The United Kingdom weighs the offer; Russia Shifts Ireland Exercises: Update on Ukraine

(Bloomberg) – The UK is considering the “biggest possible offer” to NATO, including more troops and weapons to Estonia, to help deter any Russian aggression against Ukraine, it said on Saturday evening Prime Minister Boris Johnson.

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President Joe Biden said on Friday he would send US troops to Eastern Europe as the threat of a Russian invasion of Ukraine continues to loom over the United States and its allies.

The UN Security Council will debate the Ukraine crisis on Monday. The United States and the European Union are focusing on a set of sanctions against Russia if President Vladimir Putin invades Ukraine. Russian Foreign Minister Sergei Lavrov is expected to meet with US Secretary of State Antony Blinken in the coming days.

Russia has denied plans to invade after massing tens of thousands of troops as well as tanks and equipment near Ukraine’s eastern border.

Key developments:

  • Wall Street banks told by US of possible sanctions

  • Many raw materials would be drawn into a conflict in Ukraine

  • Ukraine says US is hurting economy by spreading panic

  • Azerbaijan is ready to supply emergency gas to Europe

  • Where military forces gather around Russia and Ukraine

All hours CET.

France FM has “no knowledge” of Putin about to invade (00:00)

French Foreign Minister Jean-Yves Le Drian said he had “no knowledge” that Russian President Vladimir Putin had taken the “decision” to engage in military action in Ukraine, but he added that Russia was logistically prepared for such a scenario.

In an interview with Journal du Dimanche, Le Drian also declined to detail what possible sanctions against Russia might be, as he said describing them would undermine the effectiveness of the threat. His message for Putin was: “Not one more step.”

UK Weighs Significant ‘Offer’ to NATO (11:30 p.m.)

The UK is considering the “largest possible offer” of land, sea and air forces to NATO, including more troops and weapons to Estonia, to help deter any Russian aggression against Ukraine.

Prime Minister Boris Johnson said in a statement on Saturday evening that he had ordered British troops to “prepare to deploy across Europe next week”. He is also due to meet with Putin this week and visit Eastern Europe in the coming days.

The deployment could include fast jets, warships and military specialists, the statement said.

“This package would send a clear message to the Kremlin: we will not tolerate their destabilizing activity, and we will always stand with our NATO allies in the face of Russian hostility,” Johnson said.

Russia to move location of naval exercises near Ireland (6:57 p.m.)

Russia will move the planned naval drills outside of Ireland’s exclusive economic zone, according to its ambassador in Dublin, Yuriy Filatov, in what he described as a gesture of goodwill to the Irish government and local fishermen.

The Russian Navy was due to hold exercises off the southwest coast of Ireland from February 3-8. Irish Foreign Minister Simon Coveney said this week the drills were unwelcome and the fishing industry grew concerned about potential damage.

Coveney commented on Twitter that Russia’s response was “welcome”.

Baerbock highlights Germany’s solidarity (5:30 p.m.)

Germany continues to seek de-escalation between Ukraine and Russia based on the so-called Normandy format, Foreign Minister Annalena Baerbock said ahead of a visit to Kyiv with her French counterpart.

“Our commitment to the inviolability of Ukraine and solidarity with its people” is behind the planned visit, Baerbock tweeted.

French and German diplomats will visit Kiev on February 7 and 8 (3:30 p.m.)

French Foreign Minister Jean-Yves Le Drian and German Annalena Baerbock plan to visit Kyiv on February 7-8, Le Drian said on Twitter.

Le Drian said he assured Dmytro Kuleba, Ukrainian Foreign Minister, of “our full support and solidarity with Ukraine. Our mobilization continues, particularly in the Normandy format, to defuse tensions.

Kuleba, also on Twitter, said he and Le Drian discussed ways to help Ukraine’s economy “mitigate security risks”.

France says it is ready to deploy troops if NATO requests it (11:49 a.m.)

