The cost of war in Ukraine. Online December 13

The Bell continues to conduct online, dedicated to the economic consequences of the war in Ukraine, which began on February 24.

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21:02 The Biden administration has almost agreed on the transfer of Patriot air defense systems to Ukraine. The decision could be announced as early as this week, told three senior US officials CNN. The Pentagon's plan must first be approved by Secretary of Defense Lloyd Austin. If agreed, the document will be sent to Joe Biden for signature.

How many launchers will be sent is unknown. As noted by CNN, a typical Patriot battery pack includes up to eight mounts of four missiles each, a radar to search for targets and other support equipment.

The issue of providing Ukraine with Patriot air defense systems that would allow it to effectively defend against Russian missile attacks on critical infrastructure has become the subject of heated discussions among European politicians and NATO, especially in recent weeks against the backdrop of a missile crash in Poland, which killed two person. Germany has offered to send a Patriot to the border with Ukraine to help Poland protect its airspace. Warsaw, in response, advised Berlin to place them directly in Ukraine. Germany refused this.

The Financial Times today reported that Kiev is running out of missiles for Soviet air defense systems, primarily the S-300 and Buk, and new ones are practically nowhere to be found.

20:25 The Kremlin continues to receive Western electronics despite sanctions and restrictions from manufacturers, found out . Reuters

According to the customs service, Russia imported $2.6 billion of electronic components from April to November. Of this amount, at least $777 million went to purchases from Western manufacturers. We are talking about microcircuits of American Intel, AMD, Texas Instruments and Analog Devices, as well as German Infineon. Their products have previously been found in Russian weapons systems.

The investigation was prepared jointly with the Royal United Defense Research Institute (RUSI). The publication writes about the "whole galaxy" of little-known importers and exporters and about the routes by which semiconductors and other equipment continues to enter Russia from Hong Kong, Turkey and other shopping centers. Here are just a few examples:

– Turkish Azu International Ltd Sti. The company was registered in March 2022 as an enterprise that carries out wholesale sales of IT products, and a week later began to supply American components for computers to Russia. The co-founder turned out to be a Turkish citizen Gokturk Agvaz, who also owns the microchip supplier Smart Impex GmbH in Germany. Before the war, Smart Impex shipped American and other goods to Russia, which are now exported by Azu International. Smart Impex, Agvaz explained in response to a Reuters inquiry, has stopped deliveries to Russia in accordance with European restrictions, but has continued to export to Turkey. When asked about the supply of Azu International to Russia, he replied that it was a "commercial secret."

– Turkish Bion Group Ltd Sti. This company, according to Reuters, was engaged in the sale of textiles, and recently expanded the business to wholesale electronics. A spokesperson for Bion declined to comment. Among the company's clients is Fortap LLC, registered in St. Petersburg in April this year. Since that time, Fortap has been importing electronics, including computer components from the United States, worth at least $138 million.

- Hong Kong Pixel Devices Ltd. This company was founded in 2017 by another Hong Kong firm, Bigfish Investments Ltd, controlled by Kirill Nosov (a Hong Kong resident with Russian citizenship). When asked by Reuters, he said that he helped open a company, but does not work there and cannot comment on its activities. Pixel Devices is now owned by Singapore-based Asia Global Neolink Pte Ltd, which in turn is owned by Seychelles-based White Wings Ltd. The only director of Pixel Devices is the Spaniard Pere Rura Cano, who is also listed as the director of Asia Global Neolink and runs an aviation club in Catalonia. Rura Kano confirmed by phone that Pixel Devices supplies semiconductors and other products to Russia. According to customs, from April to November, Pixel Devices exported at least $210 million worth of electronics to Russia, including at least $50 million worth of Intel and AMD products. The Pixel Devices press service noted that they do not supply products for military purposes and prohibit their customers from reselling it to defense enterprises.

Many deliveries of Western components were provided by countries that did not join Western sanctions. But there are exceptions, such as the Estonian Elmec Trade Oü, which exported at least $17 million worth of electronics to Russia from April to November. Elmec Trade CEO Alexander Fomenko told Reuters that the company complies with all export restrictions, and “most” of current orders are last year . Deliveries, according to Fomenko, were delayed due to the pandemic.

19:03 EU energy ministers failed to agree on a price ceiling for Russian gas, said Hungarian Foreign Minister Peter Szijjarto . Discussions will continue in a bilateral format.

17:42 Inflation in the US in annual terms has slowed to 7.1% after 7.7% in October. This is the lowest price increase in the country since December 2021. November statistics also turned out to be better than forecasts. So, Dow Jones experts. inflation was expected to slow to 7.3%.

Core inflation (core CPI; does not take into account food and energy prices) was 6% in November against 6.3% in October and was below the consensus of 6.1%. In monthly terms, the growth was 0.2% against the expected 0.5%.

The stock market reacted positively. Futures on the S&P 500 added 2.3%, while the NASDAQ Composite index added 3.2%.

15:22 Russian authorities have chosen a mechanism to respond to the oil price ceiling. The draft presidential decree describing this has been agreed on the whole .

According to the newspaper, the document reflects the refusal of supplies to countries that have joined the restrictions, and there are no parameters for the maximum discount - most likely, it will be established by by-laws. Oil, in particular, is prohibited from being sold if:

• in the contract, the country that joined the ceiling is indicated as the recipient;
• in the contract, the ceiling appears as a condition, or reference prices are set equal to the ceiling, that is, $60 per barrel.

14:17 Great Britain in connection with the attacks of Iranian drones on Ukraine imposed sanctions against 12 representatives of the command staff of the Russian Armed Forces (10 generals, two colonels).

