Erdoğan blocks Nato on Finland, Sweden accession; Biden backs Nordic countries’ applications

18 May 2022

Finland and Sweden handed in their applications to join Nato, but the process could drag out as Turkish President Recep Tayyip Erdoğan blocked the alliance from starting the accession process, making clear he is frustrated with the approach of some alliance members towards Kurdish groups he considers terrorists.

US President Joe Biden said the Nato will work with Finland and Sweden “to deter and confront aggression or the threat of aggression” while their Nato applications are pending.

The European Union is proposing to spend as much as €12-billion to help fund infrastructure needed to end its reliance on Russian energy as part of a larger clean-energy package, but the bloc remains stuck on negotiations to sanction oil from Moscow.

Key developments

Yellen confirms Russia debt-payment licence extension unlikely

Finland’s and Sweden’s Nato bids in limbo as Turkey objects

EU offers funds for oil security as sanctions wrangling drags on

Russia says nearly 1,000 Ukraine troops surrendered at Azovstal

Cold War relic threatens Europe’s plans to ditch Russian oil

Russia’s economy slowed more than expected in first quarter

Russia’s economic growth slowed in the first quarter, as the initial impact of sanctions imposed following President Vladimir Putin’s invasion of Ukraine began to show up.

Gross domestic product rose by 3.5% from a year earlier, down from a gain of 4% in the previous three months, the Federal Statistics Service said on Wednesday, citing preliminary numbers.

Most of the latest results were recorded before Putin sent troops into Ukraine on February 24, triggering sweeping sanctions from Nato and its allies. The sanctions are expected to set off a deep recession in Russia, with the economy contracting as much as 10% this year, according to the central bank.

Biden backs Finnish, Swedish bids for Nato

The US strongly supports Finland and Sweden’s application for Nato membership and will work to quickly bring them into the alliance, Biden said.

The president expressed support in a written statement issued ahead of a meeting with the two countries’ leaders on Thursday.

While the applications are considered, the US “will work with Finland and Sweden to remain vigilant against any threats to our shared security, and to deter and confront aggression or the threat of aggression”, Biden said.

Top US, Chinese diplomats discuss Ukraine war

Top US and Chinese diplomats discussed the situation in Ukraine in a rare call on Wednesday, according to a statement from the White House.

The statement didn’t give additional details on what National Security Advisor Jake Sullivan and Yang Jiechi, director of the Office of the Foreign Affairs Commission, discussed, but the US has long encouraged China not to provide support for Russia’s invasion of Ukraine.

EU aims to use Russian central bank assets for Ukraine

The European Commission is exploring using Russia’s frozen central bank assets, along with those of sanctioned Russian oligarchs’ seized assets, as war reparations to help Ukraine rebuild.

“We are doing the legal assessment,” commission Vice-President Valdis Dombrovskis told reporters. “But legally we must cast this net wide because there’s a principle in international law that the aggressor pays, and we must make Russia pay for the damages is creating.”

Zelensky plans to extend martial law

President Volodymyr Zelensky is proposing to extend martial law in Ukraine by three months.

Zelensky asked lawmakers to back an extension for 90 days from May 25, according to a draft bill on the Parliament website, “because of ongoing large-scale military aggression of the Russian Federation against Ukraine”. Martial law was imposed on February 24 for 30 days and was repeatedly extended. Zelensky also wants Parliament’s approval to extend the mobilisation period by 90 days from May 25.

Yellen confirms Russia debt-payment licence extension unlikely

US Treasury Secretary Janet Yellen confirmed that it’s unlikely that the US will extend an exemption that allowed Russia to make bond payments to US investors. “The expectation was that it was time-limited,” Yellen said of the licence that’s set to expire on May 25.

No final decision has been made, but it’s reasonable to assume the licence will be allowed to expire, Yellen said at a press conference in Bonn, Germany. She spoke a day after Bloomberg reported that the Treasury Department’s Office of Foreign Assets Control was expected to let the temporary exemption lapse, citing people familiar with the matter.

