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Russia moves to seize eastern Ukraine, Europe faces gas shortages

Russia's army is regrouping its forces for an assault on eastern Ukraine, where a bulk of Kyiv's forces are pinned down. Meanwhile, Europe could be shut off from vital supplies of Russian oil and natural gas unless it pays for the energy in rubles.

(CN) — The war in Ukraine appears to be entering a new decisive phase as Russia’s army seeks to regroup and reinforce its troops in the long-running and entrenched battle over eastern Ukraine, which has been raging for eight years between Ukrainian troops and Russia-backed separatists.

Meanwhile, Russian President Vladimir Putin put immense pressure on the European Union on Thursday by signing a decree that Russian natural gas will have to be paid for in rubles starting Friday, something European leaders have refused to do.

“If such payments are not made, we will consider this a default on the part of buyers, with all the ensuing consequences,” Putin said. “Nobody sells us anything for free, and we are not going to do charity either – that is, existing contracts will be stopped.”

The move is retaliation for Western sanctions and a mechanism to shore up Russia’s hard-hit currency, which lost a lot of its value after Putin launched the Ukraine invasion on Feb. 24, though the ruble has since rebounded.

A shut-off of supplies could become disastrous for both sides because Russia’s treasury depends on energy sales and the EU faces devastating economic damage if it must go without Russian energy. German manufacturers are warning about closing factories and laying off workers if gas supplies are cut off.

So far, European leaders are talking tough about not going along with the Kremlin’s ultimatum, arguing that existing contracts stipulate payments are to be made in euros and dollars.

German Vice Chancellor Robert Habeck, the Green party minister overseeing economic affairs and climate change policy, called it “blackmail.”

“With regard to the threat, demand or consideration – one doesn’t know how to call it any more – to be made to pay in ruble, it is crucial for us that the contracts are respected. It is important for us not to give a signal that we will be blackmailed by Putin,” he said.

It remains uncertain how this showdown will end, but it is likely an agreement will be reached. One solution could be for European nations to open accounts with Gazprombank, a bank affiliated with Russian state gas giant Gazprom but which is not under Western sanctions, and make euro and dollar payments that are then converted to rubles.

Late Wednesday, Ukrainian President Volodymyr Zelenskyy urged Ukrainians to steel themselves for more fighting as Russia prepares to launch a ferocious attack on Ukrainian forces in eastern Ukraine. He said peace negotiations for now are “still just words.”

“Today I have few words, not much time, a lot of emotions and even more tasks,” he said in a video message. “It is that kind of moment. A turning point, when we can and should talk only about the most important thing. Yes, there is an ongoing negotiation process. But these are still just words. So far no specifics.”

He added: “We will not give up anything and will fight for every meter of our land, for every person.”

Recently Russia’s general staff declared the first phase of the war was complete and that the army was going to focus on defeating a large contingent of Ukrainian forces in the plains of the Donbas region.

About 60,000 or more Ukrainian troops are believed to be battling in Donbas, where vicious fighting has been taking place ever since 2014 when Russia-backed ethnic Russian separatists declared independence from Ukraine.

Over the past eight years, bunkers, a warren of trenches, depots and fortifications were constructed along this front-line, making the fighting now that much more intense.

Videos and reports depict a battlefield with the constant sound of mortars and other artillery throughout the day, anti-aircraft gunners lighting up the nights, drones whirring overhead, tanks rumbling across fields and down broken roads, fighter jets appearing on the horizon and launching missiles. Videos show soldiers clad in camouflage and helmets dashing across fields carrying grenades, ducking behind buildings and patrolling deserted villages. The number of casualties keeps mounting on both sides too.

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Ukrainian soldiers carry a body of a civilian killed by the Russian forces over a destroyed bridge near Kyiv, Ukraine, on Thursday, March 31, 2022. (AP Photo/Efrem Lukatsky)

With Ukraine reportedly reinforcing its side too, there are expectations that Donbas is set to become an ever more lethal theater for the kind of battle not seen since World War II in Europe where two well-equipped armies fight conventional warfare in open plains, villages, towns and small cities.

The Donbas war remained unresolved when Putin launched his invasion about five weeks ago. He declared the “liberation” of the two self-declared republics of Luhansk and Donetsk as a chief objective in the war.

Efforts to bring the Donbas war to an end failed despite the signing of two peace agreements in 2014 and 2015, known as the Minsk Accords. Under those agreements, Kyiv was supposed to allow the residents of Luhansk and Donetsk a chance to vote on becoming autonomous regions, also known as oblasts.

But Kyiv and Moscow accused each other of failing to live up to the deal and war raged and simmered there for years. Some 14,000 people were killed over those eight years and about 2 million people were forced out of their homes. Putin accuses the West of ignoring the Donbas war and not taking Ukraine's attacks on ethnic Russians there seriously. Eastern Ukraine is home to many ethnic Russians and these regions have in the past backed pro-Russian political parties.

