Crypto News: Keeping Ukraine afloat

Ukraine unveils a massive postwar rebuilding program today just as Russian President Vladimir Putin marks the first real strategic success of his invasion. The developments may amount to a recipe for endless war.

The withdrawal of Ukrainian troops from the city of Lysychansk means Russia seized the last urban stronghold in the Luhansk region, moving Putin closer to capturing the whole province. Russian forces may now concentrate fire on the neighboring Donetsk region to try to cement control of Ukraine's east.

Key reading:

Ukraine Loses Its Final Eastern Stronghold in Luhansk Region
Ukraine to Unveil Massive Rebuilding Plan Even as War Drags On
US Envoy to Beijing Urges China to Stop Spreading Russian 'Lies'
German Regulator Fears Breakdown of Russian Gas Deliverie
Follow our latest coverage of Russia's war in Ukraine here

The reconstruction plan outlined at a conference in Switzerland may cost more than $500 billion. The bulk of the funding is likely to come via the European Union which has just accepted Ukraine as a membership candidate and will seek to rally global donors to help finance Kyiv, a challenging proposition in the current security environment.

It underscores the scale of the task of keeping Ukraine's war-battered economy afloat, while oil and gas revenues continue pouring into the Kremlin's coffers. The economic damage is rising for Europe, too, as Russia turns the gas-supply screw in retaliation for sanctions.

The plan amounts to rebuilding Ukraine to meet EU entry standards amid Russia's destruction of much of its Soviet-era legacy of outdated infrastructure and city buildings. That's an incentive for Putin to continue missile strikes on Ukraine to stall its integration with Europe.

Yet Russia so far has shown it can't deliver a knockout blow in the war. Ukraine has proved able to defend itself and President Volodymyr Zelenskiy has vowed not to cede territory to Russia.

Eastern Ukraine's open landscape makes it hard for either military decisively to hold territory. Ukraine is awaiting more heavy weapons from the US and its allies before a potential autumn counterattack, while Russian forces are tiring and need reinforcement.

Russia, and some of Ukraine's supporters, initially expected the invasion to be over in days. After nearly five months, the risk is the war settles into a pattern that lasts for years. That may mean ambitious postwar reconstruction plans remain just that — plans.

The destroyed Community Art Center in Lysychansk on June 17. Photographer: Aris Messinis/AFP/Getty Images

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Shifting mood | A year before Britain handed Hong Kong back to China, then-President Jiang Zemin hailed the "one country, two systems" plan for the city as a model for China to one day unify with Taiwan. For Taipei, though, the proposal has never been an option. Making Xi Jinping's task even harder is a drastic shift in the consensus in Taiwan against any form of integration, given its growing sense of nationhood and the Communist Party's crackdown on dissent in Hong Kong.

China is racing to quash a new Covid-19 flareup that risks spilling over into one of its most economically significant regions, raising the specter of disruptions that could roil global supply chains for solar panels, medicines and semiconductor chips.
Unknown hackers claimed to have stolen data on as many as a billion Chinese residents after breaching a Shanghai police database, in what industry experts are calling the largest cybersecurity breach in the country's history.

Residents line up for Covid tests in Suqian city, Jiangsu Province, on Saturday. Photographer: Future Publishing/Future Publishing

More sleaze | UK Prime Minister Boris Johnson is facing opposition calls to explain what he knew about allegations surrounding a disgraced Conservative lawmaker who was suspended from the party last week, the latest scandal to wash over his premiership. At issue is Johnson's decision to name Chris Pincher to the post of deputy chief whip in February, despite the MP quitting a similar role in 2017 amid prior allegations he had made unwanted sexual advances to a former Olympic rower.

The poorest families in the UK have been left "brutally exposed" to the cost of living crunch after almost two decades of income stagnation, the Resolution Foundation think tank warned.

One of the world's worst inflation crises is closing in on another grim milestone in Turkey, and efforts by President Recep Tayyip Erdogan's government to help the population cope only threaten to make it worse. Erdogan, who believes lower borrowing costs should help bring down inflation, last week said price growth will slow to "reasonable" levels from February-March before elections in June.

New testimony | Members of the House committee investigating the US Capitol attack by Donald Trump supporters have promised further revelations after an ex-White House aide portrayed the former president's outbursts of rage. Possible witnesses include Trump's White House Counsel Pat Cipollone, whom the committee has subpoenaed to appear Wednesday for closed-door questioning.

Deepening crisis | President Alberto Fernandez tapped leftist economist Silvina Batakis as Argentina's new economy minister yesterday after her predecessor's resignation the day before deepened a political crisis that is hitting the economy and markets. The Latin American nation is dealing with inflation that's over 60%, scarce central bank cash reserves and tough negotiations over a $44 billion program with the International Monetary Fund.

Not enough | The record $324 billion of green finance European governments, banks and businesses raised last year is nowhere near enough to meet a mid-century target of net zero greenhouse gas emissions, according to a report by UK-based think tank New Financial. In order to hit climate neutrality by 2050, Europe will need to spend as much as 1 trillion euros a year, the European Commission estimates.

Bloomberg TV and Radio air Balance of Power with David Westin weekdays from 12 to 1 p.m. ET, with a second hour on Bloomberg Radio from 1 to 2 p.m. ET. You can watch and listen on Bloomberg channels and online here or check out prior episodes and guest clips here.

Japan's ruling coalition is set to win a majority in Sunday's election for the upper house of parliament, with the opposition failing to pick up support from voters worried about rising prices, polling shows.
French President Emmanuel Macron shuffled his cabinet after losing his outright majority in parliament last month but made few changes, in a sign he's failed to convince major opposition figures to join his coalition.
A Chinese-Canadian tycoon who was seized at a Hong Kong hotel five years ago and has lost much of his business empire to the Chinese government is going on trial today. The Wall Street Journal reported earlier that Xiao Jianhua would be charged with illegally collecting funds from the public.
Presidents of West Africa's regional bloc agreed yesterday to lift sanctions on Mali after the nation's military leaders agreed to a return to democracy by 2024.
Chile is today due to submit a draft of its new constitution, the signature policy of President Gabriel Boric, two months before a referendum to approve it.

Thanks to the 24 people who answered Friday's quiz and congratulations to Gunilla Edvardsson who was the first to name Johnson as the leader who asked whether he and his colleagues the G-7 summit should keep their jackets on in the heat to show they were tough like Putin.

And finally ... A Kremlin disinformation campaign blaming Western sanctions instead of Russian blockades of Ukrainian grain for increasing the risk of famine in Africa is fueling alarm in European capitals. The public-relations onslaught shows how the war in Ukraine is becoming a global propaganda battle as food, fuel and crop-nutrient prices surge.