May 26, 2023: Global News Roundup
With friends like these—Following loss in Bakhmut and fumble in Belgorod, US and Germany blame Ukraine for Nord Stream sabotage and Kremlin attack
The Global News Roundup collects news stories from entirely international (non-US) media sources on variety of pressing global issues and events.
This past Saturday, Russian President Vladimir Putin “congratulated assault teams of the Wagner private military company and Russian troops with the liberation of the city of Artyomovsk” (called Bakhmut when it was under Ukrainian control), marking the end of the longest and most deadly battle of the war. Russia state media outlet TASS reiterated the sequence of events that, from Russia’s perspective, legitimized its invasion of Ukraine in February 2022 and justified the steep costs incurred in the roughly eight months it took to gain control of the city:
Putin announced on February 24, 2022, that, in response to a request by the heads of the DPR [Donetsk People’s Republic] and LPR [Lugansk People’s Republic] for assistance, he had decided to carry out a special military operation in Ukraine. The DPR and LPR launched a joint operation to liberate their territories that were under Kiev’s control.
From September 23 to September 27, 2022, the DPR and the LPR as well as the Kherson and Zaporozhye regions held referendums on joining Russia, in which the majority of voters opted to join Russia.
On September 30, 2022, Putin and the heads of the DPR and LPR, and of the Zaporozhye and Kherson regions signed treaties on their accession to the Russian Federation. Later, the State Duma (lower house of Russia’s parliament) and the Federation Council (upper house) approved legislation on ratifying these treaties, as well as federal constitutional laws on the accession of the four regions to Russia.
Putin’s announcement came on the heels of a similar declaration by the head of the Wagner military group—a private mercenary company contracted by the Russian government—Yevgeny Prigozhin, who declared victory “in a video in which he appeared in combat fatigues in front of a line of fighters holding Russian flags and Wagner banners”: “Today, at 12 noon, Bakhmut was completely taken. We completely took the whole city, from house to house." According to Al Jazeera, Prigozhin “taunted Ukrainian President Volodymyr Zelenskyy and US President Joe Biden, who were taking part in a G7 summit in Japan on Saturday where the Ukraine war was front of mind for world leaders. Addressing Zelenskyy, Prigozhin said, “Today, when you see Biden, kiss him on the top of his head, say hi to him from me.” On Thursday, it was widely reported that Wagner was handing over control of Bakhmut/Artyomovsk to the Russian military.
Prigozhin made headlines in the Western presses frequently over the past few months, accusing the Russian government of failing to provide sufficient weapons and ammo to Wagner forces, criticizing Russian military officials, and revealing that Russian soldiers were deserting their posts. In the wake of Russia’s victory, there has been speculation that Prigozhin’s widely publicized and often theatrical commentaries were designed to lure Ukrainian forces and trap them in the Bakhmut “meat grinder”. Others are speculating that his extensive criticisms of Putin and other officials perhaps indicate that Prigozhin is preparing to run for the Russian presidency amidst rumors that Putin is ill.
After the Russian declaration, President Zelensky offered contradictory statements, first stating at the weekend’s G7 meetings that Ukraine had “lost control” of Bakhmut and then later that Ukraine had not lost control of the city. The image below is of President Zelensky and President Biden at the G7 meetings in Hiroshima, Japan, one of two cities on which the US dropped an atomic bomb during WWII.
(Image: Ukrainian President Zelensky (left) and US President Biden (right) at the G7 meetings in Hiroshima, Japan. Caption with photo reads: “The United States – and the world – stands with Ukraine”, courtesy of @POTUS on Twitter, May 21, 2023, here).
Before I could even properly digest the Bakhmut/Artyomovsk reports, another piece of closely related news broke internationally on Tuesday, about an attack in the Russian city of Belgorod, which is about a 30-minute drive from the Ukrainian border. “The Kremlin is laying the blame on Ukrainian saboteurs, while Kyiv says anti Putin guerilla fighters are responsible. It's one of the most daring attacks on Russian territory since the invasion began,” reported ABC Australia. On Monday, “Belgorod Governor Vyacheslav Gladkov raised an alarm with the Kremlin, saying a Ukrainian “sabotage group” had entered Russian territory in the Grayvoron district. According to Russia, the raiders opened fire with mortars and artillery on residential and administrative buildings and civilian infrastructure. Russian air-defense forces reportedly shot down drones over the region.”
