AGP Executive Report

IDP Policy: Ukraine’s Cabinet approved a State Policy Strategy on internal displacement through 2030, aiming to create one continuous support pathway from displacement to integration or return, with a coordination platform and a unified digital support system. Ukraine-Russia Energy War: Ukraine’s long-range strikes hit Russian oil and gas infrastructure, including a maritime terminal in Krasnodar where a drone attack killed one and injured three, while Russia also reported attacks on energy sites in Volgograd. Debt & Aid Flows: Ukraine paid $2.84bn to creditors and received $6.03bn from Western allies and financial institutions since Jan 1, with repayments and IMF-related transfers standing out. G7 Diplomacy: US President Trump will join a G7 working session with Zelensky in France, with no scheduled one-on-one meeting, as Ukraine seeks continued military funding. Security Case: SBU said it documented a Russian intelligence officer who recruited Ukrainian children for sabotage in Odesa, including attacks on military vehicles and Ukrzaliznytsia facilities. Global Finance Watch: A report claims offshore owners are illegally dodging Scotland’s land control registry, raising fraud and money-laundering concerns. Tech & Sanctions: Anthropic suspended access to new AI models for foreign nationals after a US directive, reigniting debate in India over reliance on US-controlled AI.

Ukraine-Russia Strikes: Russia hit Ukrainian cities and markets with 118 drones overnight; Ukraine said it intercepted 110, but attacks still killed at least 8 and injured 62, including strikes on Dnipropetrovsk and Sumy. Energy & Trade Pressure: Ukraine’s drone campaign also targeted Russian fuel infrastructure, damaging tanks and loading gantries at the Tamanneftegaz terminal in Krasnodar, while separate strikes hit oil facilities in Volgograd. Frontline Support: Prime Minister Yulia Svyrydenko said the government is preparing additional subsidies for frontline communities to keep schools, hospitals, businesses and utilities running for 6+ million people across 216 communities. Sanctions & Telecom: Zelensky imposed sanctions on 10 Russian mobile operators and internet providers used to spread narratives and provide connectivity in occupied areas. IMF & Macroeconomy: The IMF agreed a $690m disbursement for Ukraine (pending board approval) while forecasting 2026 GDP growth slowing to 1–1.6%. G7 Diplomacy: Ahead of the G7 in France, US officials said Trump will meet Middle East leaders and take part in a working session with Zelensky, with supply-chain resilience and critical minerals on the agenda. Defense Industry Push: Ukraine and European partners signed nearly 20 joint defense production agreements, while Dutch Task Force Ukraine highlighted faster delivery of unmanned systems and drone-focused cooperation.

IMF Deal: Ukraine’s IMF program review is moving forward: staff reached agreement on a $690M tranche under the EFF, pending board approval, with end-March targets met but some reform benchmarks delayed. EU Accession Push: EU member states greenlit opening the first accession negotiation cluster with Ukraine and Moldova, starting June 15, focused on rule-of-law and core EU fundamentals. Defense Funding Race: Kyiv is preparing to ask allies for an extra $20B to sustain long-range strikes and protect its medium-range drone edge, as battlefield momentum depends on production and crews. Army Pay & Manpower: Zelenskyy confirmed higher military wages (basic up by one-third to 30,000 hryvnias) and new fixed-term contract rules, alongside plans to recruit more foreign fighters. Energy & Markets: ECB raised rates by 0.25 point to 2.25% as Middle East-linked energy shocks feed inflation; euro area growth forecasts were cut and risks tilted toward weaker activity. Ukraine-Russia Strikes: Overnight drone exchanges hit oil and petrochemical assets in Russia and rail/electrical infrastructure in Ukraine, with Kyiv targeting refineries and Moscow warning of intensified infrastructure attacks. Defense Industry Deals: Ukraine signed nearly 20 joint defense production agreements with European partners, aiming to localize components and plug into EU supply chains.

