Ukraine intelligence chief gives new details on Spiderweb drone operation
KYIV — For one year, six months and nine days, Ukraine's intelligence service carefully plotted, designed and built special drones, concealed in prefabricated mobile homes that were then transported across borders to strike an surprising blow thousands of miles away against Russia's strategic bomber fleet.
Intelligence chief Vasyl Maliuk revealed to journalists new details of Operation Spiderweb in a two-hour conversation on Sunday about the plan to attack Russia's air bases on June 1 that crippled several long-range bombers and rewrote the rules for drone warfare.
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Bloomberg
2 hours ago
- Bloomberg
A Putin War With NATO Would Cost the World $1.5 Trillion
European officials tracking the ramp up of Vladimir Putin's military are wrestling with a threat that would have been scarcely plausible a few years ago: war with Russia. Russia is churning out artillery shells, drones and missiles at a rate that will soon surpass the needs of its troops in Ukraine. The US and Israel's attack on Iran, a Kremlin ally, has dealt another blow to global stability. And Putin is sounding emboldened. As he signals de-escalation following Tehran's limited retaliation, Trump is expected to reaffirm the US commitment to NATO's mutual-defense clause at a summit in The Hague beginning Tuesday, at least according to a draft statement from NATO allies ahead of the meeting. Trump administration officials have also said repeatedly that they'd defend every inch of its territory. But regardless of what Trump says, European leaders aren't convinced they can bank on his commitments – at the Group of Seven summit in Canada this month, he asked why Russia wasn't attending. A war on NATO territory remains unlikely — not least because Russia doesn't, for now, have the capacity and probably would not want a war on two fronts. But some Russian generals and senior officials have said publicly that their imperial ambitions don't end with Ukraine and Putin himself laid claim to at least the whole of Ukraine last week. 'I consider Russians and Ukrainians as one people, and in this sense all of Ukraine is ours,' Putin said at the St. Petersburg International Economic Forum. 'We have a saying, or parable — wherever the Russian soldier treads is ours.' NATO Secretary General Mark Rutte suggested that Russia may be in a position to consider such an attack on the alliance within five years, echoing the assessments of German Chancellor Friedrich Merz and several European intelligence agencies. The warnings come as NATO – under pressure from Trump – pushes members to raise defense spending to the highest levels in decades. Denmark has said Russia could engage in a local war with a neighboring country within six months and pose a credible threat to one or more NATO countries within two years. In such a scenario, Estonia, Latvia and Lithuania on NATO's northeastern flank would be the most likely flashpoint. The three Baltic nations make up a small fraction of the European economy but strategically, they are critical. As the only NATO members once directly administered by the Soviet Union, and the home to substantial Russian minority populations, they have a special place in Putin's distorted historical imagination. They also have long borders with Russia and its satellite, Belarus. Any attack would quickly become a test of US willingness to defend NATO allies against Russia, the cornerstone on which the western alliance was built. A war, even in its initial phase, would see many people killed and likely trigger a flood of refugees. It would also exact a heavy economic toll. Bloomberg Economics estimates that the direct cost of destruction in the warzone, higher energy prices as supply from Russia is cut off, and a selloff in financial markets could cut global output by 1.3% or $1.5 trillion in the first year, almost as much as the impact of the full-scale invasion of Ukraine. The losses would be much greater if the conflict spilled into other European countries. Testing Boundaries This article is based on modelling by Bloomberg Economics as well as interviews with senior government officials who spoke on condition of anonymity to share their views and private assessments frankly. In the light of Russia's ongoing threat, all three of the Baltic states are already in the process of withdrawing from an international agreement against landmines so that they can be potentially deployed to bolster their defenses. NATO members are planning to ramp up air defenses along the eastern flank. Of course, as European governments try to persuade their voters to accept massive increases in defense spending, fears of Russian aggression can only help their case. But Russia, for its part, has upgraded its nuclear-weapons base in Kaliningrad, the exclave between Poland and Lithuania, as well as adding bases and military infrastructure along its northwest border with NATO. How An Invasion Might Unfold An invasion could begin with a staged incident or a hybrid attack of some sort. The Moscow-Kalingingrad rail line, which passes through Vilnius without stopping, is one point of vulnerability — Lithuania police were this month hunting a Russian man who jumped from a moving train as it passed through their territory. Lithuania's former foreign minister, Gabrielius Landsbergis, has suggested that as a first step Russia could fabricate an excuse for the Moscow-Kaliningrad train to stop inside Lithuania. Moscow could then send in troops under the guise of protecting stranded Russian citizens, effectively invading Lithuania. It could also launch attacks on Estonia and Latvia, deploy its navy to take control of the Baltic Sea and key islands in it, and sever Baltic states' land connection with Poland at the Suwalki corridor. Baltic countries would invoke Article 5 and launch a