Among them is the head of the Main Computing Center of the Ministry of Defense (MCC), Major General Robert Baranov, whom Bellingcat (recognized in Russia as a foreign agent and undesirable organization by the media) called the main person responsible for compiling flight tasks. The Iranian concern MADO, its CEO, and Iranian officials who contributed to the supply of drones were subject to sanctions.

13:52 The Forward Perm Bicycle Plant will start producing Kama bicycles, "popular in the 1970s-1990s," at a price of up to 10,000 rubles, reported . TASS

• Forward (brands Forward, Format) is the second bicycle manufacturer in Russia after Velomotors (Stels), but it is not a direct successor to the Perm Bicycle Plant (PVZ). The old plant, which assembled the last Kamas from stock in the early 1990s, was renamed Velta and closed in 2006.
• The new Kama will be either a modernized replica of the old one, or a product of badge engineering. In any case, the manufacturer says that he has changed the geometry of the frame "for strength and comfortable fit." The main feature of the old "Kama" was just a "clean" spinal frame - without a top tube and braces.
• The old Kama is not quite an original development: it clearly shows the features of the English Raleigh 20 bike.
• The series will be small for bicycle production - three thousand pieces, and a separate one limited to the 300th anniversary of the founding of Perm.

13:09 The EU makes another call on the ceiling of gas prices that has not been agreed upon for several months - Bloomberg has learned the details .

• From the side of the European Commission, the proposal remained the same : the market correction mechanism is activated automatically when two conditions are met: the gas price for the month ahead is more than 275 euros per megawatt-hour at the TTF hub (now - 140 euros) and the gap between European prices and world prices is more than 58 euros. When the mechanism is enabled, European companies are prohibited from entering into transactions at a higher price.
• The Czech Presidency of the EU proposed a threshold of 220 euros and a lead of 35 euros. The compromise level is still too low for those who advocate high ceilings and minimal market intervention (Germany, the Netherlands, Denmark), and too high for countries calling for aggressive intervention (Poland, Greece, Italy, Belgium). In addition, disagreements about the terms of the contracts subject to the ceiling and the conditions for removing the ceiling have not been resolved.
• The main question for the ceiling is at what level it will not alienate the already scarce LNG from the European market and cause prices to rise. If there is no agreement today, it will be submitted to the EU summit on Thursday, and then to the meeting of energy ministers next week.

12:30 Italian banking group Intesa Sanpaolo is negotiating the sale of its subsidiary bank in Russia to Gazprombank structures, and not to top management, writes Frank Media. But the negotiations are difficult, and the deal may not take place: the Italians do not want to have anything in common with the Russian Intesa, including they do not intend to maintain correspondent relations with the former "daughter".

The transaction, as in the case of other foreign-owned banks, is in any case possible only with the special permission of the president.

12:10 The Financial Times writes that Ukraine has almost exhausted its stocks of missiles for Soviet air defense systems, primarily the S-300 and Buk, and there is practically nowhere to get new ones. The main message of the article is that Ukraine needs more modern Western systems, including the American Patriot, capable of fighting Russian ballistic missiles. Neither the United States nor Germany want to supply them to Ukraine yet. The newspaper uses Ukrainian data on the effectiveness of air defense - 87% in the attack on December 5th.

11:53 The president's address to the Federal Assembly will still take place before the end of the year - on Tuesday, December 27, RIA Novosti writes , citing a source in the State Duma.

The day before, Dmitry Peskov confirmed that there would be no big press conference by Vladimir Putin before the New Year. Unlike a press conference and a direct line, the president's annual address is directly written into the Constitution. The last one took place on April 21, 2021.

The British Ministry of Defense is confident that the abandonment of the decade-long tradition of press conferences is due to the fact that officials are afraid of an anti-war agenda: “The Kremlin is almost certainly extremely afraid that an unorthodox discussion of a “special military operation” could break into any event with Putin’s participation.”

11:00 in Belarus A sudden check of combat readiness has begun . Judging by the reports, the demonstration is intended for the West: bridge crossings are being built across the Neman and the Berezina.

The main thing for the night and morning:

• China has banned the supply of Loongson processors to Russia. The decision is rather demonstrative, but it was the only non-sanctioned alternative to modern general-purpose Intel and AMD processors.
• The founder of the collapsed crypto exchange FTX, ex-billionaire Sam Bankman-Freed, was arrested in the Bahamas after the prosecutor's office of the Southern District of New York filed charges against him. He is waiting for extradition to the United States, a long trial and, possibly, a life sentence.
• World debt in 2021 fell as a percentage of gross product, but not in dollars, the IMF writes . This is a dubious gift of inflated GDP inflation, which the poorest countries did not get at all.
• next year Europe will need at least 50 billion cubic meters of additional gas , even if Russia keeps supplies at current levels. There will not be so many additional LNG on the market until 2025 — the realities are pushing Europe hard to expand purchases from Russia.
• RANEPA experts proposed to exclude beef and apples from the list of socially significant products for which the state can limit retail prices. Other conclusions of the study: the margin threshold almost does not work as it should, and the main positive effect of it is psychological.
• Judging by the vacancies on Headhunter, the Russian retail chain Fix Price plans to enter the UAE.
• After the entry into force of the EU oil embargo, 90% of tanker shipments of Russian oil go to Asia .
• Twitter has restarted the premium subscription for $8 per month. If you pay through the Twitter app for iOS, it will be more expensive - Elon Musk is struggling with Apple's commission.

Continuation of the broadcast on December 13th. Read the previous one here .