Ukraine-UK Diplomatic Friction: Zelensky criticized Reform UK councils for removing Ukrainian flags from British civic buildings, warning it could “break a big friendship” despite the UK’s $26.7B aid since 2022. IMF & Fiscal Leverage: The IMF agreed to release nearly $700M to Ukraine after allowing a delay on parcel-tax implementation, pushing the deadline to July while the next program review is set for September. Defense Pay & Manpower: Zelensky announced higher military wages—30,000 hryvnias for rear roles and ~300,000 for frontline infantry—plus fixed-term contracts and a push to recruit more foreign fighters. AI-Driven Warfare: Ukraine’s Defense AI chief says AI will create a “war of operating systems,” linking battlefield data and speeding decisions. Defense Industry Deals: Skyfall signed a strategic partnership with Airbus Defense and Space to strengthen air defense against drones and missiles. Ukraine’s Drone Pressure on Russia: Putin said Ukraine’s strikes damage Russia’s economy but Moscow is “recovering quickly,” as attacks continue to hit oil and energy infrastructure. Corruption Probe: NABU searched Ukraine’s State Financial Monitoring Service over alleged embezzlement tied to its head, Filip Pronin.

Crimea Fuel Crunch: Ukrainian drone strikes on Russian refineries, depots and pipelines have triggered Crimea’s worst fuel crisis since 2014, with stations running dry and rationing queues growing. Long-Range Drone Pressure: Kyiv also claims strikes hundreds of kilometers deep, hitting petrochemical and logistics targets, including in Russia’s Samara and Tatarstan regions. EU Money & Rates: The ECB resumed rate hikes, lifting borrowing costs to 2.25% as energy shocks from the Middle East feed eurozone inflation fears—raising pressure on households and financing conditions. Ukraine Defense Budget & Tech: Ukraine’s defense spending is set to rise to a record level, while the MoD says AI is improving “middle strike” targeting to cripple Russian logistics. Sanctions & Finance: Russia downplays new EU bank sanctions, while Ukraine’s push to disrupt Russian energy exports continues as crude shipments from western ports fall. Business & Commerce: Kyivstar’s Uklon expands into in-app commerce with Uklon Store, adding delivery-based marketplace shopping for everyday goods. G7 Agenda: The Evian G7 summit will put Ukraine, AI and global economic imbalances on the agenda.

Drone Campaign & Crimea Fuel Squeeze: Ukraine’s Unmanned Systems Forces commander “Madyar” says strikes are cutting traffic on the Novorossiysk highway by more than two-thirds and aim to fully isolate Crimea within a month, with fuel rationing already reported. Deep-Strike Impact on Russia’s Economy: Analysts say Ukraine’s long-range attacks are eroding Russia’s war-making capacity by hitting industrial systems, not just front-line targets. Energy Pressure & Export Strain: Reuters reports Russia is reducing crude exports from western ports to about 1.7m bpd in June (from 2.5m in May) as drone attacks disrupt infrastructure and output. Air Defense Deal-Making: Ukraine and France are prioritizing radar procurement and Aster-30 missile supply, plus anti-ballistic cooperation and possible localization of French production in Ukraine. AI for Defense: Ukraine’s Defense Ministry says 100+ firms are using Brave1 Dataroom with real battlefield data to train AI for drone detection and interception. EU Money & Politics: Germany proposes redirecting €6.6bn from the European Peace Fund to Ukraine; Poland says it will fight for every euro and wants compensation for weapons sent. Monetary Policy Watch: The ECB raised rates by 0.25pp to 2.25%—a move that could lift borrowing costs across the euro area. Local Cost Relief: Kyivteploenergo recalculated January heating bills, cutting costs by about 40% for most customers after shelling disruptions. EU Integration Signal: Rada’s EU integration committee head says Merz’s “associate member” idea is constructive if it doesn’t replace full EU membership. Court Delays in Medical Case: Odrex doctors’ trial in Odesa faces further postponement due to lawyer absences.

