Funding Putin’s war

To understand how Vladimir Putin pays for his war machine, look no further than Europe.While European nations, along with the U.S. and other [View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( To understand how Vladimir Putin pays for his war machine, look no further than Europe. While European nations, along with the U.S. and others, have slapped stiff economic sanctions on Moscow since its troops rolled into Ukraine in late February, their dependence on Russian oil, gas and coal supplies provides Moscow with a vital financial lifeline — one that dwarfs military aid to President Volodymyr Zelenskiy’s administration in Kyiv. Key Reading: - [Mocked as ‘Rubble’ by Biden, Russia’s Ruble Comes Roaring Back]( - [European Gas Hovers With EU Still Reluctant to Ban Russian Flows]( - [Key Russian Crude Oil Grade Sells Out as Asia Snaps Up Barrels]( - [Ruble Erases Invasion Loss Even as Default Risk, Sanctions Swirl]( - Follow the latest with our [rolling coverage]( As EU foreign policy chief Josep Borrell put it yesterday, what Europe has given so far to Ukraine — roughly 1 billion euros — it hands to Russia each day for energy purchases. Cut-price cargoes are also heading to Japan, South Korea, China and India. The cash has not only helped push up the value of the ruble — mocked last month by U.S. President Joe Biden as having been reduced to “rubble” — back up to pre-invasion levels, it has allowed Putin to crow to his domestic audience that all these sanctions really aren’t doing damage. Of course the currency is also being propped up by drastic emergency measures, and the penalties are having a severe impact. They include everything from a halt to international investment, asset seizures, banning Russian banks from the SWIFT financial messaging service, and sanctions on oligarchs — and soon Putin’s daughters. Although Moscow has avoided a default on its debt so far, it’s a distinct possibility within a year. While the alleged atrocities in Bucha and other Ukrainian towns have provoked widespread outrage and heightened the pressure to ban Russian fuel imports, they remain the lifeblood of Europe’s energy system — and Putin’s invasion. Restrictions on coal may be announced soon, but there’s firm resistance from Germany, Hungary and others to cut off the biggest ticket item: gas. After Lithuania became the sole EU member to halt natural gas imports from Russia, its foreign minister, Gabrielius Landsbergis, tweeted, “Dear EU friends, pull the plug. Don’t be an accomplice.” — [Karl Maier]( Customers line up at a currency exchange kiosk in Moscow on Feb. 28. Photographer: Andrey Rudakov/Bloomberg Sign up [here]( for the Special Daily Brief: Russia’s Invasion of Ukraine and share this newsletter with others too. They can sign up [here](. Global Headlines Warning India | The U.S. has warned India it will face [consequences]( if it forms a “more explicit strategic alignment” with Russia, according to Biden’s top economic adviser. India has rejected imposing sanctions on Moscow and sought to continue buying Russian oil. That’s complicating its relationship with Washington, where it’s seen as important to countering Chinese influence in Asia. Missile lag | The first U.S. hypersonic weapon will be [delayed]( for as long as a year, even as lawmakers say the Pentagon is lagging behind in a new technology that Russia has already used in Ukraine and China has demonstrated in a space launch. A U.S.-built missile failed three consecutive booster-motor tests last year, pushing back a goal to declare “early operational capability” by Sept. 30, the Air Force said. The heads of six companies including Exxon Mobil and BP America were grilled for six hours yesterday by a House energy investigations subcommittee amid intensifying scrutiny of profits that have climbed along with crude and fuel prices. Congressional Democrats [accused]( the executives of exploiting the war in Ukraine and a surge in oil prices to reap windfall profits. Race conspiracy | With France poised to hold its presidential election on Sunday, right-wing candidate Eric Zemmour has put racial grievances at the center of politics. While his chances of winning are slim, his promotion of the so-called Great Replacement [conspiracy theory](, which says that White, Christian Europeans are being supplanted by Muslim migrants, has become part of mainstream discourse. Best of Bloomberg Opinion - [Russia’s Court Jester Enabled Putin’s Regime: Leonid Bershidsky]( - [Beijing Needs Help With Its Russian Lessons: Marques & Brooker]( - [Le Pen Is Finally Getting Noticed by Markets: John Authers]( Beijing’s choice | A veteran Hong Kong law enforcement official announced he will run for the city’s top job, a sign China is focused on deepening its crackdown on dissent in the Asian financial hub. Local media reported John Lee has the [blessing]( of President Xi Jinping’s government to become chief executive in the May 8 vote that would mark the first time in two decades a candidate will stand unopposed. Explainers you can use - [Tracking the Sanctions Imposed on Russia Over Ukraine Invasion]( - [How Sanctions Are Pushing Russia to Brink of Default]( - [About Title 42, the Pandemic Order Biden Is Lifting]( New sources | Prime Minister Boris Johnson [ramped]( up plans to build new nuclear power stations as he seeks to shore up the U.K.’s energy supplies in the wake of Russia’s invasion of Ukraine. The energy-security strategy targets a tripling of atomic power capacity by 2050, accelerates plans to install offshore wind farms this decade and raises goals for hydrogen, solar and oil and gas projects. 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](. News to Note - The U.S. House voted to hold former top Donald Trump administration officials Dan Scavino and Peter Navarro in [contempt]( of Congress for defying subpoenas from the committee investigating the insurrection at the Capitol. - China’s Communist Party issued a rare call [imploring]( rank-and-file members to help contain Covid-19 in Shanghai, showing the strain the locked-down financial hub is under as its worst outbreak to date spreads. - House Speaker Nancy Pelosi is scheduled to visit Taiwan, according to media reports, a [landmark]( display of American support that triggered a diplomatic protest from Beijing. - Texas rejected about one in eight [mail-in]( ballots in its March primary, the first election held since the state’s Republicans signed a massive overhaul of voting laws. - North Korea may be considering conducting a [nuclear]( test next week to coincide with celebrations marking the birthday of its founder, the U.S. special envoy for Pyongyang said. And finally ... An incident involving a security detachment that delivered Russian nuclear fuel to a Ukrainian power plant the day before Moscow invaded was just one atomic [flashpoint]( of Putin’s war. But it highlighted another looming energy challenge for European leaders, even as the continent moves to bar more Russian fossil fuels: how to cut their reliance on nuclear trade with the heavily sanctioned nation. Zaporizhzhya nuclear power plant in southeastern Ukraine.Source: Google Maps Like Balance of Power? [Get unlimited access to Bloomberg.com](, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( [Ads Powered By Liveintent]( | [Ad Choices]( Bloomberg L.P. 731 Lexington, New York, NY, 10022