MADRID — NATO leaders will formally invite Finland and Sweden to join the alliance on Wednesday after Turkey lifted its veto on their membership, NATO’s secretary-general said Tuesday evening, clearing the way for what would be one of the most significant expansions of the alliance in decades.
The historic deal, following Turkey’s agreement to a memorandum with the two Nordic countries, underscored how the war in Ukraine has backfired for President Vladimir V. Putin, subverting Russian efforts to weaken NATO and pushing Sweden and Finland, which were neutral and nonaligned for decades, into the alliance’s arms.
After weeks of talks, capped by an hourslong meeting in Madrid, President Recep Tayyip Erdogan of Turkey agreed to lift his block on Sweden and Finland’s membership in return for a set of actions and promises that they will act against terrorism and terrorist organizations.
“As NATO allies, Finland and Sweden commit to fully support Turkey against threats to its national security,” NATO’s Secretary General Jens Stoltenberg said, providing some details of the agreement. “This includes further amending their domestic legislation, cracking down on P.K.K. activities and entering into an agreement with Turkey on extradition,” he added, referring to the Kurdistan Workers’ Party which seeks an independent Kurdish state on territory partly within Turkey’s borders.
Mr. Erdogan had been blocking the Nordic countries’ NATO bids amid concerns over Sweden’s longtime support for the P.K.K. which has attacked nonmilitary targets and killed civilians in Turkey, is outlawed in that country and is designated by both the United States and the European Union as a terrorist organization.
But the memorandum does not specify the extradition of any of the 45 people or so Mr. Erdogan wanted sent to Turkey to face trial on terrorism charges. Sweden has already passed tougher legislation against terrorism that goes into effect July 1.
Both Finland and Sweden had been militarily nonaligned for many years, but decided to apply to join the alliance after Russia invaded Ukraine in February. With Russia attacking a neighbor, both countries felt vulnerable, though Sweden, with a long tradition of neutrality, was more hesitant.
President Vladimir V. Putin of Russia warned both countries against joining NATO, but his threats proved counterproductive.
The two countries bring geostrategic benefits to the alliance. Finland shares an 830-mile border with Russia and has a well-equipped modern army; Sweden can control the entrance to the Baltic Sea, which will help a great deal in NATO planning to defend the more vulnerable countries in Eastern Europe.
The final push to resolve the dispute started early Tuesday morning, when President Biden called Mr. Erdogan to urge him to “seize the moment” on the eve of the summit, to allow discussions on other topics to proceed, according to a senior administration official with knowledge of the discussion.
The official, who requested anonymity to discuss private deliberations, said the president conveyed the substance of his conversation with Mr. Erdogan to the leaders of Finland and Sweden. And after several hours of negotiations later that night, the two Nordic leaders consulted with Mr. Biden again before announcing the agreement with Turkey.
The American official said that the deal between Turkey and the two Nordic countries involved a series of compromises on both sides, including the statement by Turkey welcoming Finland and Sweden to apply and issues involving an arms embargo imposed on Turkey and Turkey’s belief that Finland and Sweden had offered safe havens to groups they considered terrorists.
American officials had for days played down Mr. Biden’s role in the negotiations, saying he would not be a broker between the other countries and insisted that it was up to Turkey, Finland and Sweden to resolve their differences.
After the agreement was announced Tuesday night, the senior administration official conceded that it was considered more diplomatic to publicly minimize Mr. Biden’s involvement. Doing so prevented Turkey from seeking concessions from the United States for agreeing to lift its veto, which might have complicated the discussions, the official said.
The next steps for Finland and Sweden are clear: NATO will vote on Wednesday to accept their applications. There will also be a quick study of their defense capacities and needs. But the talks are expected to be routine, since both countries are NATO partners and have exercised together with NATO allies.
The more difficult last step requires the legislatures of all 30 current members to vote to amend the NATO founding treaty to accept the new members. That has in the past taken up to a year, but is expected to be much quicker for the Nordic countries.
The U.S. Senate is already pressing ahead with hearings on the application and Mr. Biden has been a firm proponent of the new members.
Johanna Lemola contributed reporting from Helsinki, Finland.
WASHINGTON — Attorney General Merrick B. Garland said during a surprise trip to Ukraine on Tuesday that a veteran prosecutor known for investigating former Nazis would lead American efforts in tracking Russian war criminals.
Mr. Garland’s visit, part of scheduled stops in Poland and Paris this week, was intended to bolster U.S. and international support in helping Ukraine identify, apprehend and prosecute Russians involved in war crimes and other atrocities.
His overseas travel comes at a particularly tense moment in his tenure at the Justice Department, on a day of dramatic congressional testimony about the Jan. 6 attack on the Capitol that prompted many Democrats to renew their call for him to prosecute former President Donald J. Trump and his allies.
Mr. Garland met for an hour with Ukraine’s prosecutor general, Iryna Venediktova, in the village of Krakovets, about a mile from the border with Poland, to discuss the technical, forensic and legal support that the United States could provide, department officials said.
“The United States is sending an unmistakable message” to those who have committed atrocities, Mr. Garland said: “There is no place to hide.”
“We will pursue every avenue available to make sure that those who are responsible for these atrocities are held accountable,” he added.
After the meeting, Mr. Garland said he was tapping Eli Rosenbaum, the former director of the Justice Department’s Office of Special Investigations, to create a war crimes accountability team that would work with Ukraine and international law enforcement groups.
Mr. Rosenbaum, 67, is best known for his work for the World Jewish Congress in the 1980s investigating the hidden history of Kurt Waldheim, a former United Nations secretary general whose army unit was implicated in war crimes against Jews and Yugoslavian partisans during World War II.
His work, during a 36-year career in the department, and in stints outside government, earned him the nickname “Nazi hunter” from historians, a sobriquet he dislikes.
In the department’s criminal division, Mr. Rosenbaum has also been instrumental in the prosecution and deportation of Nazis living in the United States and Jews who committed atrocities against their own people in concentration camps. In recent years, his portfolio has taken on a broader mission, as former Nazis die off, and now includes a wider array of human rights cases, at home and abroad.
