The situation in Ukraine: May 12 -18, 2022

During the week, the main military activity was concentrated in the Lugansk and Donetsk directions. The intensity of hostilities and the concentration of troops decreased. There is a transition of the Armed Forces of the Russian Federation to the tactics of operating in small groups (platoon, company character), greater involvement of PMCs, special forces, and units of the “DLNR,” and saving resources.

The Ukrainian side already controls only about 10% of the territory in the Lugansk region. The RF Armed Forces established firm control over the towns of Popasna and Rubezhne and reached the outskirts of the city of Severodonetsk. The Russian Federation is trying to resume the attack on the cities of Barvenkovo and the town of Sloviansk. Still, they cannot overcome the fortified area of the Armed Forces of Ukraine in settlement of Dolgenke.

The Armed Forces of Ukraine inflicted heavy losses. They stopped the offensive of the RF Armed Forces in the area of the settlement of Belogorovka, where the RF Armed Forces could not cross the river Seversky Donets.

In the Kharkiv region, Ukrainian troops are conducting local counteroffensives in the direction of the state border with the Russian Federation and the flank of the “Izyum group” of the RF Armed Forces. In Ukraine, they announced that they had restored control over a section of the border with a length of 1200 km, 2/3 of which is the border with the Russian Federation.

The likelihood of an escalation in Transnistria has decreased.

Russian Federation continues to prepare a model for annexing the occupied territories of the Kherson and Zaporizhzhia regions.

The negotiation process has been completely stopped. The parties are tightening their positions: in the Russian Federation, they say that now they are against Ukraine's entry into the EU as well as into NATO, and in Ukraine, they say they intend to restore territorial integrity within the 1991 borders.

Finland and Sweden have jointly applied for NATO membership, which will lead to further aggravation between the Russian Federation and NATO. But in general, it is expected that despite the growing tension, the reaction to this entry of the Russian Federation will be somewhat softer than in the case of Ukraine.

The issue of an embargo on Russian fossil fuels remains unresolved. The EU again disagreed on an oil embargo against Russia due to disagreements.

As a result of counter-sanctions, energy supplies through the Polish section of the Yamal-Europe pipeline were blocked, which will provoke another increase in gas prices in Europe.

The President of the United States signed the Lend-Lease program for Ukraine adopted by Congress, which assists Ukraine with $40 billion.

Western partners continue to provide financial and military assistance to Ukraine. The European Commission plans to issue €10 billion of EU debt to cover Ukraine's three-month funding needs. The G7 countries plan to provide Ukraine with 30 billion euros of financial support in loans and grants. In addition, the European Commission may adopt a plan for the restoration of Ukraine for hundreds of billions of euros and is already allocating $9 billion in aid to the country.

Against the background of the war in Ukraine, unemployment is growing, wages are falling, and contract work carries significant risks for workers' rights. A protracted conflict could push 9 out of 10 Ukrainians below the poverty line and jeopardize development success for almost two decades.

The threat of a global food crisis, which has already affected 440 million people, is growing, affecting populations worldwide.

Military situation

Slobozhansky direction: Russian troops began to withdraw from the northern part of the Kharkiv region because the Armed Forces of Ukraine regained control over several settlements. At the same time, the Russian Federation is striving to hold the line near the city of Volchansk, through which communications go to the town of Izyum. Russian troops are trying to prevent the Ukrainian Armed Forces from reaching the rear of the “Zyum” group of the Russian Federation. From the Izyum direction of the Russian Federation, they are trying to resume the offensive on Barvenkovo and the city of Sloviansk. Still, they cannot overcome the fortified area of the Armed Forces of Ukraine in the area of the settlement Dolgenke.

Donbas: the heaviest battles are taking place in the Lugansk region. The Armed Forces of the Russian Federation took control of the city of Rubezhne, and the town was fighting for the towns of Severodonetsk and the town of Lysychansk. The Russian Federation is trying to encircle the cities. Ukrainian forces prevented several times an attempt to cross the Seversky Donets west of Severodonetsk in the area of Belogorovka. From the direction of the captured town of Popasna, the RF Armed Forces launched local offensives to the north, south, and west. In the Liman direction, RF Armed Forces were trying to capture the settlement of Drobyshevo. Drobyshevo blocks the city of Liman from the north. The Russian Federation carried out offensive operations in Marinka and the town of Avdeevka. Shelling of units of the Armed Forces of Ukraine along all front lines was carried out.

