch of Schwarzer Abt.

What helps, too, is taking a long view of the history that comes with running a business founded in 1589, the events that it has witnessed and withstood over time.

“Nazis, Communists, government takeovers — in the past, we’ve had just about everything here,” Mr. Fritsche said. “And we have survived it all. We will get through this as well.”

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Struggling in Ukraine’s East, Russian Forces Strike in Kyiv

KYIV, Ukraine — Russian forces pressed hard on Sunday to take the town of Sievierodonetsk, one of the last obstacles to seizing the region of Luhansk. But as so often in this grinding war of attrition, the Russian Army is finding the going difficult, with Ukrainian forces making counterattacks and seizing back some of the town.

President Volodymyr Zelensky of Ukraine, who said he visited frontline troops near Sievierodonetsk on Sunday, said that fighting was being waged street by street and that the situation was “extremely difficult.” The city is largely in ruins, and thousands of civilians are still sheltering in basements there.

Capturing Sievierodonetsk would deliver the Luhansk region to Russian forces and their local separatist allies, who also control much of neighboring Donetsk. But their inability to take ground quickly and their persistent vulnerability to determined Ukrainian fighters again show that the Russian war plan has not gone according to Moscow’s expectations.

Even as it struggled in the east, Moscow offered a reminder Sunday that it retains the power to lash out in much of Ukraine, hitting Kyiv, the capital, for the first time in more than a month. President Vladimir V. Putin of Russia, angered by the impending arrival in Ukraine of long-range missiles from the West, warned that Moscow may hit hitherto unscathed targets.

he threatened “to strike targets we haven’t hit before” if Western countries supply Ukraine with longer-range missiles, but he provided no specifics.

Speaking to the state-run Rossiya TV network, Mr. Putin was asked about the U.S. announcement that it would supply Ukraine with a more sophisticated rocket system that could strike targets some 40 miles away. Even as he warned about new Russian targets, he sought to play down the rocket deliveries, suggesting that Western nations were just replenishing stocks of similar weapons that Ukraine had depleted.

Russia has been irritated by the U.S. decision to supply Ukraine with HIMARS truck-mounted multiple-launch rocket systems, with missiles that have a range of up to 40 miles, greater than anything Ukraine currently possesses. Since the invasion, the Pentagon has provided Ukraine with 108 M777 howitzers. But the range of the HIMARS missiles is more than twice that of the 155-mm shells fired by howitzers.

five missiles hit near the Darnytsia railway station and Pozniaky, a residential neighborhood, wounding one person.

Russia’s Defense Ministry claimed that the missiles had struck a railway repair workshop and destroyed an unspecified number of Soviet-era T-72 tanks delivered by Eastern European nations. Poland and the Czech Republic have sent hundreds of such tanks to Ukraine. Ukrainian officials denied that any tanks had been destroyed.

several powerful explosions early Sunday in the eastern city of Kramatorsk, rattling windows miles away. Kramatorsk, which serves as the provincial capital for Ukrainian-controlled areas of the Donetsk region, has been repeatedly struck by missiles but has escaped the sweeping destruction in other towns. There were no reports of injuries in Sunday’s attack, which hit industrial areas.

in a Twitter message that talk of humiliation was not the point. The real question, he said, is: “How to defeat Russia while offering it a way out? To avoid an everlasting war, the temptation of escalation and the total devastation of Ukraine.”

Tone matters, Mr. Araud wrote in English.

“The word ‘humiliate’ is giving to the debate an emotional and moral tone which is a dead end,” he said. “In foreign policy, at the end of a war, there are a winner and a loser or, which is much likelier in this case, there is a stalemate. A stalemate means an ever-going war or a compromise.”

Helene von Bismarck, a German historian, said that what was most annoying about Mr. Macron’s talk of humiliation “is not just that it sounds callous, after Bucha, but that it is yet another example of discussing the long-term relationship with Russia as if it wasn’t influenced by the short-term development of the war.”

But the strain of the long war was evident even in Estonia, whose prime minister, Kaja Kallas, has been one of the most outspoken voices urging a Russian defeat and Mr. Putin’s isolation.

Ms. Kallas dissolved her coalition government on Saturday, firing seven Centre party ministers from the 15-strong cabinet, including the foreign minister, Eva-Maria Liimets. The dismissal of the Centre ministers followed weeks of political deadlock, including a vote on an education bill in which Centre voted against the government and with a far-right opposition party.