The new team will include Justice Department staff members and outside experts. In addition to offering assistance to Ukrainian officials, the department said in a statement that Mr. Rosenbaum would investigate “potential war crimes over which the U.S. possesses jurisdiction, such as the killing and wounding of U.S. journalists covering the unprovoked Russian aggression in Ukraine.”
This line of work is, in a sense, part of Mr. Rosenbaum’s family business. His father, Irving, escaped Dresden in 1938, the year of the Kristallnacht attacks against Germany’s Jewish population, joined the U.S. Army, eventually served in an intelligence unit that interrogated German soldiers — and collected information at the Dachau concentration camp.
Mr. Rosenbaum was set to retire before Mr. Garland asked him about a week ago to lead the new unit. He agreed immediately, according to a senior Justice Department official with knowledge of the exchange.
The department is also assigning additional personnel to expand its work with Ukraine and other partners to counter Russian use of illicit financial methods to evade international sanctions — detailing a Justice Department expert to advise Ukraine on fighting kleptocracy, corruption and money laundering, officials said.
“We will pursue every avenue available to make sure that those who are responsible for these atrocities are held accountable,” added Mr. Garland, whose own family immigrated to the United States after fleeing antisemitic pogroms in Eastern Europe in the early 1900s.
After stopping in Poland, Mr. Garland flew on to Paris, where he was scheduled to join the homeland security secretary, Alejandro Mayorkas, in a series of bilateral meetings with European counterparts to discuss efforts to combat terrorism and carry out a strategy of holding Russia accountable for its brutal invasion of Ukraine.
Mr. Garland and Ms. Venediktova last met in May in Washington.
In April, Mr. Garland and the F.B.I. director, Christopher A. Wray, said they would work with investigators and prosecutors in Ukraine, a signal that the Biden administration intended to follow through on its public condemnation of atrocities committed by Russian forces that have been documented during the war.
His team has also been working with the State Department to provide logistical support and advice to Ms. Venediktova and the leaders of other ministries in Ukraine.
“We’ve seen and have determined that a number of war crimes have been committed by Russia’s forces,” Beth Van Schaack, the State Department’s ambassador at large for global criminal justice, said at a briefing in Washington last week.
“What we are seeing is not the results of a rogue unit,” she added, “but rather a pattern and practice across all the areas in which Russia’s forces are engaged.”
Ukraine EU candidacy signals major shift in European geopolitics
‘Europe can create a new history of freedom’ Zelenskiy says
Battle for Sievierodonetsk grinds on
Ukraine claims strike on Russian tugboat
BRUSSELS/KYIV, Ukraine, June 17 (Reuters) – The European Union gave its blessing on Friday for Ukraine and its neighbour Moldova to become candidates to join, in the most dramatic geopolitical shift to result from Russia’s invasion.
Ukraine applied to join the EU just four days after Russian troops poured across its border in February. Four days later, so did Moldova and Georgia – smaller ex-Soviet states also contending with separatist regions occupied by Russian troops.
“Ukraine has clearly demonstrated the country’s aspiration and the country’s determination to live up to European values and standards,” the EU’s executive Commission head Ursula von der Leyen said in Brussels. She made the announcement wearing Ukrainian colours, a yellow blazer over a blue shirt.
Register now for FREE unlimited access to Reuters.com
President Voloymyr Zelenskiy thanked von der Leyen and EU member states on Twitter for a decision he called “the first step on the EU membership path that’ll certainly bring our victory closer”.
Moldova’s President Maia Sandu hailed a “strong signal of support for Moldova & our citizens!” and said she counted on the support of EU member states.
“We’re committed to working hard,” she said on Twitter.
While recommending candidate status for Ukraine and Moldova, the Commission held off for Georgia, which it said must meet more conditions first.
Von der Leyen said Georgia has a strong application but had to come together politically. A senior diplomat close to the process cited setbacks in reforms there.
Leaders of EU countries are expected to endorse the decision at a summit next week. The leaders of the three biggest – Germany, France and Italy – had signalled their solidarity on Thursday by visiting Kyiv, along with the president of Romania.
“Ukraine belongs to the European family,” Germany’s Olaf Scholz said after meeting President Volodymyr Zelenskiy.
Ukraine and Moldova will still face a lengthy process to achieve the standards required for membership, and there are other candidates in the waiting room. Nor is membership guaranteed – talks have been stalled for years with Turkey, officially a candidate since 1999.
But launching the candidacy process, a move that would have seemed unthinkable just months ago, amounts to a shift on par with the decision in the 1990s to welcome the ex-Communist countries of Eastern Europe.
“Precisely because of the bravery of the Ukrainians, Europe can create a new history of freedom, and finally remove the grey zone in Eastern Europe between the EU and Russia,” Zelenskiy said in his nightly video address.
European Commission President Ursula von der Leyen attends a news conference, with European Commissioner for Neighbourhood and Enlargement Oliver Varhelyi, after a meeting of the College of European Commissioners addressing its opinion on Ukraine’s EU candidate status, in Brussels, Belgium June 17, 2022. REUTERS/Yves Herman
If admitted, Ukraine would be the EU’s largest country by area and its fifth most populous. All three hopefuls are far poorer than any existing EU members, with per capita output around half that of the poorest, Bulgaria.
All have recent histories of volatile politics, domestic unrest, entrenched organised crime, and unresolved conflicts with Russian-backed separatists proclaiming sovereignty over territory protected by Moscow’s troops.
President Vladimir Putin ordered his “special military operation” officially to disarm and “denazify” Ukraine. One of his main objectives was to halt the expansion of Western institutions which he called a threat to Russia.
But the war, which has killed thousands of people, destroyed whole cities and set millions to flight, has had the opposite effect. Finland and Sweden have applied to join the NATO military alliance, and the EU has opened its arms to the east.
Within Ukraine, Russian forces were defeated in an attempt to storm the capital in March, but have since refocused on seizing more territory in the east.
The nearly four-month-old war has entered a punishing attritional phase, with Russian forces relying on their massive advantage in artillery firepower to blast their way into Ukrainian cities.
Ukrainian officials said their troops were still holding out in Sievierodonetsk, site of the worst fighting of recent weeks, on the east bank of the Siverskyi Donets river. It was impossible to evacuate more than 500 civilians who are trapped inside a chemical plant, the regional governor said.
