Ukrainian President Volodymyr Zelensky was set to nominate Andrii Sybiha, a senior diplomat and former ambassador to Turkey, to become foreign minister as part of the biggest Cabinet reshuffle since Russia invaded in 2022.
Chancellor Olaf Scholz took delivery of an advanced air defence system for the German armed forces and confirmed orders for five more, as well as an additional 17 units for Ukraine to help repel Russian attacks.
The US Treasury Department warned other countries to be on the lookout for Russian banks that open overseas branches as a way to avoid financial sanctions imposed after the invasion of Ukraine.
Zelensky to nominate Sybiha as Ukrainian foreign minister in reshuffle
Ukrainian President Volodymyr Zelensky was set to nominate Andrii Sybiha, a senior diplomat and former ambassador to Turkey, to become foreign minister as part of the biggest Cabinet reshuffle since Russia invaded in 2022.
Sybiha, a deputy minister, would replace Dmytro Kuleba, the head of Zelensky’s political party, David Arakhamia, said on Telegram after the president met with the legislators.
Olha Stefanishyna, a deputy prime minister, would take an expanded role that added justice minister to her portfolio, said Arakhamia.
Oleksiy Kuleba, who works for the presidential administration, would be appointed as infrastructure minister; Oleksandr Kamyshin, the minister who oversaw weapons production would be moved to Zelensky’s office and would be replaced by Herman Smetanin, the head of state-owned arms group Ukroboronprom, he said.
State Property Fund head Vitaliy Koval would be proposed as agriculture minister, said Arakhamia.
Scholz touts major order for air defence systems for Ukraine
Chancellor Olaf Scholz took delivery of an advanced air defence system for the German armed forces and confirmed orders for five more, as well as an additional 17 units for Ukraine to help repel Russian attacks.
Speaking on Wednesday at an air force base on the north coast near Kiel, Scholz said the procurement for the Bundeswehr of the six Iris-Ts would play a key role in strengthening the European Sky Shield Initiative. So far, 21 nations including the UK and Turkey have signed up to the German-led project, designed to make the continent less vulnerable to air strikes at a time of increasing geopolitical tension.
The Iris-Ts earmarked for Ukraine are on top of seven already delivered, which have helped bring down more than 250 Russian rockets, drones and missiles and saved many lives, Scholz said. Four would be sent before the end of this year and the rest starting next year, he pledged.
“This shows that German support for Ukraine is not letting up,” Scholz told guests including Defense Minister Boris Pistorius.
“We have planned ahead and secured contracts and financing in a timely manner so that Ukraine can continue to fully rely on us in the future,” he added. “And that also shows that our industry is highly efficient — when it has the necessary planning security.”
Despite mounting budget constraints, Scholz’s government has been one of the most generous backers of Ukraine since Russia’s full-scale invasion, supplying or promising materiel worth some €28-billion, behind only the US in value.
By 2026, Ukraine will have received 24 Iris-T systems from Germany, 12 of the medium-range version and 12 shorter-range, according to a government official.
While Scholz has earned praise for bolstering Ukraine’s air defences, he has also been criticised for refusing to supply the government in Kyiv with longer-range missiles. The concern expressed by the German leader is that the country could be drawn into a wider conflict if weapons it provides are deployed against Russian targets.
US warns of risks from dealing with new Russian bank units
The US Treasury Department warned other countries to be on the lookout for Russian banks that open overseas branches as a way to avoid financial sanctions imposed after the invasion of Ukraine.
Foreign banks could face US sanctions themselves if they do business with the Russian entities, the Treasury’s Office of Foreign Assets Control said in an alert. Banks and their regulators “should be cautious” about new branches or subsidiaries of Russian banks, including banks that have not yet been sanctioned.
“Russia continues to reorient its entire economy and government resources to support its war effort, including through Russian financial institutions,” the alert said, adding that new branches “should be viewed as a red flag for attempted Russian sanctions evasion”.
The move highlights how the US and its allies are looking to put new pressure on foreign financial institutions that Russia has used to circumvent the sweeping sanctions imposed after its invasion of Ukraine in 2022. That pressure campaign accelerated in June, creating new hurdles to payments via previously friendly jurisdictions including China and the United Arab Emirates.
Transactions involving items exempt from sanctions, such as food, agricultural products, medicine, energy and telecommunications were allowed, the alert said.