South direction: no active hostilities took place. Shelling of units of the Armed Forces of Ukraine was carried out. In the Zaporizhia direction, the Russian Federation is preparing for offensive operations.

Black Sea-Azov direction: No significant changes. The Russian Federation is shelling the coast of the Odessa region.

Following the results of the battles, Snake Island remained under the control of the RF Armed Forces. Both sides suffered significant losses in men and equipment.

The situation regarding the Ukrainian military from Azovstal. On the evening of May 16, the Russian Ministry of Defense announced an agreement with representatives of the Ukrainian army blocked at Azovstal in Mariupol to evacuate the wounded. A ceasefire was introduced, and a humanitarian corridor was opened. The Ukrainian authorities also confirmed this. Speaking about the withdrawal of the military from Azovstal, the officials of the Russian Federation and Ukraine use different rhetoric. In Russia, they say that the Ukrainian army surrendered, and in Ukraine, they call it a "humanitarian operation to save lives." The Ministry of Defense of Ukraine reported that there can be no other formula for saving the Ukrainian defenders of Azovstal than the one used now. They believe that the operation will be carried out until the return of these persons to the territory controlled by Ukraine. What was also stated by the President of Ukraine, Volodymyr Zelensky, Minister for Reintegration of the Temporarily Occupied Territories of Ukraine Irina Vereshchuk, says that she hopes for the exchange of wounded Ukrainian soldiers after their recovery for Russian prisoners of war. But the process of returning the military from Azovstal to Ukraine can become much more complicated. In the State Duma of the Russian Federation, as well as in the “DPR,” they declare that the “Azov” are not subject to exchange and should be “punished by law.” State Duma Speaker Vyacheslav Volodin demanded that the deputies prepare an appropriate resolution. For his part, Russian presidential spokesman Dmitry Peskov said that international laws would treat the service members. Still, he did not answer whether those who surrendered from Azovstal would be considered prisoners of war or war criminals, redirecting this question to the military.

At the moment, about 2,000 Ukrainian soldiers and officers (at least 100 wounded) have left Azovstal. The absence of a clear, articulated, and official position of the parties may indicate the continuation of the negotiation process regarding their fate.

Combat map.


Negotiation process.

Within a week, it finally became apparent that negotiations between Ukraine and Russia were not being conducted. The Russian Federation and Ukraine confirm that the negotiation process has been suspended. Mikhail Podolyak, the adviser to the head of the President's Office, said that the negotiation process is on pause, but he hopes for its resumption. In Russia, press secretary Dmitry Peskov confirmed that Russia and Ukraine had stopped negotiations. He stated that Moscow “states the complete lack of desire of the Ukrainian negotiators to continue this process.”

The positions of the parties have hardened. Once again, the Ukrainian side clarifies that it will not make any concessions regarding its territorial integrity. And in the Russian Federation now opposes Ukraine's accession to the EU and joining NATO, which further reduces the zone for compromises. No specifics have yet been noted in the talks on security guarantees.

Representatives of European countries (Germany, France, and Italy) called for the resumption of a constructive course of negotiations. The EU countries are primarily suffering losses from the war in Ukraine. Therefore, they are more interested in the early conclusion of peace agreements. In addition to the expected economic losses due to the tightening of anti-Russian sanctions, Europe fears that the war in Ukraine could cause a global food crisis. At the same time, there is no rapprochement between the positions of Ukraine and Russia, and the parties are more focused on the outcome of hostilities in the east of the country or the effect of sanctions.

Domestic policy.

V. Zelensky will extend martial law and general mobilization for another 90 days. The Parliament registered draft laws on the continuation of martial law in Ukraine and on the continuation of public mobilization. May 24 is the end of the 90 days. The Verkhovna Rada must approve the decision.

According to a new report from the International Labor Organization (ILO), about 4.8 million jobs have been lost in Ukraine since Russian aggression. However, if the fighting stops immediately, a quick recovery is possible with the return of 3.4 million jobs, which will reduce job losses to 8.9%. According to the UN, since the beginning of the Russian invasion, more than 6 million Ukrainian citizens have already left for neighboring countries. Of the total number of refugees, about 3 million people are of working age. Of these, 43.5%, or 1.2 million people, were previously employed and lost or quit their jobs. If hostilities continue, this will increase the number of lost jobs in Ukraine to 7 million.

Ukraine's GDP in 2022 will fall by 30% with a protracted war until the end of the year and with a truce - by 20%. Such estimates were voiced by the head of Dragon Capital, Tomas Fiala. Russia's GDP is expected to contract by 12% due to sanctions imposed by the US and Europe.

