Putin’s setbacks in Ukraine

Ukraine’s lightning military campaign to expel Russian forces from its northeastern Kharkiv region may mark a turning point in the war — and [View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( Ukraine’s lightning military campaign to expel Russian forces from its northeastern Kharkiv region may mark a turning point in the war — and signals a moment of peril for Russian President Vladimir Putin. For years, Putin cultivated an image at home as the leader who restored Russia’s military might and great-power status after the Soviet Union’s collapse. Those achievements look increasingly threadbare in Ukraine as Russian troops flee in apparent disarray. Key reading: - [Russia Strikes Power Plants as Ukrainian Forces Extend Advances]( - [Russian Defenses Crumble as Ukraine Retakes Key Territory]( - [Macron Urges Putin to Remove Weapons From Around Nuclear Plant]( - [Ukraine’s Premier Criticizes IMF For Slow Progress In Giving Aid]( - Follow our rolling coverage of Russia’s war in Ukraine [here](. Pro-Kremlin military bloggers are angrily denouncing the army’s top commanders. Some state-television commentators, once confident of easy victory in Ukraine, now talk gloomily of the difficulties facing their troops against a powerful opponent. To be sure, the war is far from over. Despite the advances, Russia still occupies a sizeable part of Ukraine and showed it can continue inflicting destruction by shelling critical infrastructure, cutting power and water supplies in several regions yesterday. But talk of referendums to annex occupied territories is being replaced by anxiety about whether Russia will be forced to retreat from Ukrainian regions it first seized in 2014, including possibly even Crimea. Putin and the Kremlin have been silent about the weekend’s reverses. There’s no sign yet of any groundswell of opposition to the war among ordinary Russians or that they blame the president personally for mistakes. Yet the drumbeat of discontent over the army’s failures is growing louder among Russian analysts, who increasingly contemplate defeat in Ukraine. That outcome would shatter Putin’s reputation as an infallible leader. It would intensify infighting within the Kremlin and security services over blame for the worst military debacle since the Soviet withdrawal from Afghanistan. The Afghanistan humiliation contributed to the Soviet collapse, something Putin will be well aware of as he confronts his military’s changed circumstances in Ukraine. Destroyed armored vehicles in the Kharkiv region on Saturday. Photographer: Juan Barreto/AFP/Getty Images UK politics are entering a new era. Get the latest in your inbox with [The Readout]( from Allegra Stratton and share this newsletter with others. They can sign up [here](. Global Headlines Waiting game | After last week’s [frenzy]( of government activity in Europe to try and halt the spiral in energy prices, this week all eyes are on European Commission President Ursula von der Leyen, who is expected to outline concrete steps to rein in costs on Wednesday. Natural-gas prices fell today, but remain almost [eight times]( higher than normal for this time of year. New era | Sweden’s right-wing alliance looks to have secured a narrow win in yesterday’s general election that promises to [rewrite]( the political map in the Nordic region’s biggest country. The expected victory is thanks to the rise of the anti-immigrant Sweden Democrats, which saw the biggest gains of any party and now makes them the country’s second-largest political force. - [Here]( are some of the main challenges the new government will face when taking power. The center-right coalition headed by Brothers of Italy Leader Giorgia Meloni that’s expected to win the Sept. 25 election will take charge of an economy still warm from a summer boom, but with [darkening prospects](: high debt, an inflation shock, weak growth, an aging population and stubborn North-South disparities. System shock | The UK’s new prime minister, Liz Truss, has [damaged]( Britain’s system of government by firing the permanent secretary to the Treasury and removing another civil servant, two former heads of the Civil Service said. [Philip Aldrick]( reports that sacking the top official at the body that controls the nation’s finances in the first days of a premiership has never happened before. Best of Bloomberg Opinion - [Putin and the Possibility of Defeat: Leonid Bershidsky]( - [China’s Surveillance State Is in Our Futures: Adrian Wooldridge]( - [Putin Will Love Europe’s ‘Hot Autumn’ of Protests: Andreas Kluth]( China apology | Senior officials in China’s contentious Xinjiang region have [apologized]( for shortages of food and medicine in areas that have been locked down for a month to contain a Covid-19 outbreak. Reports of tough conditions in Yili, a part of northern Xinjiang, had been swirling on Chinese social media for days. - Authorities in Beijing vowed to [stamp out]( a Covid outbreak in a leading media school in the “shortest period of time.” Disinfecting a cinema in Urumqi, Xinjiang, on Aug. 9. Photographer: Liu Xin/China News Service/Getty Images Explainers you can use - [UK’s Truss Takes Charge of a Nation Adrift and in Mourning]( - [European Retailers Could Learn Energy Saving From South Africa]( - [What Congress’s Same-Sex Marriage Bill Could Mean]( Moderate appeal | Brazil’s presidential front-runner Luiz Inacio Lula da Silva may tap his centrist running mate for a top cabinet post to emphasize a commitment to a [moderate agenda]( if elected in October, sources say. The alliance with Geraldo Alckmin is seen as the biggest sign yet that the leftist ex-president is moving away from radical members of his Workers’ Party. Bloomberg TV and Radio air Balance of Power with [David Westin]( weekdays from 12 to 1pm ET, with a second hour on Bloomberg Radio from 1 to 2pm ET. You can watch and listen on Bloomberg channels and online [here]( or check out prior episodes and guest clips [here](. News to Note - China confirmed that Xi Jinping plans to travel to Central Asia this week, in what would be the president’s [first trip]( aboard since the pandemic hit more than two years ago. - Corruption is seen by Philippine business leaders as the [top risk]( to economic recovery, trumping inflation and rising oil prices. - Lithuania is set to open its first [representative office]( in Taiwan this week, setting course for further tensions with Beijing, the South China Morning Post reported. - Japan is [looking to scrap]( most of its Covid-related restrictions on foreign tourists, including ending visa requirements and allowing individual tourism, broadcaster FNN said. - President Joe Biden’s administration plans to [broaden]( curbs on US shipments of semiconductors for artificial intelligence and chipmaking tools to China, Reuters reported, citing sources. Thanks for the 81 responses to our Friday quiz question and congratulations to Alkistis Economou who was the first to name Truss as the government leader whose cabinet is the first in the UK without a White man holding one of the so-called four great offices of state. And finally ... From Sydney to Stockholm to Seattle, home buyers are [pulling back]( as central banks raise interest rates at the fastest pace in decades, sending house prices falling. While the slump hasn’t approached the levels of the 2008 financial crisis, [Enda Curran]( and [Ainsley Thomson]( write, how the decline plays out is a key variable for central bankers who want to throttle inflation without hurting consumer confidence and triggering a deep recession. Residential homes in San Francisco, California. Photographer: David Paul Morris/Bloomberg Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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