Ms. Kallas, who is seeking to create a new coalition to avoid early elections, cited the need for unity during this war to explain her actions. She said she hoped that the war “would have opened the eyes of all the parliamentary parties to the importance of a common understanding of the threats for us as a country neighboring Russia.”

Valerie Hopkins reported from Kyiv, and Steven Erlanger from Brussels. Reporting was contributed from Andrew E. Kramer from Kramatorsk, Ukraine; Neil MacFarquhar from Istanbul; and Ivan Nechepurenko from Tbilisi, Georgia.

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Live Updates: Facing Heavy Losses, Ukraine Slowly Falls Back in East

Amid the roar of artillery and bone-rattling explosions, New York Times photographers have borne graphic witness to the fight to survive. These are their stories and images.

Through the three months of Russia’s invasion, New York Times journalists have chronicled carnage and courage, ruin and resolve, across the wide arc of combat through eastern Ukraine, where Vladimir V. Putin’s brutal offensive is now concentrated.

At the front line and within easy range of it, they have joined civilians whose homes, families and emotions have been shattered, as well as Ukrainian soldiers — hardened veterans and green volunteers — using tools as modern as surveillance drones and as ancient as trenches.

Amid the roar of artillery, the clatter of small arms and bone-rattling explosions, Times photographers have borne graphic witness to the fight to survive and kill — or just survive. These are their accounts and images from the last few weeks of that fight.

On the front line south of Izium, a Russian-captured city just north of the Donetsk region, two Ukrainian 122-mm guns thundered across the rolling landscape last week. They belonged to an artillery detachment of the 93rd Mechanized Brigade, called in to fire on Russian forces who had pinned down Ukrainian troops.

The camouflaged gunners then worked at lightning speed to conceal their position, moving broken branches to hide from view the smoking barrels of the powerful weapons. A young soldier wearing a bandanna and a determined expression burst out of the greenery, sprinting back into the woods to hide from enemy drones. Soon the team was reloading, aiming and firing again.

Credit…Ivor Prickett for The New York Times
Credit… Ivor Prickett for The New York Times
Credit…Ivor Prickett for The New York Times

Along the same front, a dozen members of the 95th Air Assault Brigade camped in a concrete building at an abandoned farmhouse. Throughout the night, in pairs, they took turns on sentry duty from inside a trench system worming down a hillside, overlooking a valley of rolling wheat fields pockmarked with dark clumps of dirt kicked up by the impact of recent shelling by Russian artillery.

Several nearby buildings had been shattered by shelling, and the thump of artillery exchanges between Ukrainian and Russian troops a few miles north rumbled day and night.

Artem Sandul, 20, pulled on a cigarette under the cover of a wood and mud bunker in the trenches as dawn broke. Until Russia invaded on Feb. 24, he had been flipping burgers at a McDonald’s. Now he was cooking for his fellow soldiers, his commander seemingly keeping him back from the most dangerous shelling a couple of miles up the road, where Ukrainian lines were only 400 yards from Russian lines in some places.

Credit…Finbarr O’Reilly for The New York Times
Credit…Finbarr O’Reilly for The New York Times
Credit…Finbarr O’Reilly for The New York Times

Near Izium, jets, most likely Russian, flew low over Ukrainian positions, firing defensive flares to confuse antiaircraft batteries, then made a sharp turn toward the trenches and screamed by so low that they disappeared behind a tree line before vanishing over the horizon.

On Tuesday, in Vuhledar, about 30 miles southeast of the Russian-occupied Donetsk, an artillery team from the 53rd Brigade responded to Russian artillery fire the soldiers said was coming from inside a church about four miles away.

Credit…Finbarr O’Reilly for The New York Times

In Barvinkove, a Ukrainian-held town 20 miles southwest of Izium, a cyclist pedaled past blown-out buildings and a barricade, while at a small base, soldiers drank coffee and a sniper prepared his rifle for a mission. Nearby, Russian forces were trying to push southward, part of a pincer move to trap the Ukrainian troops still holding a pocket of territory in the two eastern provinces of Donetsk and Luhansk.