The planned volume of grain production in Ukraine is 35% less than last year. This figure is 23% below the five-year average. The cultivated area decreased by 21% compared to the previous year.

Ukraine has already raised more than $11.5 billion in additional funding. Ukraine needs about $5 billion a month in additional financing. Now you can count on more than $11.5 billion, said Roman Kachur, Ukraine's representative at the World Bank. Now the largest donor of the trust fund in the United States - $1 billion, Kachur emphasized. Of these, $500 million is already in the fund, and the transfer of the second part is expected - assistance from USAID for $500 million. The agreement has already been signed. In general, the World Bank announced $3 billion to Ukraine. As of May 10 - $997 million. In late May-early June, it is planned to approve a project to finance salaries for civil servants and teachers for $1.5 billion: $500 million immediately and then $200 million each month, Kachur said. In addition, negotiations are underway to increase the volume to $2 billion in June through guarantees from the British government.

The Government of Ukraine has suspended state regulation of motor fuel prices. Market operators reached an agreement on the maximum gasoline and diesel fuel cost at filling stations. It is expected that the top prices for diesel fuel will not exceed 58 hryvnias per liter and for gasoline - 52 hryvnia. In case of violation of agreements and abuses in the market, sanctions will be imposed against the operators. But even if small wholesale prices are taken as a guideline, they will exceed the approach recommended by the government for retail prices after the deregulation. Considering the markup of gas stations, prices will be approximately 60-72 hryvnias for diesel and 55-65 hryvnias for A-95 gasoline.

Parliament passed three bills that changed labor legislation. No. 7251 (on the simplified termination of labor contracts during martial law), No. 5371 (introduction of the contractual regime of labor relations for small and medium-sized businesses), and No. 5266 (on collective agreements). The latter was voted whole, and the rest were accepted. The main thing that changes these documents is that in Ukraine, many articles of the Labor Code are actually "turned off,” including those on working conditions, vacations, and payments. Individual and collective labor contracts will govern all. Against the background of the war in the country, unemployment is rising, wages are falling, and contract work carries excellent risks for workers' rights.

The volume of exports of agricultural products in April increased by 2.9 times compared to March. Rail transportation grew by 238%.

Export volumes by rail increased by 238%. During March and through May 9, inclusive, 61% of the total volume of real exports of grain, meal, and vegetable oils were transported by rail, while 29% were transported by sea,” the report says. Earlier, it was reported that Ukraine could not export about 90 million tons of agricultural products because Russia blocked Ukrainian ports.

Ukraine was forced to spend 245.1 billion hryvnias ($8.3 billion) on war with Russia instead of development.

According to Finance Minister Sergei Marchenko, spending taken from some of the funds budgeted initially for development has gone to everything from buying and repairing weapons to emergency support for internally displaced people. According to the Ministry of Social Policy, 2.7 million IDPs are registered, although the actual figure is many times higher.

The government collected only 60% of its planned tax revenue for April, 79.5% through grants from foreign partners. In May-June, this figure may drop to 45-50%. Therefore, Kyiv urgently needs foreign support.

Ukraine in April received about $2 billion in external funding, of which $719 million were grants.

Since February, this figure has been $5.4 billion, including $801 million in grants.

For the first four months of this year, the state budget was executed with a deficit of UAH 146.6 billion. In April alone, the deficit of the general budget fund amounted to UAH 89.7 billion, or about $3 billion.

Ukraine remains committed to servicing its debt despite the war.

Military spending of $8 billion corresponds to more than a month's total government spending, as measured by annual expenditures in 2021 of 1.84 trillion hryvnias ($62.28 billion).

Public opinion.

IRI (International Republican Institute) published the results of a poll of Ukrainians conducted by the Rating group on his order from March 30 to April 2.

The results show that the vast majority of Ukrainian citizens support the Armed Forces of Ukraine and the President and intend to restore the territory of Ukraine within the pre-1991 borders. And the maximum they agree to in terms of concessions is the refusal to join NATO.

