Ukraine denies its troops are encircled in battle hotspot in Donbas; Kyiv believes Russia is ‘planning something’ in the south

Russian forces are conducting offensive actions but failing to advance, the head of Donetsk’s Regional Military Administration Pavlo Kyrylenko said during a briefing reported by news agency Ukrinform.

“In the Donetsk region, which is one of the main regions holding back the enemy, the situation is challenging but controlled. All of us are acting in a coordinated and focused manner. Thanks to our brave defenders, the enemy is failing to advance and achieve success in terms of combat actions,” Kyrylenko said, Ukrinform reported.

Donetsk in eastern Ukraine is seen as a hotspot in the war with battles raging between Russian and Ukrainian forces in the region, particularly around Bakhmut, with the severely destroyed area reminiscent of World War 1.

Kyrylenko reportedly said Russian forces continue to strike the Donetsk region, saying they used multiple launch rocket systems to open fire on the city of Lyman on Tuesday.

He said civilian casualties are reported every day and that since the Russian invasion started back in February, a total of 1,235 civilians have been killed and 2,662 injured in the Donetsk region.

— Holly Ellyatt

The European Commission proposed a plan on Wednesday to compensate Ukraine for damage from Russia’s invasion with proceeds from investing Russian funds frozen under sanctions.

Officials in the EU, United States and other Western countries have long debated whether Ukraine can benefit from frozen Russian assets, including around $300 billion of Russia’s central bank reserves and $20 billion held by blacklisted Russians.

Moscow says seizing its funds or those of its citizens amounts to theft.

“Russia must … pay financially for the devastation that it caused,” Ursula von der Leyen, president of the EU’s executive said in a statement. “The damage suffered by Ukraine is estimated at 600 billion euros. Russia and its oligarchs have to compensate Ukraine for the damage and cover the costs for rebuilding the country.”

European Commission officials said that one short-term option for Western nations would be to create a fund to manage and invest liquid assets of the central bank, and use the proceeds to support Ukraine.

The assets would be returned to their owners when sanctions were lifted, which could be part of a peace agreement that ensured Ukraine received compensation for damages.

“It’s not easy so it will require strong backing from the international community but we believe it is doable,” one official said.

With regard to the frozen assets of private individuals and entities, seizing these is usually only legally possible where there is a criminal conviction. The Commission has proposed that violations of sanctions could be classified as an offence that would allow confiscation.

— Reuters

Ukraine said Russian claims that its troops are practically encircled in the fighting hotspot of Bakhmut in eastern Ukraine are “fake.”

On Monday, Denis Pushilin, the acting head of the separatist, pro-Russian “Donetsk People’s Republic” suggested that Russian forces were close to encircling Bakhmut, a city in Donetsk that Russia wants to capture. Fierce fighting has been going on for four months in the area, turning the landscape into a muddy war zone.

“Our units are moving forward. There are successes directly in the vicinity of Artemovsk … We can say that the situation of the operational encirclement is quite close,” Pushilin told the Rossiya-24 TV channel, state news agency Tass reported.

Ukrainian Defense Ministry Official Yuriy Sak vehemently denied claims, telling CNBC Wednesday that “there is no question of any Russian encirclement or even semi encirclement.”

“This is a fake that is being spread now by the Russian propaganda that is not true Ukrainian armed forces continue to defend the city, even though it’s not easy.”

He said the losses of regular Russian troops and newly mobilized troops, and those from the mercenary Wagner Group also fighting there, were “colossal.”

“The losses of the enemy in all of these categories are colossal, and they’re measured in [their] thousands [in terms of those] killed in action,” he said.

— Holly Ellyatt

The sight of trenches, endless mud and mass destruction — with just the stumps of trees emerging from a boggy, churned up landscape — is associated with World War I but one part of Ukraine is witnessing the same kind of destruction and desolation.

For several months now, Russian and Ukrainian forces have been fighting for control of the city of Bakhmut in eastern Ukraine — in what is essentially a key part of a larger battle for control of the Donbas. The Donbas is a region in eastern Ukraine that contains two pro-Russian, so-called “republics” that Russia says it wants to “liberate.”

Some analysts have posted images comparing the destruction of the area to the “Battle of Verdun” in World War I, a bloody and intense battle between French and German forces that lasted from February to December 1916.

One of the longest and fiercest battles during the war, it is also seen as one of the most costly in terms of life; both France and Germany are estimated to have seen hundreds of thousands of casualties each. In the end, the French forces won the battle but it came to symbolize the immense destructiveness and human cost of war.

Read the whole story here: Trenches, mud and death: One Ukrainian battlefield looks like something out of World War I

— Holly Ellyatt

Moscow said on Wednesday it had promoted the chief engineer of Ukraine’s Zaporizhzhia nuclear plant to become its head, filling a position vacant since October when Kyiv says the plant’s boss was abducted by Russian authorities.

The nuclear power plant, Europe’s biggest, has been occupied by Russian forces since March. It has not been producing electricity since September but is still run by its Ukrainian staff to keep it safe. Moscow said in October it wa putting the plant under control of Russia’s nuclear authorities, a move Kyiv says is illegal.

Russian nuclear agency Rosenergoatom announced that chief engineer Yuriy Chernichuk would become plant director. Ukraine says the plant’s boss, Ihor Murashov, was abducted by Russian forces on his way from the plant in October.

Murashov was later released after Russian state television broadcast a video in which he was shown confessing to “communicating with Ukrainian intelligence”.

The IAEA U.N. watchdog said he was allowed to join his family in Ukrainian-held territory.

