On the front, the Armed Forces of Ukraine are advancing in the Southern (Zaporizhzhia-Kherson) direction. In the Zaporizhzhia direction, Ukrainian troops managed to advance slightly in the directions of Levadne - Priyutne, Mala Tokmachka - Ocheretovate, Privolne- Zaliznyanske.
Also, the Armed Forces of Ukraine successfully storm the flanks of the city of Bakhmut and hold back the offensive of Russian troops in the Limansky, Avdiivsky, and Mariinsky directions. The General Staff reports on the successes of the Armed Forces of Ukraine in the area of the settlement of Klishchiivka, which is south of the city of Bakhmut.
A change in the tactics of the Armed Forces of Ukraine is noted - instead of attacks by armored groups, the Armed Forces of Ukraine are now decentralized attacking by many small infantry groups without the use of armored vehicles.
In general, now the advancement of Ukrainian troops is not as fast as was expected by the public in Ukraine and Western countries. During the counter-offensive, Ukraine faced a layered Russian defense, its first line was significantly fortified by the installation of mines, artillery, and front-line aviation. But it is possible that on the eve of the NATO summit in Vilnius (July 11-12), the Armed Forces of Ukraine will try to develop a counteroffensive and break through the Russian defenses. In particular, information is being disseminated about the upcoming big offensive of Ukraine in two directions - one near the city of Bakhmut, the other, larger, in the Zaporizhzhia sector of the front to reach Tokmak, Energodar, and Melitopol.
On the eve of the NATO summit in Vilnius, the Ukrainian leadership expects that the terms of Ukraine's membership in the Alliance will be announced there. But as we wrote earlier, with a high degree of probability that the terms of Ukraine's membership in NATO will not be announced, and Ukraine will be offered a "compensatory political package" in the form of assurances about the possibility of acquiring membership in the Alliance after the war, additional military-technical assistance, etc.
Recently, the allied countries have intensified the discussion regarding possible security guarantees for Ukraine. The modest progress of the Ukrainian counter-offensive and the fallout from the failed Wagner PMC insurgency in Russia is forcing a rethink about the level of support Ukraine needs. But the potential treaty that the allies are talking about now is aimed primarily at creating conditions under which Ukraine will be able to defend itself, but this is not about joint defense. At the same time, the set of sanctions, the timing of delivery, and the amount of assistance have not been determined. And if Ukraine signs such an agreement, it will mean that the country no longer claims external foreign military security guarantees. And most likely, the allied countries are not yet ready to go for more concerning Ukraine today.
If Ukraine and its partners do not agree on the terms of this compensation package, a demarche of the Ukrainian delegation at the summit is likely - raising the issue of NATO membership directly at the meeting or lowering the status of the delegation (not the arrival of President V. Zelensky).
The probable counter-offensive of Ukraine in the Zaporizhzhia direction may be mainly connected to statements about an impending terrorist attack at the Zaporizhzhia nuclear power plant. In Ukraine, they say that the Russian Federation is preparing to undermine the ZNPP. The head of the GUR, Kirill Budanov, said that the Russians were fully prepared for a terrorist attack and placed explosives near four of the six power units. In turn, the Russian Federation denies all accusations against it, arguing that the terrorist attack is being prepared by Ukraine. Which, given that the station is under Russian control, looks unlikely. In particular, a massive strike on the station, which could lead to an accident or a radiation leak, would be virtually impossible to hide.
According to Western experts, it is unlikely that the Russian Federation will provoke a terrorist attack at the ZNPP since the consequences of the radiological incident outweigh any benefits for the Russians, this will harm their army in the Energodar region. But according to the head of the IAEA, Rafael Grossi, the threat of a catastrophe at the Zaporizhzhia nuclear power plant is still real: "The station is incredibly fragile and can be damaged in the event of a firefight," he said.
At the same time, Ukraine is trying to achieve the withdrawal of Russian troops from the ZNPP and its transfer under the control of the IAEA and "Energoatom", which will greatly simplify the counter-offensive operations of the Armed Forces of Ukraine in the southern direction.
In general, after the explosion of the Kakhovska hydroelectric power station, it is already clear that in this war there are fewer and fewer facets of what is acceptable. And other objects of this kind, both in Ukraine and the Russian Federation, can now be the target of such attacks. The explosion of the Kakhovska hydroelectric power station started the timer before the crisis began around the Zaporizhzhia nuclear power plant.
