Western media continue to cover the war in Ukraine—today's foreign press reviews discuss the rapid expansion of the EU, the phasing out of Russian oil and gas, the collapse of the Russian economy, and how small Chinese investors rushed to buy shares of companies associated with the Russian Federation.
has compiled an up-to-date overview of what the European and American media are reporting, covering 14 days of an active Russian invasion.
The EU is disputing whether to admit Ukraine
Photo: Pixabay
Sky News reports that European Union leaders are divided on whether to set Ukraine firmly on the path to membership, citing a bloc official as saying.
It happens one day before heads of member states are due to discuss Kyiv's request for fast accession submitted last week.
An official who is preparing the EU summit in Versailles and asked to remain anonymous said that all leaders are in favor of strengthening ties with Ukraine.
"But the question is whether they will come to a consensus on expansion, which is sometimes more of a challenge," the official said.
Granting membership is likely to be perceived by Russia as a provocation, according to Europe.
Russia seized only Kherson
Photo: bessarabiainform.com
The EU official also said that some countries in the bloc are in favor of phasing out Russian fossil fuels by 2027.
The outlet also quotes British Defense Secretary Ben Wallace, who, in his address to the House of Commons, said that Russia had achieved only one of its goals—the seizure of Kherson.
Wallace also noted that although Russia encircles cities like Mariupol, it does not control them, and Ukrainian air defenses prevent its air supremacy.
The Defense Secretary stated that the UK was sending additional defensive weapons to Ukraine to defend against tanks and added that humanitarian aid from the government would be increased to £220 million (about $290 million).
The Kremlin will soon be unable to pay the national debt
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The BBC quotes Fitch Ratings, the leading credit rating agency, as saying Russia will soon be unable to pay its debts.
The agency downgraded the view of the country's public debt, warning that a default is "imminent".
The move comes amid increasing international sanctions against Russia following its invasion of Ukraine.
A credit rating is intended to help investors understand the level of risk they face when buying a country's debt or bonds.
A low rating means the chances of not getting repaid is considered to be high—and so an investor will charge more to lend to that country.
This week, Moscow itself said its bond payments may be affected by sanctions.
The ratings cut to C from B is the second time this month Fitch has downgraded its view of Russia's ability to pay its debts.
Blow to the main artery of the Russian Federation
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The announcement from Fitch came after the US and UK stated they would ban Russian oil, as they strengthen the economic response to the invasion of Ukraine.
US President Joe Biden said the move targeted "the main artery of Russia's economy".
Meanwhile, the European Union stated it would eventually end its reliance on Russian gas.
As a major exporter of energy, the measures are aimed to hit Moscow's finances, although experts warn this is also likely to send the price of oil and natural gas higher on global markets.
On Sunday, March 6, Moscow told investors that it would continue to service its sovereign debt.
However, it warned that international sanctions imposed on the Kremlin's energy industry could limit its ability and willingness to meet its obligations.
The debt of the Russian Federation was assessed as "junk"
In recent days, rival rating agencies Moody's Investors Service and S&P Global Ratings have also downgraded their views of Russia's sovereign debt.
This means that the country's sovereign debt is currently rated by three of the world's leading rating companies as being below investment grade, that is, the so-called "junk" one.
S&P said the move follows measures it believes will "substantially increase default risk."
Shane Oliver of AMP Capital, an investment management company, believes that the default on Russian debt was "effectively already occurring"
"Russia will only service it in much depreciated roubles anyway and foreign investors are offloading it at fire sale prices," he told the BBC.
The Russian ruble also hit an all-time low as countries around the world impose ever-tougher sanctions against the country.
In February 2022, Russia's central bank more than doubled its interest rate to 20% in an attempt to stop the value of its currency from sliding further.
Dozens of global brands, including McDonald's, Coca-Cola, and Starbucks, have halted their work in Russia over the invasion of Ukraine.
Russians can no longer buy dollars
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CNN Business reports that Russia has banned its citizens from buying U.S. dollars, completing the isolation of an economy that once sought to join the global club of financial powers.
As recently as the 2008 global financial crisis, Russian President Vladimir Putin and his deputies promoted the ruble as a potential alternative to the US dollar, arguing that it should become an integral part of the global financial system. They argued that Russia would become one of the five largest economies in the world.
Putin's quest to dominate his neighbors, starting with his attack on Georgia in 2008, and continuing with the annexation of Crimea in 2014 and last month's invasion of Ukraine, has shredded what remained of the authoritarian leader's economic dreams.
In early 2008, one US dollar would buy roughly 25 rubles. The Russian currency has depreciated significantly since then, and Western sanctions imposed in response to the invasion of Ukraine have pushed it into freefall. On Wednesday, one US dollar could buy 117 rubles in Moscow after the currency fell 10% and hit a new record low. The ruble has been even weaker in the offshore market this week.
The risk of capital outflow has only increased
Photo: Getty Images
The latest slide came after Russia's central bank banned Russians from buying hard currencies and ordered banks to limit withdrawals from foreign currency accounts to $10,000 for the next six months, moves that could help preserve some of the country's dollar reserves and support the ruble.
Sergey Aleksashenko, a former official at Russia's finance ministry and central bank, called the strategy "incredible foolishness" that could lead to a run on the banks.
"The biggest mistake monetary authority may make in Russia is to touch private savings — if there was no bank run until now, it's going to happen," Aleksashenko explained.