In the surrounding Donbas region, which Moscow claims on behalf of its separatist proxies, Ukrainian forces are mainly defending the river’s opposite bank.
Near the frontline in the ruins of the small city of Marinka, Ukrainian police made their way into a cellar searching for anyone who wanted help to evacuate. A group of mainly elderly residents huddled on mattresses in candlelight.
“There’s space down here, you could join us,” joked one man as the officers came in. A woman named Nina sighed in the darkness: “There is nowhere. Nowhere. Nowhere to go. All the houses have been burnt out. Where can we go?”
In the south, Ukraine has mounted a counter-offensive, claiming to have made inroads into the biggest swath still held by Russia of the territory it seized in the invasion. There have been few reports from the frontline to confirm the situation in that area.
Ukraine claimed its forces had struck a Russian tugboat bringing soldiers, weapons and ammunition to Russian-occupied Snake Island, a strategic Black Sea outpost.
Register now for FREE unlimited access to Reuters.com
Additional reporting by Abdelaziz Boumzar in Marinka and Reuters bureaux; Writing by Peter Graff, Editing by Angus MacSwan
Our Standards: The Thomson Reuters Trust Principles.
Coca-Cola bottles are seen on sale in central St. Petersburg, Russia, August 6, 2014. REUTERS/Alexander Demianchuk/File Photo
Register now for FREE unlimited access to Reuters.com
NEW YORK, June 16 (Reuters) – Bottler Coca-Cola HBC AG (CCH.L) and its existing customers in Russia are “in the process of depleting stock,” Coca-Cola Co (KO.N) said in a statement, after Reuters reported that Coke was for sale at a McDonald’s Corp (MCD.N)franchise in St. Petersburg. read more
Once the stock is depleted, Zug, Switzerland-based Coca-Cola HBC, an independent company, will “no longer produce or sell Coca-Cola or other brands of the Coca-Cola Company in Russia,” Atlanta-based Coca-Cola said.
Coca-Cola HBC in May said it was evaluating all options for the Russian market and said it stopped placing orders for concentrate on March 8. The company, which has 10 production sites in Russia, said it would focus on local brands. read more
Register now for FREE unlimited access to Reuters.com
Coca-Cola in March joined an exodus of U.S. companies leaving Russia after its invasion of neighboring Ukraine in February. Coca-Cola HBC at that time said it was working in close alignment with Coke on the implementation of its decision.
Coca-Cola holds a 23% stake in the bottler.
Coca-Cola HBC bottles and sells Coke beverages exclusively in its 29 markets, which includes Greece, Italy and countries in Eastern Europe, according to its website.
Register now for FREE unlimited access to Reuters.com
Reporting by Jessica DiNapoli in New York; Editing by Mark Porter
Our Standards: The Thomson Reuters Trust Principles.
BRUSSELS — Losing ground to Russia’s brutal advance in the east, Ukraine on Monday demanded an arsenal of sophisticated Western weapons many times greater than what has been promised, or even discussed, underscoring the rising pressure on Western leaders to reconsider their approach to the war.
The tactics that served the Ukrainians well early in the war have not been nearly as effective as the fighting has shifted to the open ground of the Donbas region in the east, where Russians are relying on their immense advantage in long-range artillery. Russian forces are poised to take the blasted city of Sievierodonetsk, the easternmost Ukrainian outpost, and are closing in on the neighboring city of Lysychansk.
With the leaders of France, Germany and Italy planning their first visit to Ukraine’s capital, Kyiv, since the war began, they and other Western leaders have to decide whether to double down on arming Ukraine or press harder for negotiations with Moscow to end the war.
running out of ammunition for their Soviet-era artillery, and Ukrainian officials contend that Russian artillery in the east is out-firing their own, 10 to 1.
Mykhailo Podolyak, the Zelensky adviser, said Ukraine needs 300 mobile multiple rocket-launch systems, 1,000 howitzers, 500 tanks, 2,000 armored vehicles and 1,000 drones to achieve parity with Russia in the Donbas region where fighting is concentrated — numbers many times beyond anything that has been publicly discussed in the West. The United States has promised four of the mobile rocket launchers and Britain a few more; Washington has sent a little more than 100 howitzers, and other nations a few dozen more.
faster than Ukrainians can be trained to use them — but Mr. Podolyak, Mr. Zelensky and others clearly mean to keep up the pressure on the West, complaining daily that the current arms flow is woefully inadequate.
mposed tough economic sanctions on Russia, supplied significant financial and military aid to Ukraine, and insisted publicly that it is up to Ukraine’s own, democratically elected leaders to decide how and when to negotiate with Russia.
But they also worry that a long war will bring in NATO countries and even cause President Vladimir V. Putin of Russia to escalate what has been a brutal but conventional campaign. President Emmanuel Macron of France, in particular, has twice said it was important not to “humiliate Russia.”
European officials also worry about the damage being done to their own economies by inflation and high energy prices, and about the likely domestic political backlash. And many in Europe are eager to find a way, even if it’s a temporary cease-fire, to resume Ukrainian grain exports as global food prices soar and parts of the world face a threat of famine.
Such talk raises hackles in Kyiv and in the capitals of Central and Eastern Europe where Russia is most feared, and officials questioned how committed their friends to the west are to beating back Mr. Putin’s aggression. Leaders of several countries that were once part of the Soviet bloc believe this war is about more than Ukraine, and that the Kremlin’s ambitions to re-establish that sphere of influence and overthrow the European security order must be met with defeat, not a cease-fire.
matériel, but fear it could soon be surrounded, trapping a large number of Ukrainian troops.
Mr. Michta wrote for Politico.
“For the first time in the modern era,” he wrote, “it would force Moscow to come to terms with what it takes, economically and politically, to become a ‘normal’ nation-state.”
Reporting was contributed by Andrew E. Kramer and Valerie Hopkins from Kyiv, and Thomas Gibbons-Neff from Lysychansk, Ukraine.
WASHINGTON — Three months into Russia’s invasion of Ukraine, America and its allies are quietly debating the inevitable question: How does this end?
In recent days, presidents and prime ministers as well as the Democratic and Republican Party leaders in the United States have called for victory in Ukraine. But just beneath the surface are real divisions about what that would look like — and whether “victory” has the same definition in the United States, in Europe and, perhaps most importantly, in Ukraine.
