Rebels Kill 23 Ukraine Troops as EU Widens Sanction List

Ukraine’s government forces suffered their worst losses in battles with separatists since President Petro Poroshenko called off a truce, prompting the authorities in Kiev to lash out at Russia and pledge retaliation.

“For every life of one of our soldiers, the militants will pay with dozens and hundreds of theirs,” Poroshenko, who ended the cease-fire July 1, said today at a meeting in Kiev. “Every single one will be held accountable and get their due.”

With government forces moving to tighten an encirclement around the militants, rebel fighters killed 23 Ukrainian soldiers and wounded 93 in fighting near the frontier with Russia. The Foreign Ministry in Kiev denounced Russia’s border violations, protesting incursions by a helicopter and drones.

As the unrest threatened to reignite the conflict, the European Union added 11 names to a list of people it has sanctioned for supporting the pro-Russian insurrection. After retreating from their former strongholds of Slovyansk and Kramatorsk last week, the rebels have continued to attack Ukrainian forces across the easternmost provinces in the country’s bloodiest conflict since World War II.

Ukraine had its credit-rating outlook raised to stable from negative by Standard & Poor’s today after the country got a $17 billion bailout loan from the International Monetary Fund.

Weighing Heavily

“Tensions between Ukraine and Russia, and the conflict in eastern Ukraine continue to weigh heavily on Ukraine’s political and economic stability,” S&P said. “We do not anticipate that the geopolitical environment will stabilize in the short term.”

Government bonds due 2023 rose to the highest since June 2013, pushing the yield down to 8.31 percent, from as high as 10.33 percent on Feb. 21, according to data compiled by Bloomberg. The Micex Index rose, adding 0.3 percent by the close in Moscow and extending a second weekly advance.

The insurgents are now preparing for a siege in Donetsk, where they said they may have to evacuate 100,000 civilians. An average of 1,200 people are streaming out of the conflict zone every day, Ukraine’s Ministry of Regional Development said today.

In today’s fighting, some of the soldiers died after being hit by fire from Grad rocket systems near Zelenopillya, a village about 5 kilometers (3 miles) from Ukraine’s eastern frontier, military spokesman Vladyslav Seleznyov said by phone. The attack came from the direction of the Russian border, according to Defense Ministry spokesman Andriy Lysenko.

In Crosshairs

Ukraine is targeting militant bases with air strikes, hitting installations set up on the territory of a mine near Krasnodon and killing militants stationed there, Seleznyov said. A day earlier, the ministry said Ukrainian forces killed more than 50 insurgents in air strikes near Donetsk, the biggest city in the country’s conflict zone.

EU governments imposed asset freezes and travel bans on 11 more people accused of fomenting unrest and will publish the names tomorrow, the 28-nation bloc said in a statement in Brussels. Most of the new targets are separatists, an EU official said before the announcement. The EU has blacklisted 72 people and two companies connected with the destabilization of Ukraine and Russia’s annexation of Crimea in March.

The EU’s first opportunity to consider wider penalties on Russian industry, investment or trade will be at a July 16 summit. Objections by countries such as Italy, Austria, Slovakia, France and Greece have frustrated moves toward broader sanctions, which require unanimity.

‘Very Cautious’

“We have to be very cautious,” Hungarian Foreign Minister Tibor Navracsics said in an interview in Dubrovnik, Croatia today. “It’s not clear whether the fighters are separatists with no Russian help or there are paramilitaries with some Russian support. The answer to that question is crucial in deciding the third round of the sanctions.”

Poroshenko told German Chancellor Angela Merkel and U.S. Vice President Joe Biden by phone last night that he was ready for truce talks if a cease-fire monitoring system can be put in place and weapons and fighters stop flowing over the border from Russia, his office said in a statement today.

About 20 Russian tanks crossed the Ukrainian border in the Luhansk region from Russia today, Ukrainian Channel 5 reported, citing local residents. Putin’s government has denied the charges that it’s supporting the rebels.

Separatists attacked the airport at Donetsk overnight, according to Ukrainian officials. Violence continued to take a toll on the region’s residents, hundreds of whom have died in the fighting. A mortar round hit a bus carrying workers from DTEK, a coal-mining and power producing company owned by Ukraine’s richest man Rinat Akhmetov, killing four, according to Interfax.

DTEK said it had suspended operations in some facilities because of the violence, while Cargill Inc. halted work at a sunflower-oil plant in the Donetsk region on July 4 and said it was occupied by gunmen.

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