Scholz promises 65 bln euros to shield Germans through tough winter

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  • Package funded through additional tax revenue
  • Gas stores now 85% full
  • Scholz promises welfare state will shield Germany from turmoil

BERLIN, Sept 4 (Reuters) – Germany will spend at least 65 billion euros ($64.7 billion) on shielding customers and businesses from soaring inflation, Chancellor Olaf Scholz said on Sunday, two days after Russia announced it was suspending some gas deliveries indefinitely.

The measures, agreed after 22 hours of talks between the three coalition parties, included benefit hikes and a public transport subsidy, to be paid for from a tax on electricity companies and by bringing forward Germany’s implementation of the planned 15% global minimum corporate tax.

Russia’s invasion of Ukraine in February has led to inflation worldwide and prompted warnings of social and economic turmoil as the world weans itself off cheap energy and flexible global supply chains.

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In Germany, where year-on-year inflation was running at 7.9% in August, the effect has been exacerbated by Russia’s reduction in volumes of gas pumped to the country, which has caused a surge in the price of energy fuelling Europe’s largest economy.

“Russia is no longer a reliable energy partner,” Scholz told a news conference, adding that Germany’s earlier preparations meant that it would get through the winter heating season.

Gas stores reached 85% of capacity on Saturday, almost a month ahead of schedule, partly thanks to corporate consumers cutting consumption.

But while supplies were sufficient, the government would need to help shield consumers and businesses from the higher costs, he said.

“You’ll never walk alone,” he added, switching to English to recite a song famously adopted by fans of English soccer club Liverpool.

The energy crunch came into sharper relief when Russia’s state-controlled energy giant Gazprom (GAZP.MM) said on Friday that it was keeping closed its main Nord Stream 1 pipeline, the biggest single pipeline carrying Russian gas to Germany.

Scholz rejected suggestions that losing the steady flows of cheap Russian gas off which Germany has prospered for dedcades could herald a new, darker era for his country.

“Germany will come through this time as a democracy because we are very economically strong and we are a welfare state: the two together are important,” he told ZDF television. “With every new windpark, we will become more independent.”

The latest package brings to 95 billion euros the amount allocated to inflation-busting since the Ukraine war began in February. By contrast, the government spent 300 billion euros on propping up the economy over the two years of the pandemic.

Finance Minister Christian Lindner said the 65 billion announced on Sunday could be increased if electricity prices rose further. The windfall tax – dubbed a “coincidence tax” to assuage his party’s objections to the original term – would bring in revenue in the “two-digit billions”, he said.

Part of the proceeds would be used to offer 1.7 billion euros in tax breaks to 9,000 energy intensive companies, a government document showed.

($1 = 1.0049 euros)

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Reporting by Thomas Escritt
Editing by David Goodman and Frances Kerry

Our Standards: The Thomson Reuters Trust Principles.

Thomas Escritt

Thomson Reuters

Berlin correspondent who has investigated anti-vaxxers and COVID treatment practices, reported on refugee camps and covered warlords’ trials in The Hague. Earlier, he covered Eastern Europe for the Financial Times. He speaks Hungarian, German, French and Dutch.

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Ukraine Girds For Heavy Attacks As It Marks Independence Day

Independence Day commemorates Ukraine’s 1991 declaration of independence from the Soviet Union.

Ukraine nervously braced for what President Volodymyr Zelenskyy warned could be especially brutal Russian attacks Wednesday as the country observed its Independence Day — and marked the war’s six-month point — under conditions considered too dangerous to allow any major public celebrations in the capital.

Residents of Kyiv woke up to air raid sirens, but there were no immediate airstrikes. The capital has been largely spared from attack in recent months, as a war that was widely expected to be a lightning conquest by Moscow turned into a grinding conflict fought largely in the east and south.

Outgoing British Prime Minister Boris Johnson marked the holiday with a visit to Kyiv — his third since the war started — and other European leaders used the occasion to pledge unwavering support for the country and pay tribute to the sacrifices of its people. The U.S. announced a major new military aid package totaling nearly $3 billion to help Ukrainian forces fight for years to come.

Independence Day commemorates Ukraine’s 1991 declaration of independence from the Soviet Union.

Kyiv authorities banned large gatherings in the capital through Thursday, fearing the national holiday might bring particularly heavy Russian missile strikes.

