Russia

The European Union’s executive arm moved Wednesday to jump-start plans for the 27-nation bloc to abandon Russian energy amid the Kremlin’s war in Ukraine, proposing a nearly 300 billion-euro ($315 billion) package that includes more efficient use of fuels and faster rollout of renewable power, the Associated Press reported. The European Commission’s investment initiative is meant to help the 27 EU countries start weaning themselves off Russian fossil fuels this year.

The Russian economy expanded by 3.5% year-on-year in the first quarter of 2022 after growing 5% in the previous quarter, data from federal statistics service Rosstat showed on Wednesday, Reuters reported. The first quarter is expected to have been the last with sound growth before the Russian economy took a hit from sweeping sanctions for Moscow's decision to send tens of thousands of troops into Ukraine on Feb. 24.

Google’s Russian subsidiary plans to file for bankruptcy, Reuters reported. The U.S. tech firm said Wednesday (May 18) that Russian authorities had seized the unit's bank account. Alphabet’s Google has been under pressure in Russia for months as Moscow wanted it to delete content it viewed as illegal. It was also criticized in the country for restricting access to some Russian media on YouTube. The Kremlin has so far stopped short of blocking access to its platforms. Google said that by seizing its bank account authorities had made it impossible for its Russian office to function.

Credit Bank of Moscow (MKB), one of Russia's largest private lenders, has obtained a gold export license from the government, it said on Monday, becoming the latest Russian bank to turn to precious metals trade to offset the impact of sanctions, Reuters reported. The main operators of the gold market in Russia and its largest lenders - Sberbank and VTB - have been hit by harsh Western sanctions imposed on Moscow after it sent tens of thousands of troops into Ukraine on Feb. 24. "MKB has a dedicated focus on developing operations with precious metals," MKB said in a statement.

Shipping traffic in and out of Russia has remained relatively strong in the past few months as companies have raced to fulfill contracts for purchases of energy and other goods before the full force of global sanctions goes into effect, the New York Times reported. With the European Union poised to introduce a ban on Russian oil in the coming months, that situation could change significantly. But so far, data show that while commerce with Russia has been reduced in many cases, it has yet to be crippled.

Consumer inflation in Russia accelerated in April to 17.83% in year-on-year terms, its highest level since January 2002, data showed on Friday, as it got a boost from the volatile rouble and unprecedented western sanctions that disrupted logistics chains, Reuters reported. But monthly inflation slowed to 1.56% in April from 7.61% in March when it staged the biggest month-on-month increase since January 1999, data from the federal statistics service Rosstat showed. Inflation in Russia has accelerated sharply after Russia began what it calls "a special military operation" in Ukraine on Feb. 24.

Moscow has imposed sanctions on the owner of the Polish part of the Yamal pipeline that carries Russian gas to Europe, as well as the former German unit of the Russian gas producer Gazprom, whose subsidiaries service Europe's gas consumption, Reuters reported. The entities on a list of affected firms on a Russian government website on Wednesday were largely based in countries that have imposed sanctions on Russia in response to its invasion of Ukraine, most of them members of the European Union.

European natural gas prices jumped as some shipments from Russia were disrupted, and Germany said Moscow was using energy as a weapon in an escalating clash over supply, Bloomberg News reported. The benchmark contract surged 14% as flows from Russia via Ukraine fell further Thursday following interruptions at a cross-border entry point as a result of the war. It adds to the market’s concerns, as Moscow retaliates to Europe’s penalties with a slew of its own curbs targeting some gas companies in the region.

Ukraine shut down a pipeline Wednesday that carries Russian natural gas to homes and industries in Western Europe, while a Kremlin-installed official in a southern region seized by Russian troops said the area will ask Moscow to annex it, the Associated Press reported. The immediate effect of the energy cutoff is likely to be limited, in part because Russia can divert the gas to another pipeline and because Europe relies on a variety of suppliers. But it marked the first time since the start of the war that Ukraine disrupted the flow westward of one of Moscow’s most lucrative exports.

Russia's weekly inflation rate eased further in early May, data from statistics service Rosstat showed on Wednesday, after spiking sharply soon after Russia began what it calls a "special military operation" in Ukraine on Feb. 24, Reuters reported. Inflation is slowing even after the central bank lowered its key interest rate to 14% from 17% in April and said it saw room for more cuts, as it tries to manage a shrinking economy and soaring inflation. Inflation was 0.12% in the week to May 6, down from 0.21% a week earlier and well below the 2.22% hit in early March.