Russia dares West with attack on Ukraine, warned of 'decisive response'

Russian forces attacked targets across Ukraine after President Vladimir Putin ordered an operation to “demilitarize” the country, prompting international condemnation and a U.S. threat of further “severe sanctions” on Moscow, sending markets tumbling worldwide.

Russia launched a barrage of missile, artillery and air attacks early Thursday, triggering the worst security crisis Europe has witnessed in decades. Ukraine’s Interior Ministry warning that the capital, Kyiv, was being targeted and urged citizens to go to shelters. Ukraine’s border guard said that it was being shelled from five regions, including from Crimea in the south and Belarus to the north. 

In a nationally televised address ahead of the offensive, Putin said that Russia doesn’t plan to “occupy” its neighbor but said the action was necessary after the U.S. and its allies crossed Russia’s “red lines” by expanding the NATO alliance. U.S. President Joe Biden called Putin’s move “an unprovoked and unjustified attack” and said the “world will hold Russia accountable.” 

Commodities markets surged, with Brent oil extending gains above $100 a barrel for the first time since 2014--when Russia annexed Ukraine--while gold jumped as investors scrambled for havens.

Putin said he was taking action in part to protect civilians in the separatist regions from Ukraine’s military, though there was no evidence they were under any threat of attack. The U.S. and European allies had repeatedly warned that Moscow intended to create a false justification for military action. 

The Russian leader made other unsupported claims in his speech that may have been intended to justify a broader attack, saying he would “aim for demilitarization and denazification of Ukraine, as well as bringing to justice those who carried out “multiple bloody crimes against civilians.”

Ukraine President Volodymyr Zelenskiy imposed martial law across the country. Foreign Minister Dmytro Kuleba said in a tweet that Putin has “launched a full-scale invasion” and vowed the country “will defend itself and will win.”

“Russia attacked our military infrastructure and our border guards,” Zelenskiy said in a video address on the telegram channel after speaking with Biden. He urged people to stay calm and stay at home if possible. “We are working. The army is working.”

Russia’s defense minister said the strikes were targeting Ukrainian military infrastructure and didn’t pose a threat to the population, state-run TASS reported. 

German Chancellor Olaf Scholz, who held several calls with Putin and visited Moscow in an attempt to ease the tensions over Ukraine, denounced the Russian attacks as “a blatant violation of international law” that was unjustifiable. 

“This is a terrible day for Ukraine and a dark day for Europe,” he said.

Biden, Scholz and their Group of Seven counterparts will meet on Thursday to discuss the situation. European Union leaders are due to hold an in-person emergency summit the same day, with Poland seeking “far-reaching” sanctions that would hurt Russia financially and economically. A government spokesman said would be desirable if NATO deployed further troops to its eastern flank.

The attack follows weeks of warnings by the U.S. and its allies that Putin was planning a full-scale invasion, a charge that Russia repeatedly rejected as “hysteria” and propaganda even as it massed forces along Ukraine’s borders. 

Biden said he will address the American people to announce further punishments that would be placed on Moscow. The U.S. and its European allies imposed an initial round of sanctions this week after Putin recognized two breakaway regions of eastern Ukraine, providing him with the pretext for military action.

“President Putin has chosen a premeditated war that will bring a catastrophic loss of life and human suffering,” Biden said in a statement late Wednesday. “Russia alone is responsible for the death and destruction this attack will bring, and the United States and its Allies and partners will respond in a united and decisive way.”

Markets tumble

U.S. equity futures and stocks tumbled while bonds jumped as Putin’s decision cast a pall over global markets. S&P 500 and Nasdaq 100 equity contracts slid about 2%, signaling the tech-heavy gauge is on course for a bear market. European futures shed some 3% and an Asia-Pacific equity gauge fell to the lowest since 2020. Trading in the ruble, stocks and futures on the Moscow Exchange was halted.

The flight to safer investments saw the U.S. 10-year Treasury yield fall below 1.90%. The dollar and yen jumped, while the euro retreated.

In his address, Putin said the aim was to “protect people who for eight years have been suffering persecution and genocide by the Kyiv regime.” Ukraine and its western allies reject allegations of targeting civilians in the separatist areas and no international body supports Russia’s claims of “genocide.”

‘Demilitarization and Denazification’

“For this we will aim for demilitarization and denazification of Ukraine, as well as bringing to justice those who carried out multiple bloody crimes against civilians, including citizens of the Russian Federation,” he said. “Our plans do not include occupying Ukrainian territory.”

Russia has for years accused the government in Kyiv of supporting Nazi ideas, a charge rejected by Ukraine and its allies.

While NATO leaders have said that Russia has no veto over the bloc’s membership, the alliance has long been divided over admitting Ukraine. The Biden administration has repeatedly ruled out sending U.S. or NATO armed forces into Ukraine, instead bolstering NATO allies elsewhere in Eastern Europe.

The Kremlin said Wednesday that separatist leaders in eastern Ukraine had appealed to Putin for help fighting Ukrainian forces. The two self-proclaimed republics in Donetsk and Luhansk sought help under treaties Putin signed with their leaders Monday. 

Separatists launched attacks on Ukrainian positions along the entire line of contact, Interfax news service reported, citing the head of its militia, Eduard Basurin. Luhansk separatists said they were storming the city of Shchastia, which is held by Ukrainian forces, according to Interfax. 

(With assistance from David Wainer, Peter Martin, Jordan Fabian and Eduard Gismatullin.)