Lavrov Agrees to Meet Blinken, U.S. Says: Ukraine Update

(Bloomberg) — Russian Foreign Minister Sergei Lavrov agreed to meet U.S. Secretary of State Antony Blinken for talks in Europe next week, the State Department said Thursday night. That development occurred as tensions rose again over Moscow’s military buildup near Ukraine. Earlier in the day, President Joe Biden warned that the probability of an invasion of Ukraine is still “very high.”

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Russia told the U.S. in its official response to security proposals from Washington that it has no plans to attack, and officials in Moscow have repeatedly dismissed U.S. warnings of a possible move against Ukraine as “hysteria” and propaganda. Its foreign ministry handed over a document Thursday with its views, saying the U.S. response was unsatisfactory. The two sides in the conflict in eastern Ukraine — government forces and Moscow-backed separatists — accused each other of breaking cease-fire rules.

Biden will speak with transatlantic leaders on Friday about the Russian troop buildup, a White House official said on Thursday night. Also on Thursday night, the U.S. Senate passed a non-binding resolution in support of Ukraine.

The frictions continue to feed a risk-off tone in global financial markets. Stocks in the U.S. fell more than 1%, an advance in Treasuries took the 10-year yield back below 2% and gold pushed toward $1,900 an ounce. Oil declined despite the threat of sanctions that could disrupt global supplies.

Key Developments

• Ukraine, Russia-Backed Separatists Allege Cease-Fire Violations

• U.S. Amps Up Ukraine Warnings as Russia Says No Invasion Planned

• Stocks Drop, Bonds Climb Amid Geopolitical Jitters: Markets Wrap

• Where Military Forces Are Assembling Around Russia and Ukraine

• Diplomats, IT Firms Flock to Habsburg Jewel on Kyiv War Worries

Story continues

All times CET:

Lavrov Agrees to Meet Blinken, U.S. Says (3:15 a.m.)

Russian Foreign Minister Sergei Lavrov has agreed to meet U.S. Secretary of State Antony Blinken for talks in Europe next week, Ned Price, a State Department spokesman, said on Thursday night.

The Russian response came hours after Blinken, at the United Nations, appealed for a diplomatic solution to the Ukraine crisis.

“The Russians have responded with proposed dates for late next week, which we are accepting, provided there is no further Russian invasion of Ukraine,” Price said in a statement. “If they do invade in the coming days, it will make clear they were never serious about diplomacy.”

U.S. Senate Passes Resolution in Support of Ukraine (3 a.m.)

The U.S. Senate, after being unable to agree on legislation threatening sanctions on Russia, on Thursday night passed a non-binding resolution stating “unwavering” U.S. support for Ukraine.

The resolution, approved by voice vote, condemned the 2014 annexation by Russia of the Crimean peninsula as well as expressed support for “an independent and democratic Ukraine against any further Russian military invasion and for other purposes.”

Introduced by a bipartisan group of senators including Democrats Bob Menendez of New Jersey and Jeanne Shaheen of New Hampshire and Republicans Rob Portman of Ohio and Jim Risch of Ohio, the resolution also denounces the current Russian troop buildup on Ukraine’s borders and encourages Biden to “use all tools” at U.S. disposal to “impose significant costs” should Russia invade Ukraine.

Japan’s Kishida Speaks With Putin (12:15 a.m.)

Japanese Prime Minister Fumio Kishida spoke by telephone on Thursday with Russian President Vladimir Putin about the situation in Ukraine, according to a statement from the Japanese government. The call lasted about 25 minutes.

Kishida said Japan was monitoring the unfolding events “with grave concern,” and urged finding an acceptable diplomatic situation “rather than an unilateral change of the status quo by force,” the Japanese government said in the statement.

Ukraine Reports Escalation in Its Two Eastern Regions (7:32 p.m.)

Kyiv said Russia-backed separatists increased their shelling of the Ukrainian army across Thursday, as the United Nations Security Council met to discuss the troubled implementation of peace accords aimed at ending a conflict in the country’s east that started 8 years ago.

“Illegal armed groups, supported by Russia, increased provocations,” Defense Minister Oleksiy Reznikov said in a statement. Ukraine said there were almost 40 cease-fire violations by separatists that hit a kindergarten, a school, and other buildings Thursday, with two servicemen injured and two civilians wounded.

