Investigators of War Crimes in Ukraine Face Formidable Challenges

KOROPY, Ukraine — Four men tugged at long strips of fabric to lift a coffin out of the gaping hole in the backyard of a small house. They flung the lid open to reveal the moldy corpse of Oleksiy Ketler, who had been killed instantly by shrapnel when a mortar fell on the road in Koropy, a village outside Khavkiv in northeastern Ukraine, in March.

Mr. Ketler, a father of two young children, would have celebrated his 33rd birthday on June 25, if he had not been outside his house at the wrong time. Now, his body has become another exhibit in Ukraine’s wide-ranging effort to collect evidence to prosecute Russia and its military for war crimes in the brutal killings of Ukrainian civilians.

Experts say the process is proceeding with extraordinary speed and may become the biggest effort in history to hold war criminals to account. But it faces an array of formidable challenges.

rape, execution-style killings and the deportation of what Mr. Belousov said could be tens of thousands of Ukrainians to Russia — were being investigated.

At the same time, hundreds of international experts, investigators and prosecutors have descended on Ukraine from an alphabet soup of international agencies.

Early in the war, the top prosecutor of the International Criminal Court, Karim Khan, arrived in Ukraine with several dozen investigators. But the court, which is based in the Netherlands, tries a limited number of cases, and usually seeks to prosecute only the upper echelon of political and military leaders.

It is also slow: Investigators working on the 2008 Russian-Georgian war did not apply for arrest warrants until this year.

There are a number of other initiatives, too. Amal Clooney, an international human rights lawyer, is part of a team advising the Ukrainian government on bringing international legal action against Russia. The United Nations has started a commission to investigate human rights violations in Ukraine — with three human rights experts — but cannot establish a formal tribunal because Russia wields veto power on the U.N. Security Council.

Investigators in Poland are collecting testimonies from refugees who fled there to feed to Ukrainian prosecutors. France has sent mobile DNA analysis teams to embed with the Ukrainian authorities to collect evidence. Nongovernmental organizations based in Kyiv, Ukraine’s capital, are going to territories recently occupied by Russian soldiers to collect witness statements.

The involvement of multiple countries and organizations does not necessarily lead to a more productive investigation, said Wayne Jordash, a British criminal lawyer who lives in Ukraine. Mr. Jordash, who is part of an international task force supporting Ukrainian prosecutors, was critical of some of the efforts to assist Ukraine judicially, describing it as “smoke and mirrors,” without results and clear priorities.

The International Criminal Court’s investigators were only just getting going, he noted, and experts from other countries have also been cycling in for stints of several weeks.

“You can’t just parachute into an investigation for two weeks and expect it to be meaningful,” Mr. Jordash said.

Iva Vukusic, a scholar of post-conflict justice at the University of Utrecht, said, “Resources are being poured in, but maybe down the line we will see that they were not being spent the right way,” for instance, duplicating investigation efforts rather than providing psychosocial support to victims.

Ms. Vukusic pointed out the large size of the endeavor. Across the country, she said, “there are thousands of potential suspects, and thousands of potential trials.” All of the material needs to be properly marshaled and analyzed, she said.

“If you have 100,000 items — videos, statements, documents — if you don’t know what you’re sitting on, it limits the use of material,” Ms. Vukusic said.

She also cautioned that the International Criminal Court’s leadership could face criticism by collaborating too closely with the Ukrainian authorities because, she said, Ukraine was also “an actor in this war.”

She feared Ukrainian officials were setting expectations for justice very high, and possibly wasting scarce resources on absentia trials.

“No big case is going to be finished in two years or five years because of the scale of the violence and the fact it is going on for so long,” she said.

Mr. Belousov, the Ukrainian war crimes prosecutor, acknowledged as much. “We are playing a long game,” he said. Even if the perpetrator is tried and convicted in absentia, Mr. Belousov said, “We understand in a year, or two or three or five, these guys won’t be able to avoid punishment.”

Mr. Belousov said that he appreciated the international assistance but that coordinating it was the “biggest challenge” law enforcement authorities experienced.

For example, the Kharkiv prosecutors used a shiny new forensic investigation kit donated by the European Union for their exhumation in Koropy, the village in northeast Ukraine. But a police officer from a unit in Dmytrivka, a 45-minute drive west of Kyiv, said they had not seen or met with any international investigators or received any equipment from them.

Mr. Belousov said Ukraine wanted to take the lead in prosecuting the cases — a divergence from previous post-conflict situations in which the national authorities initially left the process to international tribunals.

