ZAPORIZHZHIA, UKRAINE – JANUARY 23: (——EDITORIAL USE ONLY MANDATORY CREDIT – ‘ZAPORIZHZHIA REGIONAL … [+] MILITARY ADMINISTRATION / HANDOUT’ – NO MARKETING NO ADVERTISING CAMPAIGNS – DISTRIBUTED AS A SERVICE TO CLIENTS——) Rescue operations and debris removal efforts are ongoing out after Russian missile strike on January 23, 2025 in Zaporizhzhia, Ukraine. Russian army launched a missile strike on the city, resulting in the destruction of residential buildings, Palace of Culture and industrial facility, and leaving one person dead, 45 people wounded including a two-month-old baby and 4 rescuers (Photo by Zaporizhzhia Regional Military Adm./Anadolu via Getty Images)

Anadolu via Getty Images

Dispatches from Ukraine. Day 1,066.

Zaporizhia region. On January 23, Russia launched two attacks on the regional capital, killing one person and wounding five others, including a two-month-old child. More than 20,000 people there were left without electricity and heat after drones destroyed the local energy facility. A ballistic missile strike then wounded emergency response personnel.

Donetsk region. Russian shelling across the region recently killed one person and wounded eight others.

Ukraine at Davos 2025.

Ukrainian President Volodymyr Zelenskyy visited the World Economic Forum in Davos, delivering a speech on January 21 focusing on Europe’s strategic unity and the conditions for an end to the war. Zelenskyy warned that European nations, which spend too little on defense, are vulnerable to Russia, which can mobilize up to 1.5 million troops and outproduces Europe by nearly two to one in military production despite smaller economic potential. Zelenskyy reiterated that Kyiv will not recognize the occupied territories as part of Russia, even under pressure from its allies.

In a January 22 interview with Bloomberg News, Zelenskyy stressed that U.S. forces must be part of any effective peacekeeping mission in Ukraine, with security guarantees from the U.S. and Europe as prerequisites for any peace deal. He emphasized that Ukraine’s voice must guide negotiations, rejecting decisions made behind Kyiv’s back as happened at the 2015 Minsk talks. Zelenskyy also called for robust, irreversible security commitments, suggesting that President Trump could play a decisive role in brokering such assurances.

Initially frozen as debt securities in Euroclear, 90% of Russian frozen state assets had been converted into Cash as of September 2024, according to a New Lines Institute policy report. At Ukraine House in Davos, a panel discussed the $350 billion in Russian state assets frozen by G7 nations since 2022. Converting these into cash created new opportunities for their transfer under international jurisdiction. The UN General Assembly has affirmed Russia’s responsibility to pay reparations estimated at $500 billion in damages caused by the war, but questions remain on how to unlock these frozen funds. Some $165 billion in such frozen assets are held in Europe and $105 to 126 billion in other countries, including the US, Canada and Japan.

Return of Ukrainian children abducted by Russia has to be part of any peace negotiations, concluded the panel Weaponization of Ukraine’s Children by Russia, organized by Victor Pinchuk Foundation as a part of Your Country First – Win With Us. In 2024, the US House overwhelmingly passed a resolution “condemning the illegal abduction and forcible transfer of children from Ukraine to the Russian Federation.” Thousands of children have been kidnapped from orphanages and disappeared. In the last 10 years, we have lost 1.6 million children to Russia. They are in Russian territories, but we don’t know where. Russia has acknowledged 744,000 children but has said they will not give the information,” said Mykola Kuleba, founder of Save Ukraine. So far, 1,037 kidnapped children have been returned, with 449 of them returned in the last year.

The National Bank of Ukraine (NBU) has raised the key interest rate by 100 basis points to 14.5% in an attempt to steer inflation toward the 5% target. Despite signaling a readiness for a more hawkish monetary policy, the institution consistently underestimated inflation dynamics throughout 2024, maintaining its forecasts within the 8-9% range for much of the year. In October, it revised the year-end inflation estimate to 9.7%. Yet, the price growth ultimately ended up at 12%, surging past the 10% threshold.

When weighing actions such as changes to the interest rate, the NBU grapples with factors largely beyond its control, including the energy deficit and labor market shortages. These challenges mainly stem from relentless Russian attacks on Kyiv’s energy infrastructure, compounded by a declining population and ongoing mobilization. Though the bank envisions anchoring inflation to the target by 2026, the path is unlikely to be soft and easy in the face of persistent security concerns and possible labor market disruptions.

The EU is set to provide almost $32 billion in direct budgetary support to Ukraine in 2025. Of the total, nearly $19 billion will come from the G7 initiative, funded through proceeds from frozen Russian assets, while $13 billion will be allocated under the Ukraine Facility program. Since February, 2022, the EU has emerged as Kyiv’s largest donor of direct budgetary support, contributing $46.8 billion for priority state expenditures. In 2024 alone, the EU accounted for more than 40% of Ukraine’s external financing, providing $16.7 billion in assistance, including $3.1 billion in grants.

Ukraine’s electricity imports soared to a decade-high level of 4.4 million MWh (megawatt-hours), while exports plummeted to a historic low of 0.35 MWh in 2024. June marked an inflection point, with imports reaching 858,400 MWh, more than the entirety of 2023, driven by peak summer heat and planned maintenance on nuclear power units. Hungary accounted for 38.5% of imported electricity, the largest share among suppliers, while Ukraine’s export activity sank by 90% from pre-war levels. Critical EU agreements in December raised import capacity to 2.1 MW, and emergency aid of 250 MW provided a crucial lifeline for stabilizing the energy system despite persistent shortages.

North Korea will deliver more weaponry to Russia in 2025, including 150 ballistic missiles and additional artillery, following recent shipments of 120 howitzers and 120 rocket systems. These weapons, with ranges up to 35 miles, are primarily used in Ukraine or for training Russian troops. In exchange, North Korea has received critical fuel and funding from Moscow to bolster its own production and military capacity. The growing alliance has seen the deployment of 11,000 North Korean soldiers to the Kremlin’s military units. The North Korean force in Russia’s Kursk region has suffered heavy losses, more than 3,000 reported casualties as of late December.

A recent survey reveals that 57% of Ukrainians believe any peace agreement without restoration of territorial integrity is doomed. In addition, 54% hold favorable opinions on U.S. President Donald Trump’s second term. Support is particularly strong among younger respondents and those in western Ukraine but weak in the east, where more than 40% feel uncertain about the prospects for Ukraine of Trump’s second presidency.

Another survey states that 70% of Ukrainians would not move abroad if borders were reopened, while 21% expressed a desire to leave. Those most willing to leave were younger respondents, particularly those aged 18 to 29, with key reasons including the threat to life from ongoing conflict and limited career prospects.

Culture Front. The nominees for the 97th Academy Awards have been revealed, with the documentary Porcelain War nominated for Best Documentary Feature. Co-produced by the U.S., Ukraine and Australia, the film, directed by Brendan Bellomo and Ukrainian Slava Leontiev, who also features as one of the film’s protagonists, focuses on ceramic artists in Kharkiv during the early days of Russia’s 2022 invasion. Despite the looming threat of encirclement, the artists continue their work, creating porcelain figurines to adorn the city’s war-torn buildings. The film premiered in January, 2024, at the Sundance Film Festival, where it won the Grand Prix for Best Documentary. In 2024, Ukraine won its first-ever Oscar for 20 Days in Mariupol by director Mstyslav Chernov.

By Danylo Nosov, Alan Sacks.