Russian-backed separatists had accused Ukraine in turn of cease-fire breaches through the day and said their forces fired in response. Tit-for-tat allegations on the truce are almost a daily occurrence.

Levels of activity and concern in eastern Ukraine have increased, but not beyond the bounds of what has been seen previously, according to a diplomat with the Organization for Security and Co-operation in Europe, which monitors the line of contact between the two sides.

Ukraine Won’t Give Up NATO Aspirations (7:01 p.m.)

Ukraine is ready to discuss how to achieve a lasting cease-fire in the country’s eastern region if “we do not cross the red lines,” Oksana Markarova, Ukraine’s ambassador to the U.S, said Thursday in a Bloomberg TV interview. “We will never give up on our sovereignty, we will never give up on our territorial integrity, we will never give up on our Euro-Atlantic aspiration.”

Ukraine is also “quietly” preparing for whatever may come, Markarova said. “Our armed forces are very motivated, very capable, and are on high alert. And they have been on high alert for some time.”

Ukraine has repeatedly insisted it will not give up its NATO aspirations even as Russia demands it. The military alliance has said it retains an open-door policy although major hurdles remain to Ukrainian membership in the foreseeable future.

Europe Moves to Shield Economy From Possible Sanctions Fallout (6:20 p.m.)

European Union countries are working to find ways to shield their economies in the event the Western alliance hits Russia with sanctions over any aggression related to Ukraine.

Germany, France and Italy have been holding talks about how to mitigate the impact punitive measures could have on key sectors of their economies, including on energy, according to people familiar with the talks. Germany and Italy have also sought to shield their banking sectors, with Rome proposing to target individuals rather than broad swaths of Russia’s economy, said the people, who asked not to be identified because the talks are private.

Russia Still Sees Offramp Via Diplomacy: Analyst (6:02 p.m.)

The Kremlin “isn’t slamming the door” on more talks with the U.S. in its response to Washington’s security proposals, even as it insists on no further expansion of NATO and a rollback of the alliance’s forces, said Victoria Y. Zhuravleva, a Moscow-based foreign policy expert. “Russia is ready to negotiate only in packages and will not move forward without fundamental agreements on security guarantees,” she said, adding negotiations may go very slowly because “both sides are taking rather tough positions.”

Blinken Says Russia Plans “Pretext” for Ukraine Action (5:42 p.m.)

The U.S. Secretary of State told the United Nations Security Council that Russia plans to manufacture a “pretext” for an attack against Ukraine “in the coming days.” He did not give further details.

Blinken, who made a last-minute stop in New York City before heading to a security conference in Munich, said he sent a letter to Lavrov proposing they meet next week in Europe, as well as further gatherings of the NATO-Russia Council and the OSCE Permanent Council. “These meetings can pave the way for a summit of key leaders, in the context of de-escalation, to reach understandings on our mutual security concerns.”

U.K. Closes Visa Route For Rich Foreigners (5:15 p.m.)

Home Secretary Priti Patel said she’s scrapping “with immediate effect” a visa program for millionaire investors as part of efforts to cut down on fraud and curb the influence of Russian money in the U.K. The program of Tier 1 visas — known as “golden visas” — offered wealthy foreigners a path to residency if they invested more than 2 million pounds ($2.7 million) in the U.K.

Politicians had become increasingly concerned it was open to fraud, and a parliamentary report in 2020 found it “offered ideal mechanisms by which illicit finance could be recycled through what has been referred to as the London ‘laundromat’.”

Russia Restates Claims of ‘War Crimes’ Committed by Ukraine (4:25 p.m.)

Russia, which is presiding over the UN Security Council this month, said it requested a meeting to “draw attention” to a Russian-sponsored investigation of “war crimes that have been committed in the course of the armed conflict in southeastern Ukraine,” according to a letter circulated by Russia. The document appears to mostly repeat allegations Moscow has made previously about alleged civilian casualties during the 2014 war when Ukraine fought Russian-backed separatists in the Donbas region.

Separately, the Kremlin said in its official response to the Biden administration’s proposed security assurances that the offers were unsatisfactory and Russia might have to resort to unspecified “military-technical measures.”

Russia Expels U.S. Embassy’s Deputy Head (3:50 p.m.)

