EU agrees $54 billion aid package for Kyiv; Orban says Hungary's funds excluded from deal

Ukrainian First Deputy Prime Minister Yulia Svyrydenko said on Thursday that financial aid from the European Union and the United States was "critically important" for maintaining macroeconomic stability and ensuring growth.

"It is very important for us to maintain macroeconomic stability. It is a prerequisite for economic growth," Svyrydenko, who is also the economy minister, told Reuters in an interview.

"Partners' aid is critically important to maintain this stability," she said, adding that she expected the United States to follow the example of the EU, which approved a 50 billion euro four-year aid package for Ukraine earlier on Thursday.

-Reuters

Hungary Prime Minister Viktor Orban took to social media Thursday afternoon to break his silence over the European Union's earlier agreed 50 billion euro ($54 billion) support package for Ukraine, saying that the deal would not include funds from Budapest.

Orban said on Facebook, according to a translation, that a "control mechanism" had been negotiated for the use of funds, which guarantees that "Hungary's money can't end up in Ukraine."

Orban has been a sole holdout in passing the funding package for Ukraine, blocking the plans at the group's last meeting in December.

His political director, Balázs Orbán (no relation) said in a social media post that the funding agreement would be renegotiated after one year, and that it would be reconsidered full after two years, "in the context of the EU budget for the next period."

— Karen Gilchrist

Ukrainian intelligence services claimed to have sunken a Russian missile boat belonging to Russia's Black Sea Fleet, saying the vessel was destroyed in a special operation.

Ukraine's defence intelligence directorate said on Telegram on Thursday that the Russian corvette Ivanovets was "at the bottom of the sea," adding that "an enemy missile boat was destroyed as a result of the special operation" of the military intelligence service, or GUR, by a specialist group.

"The enemy ship was on the raid of Lake Donuzlav" in Russian-occupied Crimea, the post said, according to a Google translation.

"As a result of a series of direct hits to the hull, the Russian ship suffered damage incompatible with further operation - the "Ivanovets" rolled to the stern and sank," the post stated.

Ukraine estimated the boat was worth approximately $60-70 million and said that Russia's search and rescue operation on the Donuzlav lake was not successful, according to preliminary information.

The Navy Recognition website described the Ivanovets are part of the Tarantu class of Russian missile corvettes. It says the Ivanovets is armed with the the Moskit missile system and guns and describes the vessel as "a small but highly capable warship, designed for coastal defense missions and equipped with potent anti-ship weaponry."

CNBC was unable to verify the information in the intelligence report. Russia's ministry of defense has not publicly commented on the claims.

— Holly Ellyatt

EU member states on Thursday agreed on an additional aid package totaling 50 billion euros ($54 billion) for Ukraine, European Council President Charles Michel said on social media.

"All 27 leaders agreed on an additional €50 billion support package for Ukraine within the EU budget," he said. "This locks in steadfast, long-term, predictable funding for #Ukraine. EU is taking leadership & responsibility in support for Ukraine; we know what is at stake."

EU leaders have been struggling to reach a consensus over the support package, amid opposition from Hungarian Prime Minister Viktor Orban who vetoed the aid deal in December. Hungary wants to have an annual review that would allow it a right to veto the disbursements each year, Reuters has reported.

— Ruxandra Iordache

Polish Prime Minister Donald Tusk said on Thursday there was no "Plan B" on European Union aid for Ukraine and Hungarian Prime Minister Viktor Orban who is stalling it must decide if Hungary is "part of our community".

"We need to play hard and play fair, but there is no room for compromise. There is no middle way - either you are on the Ukrainian side or on the Russian side," Tusk said ahead of a summit of leaders of the 27 EU member countries.

Orban is the only one of the 27 to have voiced disapproval of an EU aid package and to request a yearly vote on the long-term aid.

Thursday summit's is seen as a last opportunity to reach agreement on a four-year plan for 50 billion euros ($53.93 billion) of economic aid for Ukraine, which has been fighting a Russian invasion since 2022.

Hungary, which cultivates close ties with Moscow, has been pushing for an annual review that would give it a right to veto the disbursements every year.

— Reuters

German Chancellor Olaf Scholz on Thursday pushed for a unanimous decision by all 27 EU members to agree a joint plan offering stable financing to Ukraine in the coming years.

"I believe now is the time to reach a decision," he told reporters as he arrived for a special EU summit in Brussels. "I will work very hard to come to an agreement of all 27."

— Reuters

Ukraine's army chief Valeriy Zaluzhnyi is expected be dismissed from his post by the end of the week, news outlet CNN reported Wednesday, citing sources.

The news outlet reported that Zaluzhnyi, popular with the public but more problematic for Ukrainian President Volodymyr Zelenskyy amid a rift between the leaders, was called to a meeting at the president's office on Monday and was told he was being fired, two sources familiar with the matter told CNN.

The move had come after months of tension between the officials, particularly after Zaluzhnyi, commander-in-chief of Ukraine's Armed Forces since July 2021, gave an interview last November in which he described the war with Russia as being at a "stalemate," a characterization Zelenskyy denied.

Zaluzhnyi reportedly refused a request from Zelenskyy to step down earlier this week and remains in post for now. But one of CNN's sources said a presidential decree officially firing the military commander is expected by the end of the week

The move would be one of the biggest military shake-ups in Ukraine since the start of the war and could prove controversial if seen to be the result of a personal vendetta. Defense analysts point out that it's standard practice for military commanders to be replaced during times of war, if new strategy and vision are deemed necessary.

