War Economy Reshuffles in Russia and Europe

Russian defence sector leaders reshuffled as NATO meets to discuss new strategy and financial arrangements to fund the war effort take place in the background.

Upcoming on Visegrad Insight:

• Click here to listen to the new podcast with Matej Šimalčik on Xi Jinping’s visit to Europe.
• Jakub Jaraczewski looks into the case of Tomasz Szmydt, a judge at the centre of an espionage investigation who sought political asylum in Belarus.
• Márta Pardavi examines the future of Article 7 procedures against Hungary in light of the commission’s decision to end proceedings against Poland.
• Valdonė Šniukaitė breaks down Lithuania’s presidential election as well as referendum results.
• In Lodz, in Polish: we will discuss democratic security with IT business leaders and special branch representatives. Click here for more information
• In the German Bundestag, we will shed focus on the costs of non-enlargement during a discussion organised by DGO. Click here for more information

DEMOCRACIES PLAN DEFENCE AND FUNDING

• Freedom House published the Nations in Transit 2024 report reflecting on 2023 democratic security dynamics in CEE. Interestingly, the performance of Poland and Slovakia today is in stark contrast with the performance documented last year.
• 46 European foreign ministers will meet on 17 May at the Council of Europe gathering. Lithuania will take over the rotating presidency and coordinate continental focus on key democratic security challenges. 
• A day earlier NATO’s highest Military Authority, the Military Committee composed of defence chiefs, will gather to discuss strategic priorities. The NATO-Ukraine Council will focus on Russia’s war of aggression, the situation on the ground, and NATO and Allied continued support to Ukraine.
• The Committee will also review Deterrence and Defence of the Euro-Atlantic Area (DDA) and the new approach to NATO operations that is in the process of change.
• EU’s Economic and Financial Affairs Council will adopt modifications of national recovery and resilience plans submitted by several member states including Poland. Also, they will review the implementation of the Ukrainian Facility.
• Sanctions against Russia. Focus shifts now on Moscow’s lucrative liquefied natural gas industry. Rather than an outright ban on Russian LNG imports – which countries including Belgium, France and Spain still purchase in large quantities – the EC is proposing action against the fuel’s transshipments via EU ports.
• Unsurprisingly, Budapest was quick to hint that it could block such packages. Foreign ministry spokesman Máté Paczolay said: “Hungary considers all sanctions affecting the energy sector harmful, as they greatly limit European competitiveness and lead to price increases and supply risks.”
• The EU also contemplates a ban prohibiting political parties, think tanks and other groups from accepting funding from Russia. 
• Russian MoD Shoigu steps down making way for Deputy PM Belousov who is now expected to lead the war economy and pledges to focus on innovation and technology. Otherwise, the power structure in Moscow remains the same with Mr Putin on top and his loyalists reshuffled around the top jobs at the Kremlin.

Allies green light use of Russian assets to fund Ukrainian defence

UKRAINE