Ukraine declares state of emergency and urges citizens to leave Russia

Washington targets gas pipeline with sanctions as UN General Assembly meets on crisis

Ukraine declared a state of emergency on Wednesday and told its citizens in Russia to flee, while Moscow began evacuating its Kyiv embassy in the latest ominous signs for Ukrainians who fear an all-out Russian military onslaught.

Shelling intensified at the line of contact in eastern Ukraine, where Russian president Vladimir Putin recognised the independence of two Moscow-backed rebel regions this week and has ordered the deployment of Russian troops as "peacekeepers".

But there was still no clear indication of whether he plans to follow that up with a massed assault on Ukraine involving the tens of thousands of troops he has gathered near his neighbour’s borders.

The uncertainty and a mostly incremental first volley of sanctions on Russian interests by Washington, Brussels and their allies have roiled financial markets.

Oil prices reversed earlier losses on Wednesday. However, global stocks broke a four-day slide and demand for safe-haven assets waned as Western leaders and Ukraine awaited Mr Putin’s next move.

"Predicting what might be the next step of Russia, the separatists or the personal decisions of the Russian president – I cannot say," Ukraine's president Volodymyr Zelenskiy said.

The 30-day state of emergency was approved by Ukraine’s parliament. It restricts the freedom of movement of conscripted reservists, curbs the media and imposes personal document checks, according to a draft text. The restrictions come into force from Thursday.

The Ukrainian government has also announced compulsory military service for all men of fighting age.

Cyber attacks

Ukrainian government and state websites, which have experienced outages in recent weeks blamed by Kyiv on cyber attacks, were again offline on Wednesday. Ukraine’s parliament, cabinet and foreign ministry websites were affected.

Moscow denies planning an invasion and has described warnings as anti-Russian hysteria. But it has taken no steps to withdraw the troops deployed along Ukraine’s frontiers.

On Wednesday, it took down flags from its embassy in Kyiv, having ordered its diplomats to evacuate for safety reasons.

Washington has described Russia’s actions as the start of an “invasion”, but along with allies has so far unveiled mostly incremental sanctions, while making clear they were keeping tougher measures in reserve in case of a full-scale invasion.

European Union sanctions approved on Wednesday will add all members of Russia's lower house of parliament who voted to recognise the separatist regions in Ukraine to a blacklist, freezing their assets and banning travel.

EU leaders will also hold an emergency summit on Thursday to discuss what to do next.

Britain announced restrictions banning Russia from the issuing of new bonds in its security markets, and called for its broadcasting regulator to investigate Russia’s RT international television news channel as a propaganda outlet.

"There will be even more tough sanctions on key oligarchs, on key organisations in Russia, limiting Russia's access to the financial markets, if there is a full scale invasion of Ukraine," British foreign secretary Liz Truss said.

On Wednesday, Washington announced sanctions targeting a major gas pipeline project from Russia. "Today, I have directed my administration to impose sanctions on Nord Stream 2 AG and its corporate officers," US president Joe Biden said, referring to the company building the pipeline. The White House said the sanctions do not affect former German chancellor Gerhard Schroeder, who has headed the shareholders' committee of Nord Stream since 2005.

The steps follow measures announced on Tuesday, including freezing the approval of the new gas pipeline by Germany and new US sanctions on Russian banks.

But none of the measures announced so far directly target Mr Putin himself, or are expected to have serious medium-term consequences for Moscow, which is sitting on more than $630 billion in international reserves. The rouble fell, but not by much.

At a meeting of the UN General Assembly on Ukraine on Wednesday, UN secretary general António Guterres said that an expanded conflict in Ukraine “could see a scale and severity of need unseen for many years”. Mr Guterres also said that Russian troops deployed to the separatist regions would not be “peacekeepers”.

Ukrainian foreign minister Dmytro Kuleba told the meeting that "no one will be able to sit out this crisis" if Mr Putin makes the situation worse. "Active diplomacy, strong political messages, tough economic sanctions and strengthening Ukraine can still force Moscow to abandon aggressive plans," he said.

Bloodiest war

Western countries have been warning for weeks about the possibility of the bloodiest war in Europe for decades. That has not materialised but the apparent threat remains, leaving policymakers to struggle with calibrating their response.

Ukraine’s military said one soldier had been killed and six wounded in increased shelling by pro-Russian separatists using heavy artillery, mortar bombs and Grad rocket systems in the two breakaway areas over the previous 24 hours.

Satellite imagery showed several fresh troop and equipment deployments in western Russia and more than 100 vehicles at a small airfield in southern Belarus, which borders Ukraine, according to US firm Maxar.

For months, Russia has presented the crisis mainly as a dispute with the West, demanding security guarantees, including a promise never to allow Ukraine to join Nato. But the recognition of the separatist regions was accompanied by much stronger language against Ukraine, including personally from Mr Putin.

He rambled across centuries of history in a televised address to characterise the Ukrainian state as an artificial construct wrongly carved out of Russia by its enemies. Some who saw the speech said they now feel menaced by a leader making decisions which no longer appear rational.

“In the case of Putin, this is not a struggle for money or power: It’s about pride. Which means the mind is switched off. He can’t stop, and he can’t be stopped,” said Lilia, 72, a pensioner in the Kyiv suburb of Brovary.

Diplomacy faltering

German foreign minister Annalena Baerbock said Russia was heading down a path that would make it a global pariah, urging it not to “completely isolate yourself worldwide.”

Diplomatic efforts appear to be faltering with US secretary of state Antony Blinken and French foreign minister Jean-Yves Le Drian cancelling separate meetings with Russian foreign minister Sergei Lavrov.

A summit between US president Joe Biden and Mr Putin, floated by France at the start of the week, now seems unlikely to go ahead.

Mr Putin said he was always open to finding diplomatic solutions but that “the interests of Russia and the security of our citizens are unconditional for us.” – Reuters