Long-Range Strikes & Energy Pressure: Ukraine hit deep inside Russia with FP-5 “Flamingo” missiles, targeting a drone/missile component plant in Cheboksary and damaging refineries and oil infrastructure in Samara and Vladimir regions, while Russia said it intercepted 326 drones overnight. Oil Market Strain: Reuters calculations say Russia’s western crude exports fell to about 1.7m bpd in June from 2.5m in May, as drone attacks, fuel shortages and lower output bite. Defense Tech & Batteries: 1414 Degrees is moving SiNTL battery tech into Ukraine via a test deal with government-approved drone maker Energia 2000, aiming to scale UAV production. EU Funding Fight: EU states are disputing the unblocked €6.6bn European Peace Facility—Germany wants more to go to new aid, while Poland demands full reimbursement for past weapons. Sanctions & Diplomacy: The U.S. business lobby argues more Russia sanctions won’t end the war, as Washington debates new measures and oil waiver policy. Ukraine Industry: Ukrmetallurgprom reports May steel output rose, with rolled steel up 16.7% month-on-month, though war disruptions keep volumes below last year. Regional Trade: The EU and South Korea signed a digital trade deal to cut costs and ease cross-border data and e-contracts.

Ukraine-Russia Energy Pressure: Reuters calculations say Russia cut western crude exports to ~1.7m bpd in June (from ~2.5m in May) as Ukrainian drone strikes hit oil infrastructure, while domestic fuel shortages and weaker output bite. Defense Innovation & Production: Bundeswehr says Ukraine is leading defense innovation and is studying Ukraine’s Delta digital system; a Ukrainian expert argues Ukraine could make “dozens” of ballistic missiles per month. Frontline Tech Scaling: Ukraine’s Robot Army logged 50,000+ logistics and medical evacuation missions this year, with monthly missions rising sharply. Long-Range Strikes on Russia’s Supply Chain: FP-5 “Flamingo” cruise missiles reportedly hit Russia’s VNIIR-Progress plant in Cheboksary, tied to drone and missile navigation components. Logistics Lockdown: Ukraine’s mid-range drone campaign targets Russian supply routes and rail corridors behind the front. Business & Energy Deals: Naftogaz booked first long-term LNG terminal capacity in Europe (Klaipėda) through 2044. EU Policy & Diplomacy: Ireland’s EU presidency priorities include support for Ukraine and protecting children online; EU-South Korea digital trade talks also advanced. Regional Shock to Trade/Shipping: A suspected Ukrainian maritime drone exploded near Romania’s Constanta port, triggering evacuations and a code red. Bulgaria Policy Shift: Bulgaria’s PM says it will end weapons transfers to Ukraine, while Kyiv insists cooperation with Bulgarian defense firms remains commercial.

EU Sanctions Push: EU unveiled its 21st Russia sanctions package, with new pressure on banks, weapons makers, oil traders/refineries and crypto operators, plus a ban on entry for former Russian combatants. Ukraine Aid Flow: The EU plans to disburse the first €9.1bn tranche under the 90bn Ukraine loan, with €5.9bn for defense (including drones) and €3.2bn for budget support, alongside another €2.8bn under the Ukraine Facility. Energy Strategy: Ukraine’s energy minister Denys Shmyhal met the World Bank to shape an updated energy strategy, focusing on energy security, reforms, and investment, with nuclear as the base and digitalization/dispatching as key tools. Drone Tech & Regional Security: Zelensky met Nordic and Baltic leaders in Tallinn, offering Ukraine’s drone expertise to help allies shoot down drones more cheaply; Norway also moves to support Ukraine’s Black Sea corridor with maritime drones. Frontline Reality Check: A Ukrainian drone attack reportedly hit a Russian oil refinery in Samara, while Crimea’s fuel and transport infrastructure continues to face strikes and disruptions. Business & Finance: ING launched a global subscription banking model across nine retail markets, and new research says European firms are leaning heavily on digital risk tools as supply shortages persist.

EU Sanctions: The European Commission unveiled its 21st Russia package, including a proposed entry ban for anyone who served in the Russian Armed Forces since the 2022 invasion, plus new restrictions aimed at Russia’s banks, industrial sectors, “shadow fleet” shipping, and drone-related supply chains. Maritime Drones: Norway approved about €109m (NOK 1.2bn) for Ukraine maritime drone development and procurement to protect the Black Sea export corridor; the funding supports Norwegian-Ukrainian industrial delivery targets. Energy Finance: Naftogaz reached an in-principle deal to extend EUR 1.2bn eurobond maturities to 2032–2033, citing heavy strike pressure on gas infrastructure. Power Market Reform: Ukraine’s renewable energy lobby urged tariff changes for Ukrenergo alongside targeted support for vulnerable consumers to reduce cross-subsidies. Defense Deals: Ukraine and Latvia signed a new drone deal in Tallinn focused on joint production and integrated air defense cooperation. War Economy Signals: ArmyInform estimated Russian equipment losses at $331m in 24 hours, with drones the biggest share. Business & Travel: Ukrzaliznytsia’s summer schedule starts June 28 with added and extended routes to popular vacation regions, including longer flagship service to Rakhiv.

