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Russia economy shrinks as sanctions take their toll amid Ukraine war

A woman walks past an exchange office screen showing the currency exchange rates of the US dollar to Russian rubles in St. Petersburg, Russia, Tuesday, July 5, 2022. © Dmitri Lovetsky, AP

Russia's economy contracted by four percent year-on-year in the second quarter, the national statistics agency said Friday, as Western sanctions take their toll in the wake of Moscow's military offensive in Ukraine. Read FRANCE 24’s coverage of the day’s events as they unfolded. All times are Paris time (GMT+2). 

This live page is no longer being updated. For more analysis of the war in Ukraine, click here

10:45pm: Russian GDP slumps as country faces a recession

In the period from April to June, gross domestic product "amounted to 96 percent of the level attained in the same period of 2021, preliminary estimates show", Rosstat said in a statement.

It was the first full quarterly growth data to be published since Moscow sent troops into its pro-Western neighbour in late February and western countries slapped stinging economic sanctions on Russia in response.

After Russian GDP expanded by 3.5 percent year-on-year in the first three months of 2022, the country is now facing a long period of recession. 

10:02pm: Pentagon denies involvement of US weapons in Crimea attack

The US Defense Department said Friday American-supplied weapons were not used to attack a Russian airbase in Crimea and that it did not know the cause of the devastating explosions at the site.

Ukrainian forces are believed to be behind the multiple explosions on Tuesday at the Saki base in Russian-occupied Crimea, which damaged or destroyed some eight aircraft, as well as ammunition stockpiles.

No one has officially claimed responsibility and it remained unclear Friday exactly what caused the explosions at the base, a major staging point for Russia's war against Ukraine.

Russia has called the incident an accident, but analysts say satellite photos and ground videos suggest an attack.

8:46pm: Two civilians dead and more than a dozen wounded in Ukraine

Russian shelling Friday killed two civilians and wounded 13 others in Ukraine's Kramatorsk, the last major city under Ukrainian control in the eastern Donetsk region, the governor said.

"New attack on Kramatorsk... two civilians dead and 13 wounded," said regional governor Pavlo Kyrylenko. "The bombardment has damaged at least 20 buildings and a fire has broken out."

6:50pm: Spain and Portugal support German pipeline plan amid energy crisis

Spain and Portugal backed Germany's call for a gas pipeline linking the Iberian peninsula with central Europe on Friday, with Madrid saying its part of the connection could be "operational" within months. 

The proposal came as Europe struggles to find ways to rapidly reduce its energy dependence on Russia following its invasion of Ukraine, which has upended the power market, sending prices soaring and nations scrambling for supplies. 

On Thursday, German Chancellor Olaf Scholz said a pipeline running through Portugal, Spain and France to central Europe was "conspicuously absent" and if it existed, it could make "a massive contribution" to easing the supply crisis.

Spain currently has six liquefied natural gas (LNG) terminals for processing gas that arrives by sea which could help the EU boost imports, but only has two, low-capacity links to France's gas network, which has connections to the rest of Europe. 

Madrid has been pushing for the revival of the pipeline project linking the Catalan Pyrenees with France, which could significantly increase its supply capacity.

4:54pm: Russia mulls buying foreign currencies to counteract sanctions, central bank says

Russia is considering buying the currencies of "friendly" countries such as China, India and Turkey to hold in its National Wealth Fund (NWF), having lost the ability to buy dollars or euros due to sanctions, the central bank said on Friday.

The bank said it was sticking to the policy of a free-floating rouble exchange rate but highlighted that it was important to reinstate a budget rule which diverts excess oil revenues into the country's rainy day fund.

In a report on its monetary policy for 2023-2025, the central bank said various options on how to return to the fiscal rule and replenish the NWF are now being discussed, taking into account the Western sanctions against Russia over its actions in Ukraine.

"The Russian Ministry of Finance is working on the possibility of implementing an operational mechanism of the budget rule mechanism for the replenishment/spending of the NWF in currencies of friendly countries (yuan, rupees, Turkish lira and others)," the central bank said.

4:00pm: Ukraine urges UN, Red Cross to send representatives to Russian POW camps

Ukraine's security agencies issued a joint statement on Friday calling for the United Nations and the International Committee of the Red Cross to send representatives to locations where Russia is holding Ukrainian POWs.

The request follows earlier allegations by Kyiv that Moscow's forces have tortured and executed prisoners, including by staging an explosion in a Ukrainian POW camp in Olenivka. Moscow claims Ukraine shelled the facility, killing over 50 POWs.

2:38pm: First UN ship for Ukrainian grain to dock Friday

The first UN-chartered vessel set to transport grain from Ukraine under a deal to relieve a global food crisis should dock in Ukraine on Friday, the United Nations said.

The MV Brave Commander, which left Istanbul on Wednesday, is due to arrive in Yuzhne, east of Odessa on the Black Sea coast, the UN's World Food Programme said.