The Russian Federation continues to develop the theme of the nuclear threat. The actions of the armed forces of the Russian Federation at the front have reached a dead end. Therefore, the Russian leadership uses nuclear blackmail to deter a counteroffensive, weaken support for military assistance, and also to force the Ukrainian side to accept its terms for ending the war. So the chairman of the Security Council of the Russian Federation, D. Medvedev, said that the war in Ukraine can be ended quickly if nuclear weapons are used: "In general, any war, even a world war, can be ended very quickly. Well, either if a peace treaty is signed, or if you do what the Americans did in 1945 when they used their nuclear weapons and bombed two Japanese cities - Hiroshima and Nagasaki. They then curtailed the military campaign, and the price is the life of almost 300 thousand civilians. he said. In general, the elements of a nuclear catastrophe can act as a war switch. For example, the threat of undermining the Zaporizhzhia nuclear power plant may increase the pressure of the world community on Ukraine regarding the holding of peace talks, and attempts may also be made to freeze the conflict. Or the war may move to another higher level of escalation.
Prigozhin's unsuccessful rebellion returned the situation at the front to its starting point. In many respects, there was a calculation that with the course of the rebellion, part of the reserves of the Russian Federation would be removed from combat positions at the front, which did not happen. Now the plans of Ukraine and the West will again be directed to the realization of their goals through the Ukrainian counteroffensive.
At the same time, the rebellion of the head of PMC "Wagner" E. Prigozhin became a marker of the weakness of public administration in the Russian Federation. But, on the other hand, the expectation that this rebellion would destroy or weaken Russia also did not justify itself. This story showed the high level of consolidation of political elites in the Russian Federation and, most importantly, the unwillingness of Russian society to support any movement that could lead to a crisis of Russian statehood.
In the future, Wagner PMC may be divided into two structures: one will remain on the territory of the Russian Federation subordinate to the Ministry of Defense, and the second structure, will continue to work under the leadership of E. Prigozhin in Belarus and Africa. So individual elements of PMCs can continue to exist under the control of the Ministry of Defense of the Russian Federation. And Y. Prigozhin himself can create a new PMC based on already Belarusian troops, which in general significantly strengthens the figure and head of Belarus A. Lukashenka. In addition to the deployment of nuclear weapons on the territory of Belarus, in the future, a military formation may be formed there, similar to the example of the Wagner PMC headed by E. Prigozhin, which is not a favorable factor for Ukraine. It is impossible to completely exclude the scenario that, with a successful counter-offensive of the Armed Forces of Ukraine, the Russian Federation, to stretch the Ukrainian forces, will make some attempts to attack or destabilize the north of Ukraine (Kyiv, Sumy, Kharkiv regions). If Yevgeny Prigozhin retains combat-ready combat forces around him, then he may also pose a threat to the Ukrainian flank, in particular, to the city of Kyiv.
Prigozhin's rebellion, paradoxically, may bring a peaceful settlement closer. It is likely that now the Russian elites will be more inclined to some agreements. It is also possible that against the background of some difficulties with the counteroffensive of the Armed Forces of Ukraine, this situation makes Ukraine's allies (especially European countries) more negotiable. But in general, there is a chance for a peaceful settlement only if agreements are reached between the countries of the West, China, and the Russian Federation, or if the parties, primarily the Russian Federation and Ukraine, are completely exhausted, which looks unlikely in the next 3-6 months. Also, the negotiation process, and the degree of possible compromises of the parties on the one hand, will depend on the progress of the Ukrainian counteroffensive.
To achieve significant success at the front, Ukraine is limited in time, most likely until mid-October, when the advance of Ukrainian troops will become more difficult due to weather conditions. It may be during this period that more constructive peace negotiations between the Russian Federation and the West may begin. It is possible that in the absence of significant results at the front, such agreements may even provide for freezing the conflict. But it is expected that this scenario may be opposed in Ukraine (and part of the Western elites), where the freezing of the war and the failure to achieve significant victories at the front could jeopardize the strength of the power of V. Zelensky's team, cause an internal political crisis and increase the influence of the right opposition on society.
In June, the revenues of the state budget of Ukraine did not cover its expenses. Thus, budget expenditures in June amounted to UAH 264.7 billion. And the total budget revenue for the month amounted to $245 billion. Thus, $20 billion was already spent at the expense of the reserves of the previous months, when budget revenues covered its expenses.
In June, internal resources attracted to the budget - UAH 135.4 billion. External resources amounted to $3 billion or UAH 110 billion. (compared to May, $3.25 billion or UAH 119 billion; in April - $5.55 billion or UAH 203 billion). Since 2023, the country’s budget has already received about $23 billion. Thus, on average, since the beginning of the year, Ukraine has received about $3.8 billion per month. By the end of the year, Ukraine expects to receive more than $40 billion.
