Latest news on Russia and the war in Ukraine

Russian media agencies reported that Russia’s security service, the FSB, said it had detained a reporter with the U.S. newspaper The Wall Street Journal.

The reporter, Evan Gershkovich, was detained in the Urals city of Yekaterinburg on suspicion of espionage, news agencies TASS and Interfax reported Thursday.

The FSP press service told TASS in a statement that “the Federal Security Service of the Russian Federation stopped the illegal activities of the correspondent of the Moscow bureau of The Wall Street Journal, an American Gershkovich Evan born in 1991, accredited at the Russian Foreign Ministry, who is suspected of spying for the U.S. government.”

The FSB also claimed that Gershkovich was “acting on instructions from the American side” and alleged that the reporter “was collecting information constituting a state secret about the activities of one of the enterprises of the military-industrial complex of Russia.”

“While trying to obtain secret information, a foreigner was detained in Yekaterinburg,” the FSB said, providing no evidence for its allegation.

CNBC has requested comment and is awaiting a response.

— Holly Ellyatt, Ruxandra Iordache

Russian media reporting suggests that the authorities are preparing to start a major military recruitment campaign with the aim of signing up an additional 400,000 troops, Britain’s Defense Ministry said Thursday.

“Russia is presenting the campaign as a drive for volunteer, professional personnel, rather than a new, mandatory mobilisation,” the ministry noted.

There is a “realistic possibility” that in practice this distinction will be blurred, the U.K. said, and that regional authorities will try to meet their allocated recruitment targets “by coercing men to join up.”

“Russian authorities have likely selected a supposedly ‘volunteer model’ to meet their personnel shortfall in order to minimise domestic dissent.”

It is highly unlikely that the campaign will attract 400,000 genuine volunteers, the defense ministry said, adding that that “rebuilding Russia’s combat power in Ukraine will require more than just personnel; Russia needs more munitions and military equipment supplies than it currently has available.”

Last September, Russian President Vladimir Putin announced a “partial mobilization” in which 300,000 military reservists were called into active service. He also called for a boost to weapons production.

Since then, Russia’s Defense Ministry has announced its intentions to expand its forces in the next few years. Defense Minister Sergei Shoigu in December laid out proposals to increase military personnel to 1.5 million by 2026, up from 1.1 million at present.

— Holly Ellyatt

Russian forces in Bakhmut — made up predominantly of mercenaries belonging to the Wagner Group — have made no progress into the city in the last three weeks and are suffering significant losses, the chairman of the Joint Chiefs of Staff, Mark Milley, told U.S. lawmakers Wednesday. 

Milley said the so-called “battle of Bakhmut,” which has been raging for over seven months now, has turned into a highly attritional battle for the Russians, despite their claims of recent gains in the city.

“The Ukrainians are doing a very effective area defense that is proven to be very costly to the Russians. For about the last 20, 21 days, the Russians have not made any progress whatsoever in and around Bakhmut,” he said at a House Armed Services Committee hearing.

“So it’s a slaughter-fest for the Russians. They’re getting hammered in the vicinity of Bakhmut and the Ukrainians have fought very, very well. That’s also true across the entire frontline,” he added.

Milley said he believes there are around 5,000-6,000 Wagner Group mercenary fighters in eastern Ukraine, with up to 30,000 other recruits, many of whom are Russian prisoners offered a deal, which allows their sentences to be commuted if they serve in the Wagner forces for six months.

Milley said the Russian units fighting around Bakhmut are struggling with command and control, logistics and sustainment and are largely poorly trained. Nevertheless, he said the Wagner Group is well funded, has reach in Russia, parts of Europe, the Middle East and Africa, and is “very dangerous.”

— Holly Ellyatt

Rebuilding Ukraine is the most ambitious project of the 21st century, that country’s prime minister was quoted as saying by Ukraine’s government portal.

Since invading Ukraine in February 2022, Russian troops have largely destroyed several Ukrainian cities. Moscow has also intentionally targeted Ukraine’s energy grids and other civilian infrastructure.

Rebuilding will require “huge resources,” Denys Shmyhal said in an online address at a conference. He spoke to more than 200 industry representatives from the EU and Ukraine. The Ukraine government portal did not quantify what rebuilding would cost.