Russia expelled the U.S. deputy chief of mission in Moscow, Bart Gorman, in what a State Department spokesman called an unprovoked move. The U.S. is considering its response, the spokesman said.

Moscow and Washington have been feuding over the number of diplomats at each other’s embassies as their relations deteriorate. The U.S. embassy in Moscow suspended most consular services after Russia banned it from employing locals, while in November Russia’s ambassador in Washington, Anatoly Antonov, said more than 50 diplomats and their families would be forced to leave the U.S. by mid-2022.

Biden Accuses Russia of ‘False-Flag’ Operation (3:25 p.m.)

Biden said the U.S. believes Russia is “engaged in a false-flag operation to have an excuse to go in” to Ukraine.

In remarks to reporters as he left the White House for a speech in Cleveland, Biden offered no further details or evidence. But he spoke after U.S. officials said the Kremlin had reinforced a buildup around Ukraine by as many as 7,000 troops. Biden added he had no plans to call President Vladimir Putin.

Kremlin spokesman Dmitry Peskov dismissed Biden’s warning, saying “unfortunately, the whipping up of tensions is continuing with such statements,” state-run RIA Novosti reported.

Borrell Says EU Nations Agree on Potential Sanctions Package (2:48 p.m)

EU leaders have unanimously agreed to approve a package of potential sanctions if the situation at the Ukrainian border escalates, the bloc’s foreign policy chief Josep Borrell said after a leaders’ meeting on Ukraine. “We have a very tough package prepared,” he said, adding that he would “immediately” call a meeting to adopt them officially if needed. “Energy will be one of the most important issues in this package,” he added.

The EU has avoided sharing details of the sanctions package with its members to avoid arguments over the package and leaders weren’t scheduled to discuss them in detail Thursday.

Austin Says Russia Still Boosting Blood Supplies (2:10 p.m.)

Western allies are seeing Russian troops inch closer to Ukraine’s border, with more combat and support aircraft, and they’re also stocking up on blood supplies, U.S. Defense Secretary Lloyd Austin told reporters, following a meeting of NATO’s defense ministers in Brussels.

“You don’t do these things for no reason. You certainly don’t do them if you’re getting ready to pack up and go home,” Austin said, adding the U.S. and its allies would continue to remain vigilant for any attack. Western officials have raised doubts about Russia’s claims it is pulling back troops from Ukraine borders, while Moscow denies any intention to invade.

Russia Says Troops to Leave Belarus After Drills (1:25 p.m.)

Russian troops will leave Belarus for their bases after the end of training exercises, according to Russian Defense Ministry spokesman Igor Konashenkov.

The first soldiers involved in domestic drills have already returned to their permanent stations, he said. The Biden administration and U.S. allies have disputed Russian claims of a troop pullback from Ukraine’s border and said more soldiers have been arriving to the area. They didn’t provide details or evidence to support that allegation.

Ukraine Says Shells Hit Kindergarten (11:15 a.m.)

Ukraine’s military said two civilians suffered concussions Thursday morning from what it said was a separatist shell hitting a kindergarten in Stanytsya Luhanska, a government-controlled town in the east near the line of contact between the two sides. The shelling also caused a power cut for part of the town, the military said.

Separately, Ukrainian railway company Ukrzaliznytsia said its depot in the same area was hit by artillery fired by separatists, with no casualties reported. There was no immediate response from separatist groups. Russian state media earlier quoted the Moscow-backed separatists as saying Ukrainian forces violated the cease-fire in five places overnight, including using mortars.

Tit-for-tat claims have been common after a shaky cease-fire in eastern Ukraine was set up in the aftermath of the 2014 conflict. Interfax quoted Putin aide Dmitry Peskov as saying the situation in the Donbas region of eastern Ukraine was getting more tense.

Putin, Lukashenko to Discuss Joint Troop Actions (10:10 a.m.)

Belarusian President Alexander Lukashenko said he would discuss further joint military actions with Putin when the two meet on Friday, Belta news service reported.

Lukashenko said Belarus would request that Russia establish a training facility for Iskander short-range ballistic missiles and that there is no need for Russian bases in his country, Belta reported.

The largest joint Russia-Belarus military drills in years are currently underway and scheduled to end on Sunday. The exercises are being watched closely by the U.S. and Europe amid the Russian troop buildup.

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