Russia has massively increased spending since the invasion, pouring money into the military and defence industries. Gross domestic product jumped by 4% annually in the second quarter.
Resignation of Kyiv’s top diplomat caps wartime shakeup
Ukraine’s foreign minister became the latest Cabinet minister to resign as Zelensky pushed ahead with the most sweeping government shakeup in the 2½-year war with Russia.
Dmytro Kuleba, the public face of Zelensky’s diplomatic effort to forge a path to Nato and the European Union, became the sixth Cabinet member to submit his resignation in the last two days.
The shakeup leaves Western allies guessing after they were caught off guard by last month’s incursion into Russia’s Kursk region. With Zelensky’s firing of his top general and the removal of a minister who worked closely with the US earlier this year, Kyiv has a track record of raising questions over the rationale of abrupt personnel changes.
And while several top officials will get new posts, the president’s reshuffle caps a week of turmoil as Russia steps up missile and drone attacks on Ukrainian cities and its forces quicken their advance in the eastern Donetsk region.
Looming above all is the approaching cold season — the third full winter since the war began — as the nation’s energy infrastructure has been decimated by attacks. Ukrainians have already grappled with rolling blackouts during the summer months.
“Autumn is going to be very important, and our government institutions have to be tuned to help Ukraine achieve its results,” Zelensky said in a daily video address late on Tuesday. “We have to strengthen certain areas in the Cabinet, and staff decisions have already been prepared.”
Kuleba, Ukraine’s youngest-ever foreign minister at 43, has been a visible interlocutor with US Secretary of State Antony Blinken and other Nato foreign ministers. He will now focus on strengthening Ukraine’s relations with Nato as it seeks accession, according to a person familiar with the reshuffle, who spoke on condition of anonymity.
Volodymyr Fesenko, the head of the Penta research institute in Kyiv, said the overhaul had been signalled for months — and attributed the changes to the president’s “emotional fatigue” over the functioning of the Cabinet and a desire to give “new impetus” to the government.
Kuleba’s departure follows the resignations of Deputy Prime Minister Olha Stefanishyna — who is likely to receive a broader mandate — as well as the ministers of justice, environment, reintegration of occupied territories and the minister overseeing strategic industries. The Ukrainian parliament will vote to approve the resignations during its next session, the assembly speaker, Ruslan Stefanchuk, said in a post on Facebook.
The president said he expected a “somewhat different emphasis” in some areas of domestic and foreign policy, without elaborating. He said there would also be changes in the presidential office.
As Ukrainian officials focused on rebooting the government, there was no respite from Russia’s attacks. An early morning aerial strike in the western city of Lviv — far from the frontline — killed at least five people. Mayor Andriy Sadovyi said at least 35 were injured and some 50 residential buildings in Lviv’s historic centre were damaged.
The strike came a day after more than 50 people were killed in the central city of Poltava, some 300km southeast of Kyiv, in one of the most brutal attacks in the war.
UN nuclear watchdog extends monitoring to Ukraine power grid
The United Nations nuclear watchdog is widening its oversight in Ukraine to include high-voltage power networks critical to maintaining safety at atomic plants that generate the bulk of the country’s electricity.
The International Atomic Energy Agency’s (IAEA’s) decision followed a meeting between Zelensky and IAEA Director-General Rafael Mariano Grossi on Tuesday in Kyiv. It also comes as Russia intensifies its attacks, including a massive assault last week on energy infrastructure.
Earlier this week, the supervisory board of grid operator Ukrenergo removed the company’s chief executive, following a report about the protection of high-voltage facilities from Russian strikes.
Zelensky’s government asked whether the IAEA could also look at “critical substations in the country that have been subject to pressure or attacks, in the sense that they are also linked to the nuclear power plants”, Grossi told reporters. “We think this is relevant and we are going to be making an evaluation of the situation in some of these substations.”
Unlike other power sources like coal, gas or renewables, nuclear plants require a constant flow of electricity to keep safety-control systems operational. Without this supply, the fuel inside a reactor’s core risks overheating, raising the spectre of a meltdown.
Russia has escalated its attacks on Ukraine’s power grid in recent months, with key thermal-generation plants and transmission nodes disabled. Those strikes have had a knock-on effect on the three nuclear plants still under Ukrainian control west of the Dnieper River.
