(Bloomberg) -- Mark Milley, the chairman of the US Joint Chiefs of Staff, said Wednesday that “we do not seek armed conflict with Russia” in the wake of the downing of an American spy drone in an encounter with Russian jets.

Milley told reporters at a press conference in Washington that he didn’t know if the Russian jet intentionally struck the drone, which crashed in the Black Sea earlier this week. He said the US had video evidence of the incident and there was no doubt Russia’s actions were aggressive.

“As far as an act of war goes — I’m not going to go there,” Milley said when asked by a reporter about the possibility. 

Defense Secretary Lloyd Austin and his Russian counterpart, Sergei Shoigu, spoke Wednesday in what appeared to be an effort to reduce tensions.

“We take any potential for escalation very seriously and that’s why I believe it’s important to keep the lines of communication open,” Austin told reporters in a briefing. “I think it’s really key that we’re able to pick up the phone and talk to each other.”

Key Developments

  • Austin Speaks to Russian Counterpart After Spy Drone Crashes
  • EU Proposes More Aid to Moldova to Help Counter Russia Pressure
  • Secret Chip Deals Allegedly Help US Tech Flow to Russia
  • Austin Calls Russia ‘Reckless,’ Says Drone Flights Will Continue
  • IMF, Ukraine to Conclude War-Era Loan Talks in ‘Coming Days’
  • Poland Sees Coalition Emerging for Soviet-Era Jets to Ukraine
  • Secret Chip Deals Allegedly Help US Tech Flow to Russia

(All times CET)

IMF, Ukraine Wrapping up Talks on War-Era Loan (8:12 p.m.)

The International Monetary Fund and Ukraine expect to soon conclude discussions over a new loan program, anticipated to be worth about $15 billion (€14.2 billion).

“The discussions between IMF staff and the Ukrainian authorities were productive and very good progress has been made towards agreement on a set of policies that could underpin a fund-supported program,” Vahram Stepanyan, the IMF resident representative to Ukraine, said in a statement Wednesday.

“Staff and the authorities expect to conclude the discussions in the coming days,” he said, after the conclusion of week-long talks in Warsaw. 

An agreement would be the first time the IMF has decided on a full-fledged loan program to a nation at war. The Russian invasion, launched over a year ago, has devastated Ukraine’s export economy and infrastructure, killing thousands of people and driving thousands more from their homes. 

Military Chiefs of Ukraine and France Talk (6:53 p.m.)

Ukrainian Commander-in-Chief Valeriy Zaluzhnyi said he spoke by phone Wednesday with his French counterpart, Thierry Burkhard. 

“I spoke about the front line situation, which is under control, despite the difficulties,” Zaluzhnyi wrote on Telegram. The two also discussed air defense and military training issues. 

EU Proposes More Aid to Moldova to Counter Russia (5:45 p.m.)

The European Union is considering providing Moldova’s armed forces with €40 million ($42.1 million) more in aid to boost its air surveillance, logistics and cyber defense. 

The funding would be drawn from the bloc’s European Peace Facility, according to a proposal from the bloc’s foreign policy arm sent to member states last week and seen by Bloomberg. The fresh funding, which would come on top of previous financial support, is still being discussed and needs approval from EU countries.

The tiny nation that borders Ukraine has been under rising pressure since Russia invaded its neighbor and its leaders have accused Moscow of trying to overthrow its pro-European government. Russia has denied any involvement in Moldova’s internal affairs.

Poland Sees Coalition Emerging for Soviet-Era Jets to Ukraine (4:41 p.m.) 

Polish government spokesman Piotr Muller didn’t elaborate on which allies would agree to send MiG-29 aircraft, leaving decisions with individual states. 

In Slovakia, Prime Minister Eduard Heger said his interim government was poised to decide in favor of MiG shipments, though is awaiting details to be finalized in negotiations. Heger was forced to resolve a legal dispute, since his administration has limited powers after losing a confidence vote in December. 

Nearly a Quarter of Ukrainian Women Live Abroad: EBRD (4:36 p.m.)

Almost one in four of Ukraine’s pre-war female population is now outside the country, the European Bank for Reconstruction and Development said in a research note.

Most of the women were employed before leaving the country, the EBRD said. Among males, 13% are living outside Ukraine. Most refugees haven’t found work in the host countries, while many face financial difficulties. In total, some 35% of Ukraine’s pre-war population are now living away from home, according to the EBRD.

Read More: More Ukrainians Are Settling Abroad as War Grinds On 

Poland Makes Arrests Tied to Alleged Spy Ring(3:41 p.m.)

Polish authorities detained six foreign nationals accused of installing surveillance equipment alongside railway lines linking the country with Ukraine, RMF FM radio reported. Intelligence services say the arrests are tied to an alleged Russian espionage network, RMF said.

The network focused on Poland’s southeast Podkarpackie region bordering Ukraine, a hub of military and humanitarian support for Kyiv, the report said. Earlier this month, Poland warned the Kremlin is ramping up spying activities in neighboring Kaliningrad, a Russian exclave, in an attempt to escalate tension.

Austin Calls Russia ‘Risky,’ Says Drone Flights Will Continue (3:11 p.m.) 

The US will continue its drone flights in international airspace in the wake of a Russian aircraft’s interference with a surveillance drone over the Black Sea on Tuesday, Austin said.

“This hazardous episode is part of a pattern of aggressive, risky, and unsafe actions by Russian pilots in international airspace,” Austin said at the 10th meeting of the Ukraine Defense Contact Group. “So make no mistake. The United States will continue to fly and to operate wherever international law allows. And it is incumbent upon Russia to operate its military aircraft in a safe and professional manner.”

Russia Says It’s Trying to Get Downed US Drone (2:34 p.m.) 

“The Americans are always saying that they’re not participating in military action,” Patrushev said. “But this is the latest confirmation that they are directly involved in this war.”

The US blamed Russian planes for causing the crash, an allegation Moscow denied. The US said it tried to prevent the drone, which went down in international waters, from falling into the wrong hands.

Turkey’s Erdogan Hints at Green Light for Finland (12:49 p.m.) 

Turkish President Recep Tayyip Erdogan said his nation will fulfill its promise to Finland about the nation’s bid to join the North Atlantic Treaty Organization, offering the clearest signal yet that he’ll approve the Nordic country’s entry into the alliance after months of negotiations.

“We will meet Finland’s president and do what our promise requires of us,” the state-run Anadolu Agency quoted Erdogan as telling reporters at parliament, ahead of Finnish President Sauli Niinisto’s visit to the country on Thursday.

US Told Ambassador ‘They Need to Be More Careful’: Kirby (12:47 p.m.) 

Officials from President Joe Biden’s administration called Russian Ambassador Anatoly Antonov into the State Department on Tuesday, as they warned him over the “reckless, unprofessional behavior” by a Russian pilot involved in the drone incident, National Security Council spokesman John Kirby told CNN.   

The drone hasn’t been recovered yet, Kirby says, adding the US government did its best to avoid the craft from getting into the wrong hands. 

Read More: Russian Fighter Jet Collides With US Drone Over Black Sea (2)

Denmark Sets Up $1 Billion Ukraine Fund (11:25 a.m.)

Denmark created a new fund for Ukraine with 7 billion kroner ($1 billion) in assets in 2023 to be used for military, civil and commercial support, the government said. The Nordic nation, which contributed with about 5 billion kroner last year, also set a goal to be one of the biggest donors relative to a country’s size, the finance ministry said in a statement.

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