But most Ukrainian investigators have little experience in these kinds of inquiries.

For example, Andriy Andriychuk, who joined the police force in the region west of Kyiv two years ago, said his work previously involved investigating local disputes or livestock theft. Now it involves “a lot more corpses,” he said.

On a recent sunny afternoon, he was called to a wooded area near the town of Dmytrivka. Several days before, police officers had received a call from foresters who had come upon a man’s grave. The dead man, Mykola Medvid, 56, had been buried with his passport; his hat was hung on top of a cross made out of sticks.

His daughter and his cousin identified his body. The local morgue officially established the cause of death: a fatal shot in the chest.

Since then, his daughter Mariia Tremalo has not heard from the investigators. No witnesses have come forward, and it was unclear who might have killed her father, or why. Still, she is hungry for justice.

“My father will never be returned,” she said. “But I would like the perpetrators to be punished.”

Right now that seems all but impossible.

In Koropy, the village near Kharkiv, Mr. Ketler’s mother, Nadezhda Ketler, was inconsolable as the gravediggers and inspectors worked. She wandered down the road to another part of her property. Six officials stood over her son’s body, photographing and documenting as his best friend, Mykhailo Mykhailenko, who looked petrified and smelled of stale alcohol, identified him.

The next day, Mr. Ketler’s body was taken to the city’s morgue, where the final cause of death was established.

Eventually, Ms. Ketler gathered the strength to show investigators the crater made by the bomb that killed him, leading the police to the exact spot where he died. Ms. Ketler stood looking at the trees as they rustled in the wind. She did not speak to anyone. She said she did not know if a guilty verdict in a war crimes trial, if it ever came, would ease the pain of losing her child.

“I had to bury my son twice,” Ms. Ketler said later. “You understand, this is hard enough to do once, and to have to do it a second time. The pain of a mother will not go anywhere.”

Evelina Riabenko, Diana Poladova and Oleksandr Chubko contributed reporting.

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Gas Prices Around the World Threaten Livelihoods and Stability

“NO ES SUFICIENTE” — It’s not enough. That was the message protest leaders in Ecuador delivered to the country’s president this past week after he said he would lower the price of both regular gas and diesel by 10 cents in response to riotous demonstrations over soaring fuel and food prices.

The fury and fear over energy prices that have exploded in Ecuador are playing out the world over. In the United States, average gasoline prices, which have jumped to $5 per gallon, are burdening consumers and forcing an excruciating political calculus on President Biden ahead of the midterm congressional elections this fall.

But in many places, the leap in fuel costs has been much more dramatic, and the ensuing misery much more acute.

Britain, it costs $125 to fill the tank of an average family-size car. Hungary is prohibiting motorists from buying more than 50 liters of gas a day at most service stations. Last Tuesday, police in Ghana fired tear gas and rubber bullets at demonstrators protesting against the economic hardship caused by gas price increases, inflation and a new tax on electronic payments.

largest exporter of oil and gas to global markets, and the retaliatory sanctions that followed have caused gas and oil prices to gallop with an astounding ferocity. The unfolding calamity comes on top of two years of upheaval caused by the Covid-19 pandemic, off-and-on shutdowns and supply chain snarls.

World Bank revised its economic forecast last month, estimating that global growth will slow even more than expected, to 2.9 percent this year, roughly half of what it was in 2021. The bank’s president, David Malpass, warned that “for many countries, recession will be hard to avoid.”

ratcheting down gas deliveries to several European countries.

Across the continent, countries are preparing blueprints for emergency rationing that involve caps on sales, reduced speed limits and lowered thermostats.

As is usually the case with crises, the poorest and most vulnerable will feel the harshest effects. The International Energy Agency warned last month that higher energy prices have meant an additional 90 million people in Asia and Africa do not have access to electricity.

Expensive energy radiates pain, contributing to high food prices, lowering standards of living and exposing millions to hunger. Steeper transportation costs increase the price of every item that is trucked, shipped or flown — whether it’s a shoe, cellphone, soccer ball or prescription drug.

“The simultaneous rise in energy and food prices is a double punch in the gut for the poor in practically every country,” said Eswar Prasad, an economist at Cornell University, “and could have devastating consequences in some corners of the world if it persists for an extended period.”

Group of 7 this past week discussed a price cap on exported Russian oil, a move that is intended to ease the burden of painful inflation on consumers and reduce the export revenue that President Vladimir V. Putin is using to wage war.

Price increases are everywhere. In Laos, gas is now more than $7 per gallon, according to GlobalPetrolPrices.com; in New Zealand, it’s more than $8; in Denmark, it’s more than $9; and in Hong Kong, it’s more than $10 for every gallon.