“Russian provocations and brutal strikes are a possibility,” Zelenskyy said in a statement. “Please strictly follow the safety rules. Please observe the curfew. Pay attention to the air sirens. Pay attention to official announcements. And remember: We must all achieve victory together.”

Nevertheless, a festive atmosphere prevailed at Kyiv’s Maidan square as thousands of Kyiv residents posed for pictures next to burned-out Russian tanks put on display. Folk singers set up, and many revelers — ignoring the sirens — were out and about in traditionally embroidered dresses and shirts.

Others were fearful.

“I can’t sleep at night because of what I see and hear about what is being done in Ukraine,” said a retiree who gave only her first name, Tetyana, her voice shaking with emotion. “This is not a war. It is the destruction of the Ukrainian people.”

In a holiday message to the country, Zelenskyy said: “Six months ago, Russia declared war on us. On Feb. 24, all of Ukraine heard explosions and gunshots. … On Feb. 24, we were told: You have no chance. On Aug. 24, we say: Happy Independence Day, Ukraine!”

U.S. President Joe Biden said the latest American aid package will allow Ukraine to acquire air defense and artillery systems and other weapons.

“I know this Independence Day is bittersweet for many Ukrainians as thousands have been killed or wounded, millions have been displaced from their homes, and so many others have fallen victim to Russian atrocities and attacks,” President Biden said. “But six months of relentless attacks have only strengthened Ukrainians’ pride in themselves, in their country, and in their 31 years of independence.”

Britain’s Johnson urged Western allies to maintain their support of Ukraine through the winter.

“This is not the time to put forward flimsy negotiating proposals,” he said. “You can’t negotiate with a bear when it’s eating your leg or with a street robber when he has you pinned to the floor.”

In Germany, Chancellor Olaf Scholz rebuked the Kremlin for its “backward imperialism” and declared that Ukraine “will drive away the dark shadow of war because it is strong and brave, because it has friends in Europe and all over the world.”

A car bombing outside Moscow that killed the 29-year-old daughter of right-wing Russian political theorist Alexander Dugin on Saturday also heightened fears that Russia might intensify attacks on Ukraine this week. Russian officials have blamed Ukraine for the death of Darya Dugina, a pro-Kremlin TV commentator. Ukraine has denied any involvement.

Russian President Vladimir Putin’s forces have encountered unexpectedly stiff Ukrainian resistance in their invasion and abandoned their effort to storm the capital in the spring. The fighting has turned into a war of attrition that has reduced neighborhoods to rubble and sent shock waves through the world economy.

Russian Defense Minister Sergei Shoigu, speaking Wednesday at a meeting of his counterparts from a security organization dominated by Russia and China, claimed the slow pace of Moscow’s military action was due to what he said was an effort to spare civilians.

Russian forces have repeatedly targeted civilian areas in cities, including hospitals and a Mariupol theater where hundreds of people were taking shelter.

But Shoigu said Russia is carrying out strikes with precision weapons against Ukrainian military targets, and “everything is done to avoid civilian casualties.”

“Undoubtedly, it slows down the pace of the offensive, but we do it deliberately,” he said.

He also criticized the U.S. and its allies for “continuing to pump weapons into Ukraine,” saying the aid is dragging out the conflict and increasing the number of victims.

On the battlefield, Russian forces struck several towns and villages in Donetsk province in the east over 24 hours, killing one person, authorities said.

In the Dnipropetrovsk region on the southern front, the Russians again shelled the cities of Nikopol and Marhanets, damaging several buildings and wounding two people, authorities said. Russian troops also shelled the city of Zaporizhzhia, but no casualties were reported.

Additional reporting by The Associated Press.

Source: newsy.com

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Heat and Drought in Europe Strain Energy Supply

ASERAL, Norway — In a Nordic land famous for its steep fjords, where water is very nearly a way of life, Sverre Eikeland scaled down the boulders that form the walls of one of Norway’s chief reservoirs, past the driftwood that protruded like something caught in the dam’s teeth, and stood on dry land that should have been deeply submerged.

“You see the band where the vegetation stops,” said Mr. Eikeland, 43, the chief operating officer of Agder Energi, pointing at a stark, arid line 50 feet above the Skjerkevatn reservoir’s surface. “That’s where the water level should be.”

thousands of northern homes without electricity.

reignited talk of investing in nuclear power and has dried up the waterways crucial for transporting coal.

most severe drought on record in France has also cost the country’s energy production, as nuclear plants responsible for more than 70 percent of the country’s electricity had to cut down activity temporarily to avoid discharging dangerously warm water into rivers.