According to the post at the time:

- 34% believed that the war would end before the end of spring, 31% - during 2022, 4% - that the war would last for years. 18% believed that the war would end in two weeks, so their prediction, alas, was no longer justified

95% considered the future of Ukraine “rather hopeful”

97% believed in the victory of Ukraine in the war

- 53% believed that following the war, Ukraine would return to its entire territory within the 1991 borders, 22% - would return to the borders on February 24, 2022, and 16% - would return to Donbas, but not Crimea

- 37% allowed for the end of the war, the rejection of NATO and neutrality, 8% - the state status of the Russian language, 6% - the rejection of the Donbas, 5% - the rejection of the Crimea, 44% were against any concessions

- 67% believed that Ukraine was most supported in the war by Poland, 56% named the UK, and 54% - the USA. Fourth place was taken by Georgia - 17% (although Georgia did not even impose anti-Russian sanctions)

59% were in favor of joining NATO, 14% were against

48% said they had relatives in Russia, 39% said they had relatives in the EU

- 98% approved the actions of the Armed Forces of Ukraine, 94% - of the President

21% lost their jobs due to the war, 17% worked part-time, and 23% worked as usual.

Most Belarusians do not support Russia's military actions in Ukraine.

According to Chatham House research

Most Belarusians do not support Russia's military actions in Ukraine - 40%

support about a third - 32%

the majority also believes that the consequences of the war will be mainly negative - 53% (for the country); 48% (for myself).

60% - expect the deterioration of living standards for ordinary Belarusians in the next three months.

63% expect tougher sanctions

66% - a sharp rise in prices

Belarusians believe that they do not deserve such a negative attitude towards themselves from other countries as the Russians -56%

Few Belarusians want to intervene in the war actively.

27% of Belarusians are ready to support Russia's actions but not enter into a military conflict.

23% voted for complete neutrality and withdrawal of all foreign troops

They want to take part in the war on the side of Russia - 6%

on the side of Ukraine - 3%.

At the same time, they fear that Russia will drag the country into the war - 57%

The European Union and NATO have grown in popularity since Russia invaded Ukraine among Europeans.

According to Morning Consult research

Since the start of the war, EU support has grown the most in Norway (most considerable increase + 27%), Poland, Czech Republic, Romania, Austria, Germany and France, and the UK (even though the country left the EU)

In Spain, the attitude towards the EU has not changed. In Italy, favor towards the EU has somewhat decreased.

However, favor towards the European Union fell back into the negative in the Czech Republic in April, and the Czechs also ranked NATO as the worst performer. To the leading states of the EU bloc - Germany and France, attitudes improved in the Czech Republic and Romania. At the same time, in Poland, the attitude towards both countries has deteriorated significantly.

Support for NATO has also increased in Norway, Poland, Romania, France, Germany, Spain, and the UK.

Attitudes towards NATO deteriorated in Italy (by 10%).

EU countries now aim to strengthen their defense forces (+10-15%)

Only a quarter of Hungarians are ready to support the energy embargo against the Russian Federation. According to a study by the Hungarian company Századvég

The share of Hungarians who have a negative attitude towards Russian President V. Putin increased from 68% in February 2022 to 72% in May.

The share of those who have a negative attitude towards D. Biden increased from 58% to 62%

The negative attitude of Hungarians towards V. Zelensky increased from 52% to 65%

The majority of Hungarians believe that the Russian Federation and Ukraine are equally guilty of the escalation of the conflict in Ukraine - 50%

28% - they say that the Russian Federation, headed by V. Putin, is guilty

21% - believe that the head of Ukraine V.Zelensky

Hungarians oppose the supply of weapons to Ukraine - 79%

89% - Hungarians believe that the sanctions imposed against the Russian Federation also harm the European economy

40% - consider the sanctions sufficient

31% - excessive

24% support sanctions on natural gas and oil.

Hungary depends on gas supplies from the Russian Federation by 85% and oil - by 65%. Budapest is currently blocking an EU embargo on Russian oil.

Foreign policy.

Finland and Sweden have applied to join NATO. The Russian side stated that as soon as Finland and Sweden become NATO members and the alliance units are there, these territories will become a possible target for the Russian military. In general, the Russian Federation clarifies that the reaction to this entry will be different than in the case of Ukraine. Both Scandinavians sought security guarantees from NATO members that they would be protected in the interim period between applying for and gaining full membership. Earlier, British Prime Minister Boris Johnson signed a declaration with Finland and Sweden on mutual defense assistance in the event of an attack. Johnson signed a similar statement in Helsinki.

Ratification of the application by all 30 union parliaments may take up to a year. Turkey is opposed to the entry of Finland and Sweden into NATO. Turkey's demand in exchange for approval of Sweden and Finland's accession to NATO is the declaration by Sweden and Finland of the PKK and its derivatives as terrorist organizations. Turkey may bargain with the US on their policy in Syrian Kurdistan. And to lift the Turkish veto, Washington will have to cede something significant to Ankara in Syria or other issues.