Credit…Finbarr O’Reilly for The New York Times
Credit…Finbarr O’Reilly for The New York Times
Credit…Finbarr O’Reilly for The New York Times

On the seesawing front line of that pocket lies Bakhmut, a largely evacuated town of blasted building shells, rubble and incinerated vehicles, where two huge craters bracket the administrative building. In newly reinforced defensive positions, Ukrainian soldiers tried to hold off the Russian advance, amid the constant din and ground shudder of artillery fired by both sides.

Credit…Finbarr O’Reilly for The New York Times

In that region, Times photographers encountered evidence of Russian losses, too. Ukraine’s Territorial Defense Forces, mostly volunteer fighters, managed to retake the village of Novopil. With Russian troops still less than half a mile away, the evidence of a fierce battle was everywhere, in the wreckage of houses and the stench of dead bodies.

In front of a small shed, the body of a Russian soldier lay where he had been cut down, his clean, well-polished boots at odds with the surrounding devastation. His brown suede belt bore the hammer and sickle of the Soviet Union.

Near Bilohorivka were the ravaged bodies and tanks of hundreds of Russian troops whose disastrous attempt to cross the Seversky Donets River fell to deadly Ukrainian heavy artillery.

But many of those caught in the destruction did not wear uniforms. Vitaliy Kononenko, 47, had just built a new home for his family in the Zaporizhzhia region in southern Ukraine, but before he could bring his wife and children to see it, it was destroyed.

In the train station in Pokrovsk, in the Donetsk region, Anna Vereschak, 43, boarded a westbound evacuation train with her daughters Milana, 5, and Diana, 4, after bombardment forced them from their village. Another woman, Valentina, ushered her blind 87-year-old mother, Nina, onto the train.

Credit…Lynsey Addario for The New York Times
Credit…Lynsey Addario for The New York Times
Credit…Lynsey Addario for The New York Times

Millions of Ukrainians have fled their homes, particularly from the east, taking only what they can cram into a bag or two, often after holding out for weeks or months in basements despite bombardment, hunger and isolation. Some of the fiercest fighting now is around Sievierodonetsk, in the Luhansk region, the easternmost city still held by Ukraine.

In Lysychansk, just across the bombed-out bridge from Sievierodonetsk, three police officers braved artillery fire to collect the bodies of the dead, like a 65-year-old woman known to neighbors as Grandma Masha. Her dog growled and barked from his kennel as they loaded her into a body bag and then their white van.

Grandma Masha could not get the medicine she needed to treat her diabetes, according to a neighbor, Lena, 39. Her son had left with his family and was not able to return when she fell ill.

“It’s a completely stupid war — but no one asked for my opinion,” said Lena, who, like most people interviewed, gave only her first name because she feared for her safety.

In an apartment block in Sievierodonetsk, already partially blasted and burned by shelling, residents huddled in the basement, resigned, at last, to evacuation. They barely reacted to the sounds of explosion and nearby gunfire.

Credit…Finbarr O’Reilly for The New York Times
Credit…Finbarr O’Reilly for The New York Times
Credit…Finbarr O’Reilly for The New York Times

Across the eastern Donetsk and Luhansk provinces, and the southern part of the Kharkiv region, Times photographers found Ukrainian troops in every imaginable phase of daily life in a combat zone.

In an underground bunker were dozens of members of the Carpathian Sich Battalion — eating, sleeping, cleaning their weapons and chatting on cellphones with their wives and girlfriends. Some gathered around a monitor to watch drone video of a recent attack. Most smoked.

The floor and walls of the bunker quaked as a tank round hit a nearby building, and small-arms fire followed. Bullets ricocheted off walls outside. The Russians were close.

A handful of Ukrainian soldiers dashed outside to repel the attack, while others collected their weapons and waited by the door in case they were needed. They weren’t; the shooting subsided.

One soldier lit a stove and began frying buckwheat.

Credit…Lynsey Addario for The New York Times
Credit…Lynsey Addario for The New York Times
Credit…Lynsey Addario for The New York Times

At a well-guarded and heavily fortified checkpoint, fighters built more trenches and bunkers, using sandbags and rough-hewn logs, in preparation for a possible Russian advance in their direction. Warned of incoming artillery fire, they ducked into a bunker, and a medic in the group boasted that their hideouts could take almost anything the Russians might fire at them.

