Don's Weekly, 3 March 2025: Part 3

by Donald Hill

(…continued from Part 2…)

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Russia

Gold prices were high last year and Russia sold 46.4% of their gold reserves in 2024.

At least 40 explosions were heard during a single drone attack in Tuapse. One of Russia’s biggest refineries was reported damaged to some extent. Shrapnel damaged two ships at the port facilities in Tuapse. The Mumtaz Bey was carrying 25,000 tons of coal when its superstructure, bridge wing and portholes were damaged by shrapnel. And the diving boat of the Marine Rescue Service, Vodolaz 31, had to pump out water after being hit with shrapnel. Two military airfields were hit, as well.

At the beginning of the year, the Samara region was paying $40,000 to everyone who signed a contract. Officers and anyone renewing their contract will still receive that bonus but due to budgetary issues, all others will now only receive a $25,000 bonus for signing up.

NATO reconnaissance operations over the Black Sea are going on, flying its length and coming within 100 km of Tuapse.

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Ukraine

In the first ‘action’ related to the announced reorganisation of the ZSU, a total of 18 corps commanders have been appointed. Based on the commanders and the units they led, Militaryland identified the anchor units of these corps and the administrative corps that currently have no personnel assigned to them. The commander of the 92nd Brigade was not named despite earlier reports of that unit being an anchor brigade. The process continues without any reports on a timeline.

In three years, Ukraine uncovered 102 spy networks.

Russia has caused $524 billion worth of damage to Ukraine so far.

Ukraine produced 154 artillery systems in 2024, more than all of NATO.

On the first day of the open invasion, Ukraine was not prepared. There were plans to blow multiple bridges and slow the Russian advance down but the orders to do so were given late, many sappers were under fire as they tried to blow the bridges, not everyone was trained, and there were equipment failures. As a result, Russia was able to quickly cross many of the smaller bridges next to Crimea as well as the larger bridges across the Dnieper river 85 km away. This is the story of one Ukrainian Marine that made sure his bridge was blown.

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Diplomacy

A lot of words were spoken last week and many of those words were lies. The words the White House used were unimportant. They were a political show to provide cover for decisions that were already made. Trump is more interested in establishing a relationship with Russia than he is about stopping the fighting or protecting Ukraine. To that end, the terms of peace he would impose (if he could) favors Russia.

In Trump’s interactions with other nations, such as Canada, Mexico, Panama and Denmark, he uses America’s economic and implied military strength for intimidation purposes. In Ukraine, he sees a nation under siege that has significantly benefited from US aid. He doesn’t think in terms of national sovereignty, the rule of law or justice. He sees a victim that is more vulnerable to pressure and will apply that pressure to compel Ukraine to sacrifice its national objectives in order for Trump to develop a closer relationship with Putin.

For all the words that were spoken, it is the actions that matter. The actions taken last week included weapon shipments, sanction enforcement, aid for Ukraine’s energy grid, the end of cyber planning against Russia, and a change of command for the air defense of logistical bases in Poland.

To further his relationship with Russia, Trump said that any peace deal will leave both sides a little bit unhappy. They already said Ukraine will have to give up territory and won’t be allowed to enter NATO. They refuse to say what Russia might have to give up.

The US (and Israel, and that together with North Korea, Iran and similar) voted against a UN resolution backed by Europe that called Russia the aggressor and demanded an immediate withdrawal of Russian troops. Besides the US, Russia, Israel, Hungary, North Korea and Belarus, 13 other nations voted against the resolution, up from a total of seven in 2023. The US had their own competing resolution but abstained from voting on it after Europeans amended it to make clear Russia was the aggressor.

While sitting next to Trump, Macron not only says that Russia was the aggressor, he corrects Trump when Trump says Europe is loaning Ukraine the money. Trump responded by saying, “If you believe that, it’s ok with me.” On the next visit, Trump was sitting next to Starmer and he once again repeated a couple of lies of how much money the US gave and how Europe is getting their money back. Starmer corrected Trump on the lie about the loan. When Trump and Zelensky got together they were joined by Vance, who was not present when Macron and Starmer visited. You can draw your own conclusions of the spectacle. One of the concerns of Trump and Vance is that Zelensky didn’t say thank you enough times. After this event, Trump told the Ukrainians to leave. The Ukrainian delegation protested and wanted to continue the talks but were told that wouldn’t happen. A joint press conference and the signing of the rare earth minerals agreement was canceled. Zelensky canceled an appearance at the conservative Hudson Institute and later gave an interview on Fox.

Russian allies rejoiced.

Russia sent a new diplomat to the US as part of the thaw in relations with the US.

There are both pro- and anti-Ukrainian factions in Trump’s administration. The US briefly paused weapon shipments before resuming them a couple days later.

The nominee for the deputy secretary of defence knows that when you want to work for someone that lies about a simple fact, you can’t say that Russia invaded Ukraine.