counterattack on Russia and probably its ally Belarus. Even if NATO failed to respond, at least those countries close to the fighting would probably attack invading Russian forces and send aid to the Baltic states — seeing an existential threat to European security and a risk they could be Russia's next target. Russia would likely respond to those attacks with strikes on European military bases and critical infrastructure — including targets in major European cities. Casualties would be significant. Key ports would be closed and trade in the Baltic Sea would come to a halt. Markets would plunge. Both sides would likely engage in hybrid operations, including against subsea cables and energy infrastructure. Estimated impact on GDP With the Russian smokescreen sowing confusion, Trump might hesitate to act. Rather than the unambiguous response sought by allies, it is not unimaginable that Trump instead posts on Truth Social calling FOR PEACE NOT WAR or urging Europe TO TALK WITH VLADIMIR. The White House didn't respond to a request for comment for this article. The president has form. He told G-7 leaders earlier this month that Putin is a friend who will most likely make a deal with Kyiv – and he pushed back on allied pleas to sanction Moscow. Kremlin threats of a nuclear response could further paralyze the US and some in Western Europe, but other European officials insist this would be ignored in the East and the Baltic countries because people there have become inured to Putin's threats. All the same, fears of nuclear escalation would probably limit the direct strikes on Russia from Europe's nuclear powers. The Cost to the Global Economy To gauge the cost of the first year of the war, Bloomberg Economics used a suite of models to estimate the impact of lost output in the conflict zone, spillovers across European supply chains, reduced Russian oil and gas exports, wider credit spreads in European markets, higher European defense spending and increased uncertainty globally. The Baltic states alone would suffer a 43% hit to their economies in the first year of a conflict – matching the drop in output for Russian-occupied areas of Ukraine. Other European countries that enter the fray – including Finland, Sweden, Poland, and Germany – take a smaller but still significant hit as missiles fly. For the European Union as a whole, higher defense spending somewhat cushions the blow of increased energy costs, market turmoil, and the destruction of infrastructure, but GDP would still be reduced by 1.2% and debt would be put on a steeper upward trajectory. Russia's economy would suffer a 1% loss, a relatively minor blow as existing sanctions have insulated it from external pressure and higher defense spending creates a mirage of economic health. The UK — further from the front line, but spending more on defense — sees only a 0.2% blow to GDP. Market turmoil takes US GDP down about 0.7%, while tighter financial conditions and higher energy prices shave about 0.8% off China's. Impact of Recent Crises and Scenario on Global GDP Percentage deviation from baseline Without an immediate US response, the war could escalate, as Russia responds to the missile strikes with attacks on European cities and pours more resources into the fight, increasing the chances that the war spills beyond the Baltics. Russia's Forces Are Substantial, Europe's Are Fragmented Size and type of forces by country European intelligence assessments have no indication that Putin already has plans in place to extend his war into NATO territory. But Russia is reconstituting its forces and building up its weapon stocks far faster than the west. Rutte warned this month that Russia is producing ammunition four times faster than all of the military alliance combined. Other Possible Scenarios While NATO's military planners are most concerned by that extreme scenario, at the other end of the spectrum it's also possible that Russia and Ukraine could reach a lasting peace settlement. That would probably require the US and Europe to overcome their differences, help broker a durable deal, and provide security guarantees to hold the deal in place. It could also involve China, Russia's primary enabler, using its influence to bring Moscow to the negotiating table and discourage it from further attacks. Such a settlement would pave the way for Ukraine to join the EU and for the US to normalize relations with Moscow. The Trump administration has proposed restoring trade and investment ties with Russia in the event of an agreement, as well as sealing new energy deals and lifting all sanctions. A return to pre-2021 levels of cross-border activity would lift Europe and Russia's GDP by 0.5%, while global GDP would get a 0.3% boost, according to Bloomberg Economics. Europe, though, will be reluctant to return to business as usual with Moscow after the painful effort to disconnect, particularly from its Russian supplies of energy. In any case, Beijing is prioritizing its 'no limits' partnership with Russia rather than using its influence to end the war and sees the conflict as a way to keep the US and Europe distracted. Putin himself has given no sign that he's prepared to negotiate seriously for all Trump's talk of securing a ceasefire. The most likely scenario at this stage is that the war grinds on. Nevertheless, many western officials believe that neither side has the resources to make a decisive breakthrough and win the war outright and so the conflict will eventually have to end in a negotiated settlement. Europe Prepares With that in mind, European nations are working to put Ukraine in the strongest possible position by providing it with military aid and support to develop its own defense industry, while continuing to impose and enforce sanctions on Russia aimed at curtailing its revenues and capacity to fight on. There are other low-probability scenarios that Bloomberg Economics modelled – like