Ukraine war briefing: Wildberries attacks shake Russian economy and banking
Kremlin and state bank VTB may be forced to prop up online retailer amid crippling Ukrainian attacks; Kyiv prosecutors may target Lukashenko. What we know on day 1,617
The Kremlin has acknowledged it may have to prop up online retailer Wildberries – which has lost 10% of its warehousing capacity and huge amounts of stock in Ukrainian drone attacks. Kyiv has said its forces are attacking “Russia’s Amazon” because of its role in supplying Moscow’s army. The Kremlin acknowledged the government had discussed possible support for Wildberries. A senior industry source told Reuters that Wildberries was in a difficult situation and might have to seek government support, most likely through state-controlled banks, in order to maintain operations.
An executive at Ukraine’s leading arms producer Fire Point has said Wildberries is being targeted by Ukraine partly because of its partnership with state-controlled bank VTB. Denys Shtilerman, Fire Point’s co-founder and chief designer, in an interview posted on 27 July with the Ukrainian journalist Dmitry Gordon, described Wildberries as the largest borrower in Russia and said its demise would lead to the collapse of a large number of banks, including VTB. Wildberries and its rival Ozon are central to the Russian government’s plans to spur economic growth as Moscow faces mounting budget pressures from increased military spending and a broader economic slowdown.
Kremlin spokesperson Dmitry Peskov lavished praise on Wildberries for providing assistance to third-party sellers whose goods were stored in damaged warehouses. Those sellers have been clamouring for support. One of them, Marina Gorshkova, told her Instagram audience of 1.3 million people that she was appealing to “the country’s leadership” and there were a million registered users on Wildberries who needed help. Wildberries said that it had so far paid out 40 million roubles (US$508,582) to the families of those killed or those injured in Ukrainian drone attacks on its warehouses.
Volodymyr Zelenskyy’s office has asked Ukraine’s top prosecutor to consider launching criminal proceedings against Alexander Lukashenko, the Belarusian dictator, according to a letter made public on Tuesday. Lukashenko allowed Vladimir Putin to use Belarus as a launchpad for the full-scale invasion of Ukraine in February 2022. The Ukrainian president’s office said an exiled opposition group, the Belarus Democratic Forum, had asked Kyiv to prosecute Lukashenko for war crimes, genocide and “state terror”. Lukashenko’s administration did not respond to a Reuters request for comment.
There is no current prospect of Lukashenko appearing before a Ukrainian court, but Dmitry Bolkunets, secretary general of the Belarus Democratic Forum, said a prosecution would “significantly increase the personal legal and security risks faced by Lukashenko” and would be an act of historical justice. “It could have a profound impact inside Belarus, because Lukashenko would take it very personally and be deeply concerned about the consequences.”
Ukraine and Iran’s foreign ministers spoke on Tuesday, Kyiv said, adding it wants to avoid an “escalation” after a Ukrainian attack on an Iranian vessel in the Caspian Sea. Volodymyr Zelenskyy on Saturday said Kyiv had carried out long-range strikes in the Caspian Sea against vessels carrying military cargo involving Iran. Andriy Sybiga said he reiterated to his Iranian counterpart, Abbas Araghchi, that “all of Ukraine’s actions are aimed solely at defending our country from Russian aggression and never intended to target civilian vessels or people”.
Araghchi claimed that Sybiga had assured him the attack was “unintentional and Ukraine seeks no escalation”. However, Ukraine did not appear to publicly characterise the attack as unintentional, and Sybiga said he emphasised to Iran the need to “end any support for Russia’s war against Ukraine”. Ukraine suffers much damage and many casualties in Russian attacks that use Shahed drones either bought from Iran or built to its designs.
Volodymyr Zelenskyy said after meeting Donald Trump at the White House: “We talked with the president about licences for producing interceptors for the Patriots and other ideas that could help.” Zelenskyy said he had met with officials from Lockheed Martin – one of the companies that produces Patriot interceptors – and teams were working “to move to co-production as quickly as possible”. “We also talked about diplomacy [with Trump] – it is important to step up the diplomatic process,” Zelenskyy said, referring to the lack of peace talks with Russia. Trump’s envoys Steve Witkoff and Jared Kushner have agreed to visit Ukraine for the first time, two sources familiar with the conversations told Reuters.
The US Senate took the first steps toward passage of a sweeping Russian sanctions bill on Tuesday. The legislation would penalise countries that continue to buy Russian oil, gas and other exports. The bipartisan 86-12 procedural vote came hours after a funeral for Senator Lindsey Graham of South Carolina, the bill’s chief negotiator. Volodymyr Zelenskyy met with senators just before the vote. The bill provides exceptions for countries that import less than 15% of their natural gas from Russia and are taking steps to reduce those imports. Some Democrats are hesitant that it might give Trump additional powers to recklessly impose tariffs elsewhere and on other countries.