Emerging Europe This Week

IMF agrees Ukraine funding worth 15.6 billion US dollars: This week in emerging Europe

You can read all of our coverage of Russia’s invasion of Ukraine, including explainers and articles offering context and background information here.

Russia’s invasion of Ukraine

The International Monetary Fund (IMF) this week said it had reached an agreement with Ukraine on funding worth 15.6 billion US dollars. The organisation’s first loan to a country at war is expected to be approved in the coming weeks.

It would also be one of the largest financing packages Ukraine has received since Russia’s invasion.

The IMF recently changed a rule to allow loans to countries facing “exceptionally high uncertainty”.

“Russia’s invasion of Ukraine continues to have a devastating impact on the economy: activity contracted by 30 per cent in 2022, a large share of the capital stock has been destroyed, and poverty levels have climbed,” IMF official Gavin Gray said in a statement.

“The programme has been designed in line with the new fund’s policy on lending under exceptionally high uncertainty, and strong financing assurances are expected from donors, including the G7 and EU.”

Gray also said the agreement would “mobilise large-scale concessional financing” for Ukraine from international donors and partners, without giving further details. The funding still needs to be approved by the IMF’s executive board.

Ukrainian President Volodymyr Zelensky returned on Wednesday to the front line near Bakhmut where fighting has raged for months.

The devastated city has long been a focal point of the war as Russian forces try to revive their military campaign in the east.

UK military intelligence said on Wednesday that a Ukrainian counter-attack to the west of Bakhmut was likely to relieve pressure on the main supply route to the city, and that Russia’s attack on the city could be losing the “limited momentum” it had.

Zelensky’s visit came as Russian forces launched a series of strikes on Ukrainian cities.

At least eight people were killed near Kyiv and in Zaporizhzhia. Ukraine’s military said it shot down 16 drones, but another five got through.

Seven people died in an attack on student dormitories near the capital in Rzhyschiv. Then a rocket slammed into a block of flats in the south-eastern city of Zaporizhzhia, leaving one dead and 25 wounded. Local leaders said the number of victims could rise.

The UN nuclear agency’s chief said on Wednesday that the situation at Ukraine’s Zaporizhzhia power plant “remains perilous” following a Russian missile strike this month that disconnected the plant from the grid.

Europe’s largest nuclear power plant needs a reliable electricity supply to operate pumps that circulate water to cool reactors and pools holding nuclear fuel.

Since a Russian strike on March 9, the plant has relied on a single backup power line that remains “disconnected and under repair”, according to Rafael Grossi, head of the International Atomic Energy Agency.

“Nuclear safety at the ZNPP remains in a precarious state,” Grossi said in a statement on Wednesday.

Any attempt to arrest President Vladimir Putin after the International Criminal Court (ICC) issued a warrant for the Kremlin chief would amount to a declaration of war against Russia, his ally Dmitry Medvedev said on Thursday, while directly threatening to attack the seat of any government that allowed it to happen.

The ICC issued an arrest warrant last Friday, accusing Putin of the war crime of illegally deporting hundreds of children from Ukraine.

It said there were reasonable grounds to believe that Putin bore individual criminal responsibility.

The Kremlin says the ICC arrest warrant is an outrageously partisan decision, but meaningless with respect to Russia. Russian officials deny war crimes in Ukraine and say the West has ignored what it says are Ukrainian war crimes.

International Olympic Committee president Thomas Bach defended his organisation’s efforts to create a pathway for Russian and Belarusian athletes to return to competition in a speech in his home country of Germany which took place amid a pro-Ukraine protest Wednesday.

Bach reiterated the IOC’s position that it would be discriminatory to exclude Russians and Belarusians based on citizenship alone and argued the Olympics can help promote dialogue at a tense time. Public broadcaster WDR reported nearly 200 pro-Ukraine protesters gathered outside the venue calling for Russia to be excluded entirely from the Olympics.

Georgia’s jailed ex-president Mikheil Saakashvili told AFP on Tuesday Ukraine’s victory in the war started by Russia was a foregone conclusion and would change forever a region long dominated by Moscow.

The once flamboyant pro-Western reformer has been in prison since his return from exile in Ukraine in 2021. Doctors have said he now risks death from a litany of serious conditions that he developed in custody.

Saakashvili, 55, held top government posts in Ukraine, where he lived in exile after his second term as Georgia’s president expired in 2013.

He has been stripped of his Georgian passport and has acquired Ukrainian nationality.

“Ukraine’s inevitable win will completely change the situation in Georgia and in the region,” he said in interview notes sent to AFP through his lawyer from a Tbilisi hospital, where he remained after a 50-day hunger strike.