Leaders of three French energy companies have called for an “immediate, collective and massive” effort to reduce the country’s energy consumption, saying that the combination of shortages and spiking prices could threaten “social cohesion” next winter.

increased coal production to avoid power outages during a blistering heat wave in the northern and central parts of the country and a subsequent rise in demand for air conditioning.

Germany, coal plants that were slated for retirement are being refired to divert gas into storage supplies for the winter.

There is little relief in sight. “We will still see high and volatile energy prices in the years to come,” said Fatih Birol, the executive director of the International Energy Agency.

At this point, the only scenario in which fuel prices go down, Mr. Birol said, is a worldwide recession.

Reporting was contributed by José María León Cabrera from Ecuador, Lynsey Chutel from South Africa, Ben Ezeamalu from Nigeria, Jason Gutierrez from the Philippines, Oscar Lopez from Mexico and Ruth Maclean from Senegal.

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Ill-Prepared for Combat, Volunteers Die in Battles Far From Home

RUDNE, Ukraine — Yurii Brukhal, an electrician by trade, didn’t have a very dangerous role when he volunteered for Ukraine’s territorial defense forces at the start of the war. He was assigned to make deliveries and staff a checkpoint in the relative safety of his sleepy village.

Weeks later, his unit deployed from his home in the west to a frontline battle in eastern Ukraine, the epicenter of the fiercest fighting against Russian forces. He was killed on June 10.

Andrii Verteev, who worked in a grocery store in the village, spent the first months of the war guarding a small overpass after work and returning home to his wife and daughter at night. Then he, too, volunteered to head east. He died in battle in Luhansk, just weeks before Mr. Brukhal.

small protests as wives, mothers and daughters of some of the those who died express their discontent.

But others, like Mr. Brukhal’s family, said they supported their family members’ decision, despite their grief.

Before he left for the war, he had been building a home for his two daughters. At a memorial two weeks after his death, villagers gathered in prayer around a long table inside the house, its cinder block walls still exposed, a spread of food laid out in front of them.

It was the first meal in the still unfinished home, Ms. Datsko, his sister, said.

“It’s just horrible when you see what’s happening in the cemetery, and you don’t know when it will stop,” she said, reflecting on the rows of new graves appearing in Lviv’s military cemetery since her brother’s burial. “We are going to have lots of women without husbands and children without fathers.”

Oksana Stepanenko, 44, is also dealing with grief, along with her daughter Mariia, 8. Her husband, Andrii Verteev, was killed on May 15.

Like Mr. Brukhal, he had been a volunteer, tasked with protecting an overpass just up the road during the early weeks of the war. Then he joined an anti-aircraft unit of the military, and was redeployed to the east.

His death added a new level of pain to the family. Ms. Stepanenko’s son, Artur, died of an illness at age 13 three years ago. Now a corner of their small living room has become a shrine to the boy and his father.

Ms. Stepanenko said she finds solace in her faith and the fact that it was her husband’s choice to go to the front lines. But, like so many others in Ukraine she asked, “How many guys have to die before this ends?”

Despite the losses, families of fighters sent to the east said they viewed it as their patriotic duty to defend their nation.

Natalia Rebryk, 39, who married her husband, Anton Tyrgin, just three months before the Russian invasion, said she naïvely thought she would be spared any personal connection to the war.

“This war began twice for me,” Ms. Rebryk said. “The first time it started was the day of the invasion, and the second time was when Anton joined the arm

Mr. Tyrgin worked in the music industry before the war and had no military background when he volunteered for the Ukrainian National Guard. He spent the early weeks of the conflict guarding strategic sites, but in early June, his unit was told that it may also be sent east.

Ms. Rebryk said worries that he doesn’t have enough training and braces herself daily for that call she hopes never comes.

“We expected it to end in two or three weeks. Then in another two or three weeks,” she said. “When you talk with the soldiers, you realize it may not even end this year.”

In Rudne, away from the chaos, destruction and death on the frontline, the war’s brutality can sometimes seem remote. While air-raid sirens still ring out, it has been months since they sent residents scrambling for shelters.

But the funerals of men like Mr. Brukhal bring it startlingly close, and others from the small community of Rudne are still fighting in the east.

Yordana Brukhal, 13, said that her father felt it was his duty to join the war, even though he had been her primary caretaker after he separated from her mother last year.

“Up until recently, I felt this war only mentally, not physically,” she said. “And since my father died, I feel it physically as well.”

