Financial Times – Max Seddon et al. / Putin puts Russian nuclear forces on high alert as west steps up sanctions

• Vladimir Putin put Russia’s nuclear forces on high alert during a fourth day of bloody fighting in Ukraine on Sunday as the west stepped up its efforts to punish Moscow for starting Europe’s biggest military offensive since 1945.
• Putin’s move came after US and western allies agreed to impose sanctions on the Russian central bank and eject a group of the country’s lenders from the Swift messaging system — which is crucial for global payments — in some of the toughest such measures taken against a G20 economy.
• Nato and the US condemned Moscow’s decision, which the Biden administration described as a “totally unacceptable” escalation. “It is clearly potentially putting at play forces that, if there’s a miscalculation, could make things much, much more dangerous,” said a senior US defence official. The Pentagon declined to say if it had altered its nuclear posture in response to the move by Putin.
• In Germany, Chancellor Olaf Scholz ripped up the playbook of postwar policy when he unveiled plans to invest massively in the country’s armed forces and spend more than 2 per cent of gross domestic product on the military.
• Project Syndicate – Bennett Ramberg / The risk of nuclear disaster in Ukraine

Financial Times – Katie Martin, Tommy Stubbington and Hudson Lockett / Russia sharply increases rates as sanctions send rouble plunging

• Russia’s central bank more than doubled interest rates on Monday in an attempt to steady the country’s financial markets, after unprecedented western sanctions sent the rouble tumbling as much as 29 per cent.
• The central bank boosted its main interest rate to 20 per cent from 9.5 per cent in an emergency decision to offset the risks of the rouble’s rapid depreciation to financial stability and protect Russians’ savings from being wiped out, according to RIA Novosti, the state-owned news agency.
• The rouble dropped to almost 118 against the US dollar in offshore trading on Monday, according to Bloomberg data, following a weekend when Russian President Vladimir Putin put his nuclear forces on high alert and the US and Europe unleashed their toughest sanctions in a bid to cut the country off from the global financial system.
• The central bank also said it would announce later on Monday whether equity trading would resume after the morning session was cancelled. The country’s benchmark Moex index has dropped around 30 per cent so far in February in local currency terms.
• Foreign Affairs – Edward Fishman and Chris Miller / The new Russian sanctions playbook

Politico – David M. Herszenhorn / As war rages, Russia and Ukraine agree to talks

• Ukrainian and Russian peace negotiators agreed to meet near the Belarusian border on Sunday, after Russian military forces reportedly suffered steep casualties but still made battlefield advances — trying to break through in Kyiv, the capital, and seize wider swaths of Donbass in the east.  
• But even as tentative talks were announced, there was no immediate ceasefire declaration in the first large-scale war in Europe in decades.
• The peril only grew as Russian President Vladimir Putin ordered his nuclear forces to move to a higher state of alert, while complaining acidly about Western economic sanctions and NATO military aid for Ukraine, even though Putin is the one who started the war.
• Putin’s implicit threat came amid an avalanche of other developments, including Ukraine submitting a formal plea for intervention by the International Court of Justice in The Hague, and EU foreign ministers agreeing during an emergency conference call to finance the supplies of weapons to Ukraine and help organize the logistics of getting them there.
• The Atlantic – Alan Taylor / Photos: Chaos and resistance

Politico – Hans von der Burchard / In historic shift, Germany ramps up defense spending due to Russia’s Ukraine war

• Chancellor Olaf Scholz on Sunday announced a major boost to German military spending in the latest of a series of dramatic moves reversing decades of Germany’s post-Cold War foreign policy in just a few days.
• Speaking at an emergency session of the German parliament to discuss Russia’s war against Ukraine, Scholz said that his government would set up a special €100 billion fund to swiftly upgrade its armed forces and that Germany will in future adhere to the NATO goal of spending 2 percent of GDP on defense.
• Scholz’s remarks came just a day after Germany announced another historic volte-face, deciding to deliver arms to Ukraine to support the country against Russia’s invasion. And a few days earlier, Scholz announced Berlin would halt the Nord Stream 2 Russia-to-Germany gas pipeline.
• Germany’s political mainstream — particularly Scholz’s Social Democrats and his Green coalition partners — has been extremely reluctant to commit to the NATO spending target and to send arms to conflict zones, often arguing the country’s militaristic history means it has a special responsibility to foster peace.
• Euractiv – Oliver Noyan / Russia’s war in Ukraine triggers U-turn in Germany’s foreign policy thinking

Today’s longer reads:

• Foreign Affairs – Niclas Poitiers et al. / The Kremlin’s gas wars
• Financial Times – Derek Brower, Tom Wilson and Chris Giles / The new energy shock: Putin, Ukraine and the global economy