Many of France’s 56 nuclear plants were already offline for maintenance issues. But the rivers that cool reactors have become so warm as a result of the punishing heat that strict rules designed to protect wildlife have prevented the flushing of the even warmer water from the plants back into the waterways.

power grid operators to hire more workers amid fears of electricity shortages.

In Norway, a winter without much snow and an exceptionally dry spring, including the driest April in 122 years, reduced water levels in lakes and rivers. Shallow waters in Mjosa, the country’s largest lake, kept its famed Skibladner paddle wheel boat tied up at port and prompted city officials in Oslo to send out text messages urging people to take shorter showers and avoid watering lawns.

“Do that for Oslo,” read the text message, “so that we’ll still have water for the most important things in our lives.” In May, Statnett SF, the operator of the national electricity grid, raised the alarm about shortfalls.

But the skies offered no relief and this month, as the country’s hydro reservoirs — especially in the south — approached what Energy Minister Terje Aasland has called “very low” levels, hydropower producers cut output to save water for the coming winter.

The reservoirs were about 60 percent full, about 10 percent less than the average over the previous two decades, according to data from the energy regulator.

Southern Norway, which holds more than a third of the country’s reservoirs, is dotted with red barns on green fields and fishing boats along the coast. On a stream in the Agder region, a sign put up by the energy company, like a relic from another time, warned, “The water level can rise suddenly and without warning.”

But recent months have shown that there is danger in the water level dropping, too. Reservoirs had dwindled to their lowest point in 20 years, at just 46 percent full. One, Rygene, was so low as to force the temporary closing of the plant. On Tuesday, the rainstorms returned, but the ground was so dry, Mr. Eikeland said as he surveyed the basin, that the earth “drinks up all the water” and the water levels in the reservoirs barely rose.

He sped his electric car farther south toward Kristiansand, where a large grid sends electricity around the country’s south and to Denmark. In a fenced-off area above the hill, a Norwegian industrial developer was building a data center for clients such as Amazon, which would suck up a significant share of locally produced electricity in order to cool vast computer servers.

This year’s drought has only highlighted the urgent need for a wider energy transformation, Mr. Eikeland said.

“The drought shows that we are not ready for the big changes,” he said, but also “that we will not accept the high prices.”

Reporting was contributed by Christopher F. Schuetze from Germany, Constant Méheut from France, Gaia Pianigiani from Italy, Isabella Kwai from London and Henrik Pryser Libell from Norway.

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Finland limits visas to Russians amid rush of Europe-bound tourists

HELSINKI, Aug 16 (Reuters) – Finland will slash the number of visas issued to Russians from Sept. 1, the Finnish foreign ministry said in a statement on Tuesday, amid a rush of Russian tourists bound for Europe.

Finnish land border crossings have remained among the few entry points into Europe for Russians after a string of Western countries closed their airspace to Russian planes in response to Russia’s attack on Ukraine.

The Finnish government agreed on Tuesday to curtail their numbers, after Russian tourists begun using Finland’s Helsinki-Vantaa airport as a gateway to European holiday destinations following Russia’s lifting of pandemic-related border restrictions a month ago.

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“And this maybe is not very appropriate if we, for example, think of the airspace restrictions put in place for Russia,” Foreign Minister Pekka Haavisto told reporters after government talks.

Finland would cut daily visa application appointments in Russia from 1,000 to 500 per day, with just 100 allocated to tourists, the ministry said.

The number of visas granted was already much lower than before the pandemic and the war. In July, Finland granted just 16,000 visas to Russians, compared with 92,100 during the same month in 2019, foreign ministry statistics showed.

Finland and the Baltic states would also propose that the European Union discontinues a visa facilitation agreement with Russia that makes it easier for Russians to travel to and within the European Union, Haavisto said.

Some EU leaders, such as Finnish Prime Minister Sanna Marin and her Estonian counterpart Kaja Kallas, have called for an EU-wide visa ban, which German Chancellor Olaf Scholz contested on Monday, saying Russians should be able to flee their home country if they disagree with the government. read more

Finland was looking into creating a national humanitarian visa that could be granted to Russians that needed to flee or visit Europe for purposes such as journalism or advocacy, Haavisto added.

