Ukraine Latest: NATO expansion nears; Renault sells Lada maker

Finland and Sweden are set to deliver their formal applications at NATO’s headquarters in Brussels this week, with bloc members rallying around the move that requires unanimity among the 30 allies.

Turkey doesn’t plan to block the Nordic countries’ efforts to join the alliance, NATO chief Jens Stoltenberg said after meetings in Berlin.

Renault SA agreed to sell its majority stake in Russian carmaker AvtoVaz to a state-run automobile research institute in what is essentially a nationalisation of the unit by government.

Key Developments

• EU Braces for Storm as Ukraine Fallout Cascades Through Economy
• Renault Sells Lada Maker to Russia With Option to Buy Back
• Russia’s Backyard Weighs Opportunities, Threats From Putin’s War
• McConnell Counters ‘Isolationist’ Voices in GOP on Ukraine
• Finland, Sweden Set to Apply for NATO Entry in Historic Shift
• Germany to Stop Russian Oil Imports Regardless of EU Sanctions

All times CET:

Less Russian Gas Expected to Flow Through Ukraine (7:45 a.m.)

Russian natural gas flows crossing Ukraine are expected to be lower Monday, based on shipment orders, while supplies via Nord Stream are stable.

Russian gas shipments to Europe via Ukraine were curtailed on Wednesday after a key cross-border entry point was put out of service because of troop activity on the ground, according to Kyiv.

Renault Sells Lada-Maker With Option to Buy It Back (7:18 a.m.)

The Central Research and Development Automobile and Engine Institute, known as NAMI, which reports to Russia’s industry ministry, will receive the stake while Renault also sold its car plant near the capital to a Moscow City entity, the company said Monday.

The carmaker has the option to buy back its 68% interest in Lada-maker AvtoVaz during the next six years. Renault confirmed it will take a writedown of the value of its operations in Russia — its second biggest market — of 2.2 billion euros ($2.4 billion), including goodwill, at the end of last year.

Oil Tumbles, Reversing Gains  (4:33 a.m.) 

Oil fell for the first time in four sessions as a raft of Chinese data signaled virus lockdowns pummeled the nation’s economy last month. West Texas Intermediate futures tumbled below $110 a barrel, reversing earlier gains.

The market has been gripped by a tumultuous period of trading since Russia’s late-February invasion of Ukraine and the Covid-19 resurgence in China. The war has boosted the cost of food and fuels, with surging US retail gasoline and diesel prices helping fan the fastest inflation in decades.

Germany to Stop Russian Oil Imports Regardless of EU Sanctions (11:54 p.m.)

Germany plans to stop importing Russian oil by the end of the year even if the European Union fails to agree on an EU-wide ban in its next set of sanctions, government officials said.

Efforts to seal deals with alternative suppliers are progressing at the chancellery in Berlin and the government is confident it can solve remaining logistical problems within the next six to seven months, according to the officials, who spoke on condition of anonymity.

With European Union foreign ministers meeting in Brussels on Monday to discuss the next round of sanctions, EU diplomats have floated a delay in the phased-in oil ban after Hungary objected, saying the step would be too damaging to its economy.

NATO Prepares to Add Finland and Sweden (9:15 p.m.)

NATO members rallied around Finland and Sweden after they announced plans to join the alliance, marking another dramatic change in Europe’s security architecture triggered by Russia’s war in Ukraine.

Gathering in Berlin over the weekend, most NATO foreign ministers embraced the bloc’s northern enlargement, a process that requires unanimity among the 30 allies. The one country to voice concerns was Turkey, with Foreign Minister Mevlut Cavusoglu unhappy that Finland and, particularly, Sweden have had relations with Kurdish militants who have been active in eastern Turkey.

Sweden to Send Envoys to Turkey on NATO Membership (7:44 p.m.)

Sweden will send a delegation of diplomats to Ankara for talks this week, after President Recep Tayyip Erdogan voiced opposition to allowing Sweden and Finland as NATO members.

“We are interested in solving this situation,” Sweden’s Foreign Minister Ann Linde said. “I think you should try to find a good solution that makes both parties satisfied.”

While Sweden and Finland have strong support from a large majority of NATO members, Linde acknowledged that other issues may arise.

Ukraine Policy Dogs Scholz’s Party in Second Regional Vote (6:08 a.m.)

Olaf Scholz’s Social Democratic Party lost a regional election for the second straight week amid wavering support for the German chancellor’s Ukraine policy.

The ballot again took place under the shadow of Russia’s war in Ukraine. Scholz’s approval rating has slumped after he was criticized for foot-dragging on supplying Kyiv with heavy weapons, and for blocking an immediate ban on Russian energy imports.

McConnell Predicts Ukraine Aid Package to Pass Wednesday (5:30 p.m.)

Senate Republican Leader Mitch McConnell predicts that a $40 billion Ukraine aid package will pass the Senate with broad bipartisan backing on Wednesday, after being delayed by GOP colleague Rand Paul.

Speaking to reporters from Stockholm, McConnell said the US should back the expansion of NATO to include Sweden and Finland, and called on President Joe Biden to designate Russia as a state sponsor of terrorism.

Sweden’s Social Democrats Support Joining NATO (5:20 p.m.)

Sweden’s Social Democrats have decided to back NATO membership in an historic decision that paves the way to join neighboring Finland in an entry bid over the coming days.

The party, which for decades have been strong opponents of Swedish membership in any military alliance, shifted its stance after Russia invaded Ukraine in February. The decision means that there will now be an overwhelming majority in Sweden’s parliament in favor of joining the North Atlantic Treaty Organization.