The US State Department expressed confidence that they would be able to maintain a consensus within NATO regarding the admission of Sweden and Finland.

In connection with the disagreements concerning the two countries’ accession to NATO, Secretary of State E. Blinken will hold talks with Turkish Foreign Minister Cavusoglu. It is unclear whether this issue is about pressure on Ankara or whether Erdogan's demands will be met.

The EU was unable to agree on the issue of an oil embargo against Russia due to disagreements. The imposition of EU sanctions requires the approval of all its 27 member states. The Hungarian government is currently blocking it. Hungary depends on gas supplies from the Russian Federation by 85% and oil - by 65%. The US will propose to European countries to impose duties on Russian oil as an alternative to the embargo. This mechanism makes it possible to keep Russian oil on the market, which will prevent energy prices from rising. But the income of the Russian Federation from exports at the same time will be limited. The United States planned to discuss this idea at a meeting of G7 finance ministers.

The situation with gas transit to Europe has become much more complicated. Russia has imposed sanctions against the EuRoPol GAZ company, which supplies energy resources through the Polish section of the Yamal-Europe pipeline. The Russian government introduced “reciprocal special economic measures” against 31 European companies. The Yamal-Europe pipeline is one of the three main routes transporting Russian gas to Europe. Since the end of last year, this gas pipeline has been operating in reverse mode. Pumping is carried out from Germany to Poland. The EU does not yet plan to abandon Russian gas. Most of Europe is highly dependent on Russian gas: about 40% of the total natural gas imports in EU countries come from Russia.

The Polish company has been blocked from exercising rights on shares and other securities; for Gazprom, this means a ban on using the Polish section of the Yamal-Europe gas pipeline. The EU has not yet assessed whether the new ruble mechanism violates the bloc's sanctions. The European Commission estimates EU payments for Russian gas in rubles as a violation of anti-Russian sanctions. At the same time, Italian Prime Minister Mario Draga said at a press conference on Wednesday that companies will be able to pay for gas in rubles without violating sanctions. 20 European companies have opened ruble accounts with the Russian Gazprombank. It is noted that another 14 clients were asked to provide the documents necessary for opening.

The GTS operator of Ukraine has stopped gas transit through the compressor station in Novopskov. The Russians have blocked gas supplies to the Lugansk and Donetsk regions. This was stated by the general director of the GTS Operator of Ukraine, Serhiy Makogon. "In the occupied territories of Ukraine, the taps of the Shebelinka-Novopskov gas pipeline were blocked without authorization, through which gas was transported to the gas pipelines of the Lugansk and Donetsk regions. Ukraine was deprived of the opportunity to supply gas to consumers in the Donetsk and Luhansk regions," he said. Gazprom spokesman Sergei Kupriyanov said that Ukraine left only one entrance for gas transit to Europe, which "significantly reduces the reliability of its gas supply." The Novopskov CS is the first compressor station of the Ukrainian GTS in the Luhansk region. Almost a third of the gas (up to 32.6 million cubic meters per day) is transited from Russia to Europe. The north of the Luhansk region has been under Russian occupation since the beginning of the war. On March 10, the GTS operator reported that the Novopskov compressor station had been seized by Russian troops, which posed a threat to gas transportation. Still, all this time, gas transit to Europe continued by the contract - about 100 million cubic meters per day.

Against the backdrop of problems with gas transit on the stock exchange in Europe, prices rose to $1,200 per thousand cubic meters. Prices are expected to increase by 50%. Especially in Germany, which last season received gas for 600 euros, now - 1000 euros, and it will be 1500 euros following winter. This may lead to restrictions on gas consumption for businesses.

The G7 countries plan to provide Ukraine with 30 billion euros of financial support in loans and grants. At a meeting with representatives of the G7 in Germany, British Foreign Secretary Liz Truss said that sanctions against the Russian Federation could not be lifted to the complete withdrawal of Russian forces from the entire territory of Ukraine. Truss also noted that Ukraine's allies should go "faster and further" in supporting Ukraine in its struggle, particularly on new sanctions and providing Ukraine with a "clear path" to obtaining weapons that meet NATO standards.

The European Commission plans to issue €10bn of EU debt to cover Ukraine's three-month funding needs. Several EU countries, including Austria, Greece, and Germany, asked the European Commission to offer an alternative financing option for Ukraine until May 18. They believe that if other states, such as the UK, Norway, and Japan, agree to provide Ukraine with their funds, the EU will need to raise several billion. According to these countries, such money can be allocated on a bilateral basis.