In June, assistance from international donors amounted to 44% of total revenues. Accordingly, domestic budget revenues amounted to -56%. Please note that May 2023 state budget funding through international assistance was about 37% and 65% in April. And at the end of 2022, it was 50-55%.
Thus, international aid in dynamics tends to decrease. Despite this, the debt burden on the Ukrainian economy continues to grow. Recall that according to the new draft budget for 2023, by the end of the year, it is planned to attract only $38-40 billion of foreign aid (that is, about half of the funds). At the same time, the total debt of Ukraine will increase by 80% by the end of the year and will amount to UAH 6.4 trillion. this is more than the level of the planned GDP for 2023 - UAH 6.28 trillion.
military situation
Combat action.
The situation in the Kharkiv region: without significant changes.
In Donbas: The Armed Forces of the Russian Federation stopped actively advancing in the Limansky, Bakhmutsky, Maryinsky, and Avdiivsky directions. The main local clashes are taking place in the areas of the cities of Bakhmut, Maryinka, and Avdiivka. The attacks of the RF Armed Forces were repulsed in the area of the settlements of Novoselovsky, Nevsky, and south of Dubrava in the Luhansk region.
In the Donetsk region attacks were repelled - in the areas of settlements of Bogdanivka, Khromove, Pershotravneve, Orekhovo-Vasylievka, Grigorivka, west of Yagidne, Ivanivske, and southeast of White Mountain.
The situation in the South: In the Zaporizhzhia direction, Ukrainian troops are fixed on new frontiers. In particular, we managed to make some progress in the directions of Levadne - Priyutne, Mala Tokmachka - Ocheretovate, Privolne - Zaliznyanske. On Vremievsky's ledge, RF tried to attack the newly freed settlement Rivnopol.
Black Sea-Azov direction: without significant changes.
The results of the rebellion of the head of PMC "Wagner" E. Prigogine.
The rebellion of the head of Wagner PMC E. Prigozhin became a marker of the weakness of public administration in the Russian Federation. But, on the other hand, the expectation that this rebellion would destroy or weaken Russia also did not justify itself. This story showed the high level of consolidation of political elites in the Russian Federation and, most importantly, the unwillingness of Russian society to support any movement that could lead to a crisis of Russian statehood.
According to a study by the Russian Field group, 69% of Russians polled are sure that Prigozhin did not have a chance to make a coup, and 20% believe that he could do it. After the events of June 24, the level of approval of Prigozhin's activities fell sharply: now among Russians, a negative attitude towards the leader of the Wagner PMC dominates (39%) (+25% for the week). A positive attitude toward Prigozhin's activities is now reported by 29% of respondents (-26% over the week).
At the same time, the West was counting on the destruction of Russia. But hopes that the situation inside Russia could be changed by an insurgency will now be put on hold, at least for the time being. In many ways, there was a calculation that with the course of the Prigozhin rebellion, part of the reserves of the Russian Federation would be removed from combat positions at the front, which did not happen. Now the plans of Ukraine and the West have returned to their original position and will be aimed at realizing their goals through the Ukrainian counteroffensive.
The agreement, mediated by Alexander Lukashenko, is likely to eliminate the Wagner PMC as an independent player led by Y.Prigozhin. At the same time, there is no talk of liquidating this structure as a whole. Currently, the Russian Federation has officially confirmed that they have closed the criminal case against the curator of the PMC. And A. Lukashenko confirmed that Y. Prigozhin was already in Belarus and received security guarantees.
In the future, Wagner PMC may be divided into two structures: one will remain on the territory of the Russian Federation subordinate to the Ministry of Defense, and the second structure, will continue to work under the leadership of E. Prigozhin in Belarus and Africa.
Individual elements of PMCs may continue to exist under the control of the RF Ministry of Defense. And Y. Prigozhin himself can create a new PMC based on already Belarusian troops, which in general significantly strengthens the figure and head of Belarus A. Lukashenka. In addition to the deployment of nuclear weapons on the territory of Belarus, in the future, a military formation may be formed there, similar to the example of the Wagner PMC headed by E. Prigozhin, which is not a favorable factor for Ukraine.
It is impossible to completely exclude the scenario that, with a successful counter-offensive of the Armed Forces of Ukraine, the Russian Federation, to stretch the Ukrainian forces, will make some attempts to attack or destabilize the north of Ukraine (Kyiv, Sumy, Kharkiv regions). If Yevgeny Prigozhin retains combat-ready combat forces around him, then he may also pose a threat to the Ukrainian flank, in particular, to Kyiv.