Poland Laments EU Approach to Russian Gas Payments (5:01 p.m.)

Poland’s prime minister criticized the European Commission for a plan to offer the bloc’s importers a solution to avoid a breach of sanctions when buying gas from Russia, and still satisfy President Vladimir Putin’s demands over payment in rubles.

“I am disappointed to see that in the European Union there is consent to pay for gas in rubles,” Mateusz Morawiecki said on Sunday. “Poland will stick to the rules and will not yield to Putin’s blackmail.” Russia halted gas flows to neighboring Poland in late April.

Bloomberg reported Saturday that the EU has developed a solution to avoid a sanctions breach.

NATO Chief Says Turkey Doesn’t Plan To Block Accession (3:22 p.m.)

“Turkey has made it clear that its intention is not to block membership” of NATO for Finland and Sweden, said Jens Stoltenberg, secretary general of the military alliance, speaking after a two-day meeting of NATO foreign ministers in Berlin.

Stoltenberg said he was confident Turkey’s concerns , which came to the forefront on Friday, would be addressed without delaying the membership procedure. “A quick and swift process,” is still expected, he said.

Some German Industry May Move to US in Gas Fallout (3:20 p.m.)

The shift from Russian gas to costlier LNG could prompt some German manufacturers to relocate to the US, Michael Huether, director of the research institute IW Cologne, said in an interview with Stuttgarter Zeitung and the Stuttgarter Nachrichten.

As Germany prepares to shift permanently away from cheaper Russian supplies, the US’s energy independence could make it an attractive option, Huether said.

He added that Russia’s economy will be permanently damaged by its standoff with the West. “Putin is committing economic suicide,” Huether said.

War Will Impact World for Decades, Germany Says (3 p.m.)

German Foreign Minister Annalena Baerbock predicted the war in Ukraine “will not be over so quickly” and said Germany and its international allies will face fallout from Russia’s invasion for decades.

“Russia’s break with all the norms of peaceful coexistence, especially the European peace order, the deliberate destruction of humanitarian law: all this is a radical turning point in the international order,” Baerbock said after hosting talks with NATO counterparts in Berlin.

NATO Expected to Brand Russian Behavior a Direct Threat (12:19 p.m.)

NATO allies are expected to highlight Russia’s behavior as a direct threat in an upcoming strategic document, where they’ll also address how to better support neighboring countries that are vulnerable to coercion and aggression, according to a NATO official.

Allies will likely keep open the possibility of reviving relations if Moscow’s behavior changes, the official said, adding that the document will also address China and its relationship with Russia.

The so-called Strategic Concept document outlines the alliance’s priorities for the coming years, and is due to be finalized at NATO’s summit in Madrid in late June. The previous version, published in 2010, referred to Russia as a partner, wording that is set to be scrapped this time.

Finland Applies to Join NATO to Deter Russian Aggression (12:03 a.m.)

Finland is applying to join the NATO defense alliance to deter potential aggression from Russia as its neighbor wages a full-scale war in Ukraine.

The formal decision was taken on Sunday, President Sauli Niinisto said at a press conference in Helsinki. The move comes days after Niinisto and Prime Minister Sanna Marin said the Nordic country “must apply for NATO membership without delay.”

Kuleba, Blinken Meet in Berlin (10:25 a.m.)

Ukraine’s foreign minister met with Antony Blinken in Berlin, where the US Secretary of State is attending the NATO meeting. Blinken relayed details of the latest round of U.S. security assistance for Ukraine.

Freeing up grain exports was among the topics of discussion as Russia’s blockade of Ukraine’s Black Sea ports prevents the breadbasket nation from shipping.

Russia Fires Cruise Missiles at Lviv Region, Governor Says (10:22 a.m.)

Russia’s navy fired cruise missiles at Lviv region in Ukraine’s far west, potentially from submarines in the Black Sea, regional governor, Maksym Kozytskyi said on Telegram. Four missiles hit a military target, with no casualties reported. Two were intercepted.

Separately, an adviser to Mariupol Mayor Pitro Andryushchenko said Russian forces dropped incendiary bombs on the Azovstal steel plant in Mariupol as part of ongoing assaults.

Ukraine’s defense of Azovstal is still tying down Russian combat troops and inflicting casualties, according to the Institute for the Study of War, which said ground, air and heavy artillery assaults continued on Saturday. Ukrainian officials are attempting a negotiated evacuation of medics and injured servicemen.

Rheinmetall Adviser Criticizes Scholz Over Tank Delay (8:50 a.m.)

Dirk Niebel, an adviser to the German defense firm Rheinmetall AG, said Chancellor Olaf Scholz was dragging his feet over obtaining export approval for up to 100 of the company’s Marder tanks to Ukraine.

“Do you want to lose more time? That costs even more lives,” Niebel, a former development minister, told the Tagesspiegel newspaper. “You need to give Ukraine the support it needs for its survival fight now.”

The company has started to prepare the fighting vehicles and could start delivery in two to three weeks with sufficient ammunition, he said. Germany’s transfer of Gepard anti-aircraft vehicles has also been held up over a lack of ammunition.

Russia’s Donbas Offensive Has Lost Momentum, UK Says (8:15 a.m.)

Russia has failed to achieve substantial territorial gains in the Donbas region over the past month and during that time has sustained “consistently high levels of attrition,” the UK defense ministry said in an intelligence update.

“Russia has now likely suffered losses of one third of the ground combat force it committed in February,” the UK said. “Under the current conditions, Russia is unlikely to dramatically accelerate its rate of advance over the next 30 days.”

The assessment comes days after Ukrainian repelled Russian attempts to cross the Siverskyi Donets river in the Luhansk region.

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