“The heightened vulnerability of Ukraine’s energy infrastructure is deeply concerning for nuclear safety at Ukraine’s nuclear power plants, as we saw last week when several reactors stopped operating because of damage to the energy infrastructure elsewhere in the country,” Grossi said in a separate statement late on Tuesday.
While in Ukraine, Grossi said he’ll leading an IAEA monitoring team across the battle line to visit the Russian-occupied Zaporizhzhia Nuclear Power Plant.
Ukraine braces for IMF pressure to devalue currency, cut rates
Ukrainian officials were expecting the International Monetary Fund this week to push it to devalue its currency faster, cut interest rates and strengthen its tax-raising efforts to fill the country’s budget gap, according to people familiar with the situation.
IMF staff visiting Kyiv were expected to pressure the war-torn country to pursue those steps to continue receiving financial support, as they undertake a scheduled review of a $15.6-billion loan programme, Ukrainian officials with the knowledge of the topic for preliminary discussions with the fund. They spoke before the meetings began on Wednesday and asked not to be identified as the talks are private.
The result of the review could unlock a $1.1-billion disbursement to Ukraine if the fund’s staff determines Ukraine is hitting programme targets and has sufficient funds and policies lined up to meet its financing needs.
The National Bank of Ukraine, however, is reluctant to let the hryvnia weaken further. The currency has already lost more than 10% since October, when it ended a fixed-exchange rate imposed in the wake of Russia’s full-scale invasion. The move would challenge the central bank’s ability to maintain price stability, the people said.
A depreciation, as well as higher taxes, would also be politically damaging as the population is struggling with the fallout from a war with Russia.
The IMF, as well as Ukraine’s central bank and finance ministry, declined to comment.
Ukraine has relied on international support for weapons and financing to sustain its efforts to repel Russian forces, which invaded the country in February 2022. A surprise push by Ukraine’s military into Russia’s Kursk region has done little to tilt the war toward a resolution, with Russia dug into Ukraine’s east and raining down a punishing barrage of missile strikes across the country.
Ukraine’s government finances have been supported by about $122-billion in international assistance from the US, the European Union and other allies, as well as the IMF. But the nation still faces a $15-billion budget gap next year, which has not yet been filled by financial commitments from donors, according to recent estimates from Prime Minister Denys Shmyhal.
To help plug that hole, the IMF plans to urge Ukraine’s central bank to devalue the hryvnia at a faster pace and ease its monetary policy amid moderate inflation, according to the people. These steps are meant to balloon Ukraine’s budget revenues in the local currency and make borrowing cheaper for the finance ministry.
Separately, Ukraine is also slated to get further support from $50-billion in loans funded by profits from frozen Russian central bank assets. The Group of Seven, which is spearheading the effort, is aiming to get funds flowing by the end of the year, although the US and EU are still finalising details.
Malaysian PM visits Russia as Asian leaders defy West over Putin
Russia and Malaysia will discuss collaboration in areas from aerospace to advanced technologies on Wednesday, as Anwar Ibrahim becomes the latest Asian leader to shrug off Western efforts to cast Vladimir Putin as an international pariah.
Malaysian Prime Minister Anwar was on a two-day visit to Russia, where he would meet President Putin on Wednesday evening and brief the media on Thursday, according to his office. The meeting would allow talks on a broad range of topics, from agriculture and food security to trade and investment, Malaysia’s Foreign Ministry said in a statement.
“This visit will no doubt bring the best benefits to Malaysia, especially in strengthening cooperation as well as two-way ties between Malaysia and Russia,” Anwar wrote on X at the start of his two-day visit to the federation.
Anwar follows in the footsteps of India’s Narendra Modi, Chinese President Xi Jinping, North Korea’s Kim Jong-un, Indonesian President Joko Widodo and Myanmar army general Min Aung Hlaing in meeting with Putin since the start of Russia’s invasion of Ukraine more than two years ago. That shows many Asian leaders have been unmoved by the West’s condemnation of Putin and his charges for alleged war crimes.
Earlier this week, Putin agreed to boost economic ties during a visit to Mongolia, which was criticised by Ukraine for not executing an International Criminal Court arrest warrant for the Russian leader. And in July, Indonesian President-elect Prabowo Subianto, visiting in his capacity as defence minister, described Russia “as a real friend” when he met Putin in Moscow. DM