According to EU rules, a tourist must apply for a visa from the country they intend to visit but can enter the border-check-free Schengen area from any point and travel around it for up to 90 days in a 180-day period.

Oleg Morozov, a Russian member of parliament, said in an article published by news agency RIA Novosti that Moscow should stop allowing Finns to travel to the country except for things such as medical treatment or to attending funerals, saying Russia could manage without “cross-border trips by Finns to buy petrol”.

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Reporting by Essi Lehto, editing by Stine Jacobsen, Bernadette Baum and Alex Richardson

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Germans Tip-Toe Up the Path to Energy Savings

AUGSBURG, Germany — Wolfgang Hübschle went into city government expecting a simple life, planning things like traditional festivals replete with lederhosen.

Instead, these days he has the unpopular task of calculating which traffic lights to shut off, how to lower temperatures in offices and swimming pools — and perhaps, if it comes to it, pulling the plug on Bavarians’ beloved but energy-intensive breweries.

Municipal officials like Mr. Hübschle, the economic adviser to the provincial Bavarian city of Augsburg, sit on the front line of a geopolitical struggle with Russia since European Union leaders agreed this week to try to reduce natural gas consumption by 15 percent, fearing that President Vladimir V. Putin could cut exports in retaliation for Europe’s support for Ukraine.

a second pipeline from Russia, until the war forced the project to be suspended.

underlined the threat this week when it reduced flows through Nord Stream 1 into Germany to just 20 percent, citing, unconvincingly for many, problems with its German-made turbines.

Roughly half of all homes in Germany are heated with gas, while a third of the country’s gas is used by industry. If the coming winter is particularly cold, a cutoff would be brutal.

reopening coal-fired power plants to replace those that burn gas and rapidly expanding infrastructure for liquefied natural gas, along with securing contracts for deliveries from Qatar and the United States.

In a recent social media post, Mr. Habeck admonished people to change their daily habits as part of the effort to reach the country’s goal of saving 20 percent.

“If you think, OK, swapping out the shower head, thawing out the freezer or turning down the heater, none of that makes a difference — you are deceiving yourself,” Mr. Habeck said. “It is an excuse to do nothing.”

Some officials have expressed concern that the government is stoking panic. And some are hoping incentives will encourage careful energy use.

Chancellor Olaf Scholz has pledged to increase housing subsidies and shield renters from evictions over unpaid heating bills. This week, Munich announced an “energy bonus” of 100 euros to households that cut their annual consumption by 20 percent, and its utility company launched an energy-saving competition for customers this autumn.

Germans seem to be responding. The Federal Association of Energy and Water said the country was using almost 15 percent less gas compared to the same period last year, a trend they partly attributed to the record price of energy. Costs will increase further by the beginning of October, when the government introduces a gas surcharge.

In response, space heaters and wood ovens are selling out in many cities, and there is a long wait for mini-solar-panel units to power some home devices.

Claudia Kemfert, an energy economist with the German Institute for Economic Research, said such savings were critical but worried the country had wasted several months with appeals to citizens instead of taking more robust action with business.

Companies have shown they can reduce their gas consumption when they are not given a choice. Automaker Mercedes-Benz said on Wednesday it had trimmed 10 percent of its gas usage, and could cut as much as 50 percent while maintaining full operations.

“There is a lot we can achieve through market-based approaches, we should exhaust every option we have on that front so that we can avoid an emergency situation,” Ms. Kemfert said.

Municipal officials say they will have no way to understand how much their efforts can help until they get more data.

In Munich, capital of the southern state of Bavaria and an epicenter of German industry, the deputy mayor, Katrin Habenschaden, is skeptical.

“I honestly don’t believe that this can be compensated for, as much as I appreciate it through our efforts now to save energy.” she said. “Rather, I believe that we simply need other options or other solutions.”

As the deputy responsible for managing economic affairs, she has been helping the city with a kind of economic triage — assessing what kind of rationing different companies could face. Businesses, big and small, are courting the city, to make their case for why they should be spared.

Bavaria is of particular concern because it is home to companies that are drivers of German industry, like BMW and Siemens. The conservative regional government’s reluctance to challenge its heavy dependence on gas and push forward on renewable energies has also left it particularly vulnerable, Ms. Habenschaden, a Green, argued.

