May 26, 2022 Russia-Ukraine news

Russian troops attacked more than 40 towns in the eastern Donetsk and Luhansk regions Wednesday, according to Ukraine's Joint Forces Task Force, indicating the scale of a major Russian offensive in the Donbas region.

"During the day, on May 25, Russian troops fired on 41 settlements in Donetsk and Luhansk regions," the statement on Facebook Thursday read. "As a result of enemy shelling, 6 people were killed and 12 were injured."

According to the statement, Russian fire destroyed or damaged 52 high-rise and private residential buildings and other civilian facilities, as well as railway lines and agricultural buildings. 

Over the past 24 hours, Ukrainian rescuers had evacuated about 760 people from areas of active combat, the statement added.

The Ukrainian cities of Severodonetsk and Lysychansk are under Russian assault amid an offensive in the eastern Luhansk region, the Office of the President of Ukraine said in an update Thursday. 

Severodonetsk -- an industrial city situated across the Siverskyi Donets river from Lysychansk -- has been under heavy shelling, and the statement said the Impulse Research and Production Association and 11 high-rise buildings in the city had been destroyed.

Oleksandr Striuk, head of the Severodonetsk military administration, said in a radio interview Thursday that the connection between Severodonetsk and Lysychansk had been "complicated" because of Russian shelling of a bridge between the two cities.

The enemy hasn't stopped shelling residential neighborhoods for the past one-and-a-half weeks, Striuk said.

Striuk added that communication was limited and that 90% of Severodonetsk's housing stock had been damaged or destroyed.

The fall of Severodonetsk -- the last major city in the Luhansk region under Ukrainian government control -- would be a major setback for Kyiv.

"The situation is difficult, especially in the Donetsk operational district," said Fedir Venislavskyi, a Ukrainian lawmaker and member of the parliamentary Committee for National Security, Defense and Intelligence. 

"The hottest spots are Severodonetsk and Lysychansk," he said, adding that Russian soldiers were trying to encircle Ukrainian troops before next targeting the cities of Bakhmut and Soledar.

"The enemy partially controls Lyman and is going to the outskirts of Severodonetsk. The situation in this operational area will be very difficult in the coming days," Venislavskyi said.

German Chancellor Olaf Scholz has warned that Europe and the international community are at a critical point, and said the world has changed since the Ukraine war began.

"The world is at a turning point," said Scholz during a special address at the World Economic Forum in Davos, adding that, not only is Ukraine at risk, but also the "system of international cooperation that was forged after two world wars."

The war was a "thunderbolt," but the prospect of Russia "capturing Ukraine seems less likely than it did at the beginning" of the invasion, said Scholz, citing the fierce resistance by Ukrainian troops and help from the international community.

Moscow has failed in its military objectives so far, but succeeded in uniting the international community and fast forwarding Ukraine’s plan to join the European Union, he added.

"We cannot let Putin win this war, and I firmly believe he will not win it," said Scholz.

He added that Germany will equip its army so it's ready at "all times" to defend itself "under the new conditions" dictated by Russia.

Germany is in the process of changing its constitution to make this happen, hoping to make more than $105 million available to modernize its armed forces, he added.

"It is the security of our country that is at stake," he said. "We are sending an unequivocal message to our allies that you can rely on Germany."

Russia slashed interest rates on Thursday as a resurgent ruble — buoyed by robust oil and gas revenues — takes some of the heat out of inflation.

The Russian Central Bank cut interest rates from 14% to 11%, after inflation slowed to 17.5% in May compared to 17.8% in April, said the bank, which is now forecasting that annual inflation will decrease to 5–7% in 2023 and return to 4% in 2024.

The bank raised interest rates to 20% as the Russian economy was hit by Western sanctions, but the latest move means they are now almost the same as before the invasion of Ukraine, when they stood at 9.5%.

Reacting to the decision, William Jackson, chief emerging markets economist at Capital Economics, said that additional rate cuts and easing of capital controls seem likely.

"The key point is that high oil and gas revenues are providing policymakers with a lifeline, allowing them to row back emergency economic measures," said Jackson.

On Monday, Russian President Vladimir Putin said the economy was "withstanding the impact of sanctions" despite a gloomy outlook.

"Despite all the difficulties, the Russian economy is withstanding the impact of the sanctions, and withstanding it quite well," Putin said in a meeting with Belarusian President Alexander Lukashenko in the Black Sea resort city of Sochi.

"Yes, it's not easy. Everything that happens requires special attention from the economic bloc of the government. On the whole, these efforts are having a positive effect," said Putin.

Some background: In late April, Russia's Central Bank said the Russian economy was expected to shrink by 8-10% in 2022, noting a decline in economic activity in March after the imposition of international sanctions on Russia.

Earlier the same month, the World Bank predicted that Russian GDP would shrink by 11.2% in 2022. 

Western sanctions imposed following Russia's invasion of Ukraine are making life difficult for the Kremlin, but they are also affecting the global economy.