Two militia groups—the Russian Volunteer Corps and Freedom of Russia Legion—claimed responsibility for the attacks. Both groups are pro-Ukrainian in orientation, but their members are Russian. Russian officials have accused the US and Kyiv of sponsoring the attack, which they have deemed an act of “terrorism”. By Tuesday evening, Russia claimed that it had killed 70 of the militants and destroyed 4 armored vehicles. The Russian defense ministry stated that “the remnants of the nationalists were pushed back to Ukrainian territory, where they continued to be hit by gunfire until they were completely eliminated.” Following the incursion and attack, Ukrainian intelligence indicated that Russia was “evacuating” nuclear weapons from a storage facility in Belgorod.
At this point, it was hard for me to fathom the situation becoming more turbulent, but I was apparently just lacking imagination. On Wednesday, the New York Times published a story anonymously quoting intelligence officials who said they had evidence that Ukrainian forces are probably responsible for the drone attack on the Kremlin several weeks ago (I reported on the incident here), an attack Russia has deemed an assassination attempt. According to Reuters, “United States intelligence agencies believe that a drone attack on the Kremlin this month was likely orchestrated by Ukrainian spies or military intelligence, the New York Times said. The newspaper said the attack appeared to be part of a series of covert operations that have made officials in the United States — Ukraine’s biggest supplier of military equipment — uncomfortable.”
In the most unlikely of coincidences, also on Wednesday European outlets reported that German prosecutors had discovered “traces” of evidence indicating that Ukraine is further responsible for the sabotage of the Nord Stream pipelines, recollecting similar allegations made by Germany back in March. An article from Political Europe reads as follows:
Investigators identified a boat that was potentially used for transporting a crew of six people, diving equipment and explosives into the Baltic Sea in early September. Charges were then placed on the pipelines, according to a joint investigation by German public broadcasters ARD and SWR as well as the newspaper Die Zeit.
The German reports said that the yacht had been rented from a company based in Poland that is "apparently owned by two Ukrainians." However, no clear evidence has been established so far on who ordered the attack, the reports said.
Both Moscow and Kyiv promptly denied Germany’s allegations. Then, on Thursday morning, Russia, which has long blamed the US for the Nord Stream attacks (in part based on investigative reporting from US journalist Seymour Hersh), summoned the ambassadors of Sweden, Denmark, and Germany to “protest over what it said was the "complete lack of results" in an investigation to identify who blew up the Nord Stream gas pipelines last year… Russia's Foreign Ministry in a statement accused all three of deliberately dragging their feet and trying to conceal who was behind the blasts.”
Things I’m keeping an eye on:
1. Ukraine peace or Ukraine escalation: The Hindustan Times reported on Tuesday that Hungarian Prime Minister Orban does not believe Ukraine can defeat Russia and was opposing a €500 million EU aid package to Ukraine, while The Guardian reported last Friday that the US had finally agreed to send F-16s fighter jets to Ukraine, reversing its prior position. On Thursday, it was reported that Russia is deploying tactical nuclear weapons to Belarus. In the wake of Russia’s victory in Bakhmut, it seems that the universe of possibilities has narrowed to really only two options, the warring parties either embrace diplomacy (see my article from earlier this week) or escalate dramatically, with all the risks and danger this entails. As I’ve noted before, it appears to me that the US-led coalition in Ukraine has been looking for a way out of the conflict since at least early March.
2. UK bond markets: Gilt yields rose this week, promoting concern especially for pension funds, not unlike what happened last fall in a similar bond market scenario after former PM Liz Truss announced a new and controversial “mini-budget”. “So far this week the two-year yield has risen about 60 bps. Excluding the mini-budget announcement - a week in which the yield soared by 89 bps - the increase would be the biggest since similar moves during the 2008-2009 market crisis. Craig Inches, head of rates and cash at Royal London Asset Management, said the sharp price moves had "definitely resulted in some pain" for investors, with liability-driven investment funds (LDIs) who service pension funds holding back on buying,” reported Reuters.
3. US-China tensions: As the US-led coalition struggles in Ukraine, US relations with China are on precarious footing. On the one hand, some US leaders have recently signaled a desire to reduce tensions and resume more collaborative and less dangerous relations (e.g., Treasury Secretary Yellen). But on the other hand, recent US military positioning in the Pacific near Taiwan suggests a different sentiment entirely, for example live fire drills with Korea held this week simulating a response to a “full attack”. A US Congressional committee also released a report this week with “10 policy recommendations to preserve peace and stability across the Taiwan Strait”. The report warns about the costs of US failure to deter alleged Chinese aggression, and refers to Taiwan as “a cornerstone of the global economy and a vital partner of the US”.
4. The US economy: Always keeping an eye on this one these days, for obvious reasons.