France is ready to deploy troops if NATO deems it necessary, Defense Minister Florence Parly said on France Inter on Saturday. She added that dialogue with Russia remains the priority.

Romania is in talks with France and the United States to determine the best way to increase the number of troops it hosts within the framework of NATO. Parly traveled to Bucharest for consultations earlier this week.

Commodity Price Risk Due to Fear of Conflict (9:25 a.m.)

Tensions over Ukraine have already sent natural gas prices soaring and could hit a range of other commodities crucial to the global economy at a time when governments are grappling with an energy crisis, a surge in inflation and a cost of living crisis.

The crisis “could create a butterfly effect, driving up commodity prices as supply problems mount,” Bloomberg Intelligence analysts wrote. “Sanctions could lead to shortages of food and energy, driving up prices of both.”

Johnson to Call Putin, Visit Eastern Europe (3:40 a.m.)

Prime Minister Boris Johnson will meet with Putin this week and plans to visit Eastern Europe as soon as the UK steps up its efforts to help end the Ukraine crisis.

Johnson will reiterate the need for Russia to step back and engage diplomatically, a Downing Street spokesman said in a statement.

The UK plans to use a UN Security Council meeting on Monday to exert further pressure on Russia, the official said. At this meeting, the UK plans to focus on what it called “Russia’s misguided narrative”.

Biden says he will send US forces to Eastern Europe (11:30 p.m.)

Biden said on Friday he would send US troops to Eastern Europe as the threat of a Russian invasion of Ukraine continues. He added that “few” soldiers would be involved “in the short term”.

Biden did not name any countries where troops could be deployed or elaborated further.

US and EU Draft Sanctions Against Russian Debt, Banks and Individuals (11:12 p.m.)

The United States and the European Union are focusing on a set of sanctions against Russia if Putin decides to invade Ukraine, according to people familiar with the matter and documents seen by Bloomberg.

The measures would broadly fall into several categories, including: restrictions on the refinancing of Russian sovereign debt; financial penalties; and the sidelining of individuals and entities close to the Kremlin. Western allies are also working on a range of trade-related measures covering key goods and sectors.

Ukraine Says US Is Harming Its Economy (7 p.m.)

Ukrainian President Volodymyr Zelenskiy has said the United States is hurting his country’s economy by unduly stoking panic that Russia might be planning an invasion. Zelenskiy said satellite images alone were insufficient to assess the extent of the military buildup and the situation has not worsened.

“We are grateful to the United States for supporting our independence and territorial integrity,” Zelenskiy told foreign media in Kyiv. “But I’m the president of Ukraine, I’m here and I know more details and I have deeper knowledge than any other president.”

The UN Security Council will discuss the crisis on Monday (6:47 p.m.)

The United States said the UN Security Council should be fully engaged in the Ukraine crisis and confirmed that the Council would discuss the issue in a public meeting on Monday, a day before Russia assumes the rotating presidency of the Security Council in February.

A senior Biden administration official said the meeting, at which Ukraine’s United Nations envoy is expected to speak, will be an opportunity to hear whether Russia remains committed to diplomacy.

Ambassador Dmitry Polyanskiy, Russia’s deputy to the UN mission, tweeted his opposition to the meeting, calling it a “disgraceful blow to the reputation” of the council.

Ukrainian leader says Russia’s position is stable (5:02 p.m.)

The situation on the border with Russia has not worsened beyond what it was last spring, Zelenskiy told reporters in Kyiv. He criticized “international leaders” who openly speculated about a possible Russian invasion, and said officials should be more careful when commenting on the imminent risk of war.

“Imbalanced information” costs the Ukrainian economy “a lot”, added Zelenskiy. His remarks come amid growing US warnings about Russia’s plans. Biden told Zelenskiy on a Thursday night call “there is a real possibility that the Russians could invade Ukraine in February,” according to a US official.

Ukraine needs $5 billion in financial support from countries and international partners to stabilize its economy, Zelenskiy said.

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