Today's Contents
Just The Facts:
- Consumer and commercial lending in Ukraine has grown steadily over past year, central bank governor says
- EC to continue talks with Ukraine on gas supply as EU Council renews Russia sanctions, document shows
- Ukraine's Kernel halts operations at 1 plant due to raw materials shortage
- Ukrainian publishers defy war to keep the presses rolling
Here's What They Think:
- Ugo Bardi: West shouldn't completely rely on Trump to solve Ukraine crisis
- Reuters: Europe forced to take careful approach to Trump amid Ukraine war
- Al Jazeera: Ukraine's draft rates insufficient amid disconnect between government, population
Sober Second Thought:
- Moscow uses subsidized mortgages to resettle occupied Ukrainian territories, CEPA report says
Consumer and commercial lending in Ukraine has grown steadily over past year, central bank governor says
Lending in Ukraine has been steadily growing over the last year in both corporate and retail segments, said National Bank of Ukraine (NBU) Governor Andriy Pyshny.
Ukrainian banks have seen growth of 21% in net commercial loan portfolios and 39% in consumer loan portfolios Pyshny highlighted.
"This is the result of both the restoration of business and population demand for loans, and the increase of the risk-appetite of banks," Pyshny said via Facebook. He said businesses are maintaining a moderate debt burden, at close to pre-war levels, while the ratio of consumer loans to annual hold income is only at 10%.
Strong competition in the banking sector has resulted in improved conditions for consumer loans and lower interest rate for business loans, Pyshny said, adding that the share of non-performing loans (NPLs) has dropped to 31% as of Dec 31, which is six percentage points less than the beginning of last year.
"Of course, we will not stop there and in 2025 we will continue to implement the steps set out in the Lending Development Strategy," Pyshny concluded.
Inflation in Ukraine has accelerated to 12% YoY, exceeding NBU's forecasts, Pyshny said in a speech last week. However, he stated that Ukraine's economy is recovering due to international support and high adaptability among businesses and households.
EC to continue talks with Ukraine on gas supply as EU Council renews Russia sanctions, document shows
The European Commission plans to continue discussions with Ukraine regarding natural gas supplies to Europe, while also involving Hungary and Slovakia in the negotiations, according to a statement shared by an EU diplomat and obtained by Reuters on Monday.
"The Commission is ready to continue discussions with Ukraine on the supply to Europe through the gas pipeline system in Ukraine," the statement read. "The Commission is ready to associate Hungary in the process along with Slovakia."
The statement was presented to EU ambassadors on Monday morning ahead of a meeting of foreign affairs ministers to discuss the extension of sanctions on Russia, which require unanimous renewal every six months, Reuters reported.
At the Monday meeting, the EU foreign affairs ministers decided to extend sanctions against Russia.
Hungary's Prime Minister Viktor Orban stated last week he wanted the EU to persuade Ukraine to resume gas transit from Russia to Europe, which was halted on January 1, after a transit deal between Russia and Ukraine expired, as reported by Reuters at the time.
On Monday, Hungary's Foreign Minister Peter Szijjarto said he was satisfied with guarantees provided by the EC."The European Commission committed itself to the protection of the natural gas and oil pipelines leading to member states of the European Union," Szijjarto wrote in a post on Facebook.
Ukraine's Kernel halts operations at 1 plant due to raw materials shortage
Ukraine's largest producer and exporter of sunflower oil, Kernel, said it suspended operations at one of its plants this month due to the deficit of feedstock on the market.
Kernel has not disclosed which facility has ceased operations.
In an operations update for the quarter ended Dec 31, published last week, Kernel also said, that due to the limited availability of sunflower seeds in the market, three of its plants were processing other oilseeds.
These facilities crushed 93,000 tons of soybeans and 14,000 tons of rapeseed during the period under review.
In the October-December period, Kernel processed 973,000 tons of oilseeds, representing an annual increase of 20%, driven by the commissioning of the new oilseed processing plant in western Ukraine in February 2024.
These processing volumes represent a 42% increase from the previous three-month period, according to Kernel.
The group's grain export volume in the period, however, was 22% lower than the same period last year, and 7% lower than the previous quarter, standing at 1.376 million tons, on the back of lower grain harvest in Ukraine.
Kernel accounts for about 8% of the world's sunflower oil exports, delivering its products to over 60 countries, it says on its website.
Longer Reads
Ukrainian publishers defy war to keep the presses rolling
One November night, Ihor Pohorielov was jolted awake by a Russian bomb blast that nearly threw him from his bed. His thoughts immediately turned to the offices and storage facilities of Ranok Publishing in Kharkiv, where he works as commercial director, The Christian Science Monitor reported in a feature article.