Ukraine and the IMF estimate Ukraine's needs at €5 billion per month. Ukraine needs $15 billion in funding over the next three months. A third of this amount was promised to be provided by the United States. The European Commission announced plans to cover the remaining €10 billion over three months. According to the Government of Ukraine, the state budget deficit ranges from $5-7 billion in April-May. The government has reduced public spending by more than $6 billion, but this is not enough, as revenues are only slightly more than half of the pre-war revenues.

Republican Senator Rand Paul blocked the provision of $40 billion in aid to Ukraine, which the House previously approved by Representatives.

The fast track vote in the Senate required a unanimous decision (100 votes), and this one-person block means the House will not approve the measure this week. Due to Rand Paul's opposition to a quick poll, the Senate will go through all the usual procedural steps. Earlier, US President D. Biden signed the law on lend-lease for Ukraine, which accelerates and simplifies the procedures for delivering weapons and other assistance to Ukraine. In particular, the President of the United States receives the right to make decisions on the supply of firearms independently but within the limits of the amounts approved by Congress.

The European Commission may adopt a plan to restore Ukraine for hundreds of billions of euros. The transfer of funds will be connected with the fulfillment by Kyiv of the conditions for the implementation of reforms. In particular, we are talking about the fight against corruption and other reforms to approach the standards of the European Union. The financial contribution of the European Union will have to come from the new budget program of the association, similar to assistance during the COVID-19 pandemic. The European Commission is already providing Ukraine with $9 billion in aid as part of a plan to rebuild the country.

The Constitution of the Russian Federation does not prohibit the admission of regions of other states into Russia, said Daniil Bessarabov, First Deputy Chairman of the State Duma Committee on State Construction. This is how he commented on the initiative of the "authorities" of the Kherson region appointed by the invaders to become a subject of the Russian Federation. He outlined a "legal mechanism" by which Moscow could, in theory, annex a new part of Ukrainian territory. According to him, it is necessary to draw up an international treaty and submit it for ratification to the State Duma.

Before being submitted to Parliament, the treaty must be approved by the Constitutional Court of the Russian Federation. Along with the treaty, the Duma is submitting another document for ratification - a draft federal constitutional law on adopting a new subject in the Russian Federation. Thus, Russia has prepared a model for annexing the occupied territories of the Kherson and Zaporizhzhia regions. This fits nicely into the framework of the previously declared goals of the Russian Federation in Ukraine, namely the provision of a land corridor to Crimea and Transnistria. The plan to annex the occupied territories to the Russian Federation is also evidenced by the visit to the Kherson and Zaporizhzhia regions of the Deputy Prime Minister of the Russian Federation, Marat Khusnullina (who oversees the construction complex in the Russian government). He says that his task is to launch production as soon as possible, restore roads and bridges, and agricultural production, for which money has already been allocated in the Russian budget. According to the Deputy Prime Minister, the Russian government has already given funds "to restore and repair roads and bridges." M. Khusnullin bluntly stated that the Zaporizhzhia NPP would work for Russia. According to him, Russia will not "worry about where to sell electricity." He also stated that “the prospect of the regions is to work in our friendly Russian family” and announced plans to launch the maximum turnover of the ruble in all the “liberated” territories of Ukraine. In particular, residents, according to M. Khusnullin, will begin to pay salaries and pensions in rubles as early as May.

Russia's federal budget spending on defense increased 2.5 times and reached record highs. In April, Russia spent 628 billion rubles on "national defense.” In January 2022, the federal budget spent 233.7 billion rubles on this item. In April 2021 - 275 billion. The costs of the war are increasing. If 369 billion was spent on defense in February, then in March, the amount increased to 450 billion and reached a new record in April.

The US intends to block payments on Russian debt, threatening Russia with a default. The US Treasury is revoking the general license, which expires May 25.

In February, the U.S. imposed sanctions on Russia over its invasion of Ukraine. The U.S. Treasury gave Moscow the ability to keep paying investors, helping it prevent a default on its government debt. Treasury officials then argued that allowing Russia to repay its debt would further drain its treasury and divert resources that would otherwise be spent on armaments and military operations in Ukraine. But the administration decided not to renew its decision to increase financial pressure on Russia. Already on May 27, Russia must pay off two issues of government bonds maturing in 2026 and 2036. But one point allows payments in rubles, the other - in euros, francs, or pounds sterling and prices in dollars to accounts outside the United States. Earlier, Russia had already avoided a default that could have occurred as early as May 4th.