Other news from the region

Miroslav Lajčák, the European Union’s special representative for the dialogue between Prishtina and Belgrade, believes that an agreement reached over the weekend between Serbian President Aleksandar Vučić and Kosovar Prime Minister Albin Kurti represents a turning point in the process of normalisation of relations. Both sides now must implement all articles of the agreement on the road to normalisation of relations, Lajcak said on March 21 in a joint interview with RFE/RL and Euronews Serbia.

Hungarian Foreign Minister Péter Szijjártó has spoken out in favour of EU enlargement, saying that, if the countries in the Western Balkans were already in the European Union, migration problems could be handled more efficiently. During a visit to Bosnia and Herzegovina on Wednesday, Szijjarto said that, if the Western Balkans were already EU territory, “we could deal with the problems and difficulties of migration that we face today much more efficiently, and the EU would be stronger.”

Montenegro’s long-serving president Milo Đukanović will face a political newcomer in a runoff presidential election next month. Đukanović, 61, won 35 per cent of the votes in the election’s first round while 37-year-old economist Jakov Milatović won 29 per cent. Andrija Mandić, a pro-Serb and pro-Russian politician and the head of the Democratic Front alliance, trailed with 19.3 per cent. He announced that he would support of Milatović in the run-off.

Israel and Poland announced on Wednesday that the two countries were mending ties, ending a years-long crisis that severely strained relations between the erstwhile allies. The agreement, signed on Wednesday during an official visit by Israeli Foreign Minister Eli Cohen to Warsaw, will see Poland restore its ambassador to Israel, and the resumption of Israeli youth visits to Poland for Holocaust education. After meeting with his Polish counterpart, Zbigniew Rau, Israel’s top diplomat hailed “a new chapter” in the relations between the two counties.

Albanian Prime Minister Edi Rama this week criticised the UK home secretary, Suella Braverman, calling the singling out of migrants from his country a “disgraceful” moment for British politics. Rama, who was in Britain for talks with Rishi Sunak, said Braverman’s comments last year about “Albanian criminals” crossing the Channel in small boats, could themselves be considered a crime. “Unfortunately, we have seen ourselves and our community being singled out in this country for purposes of politics. It has been a very, very disgraceful moment for British politics,” he told BBC Radio 4’s Today programme.

Hungarian budget carrier Wizz Air is planning to grow its fleet to above 200 aircraft next year and 500 aircraft by 2030, the company said on Tuesday, adding that its expansion in the Middle East offered opportunities. Wizz Air President Robert Carey told a news briefing that the core growth in coming years would still come from Central and Eastern Europe, adding that in the West “we are happy with where we are now.”

Czech investor Daniel Kretinsky has further increased his stake in French retailer Fnac Darty and is now its largest shareholder with a 25.03 per cent stake, the AMF stock market watchdog said on Wednesday. Vesa Equity Investment, Kretinsky’s investment vehicle, bought the shares on the market. It previously owned 20.03 per cent of Fnac Darty, according to Eikon data. Kretinsky, who built one of Europe’s largest energy groups through more than a decade of deals, has been diversifying and targeting retail, media and other areas for investments.

In a bid to cut down on Russian crude imports, Hungarian national oil and gas company MOL this week said it started transporting crude oil from its oil field in Azerbaijan to the MOL-owned Slovak refiner Slovnaft in Bratislava via the Croatian state-owned Adria oil pipeline Janaf. MOL, which also owns a 49 per cent stake in Croatia’s oil company INA, said that the new transport route is a “major step” in efforts to make their crude oil supply “more flexible”.

A previously unknown painting by famed US artist Jackson Pollock has been discovered in Bulgaria by police investigating international art smugglers, officials said. The work could be worth up to 50 million euros, Bulgarian National Radio reported, citing experts. Several people, including Bulgarian citizens, were arrested in the international operation. According to Bulgarian TV, a dedication on the reverse suggests it was originally a gift for actress Lauren Bacall before somehow becoming part of the personal collection of the Romanian communist leader Nicolae Ceaușescu.

A 180-year-old oak tree in the Polish city of Łódź has been named European Tree of the Year 2023 at a ceremony in the European Parliament. It is the second year in a row that Poland has won the contest. The tree, named Fabrykant (meaning “factory owner” in a nod to Łódź’s industrial past), received 45,718 votes from the general public in an online poll, almost 28,000 more votes than runner-up Dragon Oak from Slovakia. Ukraine’s Apple Tree Colony from Krolevets came third.

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