Thomas Gibbons-Neff and Natalia Yermak contributed reporting from Druzhkivka, Ukraine.

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NATO Summit Ends, Leaving Leaders to Sell Their Pledges Back Home

Credit…Str/EPA, via Shutterstock

The United Nations is coordinating talks among Ukraine, Russia and Turkey in the hopes of hammering out security guarantees that would allow Ukraine to export its grain and help ease a global food crisis that is being exacerbated by the war.

But the Ukrainian government’s negotiator expressed skepticism in a recent interview with The New York Times that Russia would abide by any guarantee unless Kyiv had the military power to enforce it.

The Ukrainian negotiator, Rustem Umerov, told the Times that the country was preparing for talks in Istanbul to discuss a way to end Russia’s de facto blockade of the Black Sea port of Odesa to allow the shipment of the 20 million metric tons of grain Ukraine has in storage silos.

But he said that only the delivery of powerful naval weapons committed by Western allies would be an effective security guarantee, and he accused Russia of seeking to use the issue to shore up its own position in the Black Sea.

“If we will open up the ports, it means that the northwestern Black Sea will open up to them,” he said. No international backer, he added, “whoever guarantees us,” could be relied on to strike back if Russia then attacked Ukrainian shipping.

“And they understand it,” he said. “That’s why they are pressurizing the world to squeeze Ukraine to open up the ports.”

Before the war began, Ukraine exported about six million metric tons of grain a month, Kate Newton, an emergency coordinator for the U.N. World Food Program in Ukraine, said at a news conference in Kyiv on Thursday. Now, the country is only able to to export about one million metric tons per month, she said.

“We are doing everything we can,” she said, “exporting grain by truck, rail and river.” But, she said, without use of the Black Sea ports, it would not be possible to raise export levels much.

Russian forces have also bombed grain storage centers and fields across Ukraine. When Ukraine started shipping grain from a port on the Danube River, the Russians bombed the primary bridge trucks could use to get there.

In previous negotiations, Moscow has insisted on the right to “inspect” all vessels carrying Ukrainian grain — a condition that Kyiv would not accept.

Credit…Dogukan Keskinkilic/Anadolu Agency, via Getty Images

Ukraine’s military on Thursday said it had driven Russian forces from Snake Island, a strategically important outcrop whose loss could undermine Moscow’s control over Black Sea shipping lanes. But Russia’s de facto blockade showed no sign of easing.

Mr. Umerov and Foreign Minister Dmytro Kuleba have accused Russia of sowing disinformation about who is to blame for the blockade. The grain issue, and even the prospect of famine, have become part an information war waged by Moscow, Mr. Umerov said.

“They are weaponizing the famine,” Mr. Umerov said. “They are addressing the African states, saying, ‘We are always ready to support you, it’s Ukrainians who are not opening the ports.’” African countries are heavily dependent on grain from Russia and Ukraine.

The Russian defense ministry cast its withdrawal from Snake Island as a humanitarian gesture and repeated that it was not to blame for the food crisis. But at a recent appearance, Margarita Simonyan, the editor in chief of the Kremlin mouthpiece RT, appeared to suggest that the crisis could be to Moscow’s political benefit.

“I’ve heard it several times in Moscow from many people: ‘All our hope is in the famine,’” she told the St. Petersburg Economic Forum on June 20, adding that those people’s expectation was that famine would drive countries to lift sanctions on Russia.

Kyiv has been working to counter that narrative. Last week, Mr. Kuleba spent an hour speaking to journalists from Africa, emphasizing Ukraine’s urgency to resume exporting.

“The only country that is not really under time pressure here is Russia,” he said in an interview. “Everyone else is running out of time, be it us as suppliers, African and Asian countries as recipients, or the United Nations, whose reputation is at stake.”

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Ukraine Updates: Turkey Agrees to Allow Sweden and Finland to Join NATO

Credit…Bernat Armangue/Associated Press

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.

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West Seeks a More Effective Way to Tighten Sanctions on Russia

Credit…Maxim Shemetov/Reuters

Russia missed a deadline for making bond payments on Sunday, a move signaling its first default on international debt in more than a century, after Western sanctions thwarted the government’s efforts to pay foreign investors. The lapse adds to efforts to seal Moscow off from global capital markets for years.

About $100 million in dollar- and euro-denominated interest payments failed to reach investors within a 30-day grace period after a missed May 27 deadline. The grace period expired Sunday night.