EU Aid & Sanctions: The EU says the €90bn Ukraine loan is ready to roll out, with the first €5.9bn tranche earmarked for drones, while Kaja Kallas flagged 80+ new sanctions aimed at Russia’s “war economy” and military-industrial complex. Deep-Strike Economics: Ukraine hit oil facilities in Russia and occupied Crimea, as Moscow acknowledged fuel-supply problems after attacks and reported drone interceptions overnight. Drone War Tech: F-Drones launched the LITAVR interceptor, designed for more autonomous target finalization and reduced reliance on foreign components. Diplomacy Signals: Zelensky confirmed Roman Abramovich carried messages between Kyiv and Moscow and offered to relay a reply to Putin, as peace talks remain stalled. Frontline Claims: Ukraine’s top commander said Kyiv forces have recaptured over 600 sq km in 2026, with the situation described as difficult but dynamic. Energy Security: Serbia and Ukraine met gas storage targets ahead of winter, improving regional supply resilience. Business & Finance Watch: A Ukrainian bank is pushing to enforce a $1.1bn arbitral award against Russia, while analysts warn risks for the Moscow Exchange if the index slips below 2500.

EU Funding Push: Ukraine received the seventh €2.8bn tranche under the Ukraine Facility, with €2.6bn net to the state budget after advance repayments, tied to 11 reform indicators across public administration, energy, digitalization and the rule of law. Anti-Corruption Clampdown: Prosecutors say former Supreme Court chief Vsevolod Kniaziev will serve five years in prison under a plea deal over a $2.7m bribe, with confiscations and a $1.1m military donation. Private Air Defense Rollout: The Defense Ministry launched a pilot allowing 30 companies to get authorized status to run air-defense groups; some already downed 20+ Shahed/Zala drones under Air Force command. Business Rules for Reservists: New reservation rules mean one employee can count toward only one critical enterprise quota, and reserved pay thresholds rise from Sept 1, 2026. Higher-Education Restructuring: The education ministry warns 116 universities are excessive and points to gradual mergers. Defense Tech & Drones: Ukraine tested a European-made GPS-free drone navigation module (Osiris) over 3,000km, while FP-1 long-range strikes hit Russian UAV-related infrastructure near Protasovo. Ukraine-Russia Talks Stalemate: Zelensky’s ceasefire/direct talks proposal was rejected by Putin as fighting continues.

Ukraine–EU Security Talks: Zelensky met UK PM Starmer in London with Macron and Merz, with leaders stressing the “urgent need” to scale up interceptor and deep-strike production and push for an “immediate and complete ceasefire” as a basis for talks. Backchannel Diplomacy: Zelensky said Russian oligarch Roman Abramovich visited Kyiv to pass a message to Putin, with Kyiv reiterating no territorial concessions on Donbas and linking any compromise to a ceasefire. Ceasefire Freeze Debate: Zelensky told Sky News he would support freezing current front lines as the quickest route to a ceasefire that moves into diplomacy. War Economy & Financing: EBRD said external financing remains critical for Ukraine, citing €10bn provided so far and exploring guarantees to make more projects bankable. Drone Strikes & Energy Risk: Ukraine’s long-range drone campaign hit St Petersburg during SPIEF, targeting oil and naval facilities; Russia claimed hundreds of drones intercepted as residents were told to shelter. Business & Mobility: Kyivstar’s Uklon agreed to buy electric scooter operator E-wings for UAH 97.6m, aiming to fold micromobility into its app. Markets: ECB is expected to hike rates as the Iran conflict lifts energy-driven inflation, while precious metals sold off amid stronger US jobs data. Regional Trade Note: Iraq’s imports fell sharply in 2025, linked to tighter central bank compliance and lower oil prices.