Credit…Ivor Prickett for The New York Times

The evidence of war was strewn across the ravaged landscape. Wreckage was everywhere, from collapsed buildings and buckled streets to burned-out tanks. A common sight was the tail of a rocket sticking out of the ground, a reminder of the constant danger from above.

The smells and sounds of war were everywhere, too. Few civilians were around, but troops were omnipresent, patrolling, scavenging, resting and building fortifications when they were not fighting.

Credit…Ivor Prickett for The New York Times
Credit…Ivor Prickett for The New York Times
Credit… Ivor Prickett for The New York Times

After their armored vehicle broke down, a dozen soldiers from Ukraine’s 95th Air Assault Brigade recently stood by a roadside near the city of Kramatorsk, smoking, like stranded commuters waiting for a lift.

An attempt to tow them failed, so the soldiers, with their weapons, piled aboard another armored vehicle and set off in the day’s fading light toward the front.

Credit…Finbarr O’Reilly for The New York Times
Credit…Finbarr O’Reilly for The New York Times
Credit…Finbarr O’Reilly for The New York Times

The men of the 93rd Brigade are at the forefront of efforts to hold off the Russian advance south of Izium. Small units of mortar teams have camped out in destroyed villages, battling Russian forces that have thrown everything at them.

They spoke of enduring days of near-constant shelling, sheltering in dank basements, surrounded by jars of pickled vegetables.

Thoughts rarely strayed far from the lethal stakes, but between such harrowing episodes, it was striking how the ordinary business of life, like a highway breakdown, never quite disappeared.

A kiosk in Bakhmut did a brisk trade serving coffee, burgers and sandwiches to soldiers coming and going from the fighting.

Credit…Ivor Prickett for The New York Times
Credit… Ivor Prickett for The New York Times
Credit…Ivor Prickett for The New York Times

In Barvinkove, which has come under heavy Russian bombardment, a few local women were still hawking vegetables and dairy products under the shade of a tree in the town center. A passing soldier, back from the front to refuel, asked to buy some herbs.

The woman refused to take payment for her goods, waving him off and wishing him well.

Credit…Finbarr O’Reilly for The New York Times

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What Happened on Day 96 of the War in Ukraine

BRUSSELS — The European Union on Monday agreed to ban most imports of Russian oil, the harshest economic penalty yet imposed on Russia for its invasion of Ukraine, and potentially the biggest sacrifice by Europe, itself.

The deal is the latest and most far-reaching demonstration that over more than three months of war, in reaction to mounting Russian aggression and atrocities, European leaders have grown willing to take steps they considered too extreme when the invasion began. They have already barred imports of Russian natural gas, cut off Russian banks from global financial networks, frozen Russian assets and sent advanced weaponry to Ukraine.

After weeks of intense wrangling, E.U. leaders meeting in Brussels endorsed an embargo on Russian oil delivered by tankers, the primary method, with commitments to reduce imports by pipeline, according to a draft agreement seen by The New York Times. The deal was announced in a late-night tweet by Charles Michel, president of the European Council, though many details remain to be hashed out.

The endorsement came as a multipronged Kremlin assault closed in on the easternmost Ukrainian-controlled city, Sievierodonetsk. Russian forces continued their pattern of bombarding cities and towns, including civilian areas, reducing them to depopulated wastelands before attempting to seize control.

Credit…Finbarr O’Reilly for The New York Times

At the same time, Ukraine’s military mounted a counteroffensive to retake the strategic southern city of Kherson. And a car bombing in another Russian-held city, Melitopol, hinted at the kind of fierce resistance the occupiers may face.

President Vladimir V. Putin’s war machinery is financed by Russia’s sales of crude and refined petroleum and natural gas, which account for most of the country’s export revenue, collected primarily by state-controlled energy companies. With the war driving up prices, the European Union countries alone have been paying $23 billion a month for Russian oil.

Analysts say that Russia, offering discounts compared to the prices on world markets, will continue to find some buyers for its oil, but that sales volume and profits are likely to drop significantly once the embargo takes effect.

Europe relies heavily on Russian fuels — 27 percent of the crude oil imported to the European Union comes from Russia — and while E.U. countries are scrambling for alternatives, officials have warned that the financial cost to them will be high. Other sources are expected to be more expensive, if they can be arranged; gas and oil shortages are a real possibility.