“The new director of Zaporizhzhia nuclear power plant and first deputy general director of the Zaporizhzhia power plant operating company is Yuriy Chernichuk,” Renat Karchaa, an adviser to Rosenergoatom’s CEO, said, praising him as a “courageous” successor.

Chernichuk could not be reached for comment.

Ukraine’s state-run nuclear power operator Energoatom said in May that Russia had forbidden Chernichuk from leaving the city of Enerhodar, where the plant is based, holding him and other staff as “hostages”.

The six-reactor plant has since come under repeated shelling, drawing condemnation from the IAEA, which has called for a safety zone around it, a proposal so far resisted by Moscow.

Russia and Ukraine each blame the other for the shelling at the plant, located on a Russian-held bank of the Dnipro River across from Ukrainian-held territory. Kyiv also accuses Moscow of hiding military equipment at the plant, which Russia denies.

— Reuters

Russia is planning “some quite big air attacks” in Ukraine, according to a leading security and defense analyst.

“It looks as though Russians are preparing some big air attacks. There’s a lot of Twitter chat and satellite imagery at air bases… so there may be a lot of air activity,” Michael Clarke, professor and former director-general of RUSI, told Sky News late Tuesday.

“The Russians are really digging in for winter and preparing trenches. In Kherson, they’ve got huge defenses,” Clarke added.

The analyst noted that Russian forces appear to be advancing in Donetsk, around the city of Bakhmut where fighting has been going on for weeks.

“The Russians have been pounding away at Bakhmut for about four weeks and they’re trying to attack it from the east, the north and it looks as though they’ve made some progress from the south of Bakhmut.”

He said fighting there will still be “very ferocious” and that it is the “one place where they are making progress.”

— Holly Ellyatt

Ukraine’s President Volodymyr Zelenskyy described the situation at the front as difficult, with intense fighting in the east, northeast and south of Ukraine, where he said Russian forces are “planning something.”

“The situation at the front is difficult. Despite extremely large Russian losses, the occupiers are still trying to advance in Donetsk region, gain a foothold in Luhansk region, move into Kharkiv region, they are planning something in the south,” Zelenskyy said on Telegram Tuesday night.

He said Ukraine’s defenses are holding, however, preventing Russia from advancing.

“They said that they would capture Donetsk region – in spring, summer, fall. Winter is already starting this week. They put their regular army there, they lose hundreds of conscripts and mercenaries there every day, they use barricades there.”

He said Russia would lose 100,000 of its soldiers and additional mercenaries while “Ukraine will stand.”

— Holly Ellyatt

Moscow has postponed a round of nuclear arms control talks with the United States set for this week because of stark differences in approach and tensions over Ukraine, a senior Russian diplomat said Tuesday.

Deputy Foreign Minister Sergei Ryabkov said the decision to put off the talks that were scheduled to start Tuesday in Cairo was made at the political level. The postponement marked another low point in badly strained U.S.-Russian relations and raised concerns about the future of the last remaining nuclear arms control pact between the two powers.

“We faced a situation when our U.S. colleagues not just demonstrated their reluctance to listen to our signals and reckon with our priorities, but also acted in the opposite way,” Ryabkov told reporters in Moscow.

Ryabkov claimed the U.S. wanted to focus solely on resuming inspections under the New START treaty and stonewalled Moscow’s request to also discuss specifics related to the weapons count under the strategic arms reduction pact.

This week’s meeting of the Bilateral Consultative Commission established under the treaty would have been the first in more than a year. The timing of the talks was intended to show that Russia and the U.S. remain committed to arms control and keeping lines of communication open despite soaring tensions over Ukraine.

— Associated Press

Western governments want to set a maximum purchase price for Russian oil on the world market to limit Moscow’s ability to raise money for its war on Ukraine.

The plan is meant to punish Russia while at the same time keeping its vast petroleum exports flowing to energy-starved global markets to tamp down inflation.

But so far, the countries have failed to agree on what the price limit should be, reflecting divisions over how badly the scheme should seek to hurt Moscow.

If they can’t reach a deal by Dec. 5, an outright ban on Russian imports into the European Union will take effect, crimping supplies heading into peak winter heating season.

— Reuters

Secretary of State Antony Blinken announced a new $53 million assistance package from the United States to help repair Ukraine’s electrical grid, which has been decimated by Russian shelling.

The package will include distribution transformers, circuit breakers, surge arresters, disconnectors, vehicles and other key equipment, according to a State Department fact sheet.

The announcement comes as millions of Ukrainians remain without power, and many without water, as a result of Russia’s coordinated bombing campaign.

 The new U.S. assistance is on top of $55 million that has already been committed to emergency energy sector support.

— Christina Wilkie

Political analysts from Russia say anxiety is rising in Moscow as the country’s forces face what’s likely to be months more fighting and military losses, and even starts to consider it may be defeated.

That would be catastrophic for Putin and the Kremlin, who have banked Russia’s global capital on winning the war against Ukraine, analysts said, noting that anxiety was rising in Moscow over how the war was progressing.

“Since September, I see a lot of changes [in Russia] and a lot of fears,” Tatiana Stanovaya, a nonresident scholar at the Carnegie Endowment for International Peace and founder and head of political analysis firm R.Politik, told CNBC.

“For the first time since the war started people are beginning to consider the worst case scenario, that Russia can lose, and they don’t see and don’t understand how Russia can get out from this conflict without being destroyed. People are very anxious, they believe that what is going on is a disaster,” she said Monday.

Read the whole story here: ‘Losing is not an option’: Russia analysts fear a ‘desperate’ Putin as Ukraine war drags on