In the past few days alone there has been an Italian proposal for a cease-fire, a vow from Ukraine’s leadership to push Russia back to the borders that existed before the invasion was launched on Feb. 24, and renewed discussion by administration officials about a “strategic defeat” for President Vladimir V. Putin — one that would assure that he is incapable of mounting a similar attack again.
After three months of remarkable unity in response to the Russian invasion — resulting in a flow of lethal weapons into Ukrainian hands and a broad array of financial sanctions that almost no one expected, least of all Mr. Putin — the emerging fissures about what to do next are notable.
At their heart lies a fundamental debate about whether the three-decade-long project to integrate Russia should end. At a moment when the U.S. refers to Russia as a pariah state that needs to be cut off from the world economy, others, largely in Europe, are warning of the dangers of isolating and humiliating Mr. Putin.
That argument is playing out as American ambitions expand. What began as an effort to make sure Russia did not have an easy victory over Ukraine shifted as soon as the Russian military began to make error after error, failing to take Kyiv. The administration now sees a chance to punish Russian aggression, weaken Mr. Putin, shore up NATO and the trans-Atlantic alliance and send a message to China, too. Along the way, it wants to prove that aggression is not rewarded with territorial gains.
The differences over war aims broke into the open at the World Economic Forum in Davos this week, as Henry Kissinger, the 99-year old former secretary of state, suggested that Ukraine would likely have to give up some territory in a negotiated settlement, though he added that “ideally the dividing line should be a return to the status quo” before the invasion, which included the Russian annexation of Crimea in 2014 and the seizure of parts of the Donbas.
“Pursuing the war beyond that point would not be about the freedom of Ukraine, but a new war against Russia itself,’’ Mr. Kissinger concluded.
Almost immediately, President Volodymyr Zelensky of Ukraine accused Mr. Kissinger of appeasement, retorting angrily that “I get the sense that instead of the year 2022, Mr. Kissinger has 1938 on his calendar.’’ He was referring to the year Hitler began his sweep across Europe — the event that caused Mr. Kissinger, then a teenager, to flee with his family to New York. “Nobody heard from him then that it was necessary to adapt to the Nazis instead of fleeing them or fighting them.”
But Mr. Zelensky has at various moments voiced contradictory views on what it would take to end the war, even offering to commit his country to “neutrality” rather than aspiring to join NATO.
Differing objectives, of course, make it all the more difficult to define what victory — or even a muddled peace — would look like. And they foreshadow a coming debate about what position Mr. Zelensky and his Western allies would take if negotiations to end the conflict finally get going. If Mr. Zelensky agreed to some concessions, would the United States and its allies lift many of their crushing sanctions, including the export controls that have forced Russia to shutter some of its factories for building tanks? Or would doing that doom their hopes of crippling Russia’s future capabilities?
In the end, American officials say, the hard choices will have to be made by Mr. Zelensky and his government. But they are acutely aware that if Mr. Putin gets his land bridge to Crimea, or sanctions are partially lifted, Mr. Biden will be accused by Republican critics — and perhaps some Democrats — of essentially rewarding Mr. Putin for his effort to redraw the map of Europe by force.
The debate is breaking out just as the shape of the war is changing, once again.
Three months ago, Mr. Putin’s own strategic objective was to take all of Ukraine — a task he thought he could accomplish in mere days. When that failed in spectacular fashion, he retreated to Plan B, withdrawing his forces to Ukraine’s east and south. It then became clear that he could not take key cities like Kharkiv and Odesa. Now the battle has come down to the Donbas, the bleak, industrial heartland of Ukraine, a relatively small area where he has already made gains, including the brutal takeover of Mariupol and a land bridge to Crimea. His greatest leverage is his naval blockade of the ports Ukraine needs to export wheat and other farm products, a linchpin of the Ukrainian economy and a major source of food for the world.
So far, with Russia gaining ground, there is no evidence yet that Mr. Putin is willing to enter negotiations. But pressure will build as sanctions bite deeper into his energy exports, and the cutoff of key components hampers weapons production for his depleted military.
“Putin, whether we like it or not, will have to bring home some bacon, and Mariupol is a small slice, but a slice,” Dov S. Zakheim, a former senior official in the Defense Department, said in a recent interview. “And the cost to Ukraine of life and matériel will continue to increase. So it’s a difficult political decision for Ukraine.”
From Biden, a Drive to Cripple Russia
For the first two months of the war, President Biden and his top aides largely spoke about providing Ukraine with whatever help it needed to defend itself — and about punishing Russia with sanctions on an unprecedented scale.
Every once in a while, there were hints of broader goals that went beyond pushing Russia back to its own borders. Even before the invasion, Jake Sullivan, the president’s national security adviser, warned that if Russia attempted to take Ukraine by force, “its long-term power and influence will be diminished.”
But on April 25, Defense Secretary Lloyd J. Austin III, speaking with a bluntness that took his colleagues by surprise, acknowledged that Washington wanted more than a Russian retreat. It wanted its military permanently damaged.
“We want to see Russia weakened to the degree it cannot do the kinds of things that it has done in invading Ukraine,” Mr. Austin said.
Mr. Austin’s candor prompted the White House to insist he wasn’t changing policy — just giving voice to the reality of what the sanctions and export controls were intended to do. But over time administration officials have gradually shifted in tone, talking more openly and optimistically about the possibility of Ukrainian victory in the Donbas.
Last week in Warsaw, the U.S. ambassador to NATO, Julianne Smith, a former national security aide to Mr. Biden, said: “We want to see a strategic defeat of Russia.”
Now, in meetings with Europeans and in public statements, administration officials are articulating more specific goals. The first is that Ukraine must emerge as a vibrant, democratic state — exactly what Mr. Putin was seeking to crush.
The second is Mr. Biden’s oft-repeated goal of avoiding direct conflict with Russia. “That’s called World War III,” Mr. Biden has said repeatedly.
Then come various versions of the goal Mr. Austin articulated: that Russia must emerge as a weakened state. In testimony earlier this month, Avril D. Haines, the director of national intelligence, explained Washington’s concern. “We assess President Putin is preparing for prolonged conflict in Ukraine, during which he still intends to achieve goals beyond the Donbas,” she said.
