FirstFT: Ukraine calls for financial support to ensure ‘survival’

Ukraine’s finance minister has made an appeal for immediate financial support of tens of billions of dollars to plug a gaping fiscal deficit caused by the Russian invasion.

Government spending exceeded revenues by about $2.7bn in March and Ukraine expects the gap to expand to $5bn-$7bn a month in April and May because of the war. Ukraine’s gross domestic product was worth $164bn in 2021.

“We are under great stress, in the very worst [financial] condition,” Sergii Marchenko said in an interview with the Financial Times. “Now it is a question of the survival of our country.”

Meanwhile, signs that Russia is nearing a significant new offensive in eastern Ukraine have mounted as US defence officials reported that troops withdrawn from Kyiv and the surrounding areas were being resupplied and reinforced by the Kremlin for redeployment in the Donbas region.

Although Ukrainian officials have reported escalating Russian bombing in the region already — including last week’s strike on the railway station in Kramatorsk that killed more than 50 civilians — a senior Pentagon official said the US did not believe “a new offensive has started”.

As civilians flee, Ukrainian and Russian forces are moving in the other direction as they converge on the Donbas for what threatens to be the bloodiest fight of a war that is now in its seventh week.

More from Ukraine:

• Energy: US president Joe Biden discussed India’s energy purchases from Russia with India prime minister Narendra Modi as Washington pressed New Delhi to take a tougher stance on Russia over the war in Ukraine.

• Austria: Chancellor Karl Nehammer said he had “no positive impression” of his talks with Russia president Vladimir Putin, after a last-ditch trip to Moscow yesterday to try to broker an end to the country’s invasion of Ukraine.

• Banking: Société Générale will take a €3.1bn hit after agreeing to exit Russia by selling Rosbank to an investment company founded by billionaire Vladimir Potanin.

• Saving Kyiv: Ukrainian forces won the battle for the country’s capital with the help of low-tech equipment such as gym mats that blocked thermal imaging, and Russian mistakes including failing to knock out Kyiv’s air defences.

• The making of an autocrat: On a visit to New York in 2003, Vladimir Putin pitched himself to investors as an economic reformer willing to engage western capitalists. But power and success changed him, writes Ruchir Sharma.

Thanks for reading FirstFT Asia. Have feedback on today’s newsletter? Send it to firstft@ft.com — Emily.

Five more stories in the news

1. Shanghai unveils limited easing of Covid lockdown The city yesterday unveiled plans for a limited easing of its strict coronavirus lockdown, as economic and social pressures mounted. The Chinese financial and industrial centre will divide compounds into three risk categories, with several thousand to have their lockdowns lifted if they report no cases for a two-week period.

2. Elon Musk reverses decision on Twitter board Tesla boss Elon Musk will not join Twitter’s board of directors, reversing course just days after he became its biggest shareholder and was offered the seat. Parag Agrawal, the social media company’s chief executive, tweeted that Musk, who was due to be officially appointed to the board on Saturday, would no longer do so. Agrawal did not give any more details. 

3. Pakistan’s parliament appoint new PM Pakistani lawmakers have voted to install opposition leader Shehbaz Sharif as prime minister, less than 48 hours after Imran Khan lost the premiership in a vote of no confidence early on Sunday.

4. China approves new online games for first time in nearly a year Chinese regulators have approved new online games for the first time in nine months, in the first signs the government was easing its crackdown on the previously buoyant sector.

5. Macron and Le Pen begin final sprint in French run-off Emmanuel Macron has started a frantic hunt for working-class votes in an attempt to ensure victory over far-right rival Marine Le Pen in the second and final round of the country’s presidential election on April 24.

• Opinion: We need to think about a Le Pen presidency, writes Gideon Rachman. France’s far-right candidate could still defeat Macron, plunging Nato and the EU into turmoil.

The day ahead

India economic data February industrial production figures are due, as well as March’s consumer price index data.

Cosmonautics Day Today marks 61 years since Yuri Gagarin conducted the first human space flight on April 12, 1961.

EU Equal Pay Day Today marks the day of the year up to which women need to work in order to earn the same salary as men during a full year of work

What else we’re reading and listening to

The Chinese companies trying to buy strategic islands Small businesses from China have scoured the globe for important strips of land. In dozens of cases examined by the Financial Times, mostly little-known Chinese investors have proposed taking long leases or have tried to buy large chunks of land, often in sensitive locations.

Tech Tonic: Chips with everything In this week’s episode of podcast we have a detailed look into the semiconductor industry and Taiwan’s unique position as a bastion of computer-chip talent. James Kynge, the FT’s global China editor, looks into the unintended consequences of the race for semiconductor dominance. 

FT interview with Seoul’s mayor Oh Se-hoon, the mayor of Seoul, has admitted that South Korea’s reputation for opaque and heavy-handed regulation has hampered the city’s ability to lure business and investors quitting Hong Kong. Read the full interview here.

Sibling rivalries, spousal squabbles — it’s great to be back in the office You can pick your friends but not your family, goes the saying. So too with work. Unless you own the company, you rarely get to choose your colleagues, writes Emma Jacobs.

India just signed a trade deal — really India has signed a trade deal. This is not a drill. Repeat: India has signed a trade deal, writes Alan Beattie in his Trade Secrets newsletter This is not a drill. OK, so the deal, with Australia, is only an interim agreement, but the signed preferential deal, with a developed economy, is the first of its kind for India in more than a decade.

Your feedback

Thanks to readers who responded with their thoughts about John Lee entering the race to succeed Carrie Lam as Hong Kong’s next chief executive. Here’s what two FirstFT Asia readers in Hong Kong had to say. (Both preferred to remain anonymous for safety reasons.)

“The celebration of getting rid of Carrie Lam was very short lived when people saw who the replacement will be. It’s also worth noting that almost everyone I have spoken to in the international community are saying this will be an accelerator for them leaving Hong Kong.”

“As a long time resident of Hong Kong, I am hardly surprised by this development. It is part of the Chinese Communist party’s ‘long game’ takeover of Hong Kong. The Party allowed the incompetent Carrie Lam to remain in charge and reduce one of the world’s great cities to a laughing stock.”