The debate over an oil embargo has also exposed the potential vulnerability of the European bloc, just as Sweden’s and Finland’s requests to join NATO have shown fractures within that alliance. Diplomats express confidence that such differences can be resolved, but they offer reminders that the unity the United States and its allies have shown so far in opposing Russia is not guaranteed.

Hungary’s strongman leader, Viktor Orban, whose country depends more than Western Europe on Russian energy, had held up any agreement on an oil embargo, calling it an “atomic bomb” to the Hungarian economy.

The dispute illustrates how the E.U. practice of requiring unanimity among the 27 member nations for major decisions can become a weakness — particularly if Mr. Orban, who has a friendly relationship with Mr. Putin, is called on to take further steps to isolate Russia.

Credit…Johanna Geron/Reuters

The limited embargo that European leaders endorsed was tailored to win Mr. Orban’s support. Prohibiting Russian oil deliveries aboard tankers would eliminate two-thirds of E.U. imports, while having no effect on Hungary, a landlocked nation. Arriving at the E.U. summit meeting on Monday, Mr. Orban said of the pipeline exemption, “It’s a good approach.”

Slovakia, the Czech Republic and Germany, which also receive Russian oil by pipeline, were expected to commit to weaning themselves from that source; Hungary is not expected to give any such assurance.

In NATO, which also operates by consensus, Turkey has blocked the admission of Finland and Sweden, which have been sufficiently alarmed by Russia’s war on Ukraine to abandon their long-held neutrality. Western diplomats predict that President Recep Tayyip Erdogan of Turkey, who has been as contentious a partner to NATO as Mr. Orban has been to the European Union, will wring concessions from the allies but ultimately accede.

On the battlefields of the eastern Donbas region, where Russia is focused on seizing more territory, the most intense combat is around the battered, adjacent cities of Sievierodonetsk and Lysychansk, among the most important remaining pockets of Ukrainian control. After weeks of shelling, Russian forces have fought their way into “the northeastern and southeastern outskirts” of Sievierodonetsk, the Ukrainian defense ministry said in a statement, adding that Russia had funneled still more war matériel from Russia into the Donbas.

Fighting across Donbas reached “maximum intensity,” said Col. Oleksandr Motuzyanyk, the defense ministry spokesman. He added, “Russian invaders shelled the entire front line, trying to hit our deep defensive positions with artillery fire.”

Amid reports of Russian war crimes against civilians, Ukraine’s deputy prime minister, Iryna Vereshchuk, issued a call to residents of Russian-occupied territory to flee however they can to Ukrainian-controlled areas, as millions already have. It is hard and dangerous, she conceded, but “ultimately, it is a question of your safety and that of your children.”

Credit…Finbarr O’Reilly for The New York Times

A French journalist was killed on Monday near Lysychansk when a shell exploded near the evacuation bus he was riding in, according to Ukrainian and French officials, and his employer, the television news channel BFM TV. The journalist, Frédéric Leclerc-Imhoff, suffered a lethal shrapnel wound to the neck, said Serhiy Haidai, the Ukrainian governor of the Luhansk region, who said the shell was fired by Russian forces.

At least seven other journalists have been killed while covering the conflict, according to Reporters Without Borders.

The sheer weight of Russia’s military and the brutality of its tactics have yielded territorial gains in the east, but it has suffered heavy losses, and Western analysts say it is running short of ready resources.

“Russia has likely suffered devastating losses amongst its mid and junior ranking officers,” the British defense ministry said on Monday in the latest intelligence update it has made public. Battalions that the Russians are cobbling together “from survivors of multiple units are likely to be less effective.”

Perhaps most ominous for Moscow, the British cited “multiple credible reports of localized mutinies amongst Russia’s forces.”

Hoping to spread Russian forces thinner than they already are, Ukraine over the weekend launched a counteroffensive more than 300 miles away from Sievierodonetsk, aimed at retaking Kherson, a strategic port on the lower Dnipro River in south-central Ukraine. It was the first major city to fall to the Russians, less than a week after the invasion.

Credit…Associated Press

“The Ukrainian counterattack does not appear likely to retake substantial territory in the near term,” the Institute for the Study of War in Washington said in an assessment released on Sunday, but it will disrupt Russian operations across the south, “and potentially force Russia to deploy reinforcements to the Kherson region, which is predominantly held by substandard units.”