In Augsburg and Munich, local officials have requested that every city employee send their suggestions. One Augsburg civil servant pointed out the city’s two data centers were a major energy drain. They are now considering whether they can rely on just one.

More quietly, many local leaders are pondering which energy-hungry German traditions may have to be put on the chopping block, should the country be forced into energy rationing: Beer making? Christmas markets?

Mr. Hübschle said he believes Bavaria should shut down its famous breweries before letting its chemical industry face gas shortages.

Meanwhile, Rosi Steinberger, a member of Bavaria’s regional parliament, now works in a dark office to cut her consumption, and is debating whether to provoke the inevitable ire of Munich by suggesting it cancel its world-famous Oktoberfest. It is scheduled to return this fall after a two-year pandemic pause.

“I haven’t asked yet,” she said, with a nervous laugh. “But I also think that when people say there should be no taboos in what we consider — well, that’s what you have to think about.”

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German Government Agrees On Bailout For Energy Supplier

By Associated Press

and Trent Murray
July 22, 2022

The rescue package announced Friday will result in higher prices for consumers.

The German government will take a roughly 30% stake in energy supplier Uniper as part of a rescue package prompted by surging prices for natural gas and reduced Russian deliveries, the company and Chancellor Olaf Scholz said Friday.

Uniper, which has been Germany’s biggest importer of Russian gas used to fuel industry, generate electricity and heat homes, asked for a bailout two weeks ago. German officials quickly pledged that they would help, but thrashing out the details took time. One result will be higher prices for customers.

Uniper had previously downgraded its financial outlook for this year, pointing to a sharp reduction in gas deliveries by Russia’s state-owned Gazprom in recent weeks that has forced it to buy substitute supplies at significantly higher prices.

Scholz, who interrupted his summer vacation for the announcement, said Uniper is “of paramount significance for the economic development of our country and for energy supply to individual citizens, but also to many companies.”

“It was necessary to stabilize Uniper now,” he told reporters in Berlin. “If I remember rightly, about 60% of gas imports in Germany are ultimately organized in a certain way via this distributor. That is a very, very big chunk, so it’s clear you can imagine that there would have been practically no company at the end of these supply chain that wouldn’t be affected.”

Gazprom reduced the flow of gas through the Nord Stream 1 pipeline from Russia to Germany — the latter’s main source of Russian gas — by 60% in mid-June, pointing to technical issues that German officials dispute. Russian gas recently has accounted for about a third of Germany’s supply.

After a scheduled 10-day shutdown for maintenance, gas deliveries through the pipeline resumed as scheduled Thursday but still at only 40% capacity. The German government announced that it would step up its gas storage requirements and take further measures to save gas.

The package announced Friday will result in an increase in consumers’ gas prices, which have already been high and are driving inflation. Scholz said a levy for gas customers will start in September or October that could lead to an increase of 2 euro cents per kilowatt hour, which could add up to 200 to 300 euros per year to the bill for a family of four.

Scholz promised further efforts to shield Germany’s people and companies from the fallout of high energy prices, pledging that “you’ll never walk alone.”

“We will do everything necessary so that, together as a country, as companies and as citizens, we get through this situation so that no one is put in a situation that is insoluble for him or her,” he said.

The rescue package involves a roughly 267 million-euro ($272 million) capital increase signed by the German government alone, and a mandatory convertible instrument of up to 7.7 billion euros being issued to the government — in tranches and as Uniper’s liquidity needs require. An existing 2 billion-euro credit facility from Germany’s state-owned KfW development bank will be increased to 9 billion euros.

Uniper is majority-owned by Finland-based Fortum, in which the Finnish government holds a majority stake. Scholz said the owners will effectively be making a “substantial contribution” to the rescue by having the value of their holdings diluted. Fortum’s stake will go from about 80% to 56%.

Fortum CEO Markus Rauramo described talks with the German government as intense but “conducted in a good spirit.”

“Together, we saw that the undisturbed continuation of Uniper’s operations, securing security of energy supply, and cooperation and unity between EU countries were more important than getting stuck on a certain solution model,” he said in a statement on the company’s website.

Rauramo said Uniper is critical for energy security in Germany and Europe. The German energy company has become entangled in a situation where “Russia is using energy as a weapon against Europe as part of the war in Ukraine,” he said, adding that “no company has been able to fully prepare for such a business risk.”