And increasingly, American officials talk about using the crisis to strengthen international security, winning over nations that were on the fence between allying with the West or with an emerging China-Russia axis.
As the United States hones its message, no one wants to get ahead of Mr. Zelensky, after months of administration proclamations that there will be “nothing decided about Ukraine without Ukraine.”
“President Zelensky is the democratically elected president of a sovereign nation, and only he can decide what victory is going to look like and how he wants to achieve it,” John F. Kirby, the Pentagon press secretary, said on April 29.
In Europe, Unity Begins to Fracture
NATO and the European Union have been surprisingly united so far in supporting Ukraine, both with painful economic sanctions aimed at Russia and in supplying an increasing quantity of weapons to Ukraine, though not jet fighters or advanced tanks.
But that unity is under strain. Hungary, which has supported five earlier sanctions packages, has balked at an embargo on Russian oil, on which it depends. And the Europeans are not even trying, at least for now, to cut off their imports of Russian gas.
The divisions are visible in war aims, too.
Leaders in central and eastern Europe, with its long experience of Soviet domination, have strong views about defeating Russia — even rejecting the idea of speaking to Mr. Putin. Estonia’s prime minister, Kaja Kallas, and Poland’s prime minister, Mateusz Morawiecki, speak of him as a war criminal, as Mr. Biden did.
“All these events should wake us from our geopolitical slumber and cause us to cast off our delusions, our old delusions, but is that enough?” Mr. Morawiecki said last week. “I hear there are attempts to allow Putin to somehow save face in the international arena. But how can you save something that has been utterly disfigured?” he asked.
But France, Italy and Germany, the biggest and richest countries of the bloc, are anxious about a long war or one that ends frozen in a stalemate, and nervous of the possible damage to their own economies.
Those countries also think of Russia as an inescapable neighbor that cannot be isolated forever. Following his re-election, Emmanuel Macron of France began hedging his bets, declaring that a future peace in Eastern Europe must not include an unnecessary humiliation of Russia, and could include territorial concessions to Moscow.
Italian Prime Minister Mario Draghi called this month for a cease-fire in Ukraine “as soon as possible” to enable a negotiated end to the war. Mr. Draghi, who has taken a hard line against Russia in traditionally Moscow-friendly Italy, said economic pressure was important “because we have to bring Moscow to the negotiating table.”
Zelensky’s Choice: Territorial Integrity or Grinding War
Mr. Zelensky has been careful not to expand his aims toward a larger degradation of Mr. Putin’s regime. He has said repeatedly that he wants the Russians pushed back to where they were on Feb. 23, before the large-scale invasion started.
Only then, he has said, would Ukraine be prepared to negotiate seriously again with Russia about a cease-fire and a settlement. He said again this week that the war will have to end with a diplomatic solution, not a sweeping military victory.
But even those aims are considered by some European officials and military experts to be ambitious. To get there, Ukraine would have to take back Kherson and the ravaged city of Mariupol. It would have to push Russia out of its land bridge to Crimea and stop Russia from annexing large parts of Donetsk and Luhansk.
Many experts fear that is beyond Ukraine’s capability.
While Ukraine did remarkably well in the first phase of the war, Donbas is very different. To go on the offensive normally requires a manpower advantage of 3 to 1, weaponry aside, which Ukraine does not now possess. The Russians are making slow but incremental gains, if at a high cost in casualties. (While Washington and London are happy to provide estimates of Russian casualties, sometimes rather high, according to some military experts, they say little about Ukrainian casualties. Ukraine is treating those figures as state secrets.)
“What is victory for Ukraine?” asked Daniel Fried, a former U.S. ambassador to Poland and longtime senior U.S. diplomat. “The Biden Administration’s comfort zone is not a bad place to be — that it’s up to the Ukrainians to decide,” Mr. Fried said. “I agree, because there’s no way a detailed conversation now on what is a just settlement will do any good, because it comes down to what territories Ukraine should surrender.”
David E. Sanger and Eric Schmitt reported from Washington. Steven Erlanger reported from Brussels. Julian Barnes and Helene Cooper contributed reporting from Washington.
DAVOS, Switzerland — Fears of a global food crisis are swelling as Russian attacks on Ukraine’s ability to produce and export grain have choked off one of the world’s breadbaskets, fueling charges that President Vladimir V. Putin is using food as a powerful new weapon in his three-month-old war.
World leaders called on Tuesday for international action to deliver 20 million tons of grain now trapped in Ukraine, predicting that the alternative could be hunger in some countries and political unrest in others, in what could be the gravest global repercussion yet of Russia’s assault on its neighbor. At the World Economic Forum in Davos, Switzerland, where worries about the war’s consequences have eclipsed almost every other issue, speakers reached for apocalyptic language to describe the threat.
“It’s a perfect storm within a perfect storm,” said David Beasley, the executive director of the World Food Program, a United Nations agency. Calling the situation “absolutely critical,” he warned, “We will have famines around the world.”
The world’s food distribution network was already strained by pandemic-related disruptions, and exports from Ukraine, ordinarily among the world’s biggest suppliers, have plummeted because of the war. Russia has seized some the country’s Black Sea ports and blockaded the rest, trapping cargo vessels laden with corn, wheat, sunflower seeds, barley and oats.
Russian forces have taken control of some of Ukraine’s most productive farmland, destroyed Ukrainian infrastructure that is vital to raising and shipping grain, and littered farm fields with explosives. Ursula von der Leyen, the president of the European Union’s executive branch, told the political and business leaders gathered in Davos that Russia — an even bigger exporter — had confiscated Ukrainian grain stocks and agricultural machinery.
“On top of this,” she said, “Russia is now hoarding its own food exports as a form of blackmail, holding back supplies to increase global prices, or trading wheat in exchange for political support.”
The fighting in Ukraine is increasingly concentrated in a small pocket of the Donbas region of eastern Ukraine, where Russia’s battered forces are making slow, bloody progress as they try to encircle the strategically important city of Sievierodonetsk, the easternmost Ukrainian stronghold.
