[Ukraine]Russia relaxes rules to increase weapons production-EU provides immediate financial support-Bloomberg

The European Union (EU) is proposing 1 billion euros (about 140 billion yen) as financial support for the time being in response to the urgent demand for funds in Ukraine. Russia relaxes labor rules in an attempt to increase arms production amid Western sanctions.

Russian troops missile-attacked apartments and recreational facilities near Odessa in southern Ukraine early on the 1st, killing at least 20 people and injuring dozens. The day before, Russian troops admitted that they had withdrawn from Zmiinyi Island, a strategic point on the Black Sea, about 160 kilometers south of Odessa.

Ukrainian President Volodymyr Zelensky praised the situation in his speech on the night of June 30. Russia explained that the withdrawal was intended to show that it was not hindering Ukraine’s grain exports, but the Ukrainian side announced that it had been urged by the country’s missile attacks.

Russian troops withdraw from Zmiinyi Island in the Black Sea-Ukraine’s grain export support and explanation (1)

The recent major movements regarding the situation in Ukraine are as follows.

EU to propose support for Ukraine of 1 billion euros

The European Union (EU) is proposing 1 billion euros (about 140 billion yen) as financial support for the time being in response to the urgent demand for funds in Ukraine. However, a person familiar with the matter said that Germany continued to prevent talks on larger-scale support. The EU has prepared an option to cut off short-term support after the European Commission has failed to get German approval for a support measure with a loan of 8.8 billion euros.

Russia boosts defense companies’ activities-to relax labor rules

The Russian government will relax labor-related and other rules to help defense companies repair weapons and produce munitions. It was revealed in a new draft submitted to Congress.

Under sanctions by the United States and its allies, the draft explains that “the need to repair and secure supplies for weapons and military equipment is increasing in the short term.” The government will be empowered to introduce “special measures” including night shifts and overtime work as needed.

Wheat market is at a critical moment, harvesting will start soon in the northern hemisphere

The wheat market, which was pushed up by Russia’s invasion of Ukraine, which is a major producer and exporter, will reach a critical point. Harvesting will soon begin in various parts of the Northern Hemisphere, revealing the impact of the war on shipments and how much other countries can supplement their supply.

India-Russia leaders discuss energy and food security

Russian President Vladimir Putin had a telephone conversation with Indian Prime Minister Narendra Modi on the 1st. Russia is “a reliable producer and supplier of grain, fertilizer and energy,” including for India, said Putin, according to a statement by the Presidential Administration of Russia.

The two leaders “exchanged views on ways to further promote bilateral trade in agricultural products, fertilizers and medicines,” according to a press release from the Indian side.

Russia’s economy shrinks due to sanctions, but collapse is avoided

Russia’s gross domestic product (GDP) is shrinking due to sanctions, but data show that the shrinking is gradual and mottled, avoiding a tragic collapse. The latest analysis by Bloomberg Economics (BE) shows that Russia’s economy has shrunk by about 3% since the start of the invasion of Ukraine, showing signs of a modest recovery in June. However, uncertainty remains high, and BE expects economic activity to decline further as sanctions reach the supply chain.

Hungarian Prime Minister softens stance against sanctions

Hungary will not continue to block EU sanctions, except for important energy policy issues, Orban said. It looks like it has softened its stance over Ukraine, but it has not shown any concrete concessions.

In a weekly public radio interview on the 1st, Mr. Olban stated that Hungary would still oppose any sanctions on natural gas imports, but would “always go against the flow” in the EU on non-energy issues. He said he couldn’t. The country is the most Russian-friendly in the EU, and Mr Orban has had a personal dispute with Ukrainian President Zelensky.

Sakhalin 2’s business entity to Russian company-Mr. Putin signs presidential decree

Russian President Putin has signed a presidential decree ordering the oil and gas development project “Sakhalin 2” underway in Sakhalin, the Far East of the country, to change its business entity to a newly established Russian company.