Ukraine's forces are seen to be making little headway in reclaiming Russian-occupied territory, instead having adopted a more defensive stance to retain the positions held.

— Holly Ellyatt

Russian President Vladimir Putin will travel to NATO-member Turkey next month to meet with his counterpart Recep Tayyip Erdogan, Reuters cited a Turkish official as saying Wednesday.

According to the official, the meeting is scheduled for Feb. 12, before Erdogan travels on to Egypt.

Putin's international visits have been curtailed since the International Criminal Court (ICC) issued an arrest warrant in March 2023 for his role in deporting Ukrainian children. However, Turkey is not party to the ICC's Rome Statute, meaning it is not under obligation to detain Putin.

— Karen Gilchrist

Russian President Vladimir Putin said on Wednesday that Ukraine used a U.S.-supplied Patriot air defense system to down a military transport plane in the Belgorod region last week, and called for an international investigation into the incident.

Russia previously accused Ukraine of using Western missiles to down the Ilyushin Il-76 plane over the border region, killing 74 people on board, including 65 captured Ukrainian soldiers it said were en route to a prisoner exchange.

"The plane was downed, and it's been definitively established by an American Patriot system — the expert analysis has already established that," Putin said, suggesting that two missiles had been used for the downing.

"We insist that an international investigation be carried out," he added.

Ukraine has neither confirmed nor denied that it downed the plane, and has demanded proof of who was on board.

— Karen Gilchrist

Ukraine and Russia have carried out a prisoner of war (POW) swap, a week after a scheduled prisoner exchange was canceled following the downing of a Russian plane carrying 65 POWs.

"Our people are back. 207 of them," Ukraine's President Volodymyr Zelenskyy said on X, formerly known as Twitter, on Wednesday.

"We return them home no matter what. We remember each Ukrainian in captivity. Both warriors and civilians. We must bring all of them back. We are working on it. The Ukrainian team has done another excellent job. Budanov, Yermak, Usov, Maliuk, and Klymenko. Well done!," the president said, praising the efforts of senior government officials.

Russia's defense ministry confirmed the swap, saying 195 Russian military personnel had been returned, saying the personnel had been "in mortal danger in captivity" without further details. It's likely the comment was an attempt to discredit the conditions within Ukrainian prisoner of war facilities, however.

Russia said that, in exchange, 195 Ukrainian POWs had been exchanged. The discrepancy for the figures cited by both sides was not immediately clear. It's also unknown where or when the latest exchange took place.

In any case, the swap comes just days after a Russian military transport plane carrying 65 Ukrainian POWs, and nine Russians, crashed over the Russian border region of Belgorod.

Russia accused Ukraine of shooting down the plane with Western-provided missiles. Ukraine has not confirmed nor denied it shot down the plane and called for an international investigation into the incident. Russian law enforcement agencies were quoted yesterday by Russian media as saying that black box data suggested that there had been an "external impact" on the plane before it crashed.

— Holly Ellyatt

Russia's Defense Minister Sergei Shoigu has told military manufacturers to "stop fooling around" when it comes to the ramping up the production of self-propelled artillery systems.

Russian news outlet RBC published a video online showing Shoigu visiting arms-producing factories in the Urals industrial city of Yekaterinburg. During the tour of a manufacturing facility, Shoigu reportedly chides the management for not producing enough self-propelled artillery.

"Listen, stop fooling around here, guys. We got busy with this in 2022. We should have had these machines operating at full capacity in 2023," he told the plant's bosses, in comments translated by Reuters.

"I'd like to receive within a week a specific proposal on how we'll reach the indicators set by the president [Vladimir Putin] ... this must be done, because all these orders are connected with the performance of very specific work on the battlefield," he said.

The director reportedly responded that the factory had already increased production six-fold in the last two years.

The comments illustrate Russia's determination to increase weapons and ammunition production, two years into its so-called "special military operation" in Ukraine.

Moscow has called upon the country's domestic military industrial complex to dramatically increase its manufacturing of a variety of combat hardware, from drones and tanks to artillery and military vehicles. Russia's biggest weapons producer reportedly said last fall that Russia had ramped up the production of some military hardware by more than tenfold to supply Russian forces in Ukraine.

Western nations are also striving to increase weapons production in order to maintain the supply of arms to Ukraine.

— Holly Ellyatt

Russian anti-war candidate Boris Nadezhdin said on Wednesday he had submitted 105,000 signatures in his support to the Central Election Commission (CEC) to underpin his bid to challenge Vladimir Putin in an upcoming presidential election.

The CEC will check the authenticity and quality of the signatures submitted by Nadezhdin and other would-be candidates and announce next month who will join Putin on the ballot paper.

Putin's victory is widely seen as a foregone conclusion, but Nadezhdin has surprised some observers with trenchant criticism of what the Kremlin calls its "special military operation" in Ukraine.

After a series of heating outages across Russia during an unusually cold winter, Nadezhdin said earlier this month that the country would be able to afford to spend more on its citizens if it was not pouring so much money into the military.

As a candidate nominated by a political party, he needed to gather 100,000 signatures across at least 40 regions in order to stand in the March 15-17 election.

Putin, who has chosen to run as an independent rather than as the candidate of the ruling United Russia party, needs 300,000 signatures but has already collected over 3.5 million, according to his supporters.

— Reuters

Putin's anti-war opponent takes step toward election; Russia says West could meddle in upcoming vote