Within the city, once an industrial hub, the devastation from Russian artillery is evident on every street in the form of shattered buildings, burned-out vehicles and cratered pavement. Russian pincers approaching the city from the north and south are separated by just 16 miles, but face “strong Ukrainian resistance,” the British Defense Ministry said on Tuesday.
Three months into the war, the United States and its allies have shown remarkable solidarity so far in supporting Ukraine with weapons and other aid, and in punishing Russia with economic sanctions, but the limits of that unity are being tested. Finland and Sweden have signaled that they want to abandon their long-held neutrality to join NATO, but that plan is being held up by one member country, Turkey. At the same time, Hungary is blocking an E.U. plan to embargo imports of Russian oil.
Within both blocs, officials have offered assurances, without specifics, that the roadblocks will soon be overcome. Jens Stoltenberg, the NATO secretary general, said Tuesday that he was confident Sweden and Finland would join the alliance, though “I cannot tell you exactly how and when.” Diplomats from the two Nordic countries traveled to Turkey for talks on the issue.
The European Union, heavily dependent on Russian fuels, has already agreed to a phased embargo on natural gas from Russia, and the head of the International Energy Agency, Fatih Birol, warned that Europe could face gas rationing next winter.
“I’m advising several European governments to prepare a contingency plan,” Mr. Birol said at Davos. He added that “Europe is paying for its over-dependence on Russian energy.”
Ukraine has applied to join the European Union, and on Tuesday its government rejected a French proposal for something short of full membership. Russia has vehemently opposed any expansion of NATO and E.U. membership for Ukraine, but its aggression has backfired, making those associations more attractive to its neighbors.
Increasingly isolated, the Kremlin has looked to Beijing for support, and Russia held joint military maneuvers on Tuesday with China, their first since the war in Ukraine began. The show of force included bomber flights over the Sea of Japan, while President Biden was not far away, in Tokyo, for meetings with world leaders.
But the food crisis took center stage at Davos, where President Andrzej Duda of Poland warned that famine in Africa and elsewhere would prompt a flood of migration to Europe, where searing memories are fresh of the 2015-2016 migration wave that strained E.U. unity and empowered xenophobic nationalist movements.
Ukraine and Russia ordinarily account for about one-quarter of the grain traded internationally; in recent years, Ukraine had exported an average of about 3.5 million tons of per month. In March, only 300,000 tons were shipped out, though exports rebounded somewhat to more than a million tons in April and could reach 1.5 million tons in May, said Roman Slaston, the chief of Ukraine’s agricultural industry group.
Ukraine’s agriculture ministry says that the Black Sea blockade has prevented 14 million tons of corn, 7 million tons of wheat and 3 million tons of sunflower seeds from reaching world markets. Ukrainian officials have accused Moscow of stealing Ukraine’s produce and then selling it abroad as Russian.
Western officials are circulating proposals for getting grain out of Ukraine, such as having multiple countries send warships to escort cargo ships from Ukrainian ports and run the blockade, but that runs the danger of a shooting confrontation with Russian vessels. Sending ships from NATO countries is considered particularly risky — like the rejected idea of having NATO members enforce a no-fly zone to keep Russian warplanes away from Ukraine — so much of the talk has been about countries outside the alliance taking part.
But Mr. Stoltenberg, the NATO chief, warned that breaking the Black Sea blockade would be very hard.
“Is it possible to get it out on ships? That is a difficult task. It’s not an easy way forward,” he said.
Ukraine has continued to ship grain overland through Europe, and work is underway to expand such routes, Ms. von der Leyen and Mr. Slaston said — but doing so on a scale great enough to replace seagoing shipment would be very difficult. The railways in Eastern Europe use different gauges, which means switching equipment when going long distances, and many of Ukraine’s railroads, highways and bridges have been damaged by Russian attacks.
One farmer said he lost 50 rail cars full of grain when his cargo got stranded between Russian airstrikes in front of and behind the train.
But the problem is not limited to shipping — farming, itself, has been greatly diminished by the war. In some places, fighting has simply made the work too dangerous. In others, Russian strikes on fuel depots have left farmers unable to power their tractors.
Farmers accuse Russian forces of regularly targeting their grain silos and seizing their grain stores, particularly in the south.
And perhaps most frightening are the countless mines left by retreating Russian forces, especially in the north. The Ukrainian Deminers Association, a group that locates and removes explosives, says nearly 45 percent of the fields it has inspected in the Kyiv and Chernihiv regions were mined.
Gordie Siebring, a farmer based near the Belarusian border, said Ukrainian military authorities warned him he could not sow the fields closest to the frontier because of the mine threat, meaning he has been unable to plant 8 to 10 percent of his field. Neighboring farmers have it much worse, he said, because Russian mines have made over two-thirds of their fields too dangerous to use.
“If they are as close as 10 to 15 kilometers away, they can launch mines with artillery,” he said. “These mines have small parachutes and land in the fields and have sensors that cause detonation later. Those are really causing havoc.”
Another threat to global supplies, experts say, is that countries will hoard their own food stocks. Robert Habeck, the vice chancellor and minister of economic affairs of Germany, said countries should curb their use of grain to make biofuel and to feed livestock.
“Markets have to stay open,” Mr. Habeck said in an interview. “The worst thing that can happen now is that every country cares for its own supply, saves all the wheat, saves all the food, and does not give it to the market, because then we have no chance of securing the food supply.”
Before the war, droughts in North America and the Horn of Africa, poor harvests in China and France, and the pandemic were already squeezing food supplies, leaving the world uncommonly vulnerable. By December, global wheat prices had risen about 80 percent in a little over a year, according to the International Monetary Fund.
Even before Russian tanks rolled across Ukraine’s border, experts were warning of “a massive surge in food insecurity and the threat of famine,” said Adam Tooze, director of the European Institute at Columbia University.
The war, he said, is “impacting an incredibly fragile food system.”
At the same time, the spike in oil and gas prices caused by the war has triggered an even sharper increase in the cost of fertilizers made in part from those fuels.
Ms. von der Leyen said E.U. countries were increasing their own grain production and working with the World Food Program to ship available stocks to vulnerable countries at affordable prices.
“Global cooperation is the antidote to Russia’s blackmail,” she said.