It will collect Ukrainian wheat grain purchased by the WFP, the agency's spokesman Tomson Phiri said.

 "This is obviously the first shipment of humanitarian food assistance under the Black Sea Grain Initiative," he said.

On July 22, Kyiv and Moscow signed a landmark deal with Turkey to unblock Black Sea grain deliveries, following Russia's February invasion of Ukraine.

Turkey has opened a special facility in Istanbul at the mouth of the Black Sea to oversee the exports. It is staffed by civilian and military officials from the warring sides and delegates from Turkey and the UN.

2:34pm: EU presidency mulls visa ban for all Russians

The Czech Republic, which holds the rotating EU presidency, said Friday that a blanket ban on visas for all Russian travellers could be the bloc's next sanction on Moscow.

"The flat halting of Russian visas by all EU member states could be another very effective sanction," Czech Foreign Minister Jan Lipavsky said in a statement obtained by AFP.

He said he would propose the idea at an informal meeting of EU foreign ministers in Prague at the end of August.

"In a time of Russian aggression, which the Kremlin keeps on escalating, there cannot be talks about common tourism for Russian citizens," said Lipavsky.

The EU has so far come up with six sanction packages against Russia.

1:44pm: IAEA Director-General speaks at UN Security Council on Zaporhizhzhia risk

During the UN Security Council meeting today, IAEA Director-General Rafael Mariano Grossi "seemed cautious and didn't point the finger towards Russia or Ukraine but talked to both parties, and said that while there is no immediate threat right now, the situation could change any moment. He called on both parties to stop any military actions close to the plant", reports FRANCE 24's Hoda Osman. 

A Russian military convoy is seen on the road toward the Zaporizhzhia Nuclear Power Station, in Enerhodar, Zaporizhzhia region, in territory under Russian military control, southeastern Ukraine, on May 1, 2022. AP

 

11:29am:  'Grave hour' at Ukraine nuclear plant 

Fighting near Ukraine's Zaporizhzhia nuclear plant has raised fears that shelling around the plant could lead to nuclear fallout akin to the 1986 Chernobyl nuclear disaster in then-Soviet Ukraine, which killed hundreds of people and spread radioactive contamination over much of Europe. 

Zaporizhzhia is the biggest nuclear power plant in Europe, supplying Ukraine with 20% of its electricity. "There is a suspicion that the Russians want to cut the power plant off from the rest of Ukraine and reconnect it to the Russian and Crimean grid, but there is no proof of that at the moment", reports Rob Parsons, FRANCE 24's chief foreign editor. Click on the video player below for more details. 

 

8:10am: Britain says Crimea blasts degrade Russia’s Black Sea aviation fleet

Blasts this week at the Russian-operated Saky military airfield in western Crimea led to the loss of eight Russian combat jets, degrading its navy's Black Sea aviation fleet, Britain said on Friday.

While the damaged jets are only a fraction of the overall aviation fleet, Britain said Black Sea capability would be affected, since Saky is used as a primary operational base. 

The base airfield probably remained operational, but its dispersal area had suffered serious damage, Britain's defence ministry added in a regular intelligence bulletin on Twitter.

The explosions, which Russia has said killed one and injured five, will prompt its military to revise the threat perception in the region, the ministry added.

 

6:57am: Two more ships depart from Ukraine, says Turkey's defence ministry

Two more ships left from Ukraine's Black Sea ports on Friday, Turkey's defence ministry said, bringing the total number of ships to depart the country under a UN-brokered deal to 14 and marking the first export of wheat.

Belize-flagged Sormovsky left Ukraine's Chornomorsk port, carrying 3,050 tonnes of wheat to Turkey's northwestern Tekirdag province, it said. Also, Marshall Island-flagged Star Laura departed from Pivdennyi and headed to Iran, carrying 60,000 tonnes of corn.

5:45am: Security Council meets on situation at Ukraine nuclear plant

The head of the UN nuclear watchdog told the Security Council that fighting near Ukraine's Zaporizhzhia nuclear plant has sparked a "grave crisis", after Kyiv and Moscow again accused each other of shelling near the site.

"This is a serious hour, a grave hour and the IAEA (International Atomic Energy Agency) must be allowed to conduct its mission to Zaporizhzhia as soon as possible," Rafael Grossi said.

Both the Russians and Ukrainians said radiation levels at the plant were normal.

Ukraine's nuclear agency Energoatom says the latest strikes were close to one of the plant's six reactors and that radiation sensors were damaged.

Ukrainian President Volodymyr Zelensky urges the international community to "react immediately" to force Moscow's troops to leave the plant, denouncing "Russian nuclear blackmail" in his daily address to the nation.

The United States supports calls by the United Nations and others to establish a demilitarised zone around the plant. 

The tensions have brought back memories of the 1986 Chernobyl nuclear disaster in then Soviet Ukraine, which killed hundreds of people and spread radioactive contamination over much of Europe.

(FRANCE 24 with AFP, AP and Reuters)

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