Read more: US set to block Russian debt payments, raising default odds

Turkey blocks first step in Sweden, Finland Nato accession

Nato failed to immediately move forward with the accession process for Sweden and Finland after Turkey blocked the formal acceptance of the applications.

Nato ambassadors met on Wednesday morning, but couldn’t agree to proceed with the applications after Turkey held up consensus, according to people familiar with the matter. Only after all Nato allies give consent can Sweden and Finland start accession talks with the alliance. A Nato official said the alliance was determined to work through the issues and reach a rapid conclusion.

Russia orders arrest of ex-Aeroflot executive who slammed war

A Moscow court ordered the arrest in absentia of Andrey Panov, a former deputy CEO of Aeroflot who publicly slammed the war after leaving Russia, RBC reported, citing the court’s website.

Panov called the ruling politically motivated and said the criminal case was opened a day after he wrote an opinion piece in the Financial Times calling on Russian executives to oppose the war or be complicit in “Moscow’s war crimes”.

He was charged with large-scale fraud related to a 200-million rouble ($3.1-million) advertising contract signed with Bain & Co. in 2019, RBC said, citing an unidentified person familiar with the case.

EU proposes tool to help countries replenish arms stocks

EU nations could use a new joint procurement fund to help them replace military equipment sent to Ukraine, under proposals put forward by the European Commission.

The instrument would have a budget of €500-million over two years to meet urgent needs, and criteria include the participation of at least three member states and benefiting European industry, according to an EU official.

The proposal is part of a package aiming to strengthen the EU’s defence capabilities, through its industrial and technological base. It also seeks to pave the way for another tool, a European Defence Investment Programme, for joint procurement in the medium to long term.

Germany strips Schroeder of perks over Russia ties

Germany’s ruling coalition is stripping former Chancellor Gerhard Schroeder of his office in the lower house of Parliament over his close ties to Russia and President Vladimir Putin.

Schroeder has refused to give up lucrative jobs as chairman of both the state-owned Russian oil giant Rosneft and the shareholder committee of Nord Stream, which built a Russia-to-Germany gas pipeline that Chancellor Olaf Scholz halted in February. A Social Democrat like Scholz, Schroeder served as chancellor from 1998 to 2005.

Google declares bankruptcy of Russian unit

The Russian unit of Alphabet’s Google intends to file for bankruptcy after mounting fines led to its local bank account being frozen, in the latest sign of the Kremlin’s crackdown on foreign internet companies.

Russia expels European envoys in tit-for-tat move

Moscow ordered a total of 85 diplomats from Italy, France and Spain to leave the country in retaliation for the expulsion of its envoys from their countries over the Kremlin’s war in Ukraine.

The Foreign Ministry in Moscow said 34 French diplomats, 24 Italian and 27 Spanish envoys were declared personae non grata and ordered to leave Russia. The announcements came a day after Russia expelled two Finnish diplomats in a tit-for-tat measure.

Countries in the EU expelled more than 200 Russian diplomats after the start of President Vladimir Putin’s invasion and as evidence of alleged war crimes emerged in Ukrainian towns freed from Russia’s occupation. France kicked out 35 diplomats, Italy ordered 30 Russian envoys to leave and Spain announced it was expelling 25.

More Ukrainians returning home, official says

Ukraine is seeing 30,000 to 40,000 citizens returning each day to the country over the past week, outnumbering those leaving, according to State Border Guard Service spokesman Andriy Demchenko.

“One can conclude that Ukrainians begin to return to Ukraine,” Demchenko said during an online video briefing.

At the same time, the number of military-age men trying to leave the country illegally is growing. A total of 2,800 men have been detained since the war started on February 24, Demchenko said.

More Ukraine troops surrender at steel plant, Russia says

Russia said another 694 Ukrainian troops “surrendered” at Mariupol’s besieged Azovstal steel plant in the past day, bringing the total close to 1,000 this week, in a fresh sign the monthslong battle for control of the territory is coming to an end. Ukraine hasn’t confirmed the Russian claims.

Ukraine’s Volodymyr Zelensky said earlier that the “evacuation mission” was continuing with help from “the most influential international mediators”, without elaborating.