Mark Landler, Matina Stevis-Gridneff and Patricia Cohen reported from Davos, Switzerland, and Erika Solomon from Lviv, Ukraine. Reporting was contributed by Carlotta Gall from Sievierodonetsk, Ukraine; Edward Wong from Washington; Matthew Mpoke Bigg from Krakow, Poland; and Monika Pronczuk from Brussels.
Shortly after Russia passed a new censorship law that effectively criminalized accurate reporting on the war in Ukraine, CNN executives on two continents gathered for an emergency video call to figure out what would happen next.
The 24-hour news network had employed numerous correspondents in Russia since the latter years of the Soviet Union. Now their future in the country, and perhaps their safety, were up in the air.
Senior producers in New York and London conferred with lawyers at CNN headquarters in Atlanta and reporters in Moscow about the new law, which raised the prospect of 15-year prison terms for journalists who called the war in Ukraine a “war.” Within hours, the network ceased broadcasting in Russia, joining other Western news outlets — including the BBC, Bloomberg News and ABC News — that temporarily or partly suspended their Moscow-based operations.
“When it comes to a potential threat to somebody, that far and away outweighs everything else in the consideration,” Michael Bass, CNN’s executive vice president of programming, said in an interview. “It would be better for our reporting and our coverage of the story to continue reporting every single day and multiple times a day from Russia, but an assessment had to be made of what can be done for your people.”
In an echo of the exodus of journalists from Afghanistan after the Taliban swept through the country last year, media executives and editors are engaged in a high-stakes debate about risk in Russia. Is it prudent, they ask their reporters over secure apps each day, to gather news in an increasingly hostile and isolated country? If not, is it feasible to continue from outside its borders?
“There is a constant minute-to-minute triage of that balance,” said Matthew Baise, director of digital strategy at Voice of America, the U.S. government broadcaster, which until recently employed several journalists reporting from Russia. “Every day, we’re attempting to adapt to the situation there while not jeopardizing people’s lives, but we also have to have a way to get reporting out of the country.”
Now a dozen Voice of America employees have left Russia. and others are lying low, Mr. Baise said.
Clarissa Ward, CNN’s chief international correspondent, said in an interview from Kyiv, Ukraine, that “it’s a huge blow to not be able to do the kind of journalism we all aspire to do in Russia at the moment.”
“It’s not just a global audience — there are a lot of Russians inside Russia who look to international news outlets to get a more well-rounded perspective,” said Ms. Ward, who has been reporting from Ukraine for nearly two months. One crucial perspective that can be lost, she said, is “how Russia is viewing this war, what ordinary Russians think about it.”
Inside Ukraine, journalists are facing more direct — and potentially lethal — risks. Brent Renaud, an American documentary filmmaker, was fatally shot in the head on Sunday in a suburb of Kyiv. On Monday, a Fox News correspondent, Benjamin Hall, was hospitalized after he was injured outside Kyiv.
Days earlier, Ms. Ward described via telephone how she and her CNN crew work from 9 a.m. to 4 a.m. each day, starting by assessing whether it is safe to travel outside their hotel. Often, spotty cellular service and security concerns force them to improvise: A 15-minute live dispatch from a subway station, where hundreds of Ukrainians were sheltering from a bombardment, was filmed on a producer’s phone.
For now, in Russia, the threat to journalism is statutory, but still dire: Under the new law, many correspondents there face the prospect of yearslong prison terms for doing their jobs. That has led to a stunning disintegration of Russia’s independent media, and left international news outlets racked with uncertainty.
Amnesty International said on Thursday that 150 journalists had fled the country to avoid the new law, which Marie Struthers, the group’s director for Eastern Europe and Central Asia, called “a scorched-earth strategy that has turned Russia’s media landscape into a wasteland.”
Amid the strangled flow of outside news, some have gone to great lengths to disrupt the information blackout inside Russia. On Monday, a state television employee burst onto the live broadcast of Russia’s most-watched news show, yelling, “Stop the war!” and holding up a sign that said, “They’re lying to you here.” The employee, Marina Ovsyannikova, was detained after the protest.
A bill introduced last week would create a register of anyone involved, currently or in the past, with media outlets or other organizations that Russia has deemed a “foreign agent.”
News organizations have scrambled to find a working solution as the cohort of credible outlets shrinks and threatens to leave audiences inside and outside the largest nation in the world blind to its dealings.
“There are many other parts of the world where it is unsafe to be a journalist and where newsrooms are having these debates and discussions,” said Damian Radcliffe, a journalism professor at the University of Oregon. “But what’s different here is that this is such a huge, high-profile story that those internal debates are playing out in the public domain in a much more overt way.”
Last week, The New York Times said it would move its editorial staff out of Russia, and The Washington Post said it would protect Moscow-based journalists by removing bylines and datelines from certain stories. Condé Nast said it had suspended its publishing operations there. Correspondents for the Canadian Broadcasting Corporation left Russia on March 6.
“It’s definitely a balancing act, and that’s why we are monitoring the situation closely and taking the necessary time to fully understand the new law,” said Chuck Thompson, a spokesman for the Canadian broadcaster.
Some outlets decided to stay put. The German public broadcasters ARD and ZDF said they planned to resume reporting from Moscow after a suspension. But the coverage will focus on the political, economic and social situations in Russia — such as the effects of economic sanctions on civilians — while the war in Ukraine will be covered from outside the country.
The BBC said last week that “after careful deliberation” it would restart its English-language reporting from Russia. (Its Russian-language correspondents have stopped working.) The broadcaster appointed Steve Rosenberg, its longtime Moscow correspondent, to be its Russia editor, and produced segments on public sentiment and McDonald’s closing its stores.
Still, BBC correspondents “have to be wary and careful about what language they use,” said Jamie Angus, a top executive who oversees news output.
On the air, Mr. Rosenberg describes the fighting as “what the Russians are calling a special military intervention.” Analysis that refers more explicitly to a war or an invasion can be delivered from London, Mr. Angus said.
The BBC has begun broadcasting through alternative channels like shortwave radio and TikTok in hopes of eluding Russian censors. Voice of America said that one day last week, 40 percent of its Russian audience had reached its coverage through censor-evading apps such as Psiphon and nthLink. Its Facebook page has also gotten an unusual surge in traffic from Italy, a sign that some Russian citizens may be using VPN services to bypass information blockades.