A formal declaration of default would need to come from bondholders because ratings agencies, which normally declare when borrowers have defaulted, have been barred by sanctions from reporting on Russia. The Credit Derivatives Determinations Committee, a panel of investors that rules on whether to pay out securities linked to defaults, hasn’t been asked to make a decision on these bond payments yet.

But it appeared that the payments had not reached bondholders’ accounts as of Sunday night, as required by the bonds’ contracts. On Monday, Russia’s finance ministry said that it had made the payments in May and that they had been transferred to Euroclear, a Brussels-based clearinghouse, but subsequently blocked from reaching bondholders.

Russia is rejecting the default declaration, on the grounds that it has made efforts to pay. Dmitri S. Peskov, the Kremlin’s spokesman, told reporters on Monday that the statements about default were “absolutely illegal.”

“The fact that Euroclear withheld this money, did not transfer it to the recipients, it is not our problem,” Mr. Peskov said. “In other words, there are no grounds to call this situation a default.”

The finance ministry added that the actions of foreign financial institutions were beyond its control and that “it seems advisable for investors to contact the relevant financial institutions directly” over the payments.

Euroclear declined to comment.

“We can expect Russia to stick to its alternative narrative: The default isn’t a default, we tried and it isn’t our fault,” said Tim Samples, a legal studies professor at the University of Georgia’s Terry College of Business and an expert on sovereign debt, adding that Russia also hasn’t submitted to jurisdiction in foreign courts. Still, “that has to be a bit humiliating, even for a country that can survive and maintain a war on its hydrocarbon revenues,” he said.

The risk of default emerged in late February after Russia invaded Ukraine and sanctions were imposed to sever the country from international financial markets. In late May, Russia tried to navigate tightening sanctions that cut off its access to American banks and bondholders by sending the payments to a Moscow-based institution. But ultimately, the funds didn’t make it all the way to bondholders’ accounts because of far-reaching American and European sanctions.

News of Monday’s apparent default showed “just how strong” international sanctions against Russia have been, a senior U.S. administration official said in a background briefing for reporters at the Group of 7 summit in Germany, highlighting the “dramatic” effect on Russia’s economy.

This default is unusual because it’s a result of economic sanctions blocking transactions, not because the Russian government has run out of money. Moscow’s finances remain resilient after months of war, with nearly $600 billion in foreign currency and gold reserves, though about half of that is frozen overseas. And Russia continues to receive a steady influx of cash from sales of oil and gas. Still, a default would be a stain on the country’s reputation that will linger in investors’ memories and probably push up its borrowing costs if it is able to tap international capital markets.

Unlike other major defaults in recent history, such as in Greece and Argentina, this default is expected to have a relatively small impact on international markets and Russia’s budget. For one thing, Russia has already lost access to international investors, traditionally the worst consequence of default.

“The only clear negative outcome of the default is that the external market will be effectively closed for the ministry of finance,” said Sofya Donets, an economist at Renaissance Capital in Moscow. “But it’s already closed.”

The head of Russia’s central bank, Elvira Nabiullina, said this month that there wouldn’t be any immediate consequences of a default because there had already been an outflow of investors and a drop in the value of Russia’s assets. The central bank is more concerned about inflation, most recently at about 17 percent, and supporting the economy through a “large-scale structural transformation” after an exodus of foreign companies and imports.

The Western sanctions alone are expected to block Russia from large parts of international capital markets for a long time. Regardless, Russia has been reluctant to give up its reputation as a reliable borrower, which was hard won after its economic collapse in 1998, when the government defaulted on ruble-denominated bonds amid a currency crisis.

Last month, Russia insisted that it had fulfilled its debt obligations by sending funds to its payment agent in Moscow, the National Settlement Depository. Since then, the depository has fallen under European sanctions, further restricting Russia’s ability to pay bondholders. The finance minister, Anton Siluanov, has accused the West of artificially manufacturing a default and has threatened legal action against U.S. authorities.

This is Russia’s first major default on foreign debt since 1918, soon after the Bolshevik Revolution.

On Wednesday, President Vladimir V. Putin signed a decree saying that future payments to holders of debt denominated in dollars or euros would be made through Russian financial institutions and that the obligations would be considered met if paid in rubles and converted. Most of the bond contracts don’t allow for payment in rubles.

Over the following two days, nearly $400 million in dollar-denominated debt payments were due from bonds that had 30-day and 15-day grace periods. The finance ministry said it had sent the payments, in rubles, using the new procedure laid out by the presidential decree. But it remains unclear how foreign investors will gain access to the funds.