Additional reporting by The Associated Press.

Source: newsy.com

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G7 to hike sanctions on Russia, nears oil price cap deal

  • G7 to announce new Russia sanctions on Tuesday – U.S. official
  • G7 to work with other countries, private sector on oil price cap
  • Japan tries to cut zero-emission vehicles goal from G7 statement

SCHLOSS ELMAU, Germany, June 27 (Reuters) – The Group of Seven rich democracies will commit on Tuesday to a new package of coordinated actions meant to raise pressure on Russia over its war in Ukraine, and will finalise plans for a price cap on Russian oil, a senior U.S. official said on Monday.

The announcement came as the White House said Russia had defaulted on its foreign sovereign bonds for the first time in decades – an assertion Moscow rejected – and as Ukrainian President Volodymyr Zelenskiy spoke virtually with G7 leaders meeting at an alpine resort in southern Germany. read more

Zelenskiy asked leaders of the Group of Seven leading industrial democracies for a broad range of military, economic and diplomatic support, according to a European official.

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G7 nations, which generate nearly half the world’s economic output, want to crank up pressure on Russia without stoking already soaring inflation that is causing strains at home and savaging the global south.

The price cap could hit Russian President Vladimir Putin’s war chest while actually lowering energy prices.

“The dual objectives of G7 leaders have been to take direct aim at Putin’s revenues, particularly through energy, but also to minimize the spillovers and the impact on the G7 economies and the rest of the world,” the U.S. official said on the sidelines of the annual G7 summit.

G7 leaders would also make an “unprecedented, long-term security commitment to providing Ukraine with financial, humanitarian, military and diplomatic support as long as it takes”, including the timely provision of advanced weapons, the White House said in a fact sheet.

Western sanctions have hit Russia’s economy hard and the new measures are aimed at further depriving the Kremlin of oil revenues. G7 countries would work with others – including India – to limit the revenues that Putin can continue to generate, the U.S. official said.

India’s Prime Minister Narendra Modi is one of the five leaders of guest nations joining the G7 for talks on climate change, energy, health, food security and gender equality on the second day of the summit.

“Since it is a mechanism that could benefit third countries more than Europe,” one EU official said. “These countries are asking questions about the feasibility, but in principle to pay less for energy is a very popular theme.”

TARGETING RUSSIAN GOLD, DEFENCE SECTOR

A U.S. official said news that Russia defaulted on its foreign sovereign bonds for the first time since the Bolshevik revolution in 1917 showed how effective Western sanctions have been.

“This morning’s news around the finding of Russia’s default, for the first time in more than a century, situates just how strong the actions are that the U.S., along with allies and partners, have taken, as well as how dramatic the impact has been on Russia’s economy,” the official added.

The Kremlin, which has the funds to make payments thanks to rich energy revenues, swiftly rejected the U.S. statement, accusing the West of driving it into an artificial default. read more

New sanctions planned by the G7 countries will target Moscow’s military production, crack down on its gold imports and target Russian-installed officials in contested areas. read more

The G7 leaders would task their governments to work intensively on how to implement the Russian price cap, working with countries around the world and stakeholders including the private sector, the official said.

The United States said it would also implement sanctions on hundreds of individuals and entities adding to the more than 1,000 already sanctioned, target companies in several countries and impose tariffs on hundreds of Russia products. read more

The agencies involved would release details on Tuesday to minimize any flight risk, a second senior administration official said.

The Ukraine crisis has detracted attention from another crisis – that of climate change – originally set to dominate the summit. Activists fear Western nations are watering down their climate ambitions as they scramble to find alternatives to Russian gas imports and rely more heavily on coal, a dirtier fossil fuel, instead.

Japan is also pushing to remove a target for zero-emission vehicles from a G7 communique expected this week, according to a proposed draft seen by Reuters. read more

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Reporting by Andrea Shalal and Sarah Marsh, Additional Reporting by Angelo Amante, Phil Blenkinsop; Editing by Thomas Escritt, Mark Heinrich and Alex Richardson

Our Standards: The Thomson Reuters Trust Principles.

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Ukraine War’s Latest Victim? The Fight Against Climate Change.

BERLIN — Russia’s invasion of Ukraine seemed like an unexpected opportunity for environmentalists, who had struggled to focus the world’s attention on the kind of energy independence that renewable resources can offer. With the West trying to wean itself from Russian oil and gas, the argument for solar and wind power seemed stronger than ever.

