Dhe financial risks of the Russia conflict and the announcement of higher defense spending are increasing the tug-of-war in the current budget negotiations. Federal Finance Minister Christian Lindner (FDP) announced that the 2022 federal budget would be weighted even more according to priorities. “The Ukraine war requires a stronger prioritization in the budget,” Lindner told the Düsseldorf “Rheinische Post” (Wednesday). “This discussion about the distribution of the available funds within the federal government is naturally becoming even more ambitious because of the events in Ukraine.”
Chancellor Olaf Scholz announced on Sunday a “special fund” of 100 billion euros to strengthen Germany’s defense capabilities – “for necessary investments and armament projects”.
Lindner, who also heads the FDP, continued: “The strengthening of defense spending also stimulates other ideas elsewhere. However, we are still aiming to limit new borrowing in the 2022 federal budget to the previously planned EUR 99.7 billion.” He added: “Compliance with the debt brake for 2023 is and will remain an imperative of economic wisdom.”
All developments in the live ticker:
5:30 a.m. – German economy in Russia fears crisis
The German economy in Russia fears the consequences of the war by Kremlin chief Vladimir Putin against Ukraine. “Even for experienced and crisis-tested managers, the attack on Ukraine is a shock. With the war, the unimaginable human suffering and the loss of trust on many levels, what has been achieved in decades of successful economic cooperation is being thrown back dramatically,” said the head of the German-Russian Chamber of Commerce Abroad (AHK), Matthias Schepp, the German press Agency on Wednesday night.
03:18 – US President Biden closes American airspace to Russian planes
US President Joe Biden has his country’s airspace closed to Russian planes because of the Ukraine war. US airspace will be closed to “all Russian flights,” Biden said on Tuesday evening (local time) during his State of the Union address to Congress. The US would thus join its allies in “further isolating Russia”.
Before the US, the EU and Canada had already banned Russian planes from flying over, taking off and landing on their territory. In retaliation, Moscow closed Russian airspace to numerous Western airlines.
02:43 – Boeing stops technical support for Russian airlines
According to the US aircraft manufacturer Boeing, it will stop supplying parts, maintenance and technical support for Russian airlines and important business activities in Russia. “As the conflict continues, our teams are focused on keeping our colleagues safe in the region,” a Boeing spokesman said. The Airbus rival had previously suspended operations at its Moscow training campus and temporarily closed its office in Kyiv.
2:11 am – US oil giant Exxon announces withdrawal from Russia
ExxonMobil plans to exit its oil and gas production business in Russia because of the Russian invasion of Ukraine. “We condemn Russia’s military actions,” said the largest US oil multinational in a statement on Tuesday evening (local time). The company supports the people of Ukraine and advocates a strong international response to Russia.
With its withdrawal from Russia, Exxon is following its competitors BP and Shell, which had also announced they would be giving up oil deals there in the past few days. The exit could be very expensive for companies. Exxon initially did not provide any information on the costs, it should be in the billions.
00:18 – London imposes sanctions on four senior Belarusian military officials
London has sanctioned four top Belarusian military officials for supporting Russia’s invasion of Ukraine. The British Foreign Office said on Tuesday that the chief of staff and first deputy defense minister Viktor Gulevich and three other major generals and deputy defense ministers were affected. They would be banned from entering the country and their assets frozen in the UK. The sanctions will therefore come into effect immediately.
British Foreign Secretary Liz Truss accused the regime of Belarusian President Alexander Lukashenko of “supporting and actively promoting” the illegal invasion of Ukraine. The country will have to bear economic consequences for this. Chief of Staff Gulevich accused the Foreign Ministry of conducting joint military exercises with Russia and agreeing to the stationing of Russian troops along the border with Ukraine. In doing so, he also made the Russian attack possible from Belarusian soil. Two Belarusian military companies were also sanctioned.
00:11 – European subsidiary of Russia’s Sberbank has to shut down operations
The European subsidiary of the Russian Sberbank, which is affected by sanctions, has to stop operations. The Vienna-based bank had to end all transactions with immediate effect, the Austrian Financial Market Authority (FMA) announced on Wednesday night. The move came at the direction of the European Central Bank (ECB), which on Sunday determined that Sberbank Europe AG may face insolvency due to the Russian invasion of Ukraine and massive cash outflows.
A reorganization or liquidation of the bank according to the European Bank Reorganization and Resolution Directive is not in the public interest, it said. Because of the expected economic difficulties, the FMA had previously prohibited transfers, transactions and larger payments.
12:07 a.m. – Around 1,300 Ukrainian refugees arrive in Berlin by train
Around 1,300 refugees from Ukraine arrived at Berlin Central Station on several trains on Tuesday evening. The trains came from Poland, said a spokesman for the fire brigade. The rbb had reported that there were special trains. When asked, a railway spokesman for dpa said that these were regular connections. Helpers provided the people at the station with food and drink.
Ukrainian refugees had already arrived in the capital on regular trains during the day. According to Deutsche Bahn, no further long-distance trains from Poland are expected on Wednesday night.
11:50 p.m. – EU Council decides on Swift sanctions against some Russian banks
EU member states have agreed to exclude “some Russian banks” from the Swift international payment system as a punitive measure for Moscow’s attack on Ukraine. This is announced by the French EU Council Presidency. Member states also gave the green light to a ban on Russian state media RT and Sputnik in the European Union (EU).
11:35pm – G7 ready for more pressure
According to US Treasury Secretary Janet Yellen, the G7 countries are ready to put further financial pressure on Russia. The group will convene a task force to focus on freezing and confiscating wealth from wealthy Russians, Yellen said after a G7 meeting of finance ministers and central bank governors on Ukraine.