Overseas investors held about half of Russia’s $40 billion in outstanding foreign-currency debt at the end of last year. As the risk of default grew this year, PIMCO, the investment management firm, saw the value of its Russian bond holdings decline by more than $1 billion, and pension funds and mutual funds with exposure to emerging market debt have also experienced declines.

But exposure to Russian assets is limited in the United States and Europe because sanctions imposed since Russia’s annexation of Crimea in 2014 have discouraged investors who didn’t want the geopolitical risk.

By international standards, Russia doesn’t have that much debt. Its public debt was only about 17 percent of gross domestic product last year, according to the International Monetary Fund, one of just a handful of countries with debt ratios under 25 percent. The United States, whose assets are in demand among global investors and deemed low risk, has a debt ratio of 125 percent of G.D.P.

Russia’s low debt levels are partly a result of “this new geopolitical era” since the annexation of Crimea, Ms. Donets said. “But it’s also a product of the default of 1998,” she added, when “the ministry of finance was burned badly.” Since then, the ministry has not been that active in issuing new foreign-currency debt, she said.

Russia hasn’t relied on borrowing from international investors for its budget. The finance ministry hasn’t issued dollar-denominated debt since 2019, when U.S. sanctions barred American banks from buying the debt directly. It last issued euro-denominated debt in May 2021.

Instead, Russia has depended on its oil and gas exports, and those dollar revenues that went into reserves and grew the national wealth fund.

“Why would you borrow and pay additional rates when you are a country that is accumulating oil funds, accumulating in hard currency, a country which has $600 billion in reserves?” Ms. Donets said.

The war hasn’t changed that calculation. Russia’s current account surplus, a broad measure of trade and investment, has soared as revenues from energy exports jumped, capital controls stopped investments fleeing and sanctions slashed imports. It has helped push the ruble to its highest level in seven years.

If Russia does issue more debt, it will lean on local banks and residents in the short term to buy ruble-denominated bonds.

Russia “will have no access to the capital markets until the war stops and the sanctions are lifted,” said Richard Portes, an economics professor at the London School of Business.

The long-term consequences of a default are unclear because of the unusual nature of the financial breach. But it’s possible to envision a future where Russia is able to sell debt on international markets again, analysts say, if the war ends and Russia’s geopolitical ambitions change. Without Mr. Putin and with hundreds of billions of dollars in international reserves unfrozen, it could return to markets.

“Capital market access can be restored very quickly,” Mr. Portes said. “Once Russia is back in good political graces and sanctions are lifted.”

“If it’s not a political pariah, it won’t be an economic pariah,” he added.

Reporting was contributed by Ivan Nechepurenko, Andrés R. Martínez, Jim Tankersley and Alan Rappeport.

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Russia’s Putin to make first foreign trips since launching Ukraine war

Russian President Vladimir Putin attends a BRICS+ meeting during the BRICS summit via a video link in the Moscow region, Russia June 24, 2022. Sputnik/Mikhail Metzel/Kremlin via REUTERS

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LONDON, June 26 (Reuters) – Vladimir Putin will visit two small former Soviet states in central Asia this week, Russian state television reported on Sunday, in what would be the Russian leader’s first known trip abroad since ordering the invasion of Ukraine.

Russia’s Feb. 24 invasion has killed thousands of people, displaced millions more and led to severe financial sanctions from the West, which Putin says are a reason to build stronger trade ties with other powers such as China, India and Iran.

Pavel Zarubin, the Kremlin correspondent of the Rossiya 1 state television station, said Putin would visit Tajikistan and Turkmenistan and then meet Indonesian President Joko Widodo for talks in Moscow.

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In Dushanbe, Putin will meet Tajik President Imomali Rakhmon, a close Russian ally and the longest-serving ruler of a former Soviet state. In Ashgabat, he will attend a summit of Caspian nations including the leaders of Azerbaijan, Kazakhstan, Iran and Turkmenistan, Zarubin said.

Putin also plans to visit the Belarus city of Grodno on June 30 and July 1 to take part in a forum with Belarusian President Alexander Lukashenko, RIA news agency citedValentina Matviyenko, the speaker of Russia’s upper chamber of parliament, as telling Belarus television on Sunday.

Putin’s last known trip outside Russia was a visit to the Beijing in early February, where he and Chinese President Xi Jinping unveiled a “no limits” friendship treaty hours before both attended the opening ceremony of the Olympic Winter Games.

Russia says it sent troops into Ukraine on Feb. 24 to degrade its neighbour’s military capabilities, keep it from being used by the West to threaten Russia, root out nationalists and defend Russian-speakers in eastern regions. Ukraine calls the invasion an imperial-style land grab.