In Melitopol, the Kremlin-appointed regional administration said a car bombing had injured two aid workers and called it “a terrorist attack aimed at destabilizing the peaceful life of the city.” People have protested the occupation in Melitopol, where Russian forces have kidnapped local officials and replaced them.

Ivan Fyodorov, the mayor of Melitopol — who was abducted by Russian forces and then returned to Ukraine in a prisoner swap — said he did not know who was responsible for the bombing, but predicted that “the ground will burn” in Melitopol until Russians leave the city.

Russian forces have held onto most of the areas they conquered in the south early in the war. But one band of fighters held out for weeks in a steel mill complex in the southern city of Mariupol, tying down significant Russian forces before the survivors surrendered this month.

And in the first weeks of the war, Russian offensives in the north aimed at Kyiv, the capital, and Kharkiv, the second-largest city, became hopelessly bogged down. Moscow gave up on those campaigns, at least temporarily, to concentrate on Donbas, and Ukrainians have retaken some of the lost territory.

The failure of those offensives and the resistance in Mariupol contributed to a shift in Russian tactics to a slower, more grinding approach, with little apparent concern for civilian casualties or physical destruction.

Describing the constant shelling of Sievierodonetsk, President Volodymyr Zelensky of Ukraine said in a video posted online on Sunday night, “They don’t care how many lives they will have to pay.”

Matina Stevis-Gridneff reported from Brussels and Richard Pérez-Peña from New York. Reporting was contributed by Matthew Mpoke Bigg and Marc Santora from Krakow, Poland, Valerie Hopkins from Kyiv, Neil MacFarquhar from Istanbul, Cassandra Vinograd and Stanley Reed from London, Carlotta Gall from Druzhkivka, Ukraine, Aurelien Breeden from Paris, and Monika Pronczuk from Brussels.

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Live Updates: Initial Talks End Between Russia and Ukraine

An article of faith in global sports — that athletes should not be punished for the actions of their governments — crumbled on Monday, when executives worldwide moved to banish Russians from competitions and deepen the country’s isolation for its invasion of Ukraine.

The International Olympic Committee recommended that athletes from Russia and Belarus, which has allowed Russian troops to use its territory, be barred from events. FIFA, soccer’s international governing body, effectively blocked Russia from qualifying for this year’s men’s World Cup. And ice hockey associations in the Czech Republic, Finland and Sweden suspended Russia from a tournament they had staged jointly for decades.

Although there were loopholes and scattered uncertainties, the penalties amounted to a bracing rebuke of Moscow and Minsk by a sports world that has long labored furiously, if sometimes unconvincingly, to depict competition as separate from politics.

The International Paralympic Committee will decide on Wednesday whether to allow Russian and Belarusian athletes to compete in the Paralympic Games, which are scheduled to open in Beijing on Friday.

But the day’s events left little doubt that Russia and Belarus, which had already drawn scrutiny for doping violations and oppression, would become further separated from the wider athletic world.

“This will continue to be a contest of two different visions of what sport is and who is allowed to participate in and control sport,” said Andrés Martinez, a research scholar at Arizona State University’s Global Sport Institute. “I think this is a bit of a reset, though, in that it does set an important precedent and a standard that sporting federations cannot continue to act with impunity and just let the highest bidder dictate what happens in sport, oblivious to other considerations, including the behavior of those highest bidders.”

The most potentially far-reaching effort on Monday came from the I.O.C., which cited “the integrity of global sports competitions” and “the safety of all the participants” when it recommended that Russian and Belarusian athletes be blocked from competitions.

“While athletes from Russia and Belarus would be able to continue to participate in sports events, many athletes from Ukraine are prevented from doing so because of the attack on their country,” the I.O.C. said in a statement, which noted that it issued its recommendation “with a heavy heart.”

It will fall to event organizers and the federations that administer individual sports to decide how, or if, to adopt the I.O.C.’s recommendation, which the committee suggested might not be enforced “on short notice for organizational or legal reasons.”

That qualifier appeared to be a nod to the imminence of the Paralympic Games, which have been expected to draw more than 70 athletes from Russia and about a dozen from Belarus.