"Russia’s invasion of Ukraine has compounded the Covid-19 pandemic – a crisis upon a crisis – devastating lives, dragging down growth and pushing up inflation," according to a blog from the International Monetary Fund published Monday.

The United Nations' under secretary-general for Humanitarian Affairs plans to visit Moscow in early June to discuss the situation in Ukraine, a spokesman for the Russian mission to the UN said Wednesday, according to Russian state-run news agency TASS. 

Martin Griffiths plans to visit Moscow to "continue dialogue he began during his previous visit to Moscow," and "to discuss the entire spectrum of humanitarian assistance to Ukraine," spokesman Fyodor Strzhizhovsky said.

Griffiths' previous visit to Moscow last month was an attempt to facilitate a "humanitarian ceasefire," having been charged with meeting both parties in the conflict by UN Secretary-General Antonio Guterres.

Strzhizhovsky added that the Secretary-General of the United Nations Conference on Trade and Development Rebeca Grynspan will visit Moscow to discuss the export of Russian fertilizers.

In recent months, the price of fertilizer -- an essential for farmers to hit their production targets for crops -- has risen due to issues with exports from Russia. Output from Europe has also declined due to the surging price of natural gas, a key ingredient in nitrogen-based fertilizers.

Norway's Yara -- one of the world's largest fertilizer makers -- has reduced export due to the surge in natural gas prices, cutting down the amount of ammonia and urea output from their plants in Italy and France.

According to TASS, Russian Deputy Foreign Minister Andrey Rudenko said on Wednesday that the resolution of the food problem "requires a comprehensive approach," calling for the lifting of sanctions on Russian exports and financial transactions.

The Portuguese government has authorized the sale of Chelsea FC, the London football team owned by Roman Abramovich, a Russian businessman and Kremlin ally.

Abramovich is subject to sanctions by the UK government and has seen his assets frozen.

He put the club up for sale in early March following the Russian invasion of Ukraine, saying at the time that it was "in the best interest of the club."

Abramovich has Portuguese citizenship and, due to sanctions, the government in Lisbon was required to approve the sale.

"Portuguese authorization is a result of the guarantee given by British authorities that proceeds from the sale will be used for humanitarian ends, without benefiting directly or indirectly the club owner, which is on the European Union sanctions list," the government said in a statement Wednesday evening.

"The national position has the assent of the European Union," the Portuguese executive added.

The UK government has already permitted the sale, which will end Abramovich's almost two decades as owner of the club. 

And on Tuesday the English Premier League announced that its board had approved the sale of the club.

The deal, worth more than $5 billion, will see an ownership group led by Todd Boehly take control.

Boehly has invested in a portfolio of sporting franchises, including stakes in the MLB's Los Angeles Dodgers, the NBA's Los Angeles Lakers and the WNBA's Los Angeles Sparks.

"Fierce battles" are taking place around the strategically important city of Severodonetsk in eastern Ukraine, according to Ukrainian officials. It comes as Russian forces intensify efforts to take full control of the Luhansk and Donetsk regions, parts of which have been controlled by Russian-backed separatists since 2014.

Here's the latest on Russia's war in Ukraine:

Ukrainian President Volodymr Zelensky has made a blistering attack on former US Secretary of State Henry Kissinger, who suggested on Tuesday that peace negotiations should be aimed at creating borders along the "line of contact" in Donbas as it existed on the eve of the Russian invasion.

Kissinger was speaking by video link to the Davos Forum.  

In his remarks, Kissinger said of the conflict that: “Negotiations need to begin in the next two months before it creates upheavals and tensions that will not be easily overcome. Ideally, the dividing line should be a return to the status quo ante,” apparently suggesting that Ukraine agree to give up much of the Donbas and Crimea.

"Pursuing the war beyond that point would not be about the freedom of Ukraine, but a new war against Russia itself," Kissinger said.

Zelensky compared Kissinger's views to appeasement of Nazi Germany in 1938.

Zelensky called those who advise that Ukraine give something to Russia, the "'great geo-politicians,' do not always want to see ordinary people. Ordinary Ukrainians. Millions of those who actually live in the territory they are proposing to exchange for the illusion of peace. You always have to see people."

Ukraine's Ministry of Foreign Affairs condemned a move by Moscow that makes it easier for Ukrainians in some Russian-occupied regions to obtain Russian citizenship.

Russia's President Vladimir Putin signed a decree on Wednesday streamlining the process for providing passports to Ukrainians in the occupied portions of Kherson and Zaporizhzhia. 

Russia has already handed out hundreds of thousands of passports to residents of separatist areas in Ukraine's east and in the annexed Ukrainian territory of Crimea, as well as to residents of the breakaway republics of Abkhazia and South Ossetia in Georgia and Transnistria in Moldova. Analysts say those moves have helped Moscow create a pretext for continued intervention in those areas. 

Yevhen Yaroshenko, an analyst for the human rights organization Crimea SOS, said Russia's policy of "passportization" may also serve an agenda of providing conscripts for Russia's invasion of Ukraine.