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Reporting by Guy Faulconbridge and David Ljunggren; Editing by Peter Graff and Mark Porter

Our Standards: The Thomson Reuters Trust Principles.

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Ukraine pleads for air defence as Russia turns sights on Lysychansk

  • This is not an accidental hit, Zelenskiy says of strike on mall
  • Russian attack on frontline eastern city kills eight: Ukraine
  • G7 leaders promise nearly $30 billion in new aid for Kyiv

KREMENCHUK, Ukraine, June 27 (Reuters) – Russian missiles struck a crowded shopping mall in central Ukraine on Monday, President Volodymyr Zelenskiy said, as Moscow fought for control of a key eastern city and Western leaders promised to support Kyiv in the war “as long as it takes”.

More than 1,000 people were inside when two Russian missiles slammed into the mall in the city of Kremenchuk, southeast of Kyiv, Zelenskiy wrote on Telegram. At least 16 people were killed and 59 injured, Ukraine’s emergency services said. Rescuers trawled through mangled metal and debris for survivors.

“This is not an accidental hit, this is a calculated Russian strike exactly onto this shopping centre,” Ukrainian President Volodymyr Zelenskiy said in an evening video address, adding there were women and children inside. He said the death count could rise.

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Russia has not commented on the strike, which was condemned by the United Nations and Ukraine’s Western allies. But its deputy ambassador to the United Nations, Dmitry Polyanskiy, accused Ukraine of using the incident to gain sympathy ahead of a June 28-30 summit of the NATO military alliance.

“One should wait for what our Ministry of Defence will say, but there are too many striking discrepancies already,” Polyanskiy wrote on Twitter.

As night fell in Kremenchuk, firefighters and soldiers brought lights and generators to continue the search. Family members, some close to tears and with hands over their mouths, lined up at a hotel across the street where rescue workers had set up a base.

Kiril Zhebolovsky, 24, was looking for his friend, Ruslan, 22, who worked at the Comfy electronics store and had not been heard from since the blast.

“We sent him messages, called, but nothing,” he said. He left his name and phone number with the rescue workers in case his friend is found.

The United Nations Security Council will meet Tuesday at Ukraine’s request following the attack on the shopping mall. U.N. spokesman Stephane Dujarric said the attack was “deplorable”.

Leaders of the Group of Seven major democracies, gathered for their annual summit in Germany, condemned what they called an “abominable” attack.

“We stand united with Ukraine in mourning the innocent victims of this brutal attack,” they wrote in a joint statement tweeted by the German government spokesperson. “Russian President Putin and those responsible will be held to account.”

Dmyto Lunin, governor for Poltava which includes Kremenchuk, said it was the most tragic day for region in more than four months of war.

“(We) will never forgive our enemies … This tragedy should strengthen and unite us around one goal: victory,” Lunin said on Telegram.

Elsewhere on the battlefield, Ukraine endured another difficult day following the loss of the now-ruined city of Sievierodonetsk after weeks of bombardment and street fighting.

Russian artillery was pounding Lysychansk, its twin across the Siverskyi Donets River. Lysychansk is the last big city still held by Ukraine in the eastern Luhansk province, a main target for the Kremlin after Russian troops failed to take the capital Kyiv early in the war.

A Russian missile strike killed eight and wounded 21 others in Lysychansk on Monday, the area’s regional governor Serhiy Gaidai said. There was no immediate Russian comment.

Ukraine’s military said Russia’s forces were trying to cut off Lysychansk from the south. Reuters could not confirm Russian reports that Moscow’s troops had already entered the city.

‘AS LONG AS IT TAKES’

Russia invaded Ukraine on Feb. 24 in what the Kremlin calls a “special military operation” to rid the country of far-right nationalists and ensure Russian security. The war has killed thousands, sent millions fleeing and laid waste to cities.

During their summit in Germany, G7 leaders, including U.S. President Joe Biden, said they would keep sanctions on Russia for as long as necessary and intensify international pressure on President Vladimir Putin’s government and its ally Belarus.

“Imagine if we allowed Putin to get away with the violent acquisition of huge chunks of another country, sovereign, independent territory,” British Prime Minister Boris Johnson told the BBC.

The United States said it was finalising another weapons package for Ukraine that would include long-range air-defence systems – arms that Zelenskiy specifically requested when he addressed the leaders by video link on Monday. read more

In his address to the G7 leaders, Zelenskiy asked again for more arms, U.S. and European officials said. He requested help to export grain from Ukraine and for more sanctions on Russia.