Nuclear Safety Under Fire: A Russian Shahed drone hit Ukraine’s Centralized Spent Nuclear Fuel Storage Facility near Chornobyl, partially destroying the fuel reception building; Energoatom says radiation stayed within normal limits and the IAEA plans an on-site assessment. Diplomatic Push: Zelensky is set to meet UK PM Starmer, France’s Macron and Germany’s Merz in London as Kyiv says Putin missed a chance for direct talks. Deep-Strike Pressure on Russia: Ukraine’s drones and Special Operations hit fuel infrastructure around St. Petersburg and in occupied Crimea, including an oil depot and a Feodosia terminal, aiming to cut Moscow’s logistics. War Economy Signals: SIPRI data highlights Ukraine as the world’s most “militarized” economy by defense spending share of GDP, underscoring heavy reliance on external support. EU Politics & Refugees: EU debate is heating up over whether military-aged Ukrainians should be excluded from temporary protection as the scheme nears renewal deadlines.

Drone Diplomacy Meets Economic Pressure: Ukraine launched a “large-scale” wave of hundreds of drones against Russia’s St. Petersburg and nearby Kronstadt as the city hosted the final day of Putin’s SPIEF, with Russian officials saying 141 drones were shot down over the Leningrad region and 376 across multiple regions; St. Petersburg’s governor urged residents to stay indoors and warned of possible mobile internet disruptions, while Ukraine said it hit the navy’s arsenals and a base in Kronstadt and also struck an oil depot in Krasnodar. Talks Standoff: The strikes followed Putin’s rejection of Zelensky’s call for face-to-face talks, while Zelensky framed the attacks as a “just response” to Russian aggression. Western Support Signals: In parallel, the U.S. House advanced an $8bn Ukraine security aid package with loans for U.S. military equipment plus longer-term assistance and new Russia sanctions, and the UK said Keir Starmer will host Zelensky with Macron and Merz in London to coordinate support and pressure on Russia. Energy & Trade Ripples: Separately, market coverage warned LNG supply tightness could return as seasonal demand rises, while the UAE participated in the EBRD board meeting in Riga, highlighting the wider economic stakes of regional conflict. EU Politics & Controversy: EU lawmakers demanded Zelensky be stripped of the bloc’s top award over his decree naming a unit tied to the WWII-era UPA, arguing it glorifies genocide and ethnic cleansing. Sanctions/Corporate Energy Deal: The U.S. granted MOL more time to negotiate the purchase of a majority stake in Russia-controlled Serbian oil firm NIS, extending talks amid divestment pressure.

US Congress & Sanctions: The U.S. House passed a bipartisan Ukraine security bill worth $8B+ in loans plus $300M in long-term aid, with new sanctions aimed at Russia’s energy and finance sectors; it now heads to the Senate after 18 Republicans backed Democrats. NATO Funding: Politico reports NATO allies are weighing a new €70B military aid package for Ukraine, with a transparency-focused mechanism likely to be discussed ahead of the Ankara summit. Drone War & Energy Pressure: Ukraine launched large-scale drone strikes on St. Petersburg and nearby targets as SPIEF wrapped, with residents told to stay indoors; Zelensky said drones hit naval arsenals and Kronstadt, while strikes also reached an oil depot in Russia’s Krasnodar region. Peace Talks Standoff: Foreign Minister Sybiha said Putin “lost his chance” by rejecting Zelensky’s call for direct talks, while Putin dismissed a meeting as having “no point.” Defense Innovation: Ukraine is testing a system that delivers high-resolution commercial satellite imagery to soldiers’ devices in about 15 minutes, cutting target identification and strike timing by nearly 90%. Labor Market Policy: Prime Minister Svyrydenko said attracting foreign labor is only an extra tool to ease Ukraine’s labor shortage, prioritizing returnees and support for youth, women, veterans, IDPs, and people with disabilities. Business & Markets Watch: Analysts warn the LNG market’s recent calm may be fragile as supply balances tighten and summer demand and storage competition approach.