Trump is extending Russian sanctions for another year but he might lift them at some point as part of the US-Russian negotiations. He says he may also increase sanctions to try and push Russia into negotiations.

When asked if he still considered Zelensky a dictator, Trump said, "Did I say that? I can't believe I said that. Next question." When asked on Feb. 24 whether he considers Putin a dictator, Trump avoided the question, saying, "I don't use those words lightly... I think we're going to see how it all works out."

Prior to Zelensky’s visit, the US ended a project to help restore Ukraine’s energy grid.

For decades, the White House Correspondents’ Association represented 60 news organizations that rotated reporters covering White House events. The White House decided to exclude news organizations that displeased it and chooses who is allowed in. A reporter for the Russian-owned TASS news organization was somehow in the White House to cover the Zelensky news conference. “TASS was not on the approved list of media for today’s pool,” a White House official told CNN in a statement. “As soon as it came to the attention of press office staff that he was in the Oval, he was escorted out by the Press Secretary.”

The US had provided the air defense for a key logistical hub in Poland that was supplying equipment to Ukraine. With the change in the administration last month, Germany deployed two Patriot systems to take over the air defense mission. The German ministers thanked the US for its “tireless commitment” on the ground.

US Defense Secretary Hegseth ordered US Cyber Command to halt the planning of digital operations against Russia. The order does not apply to the National Security Agency, as yet, and will remain in place for the foreseeable future. Russia conducted multiple offensive cyber operations against the US recently, including the 2023 breach of the SolarWinds systems that distributed malware to civilian and government organizations. This order does not support the US national interests and cannot be justified in any way.

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After his party won Germany’s election, Merz, a longtime supporter of NATO with strong ties to American businesses, recognized the present-day reality: “My absolute priority will be to strengthen Europe as quickly as possible so that, step by step, we can really achieve independence from the USA. I never thought I would have to say something like this on a television program. But after Donald Trump's statements last week at the latest, it is clear that the Americans, at least this part of the Americans, this administration, are largely indifferent to the fate of Europe.”

He envisioned other possible changes. “I am very curious to see how we are heading toward the NATO summit at the end of June," he said. "Whether we will still be talking about NATO in its current form or whether we will have to establish an independent European defense capability much more quickly."

"I am not sure what the American government's position on this war will be in the coming weeks and months. My impression over the last few days is that Russia and America are coming together here, over the heads of Ukraine and therefore also over the heads of Europe," Merz said.

France made an offer to Germany in 2007 to share its nuclear arsenal but that offer was rejected. In 2020, Macron proposed a nuclear deterrence plan that was focused on European goals independent of NATO, and Germany now has a greater interest in that plan. Britain’s nuclear arsenal currently protects European nations that are part of NATO. Its planning is tightly integrated with US planning and it is reluctant to disturb that relationship, but they are no doubt considering what a European nuclear deterrence program might mean for them.

Calin Georgescu is the far-right pro-Russian candidate that surprisingly finished first in a Romanian election that was voided for Russian interference. He was on his way to register as a candidate in the re-run of the election when he was arrested. Elon Musk wasn’t happy about it. While he was questioned, he was charged with incitement to acts against the constitutional order and other crimes related to false funding sources and false information. 40 homes and 27 individuals are under investigation for anti-constitutional actions, possession of illegal weapons caches, instigating racism, fascism and xenophobia and "promoting a cult of personality accused of genocide and war crimes".

Haltbakk Bunkers is a Norwegian company that provides fuel for commercial and military ships. They announced they will no longer fuel American naval vessels.

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Mineral Deal

This document was likely an opportunity for both the US and Ukraine to conclude negotiations without any actual action.

Putin said he’d allow the US access to rare earth metal’s in Ukraine’s occupied regions as part of a future deal. 70% of Ukraine’s mineral resources are located in Dnipropetrovsk and the Donbas, a large part of which is occupied by Russia. He also promises to supply 2 million tons of aluminum to the US once they begin trading again.

Trump insisted that the deal did not provide any military security guarantees. His secretary of the treasury said it was an economic security guarantee. The New York Times called it a memorandum of understanding with the details to be worked out later.

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Mustafa Nayyem is a native of Afghanistan who moved to Ukraine as a child, Nayyem previously served as a member of Ukraine's parliament from 2014 to 2019. He was appointed as the head of the Restoration and Infrastructure Development in January 2023. Here is his opinion:

The agreement between Ukraine and the United States on the creation of the Fund of the Restoration of Ukraine has undergone significant evolution. I've seen three versions of the document, and the latest edition is more balanced, profitable for Ukraine, and opens wide opportunities for addressing our long-term strategic interests.

1. EQUAL PARTNERSHIP INSTEAD OF EXTERNAL CONTROL

Previously, the Fund's structure provided that the United States would own the maximum possible share allowed by their legislation, while Ukraine only did its part without having any real control. In fact, key processes were controlled by the American side, which put Ukraine in a dependent position.

