Aurelia Butler

The White House said on Monday that Russia has defaulted on its international bonds for the first time since the Bolshevik revolution, as sweeping sanctions have effectively cut the country off from the global financial system.Until last week, Russia kept on paying on its Eurobonds in foreign currency as per issue conditions yet its dollar and euro coupon transfers made in May, ahead of a key U.S. waiver allowing for such transactions expired, did not reach investors. “Statements of a default are absolutely unjustified,” Kremlin spokesperson Dmitry Peskov told a call with reporters on Monday, pointing to the May forex coupon payment. “The fact that Euroclear withheld this money and did not bring it to the recipients is not our problem. There are absolutely no grounds to call such situation a default.” Euroclear did not immediately respond to a request for comment. On Monday, the finance ministry said that ‘actions of foreign financial intermediaries are beyond of the Russian finance ministry’s control,’ asking foreign bondholders to speak directly to those withholding the payments. “The non-receipt of money by investors did not occur because of lack of payment but due to the third party actions and which is not directly spelled out as a default situation by issue documentation,” the ministry added. As the U.S. waiver expired and the European Union sanctioned the National Settlement Depository (NSD), the Russian version of Euroclear and Clearstream western clearing houses, last week Moscow paid its next coupons due in forex in roubles. President Vladimir Putin ordered last week that debt obligations would be considered fulfilled once a rouble payment equal to the forex amount due was made. Bondholders would need to open an account at a Russian bank to receive the payment. Moscow would not block the payment’s conversion into forex and its transfer abroad but investors would need to say in writing they don’t have claims against Russia, the ministry has said. The banks are yet to be announced. ‘FINANCIAL NUCLEAR BOMB’ The Group of Seven major Western powers banned transactions with Russia’s central bank and froze its assets held in their jurisdictions, worth around $300 billion, after Russia launched what it called special military operation in Ukraine in February. Some western politicians have called to seize the reserves frozen to rebuild Ukraine – the idea two high-ranked Russian financial sources said they believed was behind the announcement of default and which Moscow considers artificial. “By announcing a default, they can claim that sanctions work. Economically, financially assets could be confiscated legally,” one of the two sources said. Peskov reiterated on Monday that reserves were blocked ‘unlawfully’ and any attempts to use them would ‘amount to outright theft.’ “I believe that a financial nuclear bomb was used against us, no country in the history of mankind has experienced such sanctions pressure as Russia is now,” Alexei Moiseev, Russian deputy finance minister, said last week. More

Culp will retain his responsibilities as the U.S. conglomerate’s chairman. The company last year announced it would break up into three companies focused on aviation, healthcare and energy.”The Board and I decided it is the right time for me to take on this expanded role,” Culp, who was named chief executive in 2018, said in a statement.GE also named Otis Worldwide (NYSE:OTIS) Corp executive Rahul Ghai as the aviation unit’s chief financial officer in place of Shane Wright, who is set to retire. More

Scores of Western brands have left Russia following a backlash against its military incursion into Ukraine, with McDonald’s (NYSE:MCD), IKEA and Renault (EPA:RENA) among the more high-profile. Others have reported struggles with logistics and supply chains amid Western economic and financial sanctions.One shopper, Lyubov, said Decathlon’s departure was “sad”, but was adamant that Russian consumers would cope. “We are flexible people, we will adapt,” she said. Another customer, Ivan said: “It really is a shame that it’s closed. As a climber, I’ll miss Decathlon, but what can you do? In principle, there are other things we can buy, but still, Decathlon will be missed.”Part of a retail empire owned by the Mulliez family, Decathlon imported most of the products sold in its 60 Russian stores. It announced in March that it was suspending operations as “the supply conditions are no longer met to continue … activity in Russia”.The stores closed in waves, and from Monday, Russian consumers were no longer be able to shop in store or online, the company’s local website said, although some branches stayed open for returns. The company’s repeated use of the word ‘temporary’ suggested that it may try to reopen stores when possible. On an FAQ page, it promised to save accrued loyalty points and let customers know when they could be used.Decathlon declined to offer further comment on Monday.The Mulliez family is also behind DIY retailer Leroy Merlin and food retailer Auchan, both of which remain open in Russia. In March, Decathlon said it would continue to support its 2,500 Russian staff, some of whom have been involved with the company since 2006. More