The International Paralympic Committee did not immediately respond to a request for comment, nor did Belarusian officials or the Russian Paralympic Committee. But Stanislav Pozdnyakov, the president of the Russian Olympic Committee, said in a statement that he and other Russian officials “strongly” objected to the I.O.C. recommendation, which he said contradicted “the spirit of the Olympic movement, which should unite and not divide.”

The I.O.C.’s recommendation came hours before FIFA announced that it had suspended Russia and its teams from all competitions and ejected the country from qualifying for the 2022 World Cup only weeks before it was to play for one of Europe’s final places in this year’s tournament.

FIFA, which had come under pressure for its initial hesitance to bar Russia from competition, and its European counterpart, UEFA, said the ban on Russia would be in place “until further notice.”

“Football is fully united here and in full solidarity with all the people affected in Ukraine,” FIFA said in a statement. Ukraine’s team, which is set to play Scotland in its own World Cup playoff in March, will remain in the competition.

UEFA, which has decided to move this year’s Champions League final to St.-Denis, France, from St. Petersburg, Russia, then went a step further in breaking its deep ties to Russia: It announced that it had ended a sponsorship agreement with the Russian energy giant Gazprom. The deal was worth a reported $50 million a year to European soccer.

It was unclear whether FIFA’s decision to bar Russia would face a court challenge. Russia and some its athletes have successfully fought exclusion from other events, including the Olympic Games, by getting punishments watered down through appeals to the Court of Arbitration for Sport.

Any efforts to keep Russian athletes out of other competitions could also spark legal battles. Pozdnyakov, the Russian Olympic Committee chairman, said Russian officials intended to “consistently defend the rights and interests of Russian athletes and provide all necessary assistance to our national sports federations to challenge discriminatory decisions.”

Some penalties could prove harder to fight than others.

Hockey executives in the Czech Republic, Finland and Sweden said Monday that Russia would not be allowed to participate in this year’s Euro Hockey Tour, and executives signaled that they were looking to replace Russia permanently.

“The Russian invasion of Ukraine is a terrible situation, and we in the ice hockey world are completely behind the people of Ukraine,” said Anders Larsson, the Swedish Ice Hockey Association’s chairman. “Inviting a Russian national ice hockey team to the Euro Hockey Tour tournaments in Stockholm, Helsinki and Prague is therefore completely unthinkable at the moment.”

The application of the I.O.C.’s recommendation could also be particularly thorny in individual sports and competitions in which athletes are competing more for themselves than for their nations.

In cross-country skiing, Natalia Nepryaeva of Russia holds the top spot in the World Cup standings but could lose that ranking if she cannot participate in several coming races.

Tennis has the complexity of seven ruling organizations. On the same day the I.O.C. recommended the ban, Daniil Medvedev, a Russian, took over the top sport in the men’s world rankings.

The ATP Tour heralded the achievement on its website with a picture of Medvedev next to the Russian flag. However, Medvedev moved to Monaco years ago and has campaigned for peace on his social media channels.

The ATP Tour made no immediate announcement about whether it would follow the I.O.C. recommendation, nor did the WTA, which manages the women’s professional tour and has three players from Russia and Belarus in the top 20, including Victoria Azarenka, who is on the organization’s board.

On Monday, Elina Svitolina, a top player from Ukraine and the top seed this week in a tournament in Mexico, announced that she would not play her first-round match against Anastasia Potapova of Russia. In a Twitter post, Svitolina urged the governing bodies of tennis to follow the I.O.C.’s guidance.

Although Monday’s maneuvers against Russia were particularly forceful, the country has clashed with sports executives in recent years over its reliance on a state-run doping operation. Still, Russian athletes and teams had faced the most marginal of consequences. At the Beijing Olympics, which ended Feb. 20, Russian athletes appeared as members of the “Russian Olympic Committee,” and did not formally compete under the Russian tricolor flag or hear the Russian national anthem at medal ceremonies.

And in December, Olympic officials barred the Belarusian president, Alexander Lukashenko, from I.O.C. events, including the Beijing Games. Olympic officials complained at the time that Belarusian athletes were “not appropriately protected” from what they described as “political discrimination.”