Russia advancing decisively and capturing much of southern Ukraine before invading Moldova – and potential black-swan events. Russia's banking system, for example, is already under strain from high interest rates and the pressure of funding the war, and it could suffer a systemic crisis or Putin's grip on power could slip. But a secular shift in Europe has begun nevertheless. NATO members are set to commit to increasing their defense spending to 3.5% of GDP, with an additional 1.5% for defense-related expenditures such as cyber, infrastructure and civilian preparedness. Several frontline NATO nations, including in the Baltics and Poland, are already well ahead of the pack and their defense spending already exceeds that 3.5% target. Ukraine's European allies are creating formidable conventional military forces that will continue to have an antagonistic relationship with Russia for the foreseeable future. 'All this creates an uncomfortable environment,' Landsbergis, the former Lithuanian minister, said. 'These situations can quickly escalate into a serious conflict that we may have overlooked or have been simply unprepared for.' By Alex Kokcharov Jennifer Welch Alberto Nardelli Julia Janicki Tom Fevrier Edited by Tom OrlikBen SillsAlex Newman With assistance from Jamie RushMilda SeputyteSam DodgeAntonio Barroso Photo editor: Jody Megson Data Bloomberg News analyzed movements of all crude oil tankers tracked by IHS Markit and Wood Mackenzie/Genscape from June 2024 to May 2025, whose position was broadcasted at least once in the Danish Straits over the time period. Baltic Sea ports are from IMF PortWatch and Bloomberg Economics reporting. NATO military bases are from NATO, Rochan Consulting, and Bloomberg Economics reporting. The Baltic Sea pipelines and the Moscow-Kaliningrad train line are from OpenStreetMap. Submarine cables are from TeleGeography. Population data is from the LandScan Global 2023 dataset from the Oak Ridge National Laboratory. Methodology Bloomberg Economics estimates the year-one GDP impact of a Russia-Baltics war using a suite of models to gauge the effect of five shocks: The direct impact of the war on Baltic countries and other European countries that enter the conflict. Disruptions to EU trade and supply chains. Disruptions to Russian oil and natural gas exports, leading to price shocks. A global shock to the VIX and a local shock to sovereign credit spreads. Higher defense spending in Europe. We calibrate the impact of war on activity in conflict-afflicted regions based on the 43% drop in output from the Donetsk region of eastern Ukraine after it was occupied by Russia starting in 2014. We measure the decline in Donetsk's output using locational GDP data produced by the Becker Friedman Institute. We calibrate the impact of missile strikes and collateral damage on other countries that join the conflict based on the assumption that affected regions would suffer a 4.3% drop in output - 10% of the impact suffered by regions that Russia attempts to occupy. For Finland, for example, that means a hit to GDP of 3%. It's worth noting that those results are significantly driven by our assumptions, and whilst we think our assumptions are plausible and grounded in the experience in Ukraine, different assumptions would produce different results. We rely on the multi-region input-output data compiled by the OECD to estimate trade disruptions. We assume that any industry that relies on the Baltic states for more than 2.5% of its inputs will be unable to find replacements and so will suffer a corresponding drop in output. We examine two commodity price shocks: oil and natural gas. We assume Russia's exports to Europe are halted and flows through the Baltic pipeline to Norway disrupted. That pushes the natural gas price up around €50/MWh. We also assume Russia's oil exports drop by 30%, removing 2 to 2.5 million barrels/day of supply from the global market, and lifting prices by around $25/barrel. We use Bloomberg's SHOK model to gauge what those movements in energy prices mean for growth across the European Union and other major economies. For financial markets, we assume a global shock to the VIX and a local shock to sovereign credit spreads for major European countries — calibrating the size based on the experience of Russia's 2022 invasion. To map from the increase in the VIX to GDP we use a global VAR. To estimate the impact of higher credit spreads, we use SHOK. We estimate changes in defense spending based on proximity to Russia. In line with recent experience, we assume that countries that are closer to Russia increase their defense spending by more than those further away. We assume all of that increase is financed by borrowing, and use multipliers from our previous study of the economic impact of European defense spending to calculate the impact on GDP.
Wall Street Journal
3 hours ago
- Wall Street Journal
NATO Aims to Boost Defenses Against Drones, Hacking and Sabotage
Ukraine's drone strike on parked Russian bombers and Israel's destruction of Iranian air defenses sound a warning for NATO countries: Savvy adversaries can eliminate vital battlefield assets anywhere, before they enter a fight. That makes the work of preparing for battle more important than ever. Addressing the challenge of protecting and mobilizing forces inside the North Atlantic Treaty Organization's homeland is rising on the alliance's must-do list.
Wall Street Journal
5 hours ago
- Wall Street Journal
Putin Seeks to Play Both Sides—and Trump—in Iran-Israel Clash
At the start of the year, Russian President Vladimir Putin met his Iranian counterpart at the Kremlin to sign a new strategic partnership to seal the budding alliance between the two countries that had spent the last decade trying to undermine the U.S.-led world order. Now, after more than a week of punishing Israeli and U.S. airstrikes, that partnership is doing Tehran little good.