SCHLOSS ELMAU, Germany (Reuters) -The Group of Seven club of wealthy nations on Monday vowed to stand with Ukraine “for as long as it takes”, promising to tighten the squeeze on Russia’s finances with new sanctions that include a proposal to cap the price of Russian oil.The announcement came after Ukraine’s President Volodymyr Zelenskiy, addressing G7 leaders at their summit in the Bavarian Alps via a video link, asked for weapons and air defences to gain the upper hand in the war against Russia within months.The G7 statement aimed to signal that its members were ready to back Ukraine for the long haul, at a time when soaring inflation and energy shortages – fuelled by Russia’s invasion – have tested the West’s sanctions resolve.”We will continue to provide financial, humanitarian, military and diplomatic support and stand with Ukraine for as long as it takes,” the statement said.After missiles rained down on Kyiv on Sunday, U.S. National Security Advisor Jake Sullivan said the United States was readying a new weapons package for Ukraine that included long-range air defences and ammunition. “At the top of his mind was the set of missile strikes that took place in Kyiv and other cities across Ukraine and his desire to get additional air defence capabilities that could shoot down Russian missiles out of the sky,” Sullivan told reporters about Zelenskiy’s address.The G7 countries said they were ready to provide security commitments in a post-war settlement while stressing, after Ukraine had earlier voiced misgivings, that it was up to Kyiv to decide a future peace deal with Russia. The G7 countries said they had also pledged or were ready to grant up to $29.5 billion for Ukraine. TAKING AIM AT PUTIN’S REVENUESThe announcements came as the White House said Russia had defaulted on its foreign sovereign bonds for the first time in a century – an assertion Moscow rejected.G7 nations, which generate nearly half the world’s economic output, want to crank up pressure on Russia without stoking already soaring inflation that is causing strains at home and savaging the global south.The expanded sanctions would also target Russia’s revenue stream from gold exports, Moscow’s military production and officials installed by Moscow in areas of Ukraine occupied by Russian forces.Imposing the oil price cap aims to hit Russian President Vladimir Putin’s war chest while actually lowering energy prices.”The dual objectives of G7 leaders have been to take direct aim at Putin’s revenues, particularly through energy, but also to minimize the spillovers and the impact on the G7 economies and the rest of the world,” a U.S. official said on the sidelines of the G7 summit.Western sanctions have hit Russia’s economy hard and the new measures are aimed at further depriving the Kremlin of oil revenues. G7 countries would work with others – including India – to limit the revenues that Putin can continue to generate, the U.S. official said.India has refrained from criticising Russia and provided a market for Russian oil, gas and coal as it sought to balance longstanding ties with Moscow and relations with the West.While hosting the Indonesian president at the G7 summit, German Chancellor Olaf Scholz did not rule out boycotting the Group of Twenty summit in Indonesia in November if Putin attended. India’s Prime Minister Narendra Modi is one of the five leaders of guest nations joining the G7 for talks on climate change, energy, health, food security and gender equality on the second day of the summit.MORE SANCTIONSA U.S. official said news that Russia defaulted on its foreign sovereign bonds for the first time since the Bolshevik revolution in 1917 showed how effective Western sanctions have been.The Kremlin, which has the funds to make payments thanks to rich energy revenues, swiftly rejected the U.S. statement, accusing the West of driving it into an artificial default.The United States said it would also implement sanctions on hundreds of individuals and entities adding to the more than 1,000 already sanctioned, target companies in several countries and impose tariffs on hundreds of Russia products.The agencies involved would release details on Tuesday to minimize any flight risk, a second senior administration official said.The Ukraine crisis has detracted attention from another crisis – that of climate change – originally set to dominate the summit. Activists fear Western nations are watering down their climate ambitions as they scramble to find alternatives to Russian gas imports and rely more heavily on coal, a dirtier fossil fuel, instead.Japan is also pushing to remove a target for zero-emission vehicles from a G7 communique expected this week, according to a proposed draft seen by Reuters. More