Business will be the “engine of change” to rebuild Ukraine’s economy, said Shmyal. Ukraine’s most promising sectors are energy, defense, agriculture, natural resources and IT, he said.

The U.S. International Development Finance Corporation has announced its readiness to mobilize more than $1 billion in private capital to support Ukraine’s economy, he added.

— Audrey Wan

Ukrainian President Volodymyr Zelenskyy said Russia has “been at war” with democracy for years.

“It fights via disinformation, election interference, espionage, corruption exporting, cybercrime, by trying to trigger an energy crisis and price explosions in markets that will hit your people with insane electricity or gas bills,” he said at a democracy summit hosted by U.S. President Joe Biden, according to his office.

Biden and other Western leaders have provided Ukraine with weapons and financial aid, and have slapped rounds of sanctions on Russia, since Moscow invaded its neighbor about 13 months ago. Zelenskyy said “evil must lose the war” because then “it will know that it will always lose everywhere.”

The Ukrainian president said the globe should not “think how to save Putin’s face” in trying to end the war. He also called on his allies to provide “all the weapons that will reliably guarantee” Russia’s defeat.

— Jacob Pramuk

Hungary is holding up Sweden’s admission to NATO because of grievances over criticism by Stockholm of Prime Minister Viktor Orban’s policies, the Hungarian government spokesman said.

Bridging the gap will require effort on both sides, spokesman Zoltan Kovacs said.

Sweden and its neighbour Finland asked to join the NATO military alliance last year following Russia’s invasion of Ukraine. But the process has been held up by Hungary and Turkey.

After months of foot-dragging by Orban’s ruling Fidesz party, Hungary’s parliament approved a bill on Monday to allow Finland to join NATO but the Swedish bill is still stranded.

“In the case of Sweden, there is an ample amount of grievances that need to be addressed before the country’s admission is ratified,” Kovacs said on his blog.

— Reuters

The head of the Wagner Group — a private military company whose mercenaries have been involved in heavy, intense fighting to try to capture Bakhmut in eastern Ukraine — said Wednesday that the battle for the town has taken a large toll on both sides.

“At the moment, the battle for Bakhmut has almost destroyed the Ukrainian army, and unfortunately rather battered PMC Wagner,” Yevgeny Prigozhin said on his business’ Telegram channel.

He said that if his Wagner units “win” in Bakhmut, against Ukraine’s armed forces and what he described as “foreign units” without elaborating further, Prigozhin said it would represent “the greatest turn in this war and in all modern history.”

“PMC Wagner destroys foreign forces that are trying to bring Russia to its knees. And after that, only the Russian army will remain on the chessboard, and all other pieces will be removed,” he said.

Prigozhin’s Wagner Group has been fighting to try to capture Bakhmut for over seven months, meeting stiff resistance from Ukraine’s fighters trying to hold on to the city. Capturing Bakhmut is seen as a stepping stone for Russians trying to extend their hold on Donetsk in eastern Ukraine.

— Holly Ellyatt

Defense officials in the U.K. have disputed Russian claims to have taken control of a metals plant in Bakhmut in eastern Ukraine.

A Russian-installed official in Donetsk, where Bakhmut is located, claimed on Wednesday that fighters from the Russian private military company, the Wagner Group, had taken full control of the Azom factory complex to the north of the Bakhmut town center.

But the British Defense Ministry said Wednesday that “the area likely remains contested, as it has been for the past fortnight” and that the Wagner Group, made up of mercenary fighters and Russian prisoners recruited to fight for six months in exchange for freedom, was losing personnel.

“With Wagner having now confirmed the release of at least 5000 prisoner fighters, personnel shortages are likely hampering Russian offensive efforts in the sector,” the ministry noted in an intelligence update.

The ministry noted that fighting continues in the Donbas town of Bakhmut, though Russian assaults are still at a reduced level compared with recent weeks.

“One of the key achievements of recent Ukrainian operations has likely been to push Russian Wagner Group fighters back from the 0506 route,” referring to one of the few remaining supply routes into the city.

“This minor country road has become a critical supply line for Ukrainian defenders. Wagner had previously been within a few hundred metres of the route,” the ministry said.

— Holly Ellyatt