In the latest version of the deal, it changed: now Ukraine and the United States become equal partners, not just an investor and recipient of aid. This provides Ukraine equal rights in the management of the Fund, the opportunity to influence decision-making and protect national interests. Instead of unilateral control, the Fund is transforming into a joint mechanism that takes into account the economic priorities of both countries.

The governance process itself has changed: if previously US representatives had the dominant power to make decisions based on their legislation, now governance is truly joint. The American side no longer has an automatic advantage, and both countries are consolidating their right to maximize economic benefits from the Fund. This is extremely important, because now the Fund will not work exclusively in the interests of foreign investors, and its main goal remains the restoration of Ukraine on conditions that meet its national interests.

2. EXTENDED ASSET BASE FOR FUND FINANCING

Another important change was the clarification of financing sources. In previous versions of the agreement, it provided that Ukraine should transfer 50% of future revenues from natural resources - oil, gas, useful kopalines to the Fund. It looked like a kind of "crude tax" that Ukraine pays in exchange for investments.

The Fund's funding agreement has become more diversified. Now, it comes not only from resource extraction but also from strategic infrastructure, including LPG terminals, ports and other key facilities. This reduces dependence on natural resources and makes the Fund model more sustainable.

Importantly, Ukraine retains ownership of its natural resources without transferring them to US management or any other party. U.S. investment will be directed toward development, extraction and recycling, rather than resource possession.

3. PROTECTION OF THE ECONOMIC INTERESTS OF BOTH SIDES

In the previous versions, this issue was not even violated. The parties are now asserting the right to take measures to protect their investments. This means that Ukraine will be able to counter possible attempts to pressure the Fund, raider schemes or third country interference. In fact, this item protects the Fund from political and economic risks.

After several iterations, all sorrow limits mentioned in previous versions of the document have been removed, allowing any hint of debt to be avoided.

4. PREVENTION REGARDING SANCTIONS ABOLISHMENT

The sanctions clause has also undergone significant changes. Previously, the agreement only stated that the Fund should not violate sanctionary restrictions. Now the wording has become stricter: sanctions cannot be eased, the Fund cannot be used to circumvent them, and additional control mechanisms have been introduced.

Although the document does not specify what sanctions are in question, in the context of the agreement it can be assumed that these are sanctions against Russia and its affiliated entities. Thus, the Fund becomes a tool to support the sanctioned regime, disabling the use of gray schemes or illegal withdrawal of capital.

5. RATIFICATION OF THE AGREEMENT BY THE SUPREME COUNCIL

Previously, the agreement did not provide for mandatory ratification by Parliament, which left room for flexibility, but at the same time reduced the legal strength of the document. It is now subject to approval by the Supreme Council, making it part of the national legislation. This ensures that the Fund will work on a long-term basis, regardless of changes in the political context.

The irony of fate is that this agreement will face a difficult choice of those deputies who have for years resisted the participation of international partners in the management of state-owned companies, supervisory boards and the appointment of heads of state bodies.

6. GUARANTEE OF SAFETY

But apparently the most unexpected change was the inclusion of a security clause. If previously the agreement was only about the economy, then now the document states that "The United States government supports Ukraine's efforts to obtain the security guarantees necessary to establish lasting peace."

This is the only direct mention of security guarantees in the text of the agreement, but it has great political significance. Of course, this phrase isn't a legally binding military obligation, but it provides a new ground for future negotiations. Ukraine will now be able to refer to this agreement in its discussions with the United States and allies, stressing that maintaining security is the official position of the US government.

It is quite possible that this clause can be a prerequisite for a future bilateral security treaty between the United States and Ukraine, which will go beyond this investment document.

7. ACCORDABILITY OF THE AGREEMENT TO EU REQUIREMENTS

The agreement states that during the development of the Fund Agreement, the parties will seek to avoid contradictions with Ukraine's obligations within its entry into the European Union. This means that the Fund's mechanisms must comply with European standards of transparency, competition and management of public assets.

Ukraine must ensure that the structure of the Fund will not contradict EU legislation on controlling strategic assets, will not violate the principles of open competition and will not conflict with obligations to international financial institutions. Thus, after joining the EU, individual provisions of the Agreement may need adaptation.

THE MOST IMPORTANT THING ARE TO FOLLOW (i.e. WERE LEFT OUT)

The two latest versions of the agreement contain the provision that the key aspects of the management of the Fund will be defined in a separate document - Fund Agreement. Obviously, this allowed the parties to avoid delays in signing the main document without waiting for all mechanisms to be detailed.

However, in the Fund Agreement, which, by the way, is also subject to ratification by Parliament, will prescribe mechanisms for management, financing, distribution of funds and protection of economic interests of Ukraine. While this document is not signed, many uncertainties were left, but this provides an opportunity to flexibly discuss conditions and achieve the best solutions.

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(…to be concluded in the Part 4…)