But four months into the war, the scramble to replace Russian fossil fuels has triggered the exact opposite. As the heads of the Group of 7 industrialized nations gather in the Bavarian Alps for a meeting that was supposed to cement their commitment to the fight against climate change, fossil fuels are having a wartime resurgence, with the leaders more focused on bringing down the price of oil and gas than immediately reducing their emissions.

Nations are reversing plans to stop burning coal. They are scrambling for more oil and are committing billions to building terminals for liquefied natural gas, known as L.N.G.

coal plants that had been shuttered or were scheduled to be phased out.

as top economic officials in Ukraine, say it would serve two key purposes: increasing the global supply of oil to put downward pressure on oil and gasoline prices, while reducing Russia’s oil revenue.

Proponents say it is likely that Russia would continue to produce and sell oil even at a discount because it would be easier and more economical than capping wells to cut production. Simon Johnson, an economist at the Massachusetts Institute of Technology, estimates that it could be in Russia’s economic interest to continue selling oil with a price cap as low as $10 a barrel.

Some proponents say it is possible that China and India would also insist on paying the discounted price, further driving down Russian revenues.

floating ones.

Critics charge that building all 12 terminals would produce an excess capacity. But even half that number would produce three-quarters of the carbon emissions Germany is allowed under international agreements, according to a recent report published by a German environmental watchdog. The terminals would be in use until 2043, far too long for Germany to become carbon neutral by 2045, as pledged by Mr. Scholz’s government.

And countries are not just investing in infrastructure at home.

Last month, Mr. Scholz was in Senegal, one of the developing countries invited to the Group of 7 summit, to discuss cooperating not just on renewables but also on gas extraction and L.N.G. production.

In promoting the Senegal gas project, analysts say, Berlin is violating its own Group of 7 commitment not to offer public financing guarantees for fossil fuel projects abroad.

These contradictions have not gone unnoticed by poorer nations, which are wondering how Group of 7 countries can push for commitments to climate targets while also investing in gas production and distribution.

One explanation is a level of lobbying among fossil fuel companies not seen for years, activists say.

“It looks to me like an attempt by the oil and gas industry to end-run the Paris Agreement,” said Bill Hare of Climate Analytics, an advisory group in Berlin, referring to the landmark 2015 international treaty on climate change. “And I’m very worried they might succeed.”

Ms. Morgan in the German Foreign Ministry shares some of these concerns. “They’re doing everything that they can to move it forward, also in Africa,” she said of the industry. “They want to lock it in. Not just gas, but oil and gas and coal.”

But she and others are still hopeful that the Group of 7 can become a platform for tying climate goals to energy security.

Environmental and foreign policy analysts argue that the Group of 7 could support investments in renewable energy and energy efficiency, while pledging funds for poorer nations hit with the brunt of climate disasters.

Above all, activists warn, rich countries need to resist the temptation to react to the short-term energy shortages by once again betting on fossil fuel infrastructure.

“All the arguments are on the table now,” said Ms. Neubauer, the Fridays for Future activist. “We know exactly what fossil fuels do to the climate. We also know very well that Putin is not the only autocrat in the world. We know that no democracy can be truly free and secure as long as it depends on fossil fuel imports.”

Katrin Bennhold Bennhold reported from Berlin, and Jim Tankersley from Telfs, Austria. Erika Solomon and Christopher F. Schuetze contributed reporting from Berlin.

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European leaders visit Ukraine, dangling hope of EU membership

  • Zelenskiy thanks EU leaders for solidarity visit
  • Leaders tour ruined town of Irpin
  • Fighting rages in Sievierodonetsk and southern Ukraine

KYIV/IRPIN, Ukraine, June 16 (Reuters) – The leaders of Germany, France and Italy, all criticised in the past by Kyiv for support viewed as too cautious, visited Ukraine on Thursday and offered the hope of EU membership to a country pleading for weapons to fend off Russia’s invasion.

Air raid sirens blared in Kyiv as the visit by French President Emmanuel Macron, Germany’s Olaf Scholz and Italy’s Mario Draghi began, with the leaders touring a nearby town wrecked early in the war. read more

After holding talks with Ukrainian President Volodymyr Zelenskiy, the leaders signalled that Ukraine should be granted European Union candidate status, a symbolic gesture that would draw Kyiv closer to the economic bloc.