Italy wants fast Nato entry for Finland, Sweden

Italy strongly supports Finland’s and Sweden’s bid to join Nato and wants to speed up the accession process “as much as possible”, Prime Minister Mario Draghi said at a joint press conference with Finnish Premier Sanna Marin in Rome.

Draghi also said Italy was ready to guarantee Finland’s security “without conditions” in the interim period before full Nato membership. He didn’t specify what such a guarantee entails.

EU energy plan could break oil ban deadlock, envoys told

The European Commission told the bloc’s ambassadors it hopes a new plan to cut dependence on Russian energy may help break a deadlock over banning the country’s oil, according to an official with knowledge of the discussion.

Commission President Ursula von der Leyen said the EU aims to help finance up to €10-billion in missing energy links for gas and LNG and up to €2-billion “for oil infrastructure in view of stopping the shipment of Russian oil”.

Hungary, which has been blocking a proposed ban in a sixth sanctions package, told envoys at a closed-door meeting that it had nothing new to report, said the official who declined to be named on confidential talks. Countries including Estonia, Germany, Lithuania and Poland expressed frustration at the impasse.

G7 to mark start of global food alliance

Development Ministers from the Group of Seven industrialised nations meeting in Berlin are due to mark the formal start of a new alliance for global food security, in part designed to address the fallout from Russia’s invasion of Ukraine.

“The terrible consequences of Russia’s war of aggression extend far beyond Ukraine,” German Development Minister Svenja Schulze, who is chairing the meeting, said in an emailed statement. “There is a risk of famine because Putin uses hunger as a weapon.”

Ukraine is one of the world’s biggest growers of wheat – an essential element of global food security – and the US expects production to fall by one-third this year compared to last season. Millions of tonnes of harvested grain are also stuck at Ukrainian ports due to Russia’s blockade.

Erdoğan criticises several Nato members

President Recep Tayyip Erdoğan says several Nato members haven’t collaborated enough in Turkey’s fight against Kurdish militant groups.

Erdoğan called on Nato members to support Turkey’s “legitimate” cross-border military operations against PKK affiliated militant groups in Syria, in a speech to members of his ruling AK Party. “Nato is an alliance of security,” he said. “Nato’s enlargement is meaningful to us in proportion to respect shown to our sensitivities.”

EU plans to help cover Ukraine’s bills

The European Union will propose some €9-billion in loans to cover Ukraine’s urgent bills as part of a financial package to support the war-torn country, two EU officials said.

The bloc on Wednesday also proposed a new joint debt plan and using seized assets from sanctioned oligarchs to rebuild the nation. Kyiv needs around €15-billion over the next three months and the war costs could surpass €1-trillion, the Ukrainian government said.

Finland, Sweden apply to join Nato

Sweden and Finland submitted their applications to join the Nato military alliance in Brussels on Wednesday, marking the start of a process that would fortify Europe’s defences and make it more secure in the event of Russian threats to the region.

“This is a good day at a critical moment for our security,” North Atlantic Treaty Organization Secretary General Jens Stoltenberg told reporters. “This is a historic moment which we should seize.”

Austria sees no EU fast-track for Ukraine

Ukraine can’t receive full EU membership in an expedited process and officials should seek to find ways to boost cooperation for the duration of normal accession talks, Austria’s Foreign Minister Alexander Schallenberg said on German public radio.

“We have every interest to anchor Ukraine in the European family,” Schallenberg said. “But we know that an entry process lasts years, if not decades,” he said. Austria’s top diplomat said discussions over Ukraine’s membership cannot ignore the aspirations of other countries, including North Macedonia and Albania.

Japan PM to attend Nato summit

Japanese Prime Minister Fumio Kishida plans to attend the Nato summit after a similar meeting of Group of Seven counterparts late next month, broadcaster TV Asahi reported, without attribution.

Japan, a neighbour of Russia, isn’t a member of the security bloc and Kishida would be the first sitting Japanese premier to attend the gathering.

Read more: Why Japan will struggle to do without Russian energy: QuickTake DM

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