Fighting and shelling on Thursday remained intense in many parts of Ukraine with reports of new Russian artillery strikes on Kharkiv, the second-largest city, and other locations.

Russian forces claimed they were “mopping up” Ukrainian fighters in the devastated city of Mariupol and Russian military sources have shown videos of an apocalyptic city of fires, buildings turned to rubble and bodies buried in the streets. In recent videos, the bodies of what appear to be Ukrainian fighters are piled up in body bags. The death toll on both sides has been steep. Several thousand Ukrainian fighters continue to resist.

Thursday saw a resumption in large-scale efforts to evacuate civilians with dozens of buses reportedly taking people out. City officials say up to 5,000 civilians have been killed.

Mariupol has not been entirely seized by Russia, but already a new Russia-backed civil administration was being formed to run the city, as is happening in other Russian-occupied areas. Ukraine accuses Russian soldiers and agents of kidnapping scores of officials and activists in places they have seized.

Mariupol is a key port city on the Sea of Azov and it is part of the Donetsk oblast. Shortly before announcing the invasion, Putin recognized Donetsk and Luhansk as independent republics and the Kremlin is determined to cleave them away from Ukraine in peace talks or by military force.

By controlling Mariupol, Russia will likely have additional room to maneuver forces toward the battle in eastern Ukraine.

The state of the war is difficult to judge with both sides claiming they are winning.

This week saw a string of new claims from American and British officials claiming Russia has made a major strategic mistake.

Ukrainian servicemen ride on an armored transporter driving through a Russian position overran by Ukrainian forces outside Kyiv, Ukraine, on Thursday, March 31, 2022. (AP Photo/Vadim Ghirda)

On Wednesday, American intelligence and Pentagon officials said they have information that Putin has been misled and misinformed by his advisers about how badly Russia is doing.

“Putin's advisers are afraid to tell him the truth,” said Jeremy Fleming, the head of the United Kingdom's GCHQ, a top intelligence agency.

Since the war started, Western officials have suggested Putin's catastrophic decision to invade Ukraine was caused by his being in a Kremlin bubble where no one dares contradict him and that he has lost grip with rationality. They are claiming infighting has broken out inside the Kremlin.

Kremlin spokesman Dmitry Peskov on Thursday said Washington misunderstands how Moscow functions, adding that is cause for concern.

“To our regret and even concern neither the Department of State nor the Pentagon have authentic information about what is happening in the Kremlin,” Peskov said, as reported by Tass, the Russian state news agency. “They just do not understand what is happening in the Kremlin, they do not understand Russian President Vladimir Putin, they do not understand the mechanism of decision-making.”

“It causes our concern, because such utter misunderstanding results in wrong decisions, in careless decisions that have very bad consequences,” Peskov said.

Western military analysts have argued that the Ukraine invasion has proven to be an utter failure for Russia and shown that its military is much less effective than it seemed. They have pointed to heavy losses, stalled advances and apparent logistics problems.

In its daily briefing Thursday, the Russian military said its goal in the first stage of the war was “to force the enemy to concentrate forces to hold large cities.”

Some analysts, including Western ones, have said that Russia likely never intended to enter large Ukrainian cities and that it launched its multi-pronged invasion as a kind of feint and threat to force Ukrainian forces to defend disparate parts of the country, leaving its adversary unable to concentrate its army to repel Russia's advances from the east and south.

Russia is also claiming that it has reached another objective: Knocking out much of Ukraine's military infrastructure. Ukrainian officials are acknowledging this and pleading for help from the West to replenish its fighting capacity.

On Wednesday, U.S. President Joe Biden pledged an additional $500 million in support for Ukraine. The United States has spent more than $2 billion in the past year to beef up Ukraine's military and Congress recently approved a $13.6 billion package for Kyiv.

Beyond the war front, Russia claims that by invading Ukraine it is embarking on another strategic quest to build up an alternative political and economic system to the U.S.-dominated ones. Its diplomats claim that it will work with other developing countries like China, India, Pakistan, Brazil and South Africa to build a “new multi-polar world order.”
By seeking to receive ruble payments for its exports, for instance, the Kremlin claims that it will undermine the value of the dollar.

Developing “countries will be at the heart of the new world order,” said Sergei Ryabkov, Russia's deputy foreign minister.

On Thursday, Gita Gopinath, the International Monetary Fund’s first deputy managing director, told the Financial Times that the massive package of sanctions on Russia could erode the dollar's dominance.

“The dollar would remain the major global currency even in that landscape but fragmentation at a smaller level is certainly quite possible,” Gopinath said.

Courthouse News reporter Cain Burdeau is based in the European Union.

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