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Scholz said Germany had taken in 800,000 Ukrainian refugees who had fled the conflict and would continue to support Ukraine as long as it needs.

“Ukraine belongs to the European family,” he said.

On the battlefield, Ukrainian officials said their troops were still holding out against massive Russian bombardment in the eastern city of Sievierodonetsk, and described new progress in a counteroffensive in the south.

But they said battles on both main fronts depended on receiving more aid from the West, especially artillery to counter Russia’s big advantage in firepower.

“We appreciate the support already provided by partners, we expect new deliveries, primarily heavy weapons, modern rocket artillery, anti-missile defence systems,” Zelenskiy said after the talks with his European counterparts.

“There is a direct correlation: the more powerful weapons we get, the faster we can liberate our people, our land,” he said.

Macron said France would step up arms deliveries to Kyiv, while NATO defence ministers meeting in Brussels pledged more weapons for Ukraine while making plans to bolster the U.S.-led military alliance’s eastern flank.

“This will mean more NATO forward deployed combat formations… More air, sea and cyber defences, as well as pre-positioned equipment and weapon stockpiles,” NATO Secretary-General Jens Stoltenberg said in a statement.

‘MAKE EUROPE, NOT WAR’

The visit to Ukraine by the three most powerful EU leaders had taken weeks to organise while they fended off criticism over positions described as too deferential to Russian President Vladimir Putin.

The leaders, who were joined by Romanian President Klaus Iohannis, toured Irpin, devastated soon after the invasion began on Feb. 24.

Noting graffiti on a wall that read “Make Europe, not war”, Macron said: “It’s very moving to see that. This is the right message.”

Scholz, Macron and Draghi all say they are strong supporters of Ukraine who have taken practical steps to reduce Europe’s dependence on Russian energy and find weapons to help Kyiv.

But Ukraine has long criticised Scholz over what it regards as Germany’s slow delivery of weapons and reluctance to sever economic ties with Moscow, and was furious this month at Macron for saying in an interview that Russia must not be “humiliated”.

Italy has also proposed a peace plan which Ukrainians fear could lead to pressure on them to give up territory. After the talks in Kyiv, Macron said some sort of communication channel was still needed with Putin.

While Europe’s leaders attempted a show of solidarity for Ukraine, the continent’s dependency on Russia for much of its energy supplies was laid bare, with gas deliveries through a major pipeline falling in recent days. read more

A lack of grain shipments from Ukraine, meanwhile, has created an emerging global food crisis.

Russia blames sanctions for both, while Italy’s Draghi said Moscow was making “political use” of the situation.

In an interview with Reuters, Russian Deputy Prime Minister Viktoria Abramchenko said Moscow was facilitating the export of grain and oilseeds through Russian-held transit points on the Azov Sea, without explaining who was providing the foodstuffs for export. read more

‘GHOST VILLAGES’

Ukraine is taking hundreds of casualties a day as the war has entered a brutal attritional phase in the east.

The main battle in recent weeks has been over the eastern city of Sievierodonetsk, where Ukrainian forces are holed up in a chemical factory with hundreds of civilians.

“Every day it becomes more and more difficult because the Russians are pulling more and more weapons into the city,” Sievierodonetsk mayor Oleksandr Stryuk said on Thursday.

An airstrike on Thursday hit a building sheltering civilians in Lysychansk across the river, killing at least four and wounding seven, regional governor Serhiy Gaidai said.

In the south, Ukraine says its forces have been making inroads into Kherson province, which Russia occupied early in its invasion. There has been little independent reporting to confirm battlefield positions in the area.

Zelenskiy’s chief of staff, Andriy Yermak, wrote in a tweet that he had visited an area some 3 to 4 kilometres (around 2 miles) from Russian positions, where dozens of “ghost villages” were depopulated by the combat.

“Our guys on the ground – the mood is fighting. Even with limited resources, we are pushing back the enemy. One thing is missing – long-range weapons. In any case, we will throw them out of the south,” he wrote.

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Additional reporting by Reuters bureaux; Writing by Peter Graff, Toby Chopra and Rami Ayyub; Editing by Angus MacSwan, Alex Richardson and Rosalba O’Brien

Our Standards: The Thomson Reuters Trust Principles.

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