Already a target of Russian airstrikes, he feared the worst. But the next day, he returned to work. "Pretty much any enterprise in Ukraine is a target," Pohorielov told the publication. "I thought of the orders we need to fulfill and the clients we need to serve."
Across the country, but especially in Kharkiv—Ukraine's publishing hub—the war has, paradoxically, fueled a resurgence in the book industry, the report said.
The war's impact on Kharkiv's publishing industry was starkly felt in May when a Russian missile destroyed Faktor-Druk, one of Europe's largest printing houses. The attack obliterated presses, incinerated 100,000 books, and disrupted three major publishers. Yet the devastation was met with resilience. European publishers offered to print Ukrainian books for refugees across the continent, while the Howard G. Buffett Foundation funded Faktor-Druk's reconstruction.
Kharkiv's publishers credit their survival to a mix of determination and a renewed enthusiasm for books among readers.
"Printing in Kharkiv is hanging on despite the daily attacks," said Yuliia Orlova, general director of Vivat Publishing. "The war has reminded Ukrainians that books are a source of joy, culture, and escape when other outlets are unavailable."
Still, Orlova acknowledges the toll of the war on the workforce. Many workers face mental strain from the destruction, and many men have been conscripted, leaving gaps in the labor force.
The war has dramatically reshaped Ukraine's publishing landscape. Since 2022, the number of registered publishers has plummeted from 1,600 to 150, mostly affecting smaller, specialized publishers, according to the report. However, the number of books printed has risen by 70%, a phenomenon driven by war-related power outages and reduced internet access, which have pushed people back to physical books.
One major trend in the market is "fantasy romance," a genre offering an emotional outlet for readers grappling with the personal toll of war. Disrupted lives, conscription, and the loss of loved ones have made stories of love and escape especially appealing, said Orlova.
In 2023, Savchuk opened a "Book Strongroom," a combination bookstore, event space, and bomb shelter. It offers a safe place for people to explore Ukrainian books and culture. Among the titles are works on Ukrainian folk art, biographies of notable architects, and tributes to lost wooden churches. While Savchuk regrets that it took a tragic invasion to awaken this interest, he finds solace in seeing Ukrainians reconnect with their cultural identity.
"For years, I struggled to show people their history and culture," Savchuk told The Christian Science Monitor. "Now, I see this return to books, and it makes me proud to be part of it."
Ugo Bardi: West shouldn't completely rely on Trump to solve Ukraine crisis
The war in Ukraine has exposed significant flaws in Western decision-making and strategy, as described by former diplomat Aurélien, who argued that the West's approach is mired in the "sunk costs" phenomenon, where leaders double down on existing actions to avoid admitting mistakes, Ugo Bardi, a professor of physical chemistry at the University of Florence, wrote in an op-ed.
Compounding this issue are groupthink dynamics, fear of dissent, and the absence of a clear alternative strategy. This has left NATO and Western nations relying on ad hoc measures and vague aspirations, with no coherent plan for Ukraine. While Donald Trump could potentially use his outsider status to chart a new course for Ukraine, Aurélien cautions against over-relying on any one leader, Bardi wrote. Instead, he emphasizes the need for bold, collective action.
Reuters: Europe forced to take careful approach to Trump amid Ukraine war
Europe's weakness, both militarily and economically, forces it to tread carefully with Donald Trump, especially as the war in Ukraine rages on, as without US support, Europe cannot adequately defend Ukraine or deter Russian aggression, Reuters columnist Hugo Dixon wrote in an op-ed.
To address this, Europe must boost defense spending, mobilize frozen Russian assets, and invest in NATO commitments, even relying on US arms as a stopgap, according to Dixon. At the same time, avoiding direct confrontation with Trump is crucial to prevent further destabilization, particularly as Europe remains divided and dependent on American protection.
Al Jazeera: Ukraine's draft rates are insufficient amid disconnect between government and population
Despite passing a mobilization law and lowering medical standards, recruitment of soldiers in Ukraine remains insufficient as reflected in polling and high rates of draft evasion, underscoring a deep sociopolitical disconnect between the government and the population, Peter Korotaev, an independent journalist, and Volodymyr Ishchenko, a research associate at the Institute for East European Studies at the Freie Universität Berlin, wrote in an op-ed for Al Jazeera.
Many Ukrainians, burdened by a legacy of weak state support and unequal wartime sacrifices, question the state's ability to demand further sacrifices for a war they increasingly view as distant from their own struggles, the authors wrote. This disconnect has only grown sharper as class divides deepen and stories of corruption among officials proliferate. While the rural poor bear the brunt of forced conscription, urban elites often evade service while promoting patriotic narratives.