“There are no challenges that are insurmountable today in the digital world — we just need to be agile,” said Alen Mlatisuma, the managing editor of Voice of America’s Eurasia division.
Deutsche Welle, Germany’s state-owned broadcaster, had 35 people working in Russia, which was also the hub for coverage of Ukraine, Moldova, Georgia, Kazakhstan and other former Soviet republics.
Last month, the Russian government withdrew the broadcaster’s accreditation and shut down its Moscow studio. Deutsche Welle’s website is now blocked in Russia, and viewership for its Russian Facebook channel plunged. The outlet has pulled all of its reporters out of Russia, said a spokesman, Christoph Jumpelt.
“The fact that they have revoked our credentials and physically kicked us out of the country, and made it impossible to work inside Russia as officially credentialed journalists, doesn’t mean that we cannot continue to cover Russia from inside Russia,” Mr. Jumpelt said. “There are many, many ways to get access to information.”
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 cost of energy. Oil prices already are the highest since 2014, and they have risen as the conflict has escalated. Russia is the third-largest producer of oil, providing roughly one of every 10 barrels the global economy consumes.
Gas supplies. Europe gets nearly 40 percent of its natural gas from Russia, and it is likely to be walloped with higher heating bills. Natural gas reserves are running low, and European leaders have accused Russia’s president, Vladimir V. Putin, of reducing supplies to gain a political edge.
Shortages of essential metals. The price of palladium, used in automotive exhaust systems and mobile phones, has been soaring amid fears that Russia, the world’s largest exporter of the metal, could be cut off from global markets. The price of nickel, another key Russian export, has also been rising.
Financial turmoil. Global banks are bracing for the effects of sanctions designed to restrict Russia’s access to foreign capital and limit its ability to process payments in dollars, euros and other currencies crucial for trade. Banks are also on alert for retaliatory cyberattacks by Russia.
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.
Russia’s threatened invasion of Ukraine could have economic repercussions globally and in the United States, ramping up uncertainty, roiling commodity markets and potentially pushing up inflation as gas and food prices rise around the world.
Russia is a major producer of oil and natural gas, and the brewing geopolitical conflict has sent prices of both sharply higher in recent weeks. It is also the world’s largest wheat exporter, and is a major food supplier to Europe.
The United States imports relatively little directly from Russia, but a commodities crunch caused by a conflict could have knock-on effects that at least temporarily drive up prices for raw materials and finished goods when much of the world, including the United States, is experiencing rapid inflation.
Global unrest could also spook American consumers, prompting them to cut back on spending and other economic activity. If the slowdown were to become severe, it could make it harder for the Federal Reserve, which is planning to raise interest rates in March, to decide how quickly and how aggressively to increase borrowing costs. Central bankers noted in minutes from their most recent meeting that geopolitical risks “could cause increases in global energy prices or exacerbate global supply shortages,” but also that they were a risk to the outlook for growth.
contending with quickly rising prices, businesses are trying to navigate roiled supply chains and people report feeling pessimistic about their financial outlooks despite strong economic growth.
“The level of economic uncertainty is going to rise, which is going to be negative for households and firms,” said Maurice Obstfeld, a senior fellow at the Peterson Institute for International Economics, noting that the effect would be felt most acutely in Europe and to a lesser degree in the United States.
A major and immediate economic implication of a showdown in Eastern Europe ties back to oil and gas. Russia produces 10 million barrels of oil a day, roughly 10 percent of global demand, and is Europe’s largest supplier of natural gas, which is used to fuel power plants and provide heat to homes and businesses.
The United States imports comparatively little Russian oil, but energy commodity markets are global, meaning a change in prices in one part of the world influences how much people pay for energy elsewhere.
It is unclear how much a conflict would push up prices, but energy markets have already been jittery — and fuel prices have risen sharply — on the prospect of an invasion.
loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.
What causes inflation? It can be the result of rising consumer demand. But inflation can also rise and fall based on developments that have little to do with economic conditions, such as limited oil production and supply chain problems.
Is inflation bad? It depends on the circumstances. Fast price increases spell trouble, but moderate price gains can lead to higher wages and job growth.
Can inflation affect the stock market? Rapid inflation typically spells trouble for stocks. Financial assets in general have historically fared badly during inflation booms, while tangible assets like houses have held their value better.
If a conflict drives global uncertainty and causes investors to pour money into dollars, pushing up the value of the currency, it could actually make United States imports cheaper.
Other trade risks loom. Unrest at the nexus of Europe and Asia could pose risk for supply chains that have been roiled by the pandemic.
Phil Levy, the chief economist at Flexport, said that Russia and Ukraine were far less linked into global supply chains than a country like China, but that conflict in the area could disrupt flights from Asia to Europe. That could pose a challenge for industries that move products by air, like electronics, fast fashion and even automakers, he said at an event at the National Press Foundation on Feb. 9.
“Air has been a means of getting around supply chain problems,” Mr. Levy said. “If your factory was going to shut because you don’t have a key part, you might fly in that key part.”
Some companies may not yet realize their true exposure to a potential crisis.
Victor Meyer, the chief operating officer of Supply Wisdom, which helps companies analyze their supply chains for risk, said that some companies were surprised by the extent of their exposure to the region during the Russian invasion of Ukraine in 2014, when it annexed Crimea.
Mr. Meyer noted that if he were a chief security officer of a company with ties to Ukraine, “I would militate rather strongly to unwind my exposure.”
There could also be other indirect effects on the economy, including rattling consumer confidence.
Households are sitting on cash stockpiles and probably could afford higher prices at the pump, but climbing energy costs are likely to make them unhappy at a moment when prices overall are already climbing and economic sentiment has swooned.
“The hit would be easily absorbed, but it would make consumers even more miserable, and we have to assume that a war in Europe would depress confidence directly too,” Ian Shepherdson at Pantheon Macroeconomics wrote in a Feb. 15 note.
Another risk to American economic activity may be underrated, Mr. Obstfeld said: The threat of cyberattack. Russia could respond to sanctions from the United States with digital retaliation, roiling digital life at a time when the internet has become central to economic existence.
“The Russians are the best in the world at this,” he said. “And we don’t know the extent to which they have burrowed into our systems.”