Prigozhin's rebellion, paradoxically, may bring a peaceful settlement closer. It is likely that now the Russian elites will be more inclined to some agreements. It is also possible that against the background of some difficulties with the counteroffensive of the Armed Forces of Ukraine, this situation makes Ukraine's allies (especially European countries) more negotiable.
There may be other scenarios for the development of events. For example, if Moscow wants to consider Prigozhin's rebellion an attempt to overthrow and destroy Russian statehood on the part of Western countries, and officially announce this. In this case, an escalation of the conflict can be expected, the Russian Federation may threaten to use nuclear weapons and start a new round of nuclear blackmail. At the same time, the use of nuclear weapons, although less likely, is still possible.
Combat map.
Domestic policy.
The economic situation in the country.
In June, state budget revenues did not cover its expenses. Budget expenditures in June amounted to UAH 264.7 billion. And the total budget revenue for the month amounted to $245 billion. Thus, $20 billion was already spent at the expense of the reserves of the previous months, when budget revenues covered its expenses.
In June, internal resources attracted to the budget - UAH 135.4 billion. Tax: UAH 52.1 billion (this is +0.9% to the planned one or +500 million UAH). Customs: also fulfilled the plan: UAH 36.9 billion. (+5.7% of the planned or +2 billion). War bonds: UAH 46.4 billion; External resources amounted to $3 billion or UAH 110 billion. (compared to May, $3.25 billion or UAH 119 billion; in April - $5.55 billion or UAH 203 billion). EU: $1.64 billion; USA: $1.2 billion; World Bank: $104 million; Finland: $15 million. Of these, 40% are grants that do not need to be repaid, and 60% are loans. According to the government, Ukraine needs from 3 to 5 billion dollars a month. Since 2023, the country's budget has already received about 23 billion dollars. Thus, on average, since the beginning of the year, Ukraine has received about 3.8 billion dollars a month. Until the end of the year, Ukraine expects to receive more than $40 billion
In June, assistance from international donors amounted to 44% of total revenues. Accordingly, domestic budget revenues amounted to -56%. Please note that May 2023 state budget funding through international assistance was about 37% and 65% in April. And at the end of 2022, it was 50-55%.
Thus, international aid in dynamics tends to decrease. Despite this, the debt burden on the Ukrainian economy continues to grow. Recall that according to the new draft budget for 2023, by the end of the year, it is planned to attract only $38-40 billion of foreign aid (that is, about half of the funds). At the same time, the total debt of Ukraine will increase by 80% by the end of the year and will amount to UAH 6.4 trillion. this is more than the level of the planned GDP for 2023 - UAH 6.28 trillion.
The situation at the Zaporizhzhia NPP.
In Ukraine, they say that the Russian Federation is preparing a terrorist attack at the Zaporizhzhia nuclear power plant. The head of the GUR, Kirill Budanov, said that the Russians were fully prepared to undermine the ZNPP and placed explosives near four of the six power units. The station's cooling pond is mined by Russian troops, and nuclear reactors without cooling can melt down in a period of 10 hours to 14 days. An accident at the Zaporizhzhya NPP could also be caused by an increase in voltage by the Russians on the power supply lines to the station. According to K. Budanov, the power plant could be blown up if the forces of the Russian troops were driven out from the left bank of the Dnipro River. Thus, the Russian Federation will create an exclusion zone to prevent further advancement of the Armed Forces of Ukraine.
After a while, K. Budanov said that thanks to the decisive actions of Ukraine, the threat of a terrorist attack at the ZNPP was beginning to subside. " We are taking certain actions in this area, both public and non-public, and I think that now the danger of an artificial man-made disaster is gradually decreasing," Budanov said.
In turn, the Russian Federation denies all accusations against it, arguing that the terrorist attack is being prepared by Ukraine. Which, given that the station is under Russian control, looks unlikely. In particular, a massive strike on the station, which could lead to an accident or a radiation leak, would be virtually impossible to hide.
According to the head of the IAEA, Rafael Grossi, the threat of a catastrophe at the Zaporizhzhia nuclear power plant is still real: " The station is incredibly fragile and can be damaged in the event of a firefight," he said.
According to Western experts, it is unlikely that the Russian Federation will provoke a terrorist attack at the ZNPP since the consequences of the radiological incident outweigh any benefits for the Russians, this will harm their army in the Energodar region.