Moscow uses subsidized mortgages to resettle occupied Ukrainian territories, CEPA report says
Moscow has introduced subsidized mortgage programs in occupied Ukrainian territories to incentivize Russians to "colonize" annexed areas, offering 2% interest rates to select groups, according to a report by the Center for European Policy Analysis (CEPA).
The program was initially launched in Crimea in 2019, requiring applicants to use Russian institutions to circumvent Western sanctions. After the full-scale invasion of Ukraine, the program expanded to other occupied territories, including Luhansk, Donetsk, Kherson and Zaporizhzhia.
Russia has set up a portal for the program, which makes loans only available for properties in occupied Ukrainian regions, CEPA said. The loans for new properties are available to all Russian citizens, while those for resale are reportedly limited to Putin's "special military operation" and their families.
At least four major Russian banks — VTB, Sberbank, Promsvyazbank, and Rostfinance — are operating in these territories. The offered interest rates of 2% is significantly lower than Russia's 21% benchmark, which reflects the countries economic challenges amid rising inflation.
In March 2024, the program was further expanded to include resale properties for certain eligible groups.
"This kind of mortgage program is also available in places like Chukotka, in Russia’s Far East," said Petro Andriushchenko, advisor to the exiled Ukrainian mayor of Mariupol. "So they have a choice: 2% in Mariupol or 2% in Chukotka. It seems the decision is obvious to everyone," he added.
Mariupol gained importance after the partial loss of functionality of the Kerch Bridge. The city fills the need for a land corridor that Russia could use as a logistics hub, hence the government encouraged people to invest there.
"When the Kerch Bridge lost its capacity, they changed their plans, and that’s when the restoration of Mariupol, so to speak, began," Andriushchenko said. "If it hadn’t been for that, I’m sure nothing would have happened to it, and they wouldn’t have spent anything on it."
The program is reportedly part of a broader strategy by Russia to replace local populations with Russian citizens. Ukrainians who remain in occupied territories and obtain Russian passports reported being excluded from the program and receiving inadequate compensation for destroyed homes.
"As compensation for their destroyed homes, people are offered just over $20,000," Ukrainian journalist Denis Kazanksy explained, clarifying that the amount of money is not sufficient to buy a decent apartment in neither Russia nor Ukraine.
Property confiscation persists, with residents given 30 days to re-register or risk "nationalization" into communal ownership, as highlighted by Yurii Sobolevskii, first deputy head of Ukraine’s Kherson Oblast Council. Meanwhile, Russian businesses and officials are increasingly moving into these areas, often under state orders or for personal profit, he added.
JETRO visit to Lviv
Tomohiro Yoden, deputy director general of the Ukraine team of JETRO, the Japan External Trade Organization, posted that he just started a brief visit to Lviv, his first since 2019.
"Over the course of just one and a half days, we will be engaging in more than 10 appointments, carefully arranged by the wonderful teams at Lviv city council and Lviv Investment Office," he said.
New Labelling Law for Medicine
Borys Danevych, head of CEE Life Sciences & Health Care at international law firm CMS, promoted a legal alert about new labelling requirements for medicinal products took effect in Ukraine on Jan 18.
"In our legal alert, we provide crucial practical details based on official interpretations from the Ministry of Health of Ukraine and the Quality Inspectorate, along with insights into expected further regulatory amendments by MOH."
Legal Advice to Ukrnafta
Ukrainian law firm Avellum posted that it was the adviser to oil producer Ukrnafta in obtaining approval of the Antimonopoly Committee of Ukraine to acquire a network of Shell gas stations in Ukraine.
Ukrnafta said last week that it received regulatory approvals to acquire a 51% stake in Alliance Holding, which owns a network of gas stations under the Shell brand in Ukraine. The network includes 118 operating gas stations and other properties.
Legal Advice to KNDS
Ukrainian law firm Avellum posted that it served as adviser to German-French defense contractor KNDS in the recently announced formation of a joint venture with a Ukrainian partner to maintain and refurbish Gepard, self-propelled air defence systems.
"The scope of the advice included the structuring of the joint venture, the development of corporate governance rules, merger control, tax and customs and corporate law issues," the law firm said.
Clinical Trials Increasing in Ukraine
The Clinical Trials Subcommitee of the Ukraine-based European Business Association recapped a meeting it held on Jan 16 with Edem Adamov, deputy minister of health, and representatives of the State Expert Center of the Ministry of Health of Ukraine.
"Among the key trends for 2024, they noted an increase in the number of approved CTs by 1.87 times ... they spoke about plans for 2025, in particular, to increase the number of clinical trials to the pre-war level."
URN Daily: Sense Bank and Ukrgasbank for sale? And US seeks to cancel $4.7 billion of Ukraine's debt