Monday’s wave of condemnation, though, proved far broader and came after days of swelling anger among sports executives and demands from political leaders and athletes alike. Last week, Olympic executives pressed federations to cancel or move competitions from Belarus and Russia.

Vladimir V. Putin, the president of Russia, who has long heralded the role of sports in his own life and the role of athletics in his country’s ambitions, has also increasingly come under personal pressure. The International Judo Federation recently suspended him from his role as its honorary president, and World Taekwondo rescinded the honorary black belt it gave him in 2013.

On Monday, the I.O.C. withdrew its highest honor from Putin, who received it in 2001. He attended the opening ceremony of the Beijing Games on Feb. 4, when his forces were massing at the Ukrainian border ahead of their invasion.

Matthew Futterman contributed reporting.

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Why the Toughest Sanctions on Russia Are the Hardest for Europe to Wield

The punishing sanctions that the United States and European Union have so far announced against Russia for its invasion of Ukraine include shutting the government and banks out of global financial markets, restricting technology exports and freezing assets of influential Russians. Noticeably missing from that list is the one reprisal that would cause Russia the most pain: choking off the export of Russian fuel.

The omission is not surprising. In recent years, the European Union has received nearly 40 percent of its gas and more than a quarter of its oil from Russia. That energy heats Europe’s homes, powers its factories and fuels its vehicles, while pumping enormous sums of money into the Russian economy.

a third of the national budget. But a cutoff would hurt Europe as well.

37 percent of its global trade in 2020. About 70 percent of Russian gas exports and half of its oil exports go to Europe.

The flip side of mutual interest is mutual pain.

European leaders are caught between wanting to punish Russia for its aggression and to protect their own economies.

halt Nord Stream 2 — the completed gas pipeline that directly links Russia and northeastern Germany — is among the most consequential that Europe has taken, said Mathieu Savary, chief European investment strategist at BCA Research.

Russia shrank its pipeline exports by close to 25 percent compared with a year earlier, according to the International Energy Agency. Europe’s reserves stand at just 30 percent, and Europeans are already paying exorbitant prices for energy.

The conflict is occurring when supplies of both oil and natural gas have been tight for months, driving up prices.

“There are serious concerns” that Moscow will tighten exports further and send prices higher, said Helima Croft, head of commodities at RBC Capital Markets, an investment bank.

Germany, Russia’s largest trading partner in Europe, gets 55 percent of its supply from Russia. Italy, the second-biggest trading partner, gets 41 percent. At a forum in Milan last week, the Russian ambassador Sergey Razov said President Vladimir V. Putin had told the Italian prime minister, Mario Draghi, that “if Italy needs more gas we are ready to supply it.”

Mr. Putin also made a point of saying that roughly 500 Italian businesses have operations in Russia and that bilateral investments are worth $8 billion.

Austria, Turkey and France are large consumers of Russian natural gas. In central and Eastern Europe, Hungary, Poland, the Czech Republic and Slovakia are the biggest customers, the Russian energy giant Gazprom said.

250,000 barrels a day from Russia that move through Ukraine to Hungary, Slovakia and the Czech Republic. That amount is relatively small in a global market that consumes 100 million barrels a day, but its loss could create severe shortages in those countries.

dizzying spikes in prices for energy and food and could spook investors. The economic damage from supply disruptions and economic sanctions would be severe in some countries and industries and unnoticed in others.

The money that Russia makes from energy exports could also be reduced if shippers, wary of the growing complexity of transporting Russian crude and supplies, raise what they charge Moscow, Mr. Goldwyn said.

He added it was possible that the White House would ban imports of Russian crude to the United States. Such a move, experts said, would force American refiners to rely on other suppliers and Moscow to find other buyers for around 700,000 barrels a day. China would most likely be one, after the two countries pledged to “strongly support each other.”

Flows of L.N.G. from elsewhere, mostly the United States, have exceeded Russian gas volumes to Europe in recent weeks. Such measures would probably help Western European countries like Germany and Italy more than those in southern and Eastern Europe with fewer alternatives to Russian gas.

Even without a clear cutoff of fuel by Moscow or a disruption by war, there is a substantial risk that extraordinarily high gas and electricity prices will continue, squeezing hard-pressed consumers and, possibly, pushing more businesses to scale back their operations. In recent months, some energy-intensive businesses, including fertilizer makers, have announced closures because of high gas costs.

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