The actions of the armed forces of the Russian Federation at the front have reached a dead end. Therefore, the Russian leadership is likely to use this nuclear blackmail to deter a counteroffensive, to dilute support for military assistance, and to force the Ukrainian side to accept its terms for ending the war.
At the same time, Ukraine is trying to achieve the withdrawal of Russian troops from the ZNPP and its transfer under the control of the IAEA and Energoatom, which will greatly simplify the counter-offensive operations of the Armed Forces of Ukraine in the southern direction.
In general, after the explosion of the Kakhovskaya hydroelectric power station, it is already clear that in this war there are fewer and fewer facets of what is acceptable. And other objects of this kind, both in Ukraine and the Russian Federation, can now be the target of such attacks. The explosion of the Kakhovskaya hydroelectric power station started the timer before the crisis began around the Zaporizhzhya nuclear power plant.
The situation around Ukraine.
Peace negotiations.
As a result of the Prigozhin rebellion, the Russian political system “felt its fragility” and it is possible that now the Russian elites will be more inclined to some kind of agreement, just like in the West, where it realizes that it will be very difficult to destroy the Russian Federation from the inside.
And in general, the negotiation process, as well as the degree of possible compromises of the parties, on the one hand, will depend on the progress of the Ukrainian counteroffensive.
To achieve significant success at the front, Ukraine is limited in time, most likely until mid-October, when the advance of Ukrainian troops will become more difficult due to weather conditions. It may be during this period that more constructive peace negotiations between the Russian Federation and the West may begin. It is possible that in the absence of significant results at the front, such agreements may provide for freezing the conflict. But it is expected that this scenario may be opposed in Ukraine (and part of the Western elites), where the freezing of the war and the failure to achieve significant victories at the front could threaten the strength of the power of the V. Zelensky team, cause an internal political crisis and increase the influence of the right opposition on society. In general, there is a chance for a peaceful settlement only if agreements are reached between the countries of the West, China, and the Russian Federation, or if the parties, primarily the Russian Federation and Ukraine, are completely exhausted, which looks unlikely in the next 3-6 months.
Prospects for Ukraine's membership in NATO.
On the eve of the NATO summit in Vilnius (July 11-12), the Ukrainian leadership expects that the terms of Ukraine's membership in the Alliance will be announced there.
At the same time, in Ukraine they are trying to demonstrate their successes on the battlefield, it is likely that the Armed Forces of Ukraine will try to develop a counteroffensive and break through the defenses of the Russians, to show the result of the NATO summit. " Before the summit, we must show results, but every meter is worth a life," President of Ukraine V. Zelensky said. V. Zelensky had a telephone conversation with NATO Secretary General Jens Stoltenberg. The parties discussed the situation at the front, as well as the latest events inside Russia. As already known, Jens Stoltenberg will remain at the head of the North Atlantic Alliance for another year.
With a high degree of probability, the terms of Ukraine's membership in NATO will not be announced at the upcoming July summit in Vilnius. And Ukraine will be offered a "compensatory political package" in the form of assurances about the possibility of acquiring membership in the Alliance after the war, additional military-technical assistance. If Ukraine and its partners do not agree on the terms of this compensation package, a demarche of the Ukrainian delegation at the summit is likely - raising the issue of NATO membership directly at the meeting or lowering the status of the delegation (not the arrival of President V. Zelensky).
Recently, the allied countries have intensified the discussion regarding possible security guarantees for Ukraine. The modest progress of the Ukrainian counter-offensive and the fallout from the failed Wagner PMC insurgency in Russia is forcing a rethink about the level of support Ukraine needs.
The Financial Times (FT), citing EU diplomatic sources, reports that the European Union (at the EU Leaders' Summit) is preparing to offer Ukraine "future security commitments" as bloc leaders seek to agree on long-term commitments for Ukraine. France and Germany, along with the UK and the US, have led efforts to negotiate bilateral security agreements to provide Ukraine with long-term funding, military supplies, training, and intelligence to help it fend off a full-scale Russian invasion and protect it from future aggression.
But the subtlety of the issue is that this treaty, which the allies are now talking about, is not really about security guarantees for Ukraine. It is aimed primarily at creating conditions under which Ukraine will be able to defend itself, but we are not talking about joint defense. At the same time, the set of sanctions, the timing of delivery, and the amount of assistance have not been determined. And if Ukraine signs such an agreement, it will mean that the country no longer claims external foreign military security guarantees.
Ruslan Bortnik, Oksana Krasovskaya, Andrey Timchenko
for the Ukrainian Institute of Politics