Attempts to avoid financial collapse and the ruble demise
Russia has been struggling to avert financial collapse since the US, EU and other Western allies imposed sanctions on much of the country's banking system, including freezing hundreds of billions of dollars of reserves.
Moscow had been stockpiling them for many years to protect the economy. Analysts estimate that more than half of Russia's reserves of foreign currency and gold are now off limits.
The central bank more than doubled interest rates to 20% and temporarily banned Russian brokers from selling securities held by foreigners.
The government has ordered exporters to exchange 80% of their foreign currency revenues for rubles, and banned Russian residents from making bank transfers outside Russia.
The ruble has come under intense pressure, and Moscow's failure to defend the currency will lead to economic losses. Russia is a leading exporter of oil and gas, but many other sectors of its economy depend on imports. As the ruble falls, it will become much more expensive to buy them, which will lead to an increase in inflation.
The West continues to impose punitive restrictions targeted to further isolate Moscow. The US and UK banned Russian energy imports on Tuesday, and the EU stated it would try to cut natural gas imports by 66% in 2022.
According to Anders Åslund, an economist and former adviser to the Russian government, the central bank's decision to ban Russians from buying US dollars marks the end of the ruble's value.
Chinese are buying shares associated with the RF
Photo: Getty Images
CNN Business reports that Chinese retail investors are snapping up stocks with even the slightest link to Russia as they bet on closer economic ties between the two countries following unprecedented Western sanctions on Moscow.
Shares in more than a dozen Chinese companies, from shipping companies to port operators, that have trade links with Russia or are close to its borders, have soared in the past week, although some have warned investors that their stocks are overvalued.
Analysts say increase in Sino-Russian trade will be limited by Beijing's need to protect existing business ties with the West.
This does not stop a number of Chinese retail investors. Earlier this week, shares of Jinzhou Port, China's most northerly seaport with direct shipping routes to Russia, surged 94% on the Shanghai Stock Exchange since Feb. 24.
Jinzhou Port has repeatedly warned investors that its share price is too volatile and its valuation is "too high" compared with peers.
Shares of Jinzhou Port pulled back on March 8 and 9 but are still up 60% in two weeks.
Shares of Xinjiang Tianshun Supply Chain, a logistics company for bulky goods in far northwestern Xinjiang, which has a 96 km direct border with Russia, also jumped 95% on the Shenzhen Stock Exchange over the past seven sessions. Their value fell slightly on Tuesday and Wednesday. But after the war in Ukraine, their growth is almost 60%.
Toll roads and freight: "Clams fight, fisherman stands to benefit"
Since the beginning of the war, even the shares of toll road operators and rail freight companies have risen. Shares of Heilongjiang Transport Development, a main operator of highway tolls in northeastern Heilongjiang, which shares a 1,850-mile border with Russia, has climbed 21%.
Changjiu Logistics, whose parent company operates direct freight trains between northeast China and Russia, also jumped 14% in the same period.
Heilongjiang Transport Development, a main operator of highway tolls in northeastern Heilongjiang — which shares a 1,850-mile border with Russia, has climbed 21%.
Changjiu Logistics, whose parent company operates direct freight trains between northeastern China and Russia, also jumped 14% during the same period.
He added that it is "quite possible" that trade in some goods between China and Russia will increase after Western sanctions on Moscow.
At the end of February 2022, China lifted restrictions on the import of Russian wheat, which can solve food security problems in Russia.
The decision was made during a visit by Kremlin leader Vladimir Putin to Beijing in early February. The countries signed 15 deals, including new contracts with Russian energy giants Gazprom and Rosneft.
Who is behind China's frenzy?
Photo: Getty Images
The market recovery is being driven by small retail investors, who make up more than 80% of China's stock market turnover, according to data from Shanghai and Shenzhen stock exchanges.
Despite the enthusiasm shown by small traders, experts warn that it is too early to bet on the increase of trade between Russia and China.
Beijing is not in a hurry to help Russia after its economy has been hit by sanctions from around the world and will be wary of risking its much larger trade ties with Europe and the US.
Although China refused to directly condemn the Russian invasion, some Chinese banks have limited funding for purchasing Russian goods.
Last week, the Asian Infrastructure Investment Bank, a development bank backed by Beijing, said it was suspending all its activities in Russia as "the war in Ukraine unfolds."
Experts tell CNN Business that small investors in China might be unaware of the long-term implications of Western sanctions.
It is important to understand that for China, Russia is much less important: trade between the two countries is only 2% of China's total trade.
Instead of an afterword. Russia is really drowning its economy and its currency, and small Chinese investors will not save it. Of course, contracts for the wheat export are more serious help to the aggressor country, but under pressure from the West on China, which we reported about earlier, Beijing might refuse them too.
As for Europe that believes that even EU enlargement might seem like a provocation to Vladimir Putin, now these fears will not help Ukraine much. It's nice to know that Europe is ready to take a serious cut in oil and gas supplies from Moscow, which will also impact the Kremlin's economy in agony.
But with how many more lives we will pay and whether, in addition to humanitarian one, a nuclear catastrophe will happen during this time, is not a matter of a year or even a month, but a matter of 48 hours.
As we reported earlier, British politicians and American journalists were deeply moved by the words from Volodymyr Zelensky’s video address to the British House of Commons on March 8, where he quoted Shakespeare and Churchill (although, according to our sources, the translation was incomplete and incorrect, but the phrases of the historical character were still recognized, and the audience gave the President of Ukraine a standing ovation).
Kyiv and other Ukrainian regions, meanwhile, continue to hold the line and are ready to fight to the last.
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