The G7 nations promised to squeeze Russia’s finances further – including a deal to cap the price of Russian oil that a U.S. official said was “close” – and promised up to $29.5 billion more for Ukraine. read more

“We will continue to provide financial, humanitarian, military and diplomatic support and stand with Ukraine for as long as it takes,” a G7 statement said.

The White House said Russia had defaulted on its external debt for the first time in more than a century as sweeping sanctions have effectively cut the country off from the global financial system.

Russia rejected the claims, telling investors to go to Western financial agents for the cash which was sent but bondholders did not receive. read more

The war has created difficulties for countries way beyond Europe’s borders, with disruptions to food and energy exports hitting the global economy. read more

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Reporting by Reuters bureaux; Writing by Angus MacSwan, Nick Macfie and Rami Ayyub; Editing by Frank Jack Daniel and Catherine Evans

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Go-slow Turkey unlikely to reach Nordics deal at NATO meet -sources

  • NATO leaders meet in Madrid June 29-30
  • Ankara opposed Stockholm and Helsinki’s memberships
  • Turkey ready for months of talks if needed -sources
  • Stance helped Erdogan’s sagging polls ahead of vote

ANKARA, June 27 (Reuters) – A NATO summit this week is unlikely to see a breakthrough to overcome Turkey’s opposition to Sweden and Finland’s membership bids as Ankara takes an unrushed approach to negotiations, according to Turkish officials and Western diplomats.

In response to Russia’s invasion of Ukraine, Sweden and Finland applied for NATO membership in what would be a historic enlargement of the Western defence pact. But Turkish President Tayyip Erdogan surprised allies by opposing it in May over what he called the Nordic countries’ support for terrorist groups. read more

Any membership bid requires approval of all 30 members of NATO, whose leaders convene in Madrid on June 29-30 in what some had billed as a stage to seal a deal.

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Turkish negotiators are not concerned with deadlines imposed by foreign allies and are ready to press on for months if needed for the Nordic states to drop arms embargoes and crack down on what it sees as terrorist groups, the four sources told Reuters.

Based on draft language exchanged by NATO officials and the three sides this month, a big snag is Turkey’s demand that Sweden, in particular, extradites some Kurdish militants living there, said one person close to the matter.

The officials and diplomats did not rule out a last-minute deal. But Turkish presidential spokesman Ibrahim Kalin repeated a week ago that Ankara – NATO’s second-biggest military and a member for 70 years – awaits binding steps and does not see the summit as a deadline.

“There were meetings, but unfortunately steps we expected are not being taken,” said a Turkish government official involved in the talks. “It seems difficult for a result to come out of the NATO summit.”

In an interview with broadcaster Haberturk on Sunday, Kalin said he and Deputy Foreign Minister Sedat Onal would hold fresh talks with Finnish and Swedish officials in Brussels on Monday, followed by another round of talks between the leaders of NATO, Turkey, Finland and Sweden on Tuesday before the Madrid summit. read more

“Attending this summit does not mean we will take a step back from our position,” Kalin said, referring to Tuesday’s four-way meeting. “We have largely reached an agreement, there are some issues we don’t agree on. If we agree on those, that is how we’re going to go to Madrid.”

ELECTIONS AT HOME

The person close to the matter, who also requested anonymity due to the sensitivity of talks, said the document outlining Swedish and Finnish commitments had boiled down to a few sections not yet fully agreed.

They included the appropriate treatment of a NATO partner on arms export controls, which the Nordic states applied to Turkey in 2019; a recognition of certain groups as terrorists; and concrete action on extraditions of individuals, the person said.

Turkey ramped up engagement in mid-June but its approach “is not driven by internationally-set thresholds…like Madrid”, the person said, adding one step forward was Stockholm’s agreement to ongoing consultations on counter-terrorism.

Erdogan, facing tight general and presidential elections over the next 12 months, says the Nordics harbour people linked to the Kurdistan Workers Party (PKK) that is deemed a terrorist group by Turkey, the European Union and United States, as well as Gulenist followers of a cleric accused of orchestrating a coup attempt in 2016.

The tough stance has helped his polls rebound even as Turkey’s inflation rate soars and its currency tumbles largely due to the president’s unorthodox economic policies. read more

A Western diplomat said Erdogan would likely eventually back the membership bids and declare victory to voters. “But this issue could last for several more months as he looks toward an election and NATO allies get increasingly frustrated.”

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Reporting by Orhan Coskun and Jonathan Spicer; Additional reporting by Tuvan Gumrukcu; Editing by Daren Butler and Alex Richardson

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