Ukraine doubles down on counteroffensive

This is an audio transcript of the FT News Briefing podcast episode: ‘Ukraine doubles down on counteroffensive’

[MUSIC PLAYING]

Sonja Hutson
Good morning from the Financial Times. Today is Wednesday, September 6th, and this is your FT News Briefing. The EU’s arch-rival to tech companies is leaving and the UK is out a ton of money from fraudulent business grants. Plus, Ukraine hasn’t been able to gain as much ground as it hoped during its counteroffensive. 

John Paul Rathbone
It’s been very, very gradual progress. But the kind of success it’s been having isn’t the kind of success that can be measured on a map. 

Sonja Hutson
I’m Sonja Hutson, in for Marc Filippino, and here’s the news you need to start your day.

[MUSIC PLAYING]

The European Union has been a big thorn in the side of tech companies for the past few years, and Margrethe Vestager has been the one applying the most pressure. But she’s leaving as the EU’s competition chief. And yesterday the European Commission announced who will be taking her place. Here to talk about the move is the FT’s Javier Espinoza. Hi, Javier. 

Javier Espinoza
Hi. 

Sonja Hutson
So, Javier, who is Vestager? 

Javier Espinoza
Margrethe Vestager is a Danish politician who has been the one leading and opening the largest antitrust cases against the likes of Apple, Meta, Amazon, and going after mergers and transactions that she thought were not competitive. She has also gone after sweetheart deals when it comes to taxes. Essentially, she has been like an arch-rival of some of the largest tech companies in the world. 

Sonja Hutson
And where is Vestager headed next? 

Javier Espinoza
Yesterday, she became the official candidate to run the European Investment Bank. If she’s successful, she will be the first ever female president of the bank. 

Sonja Hutson
What do we know about the person who is gonna be replacing her as the commission’s competition chief? 

Javier Espinoza
Yesterday, we reported that Didier Reynders, who is currently overseeing the justice brief, will also become competition commissioner. We know that he’s part of the same political family that is Renew Europe, which is like, sort of like a centrist liberal political group whose members also include the French president. We know also that he will have a very tough time filling in for someone who really has had a grip on competition matters. 

Sonja Hutson
Yeah. So how big of a deal is it that Vestager is stepping back from her role as the EU’s competition chief? 

Javier Espinoza
It’s a big deal because it comes at a time when the EU is giving this big push to enforce their digital rules. Only today the EU will publish this list of new services that these platforms need to comply with more responsibilities on the Digital Markets Act. And so it will be interesting — it’s just happened in the last 24 hours, this transition — whether the new person, Reynders, will be only a caretaker or whether he will depart in any way from the EU’s policy. 

Sonja Hutson
Javier Espinoza covers competition and digital policy from Brussels. Thanks, Javier. 

Javier Espinoza
Thank you so much. 

[MUSIC PLAYING]

Sonja Hutson
The UK is having trouble recovering more than £1bn from fraudulent pandemic-era business grants. A powerful House of Commons committee says the government has only recovered 2 per cent of the money. Business department officials said they recouped so little because there were legal questions about the ability to claw back some of the payments. And they said it would be, quote, “incredibly hard” to recover most of the losses. The House of Commons committee is calling on the government to set out the specific steps it’ll take to get the money back.

[MUSIC PLAYING]

Some western officials had been concerned that Ukraine’s counteroffensive was going slower than expected. They had been worried that Ukraine won’t take back enough land from Russia before the colder months set in. But now there are some signs of optimism. Here to talk more about this is the FT’s John Paul Rathbone. Hi, JP. 

John Paul Rathbone
Hi. 

Sonja Hutson
So give us the latest update. The Ukrainian military has been able to make some progress recently. How much and what does that look like? 

John Paul Rathbone
So the Ukrainians have spent since June 4th, grinding away against Russian minefields and artillery positions and trenches, this massive array of defences that Russia has put up, and it’s worked to try and degrade them. And they may have done that in one small pocket around a small village called Robotyne in the south-east. They’ve managed to push through these incredible Russian defences and the hope is that if they can expand this pocket they may be able to pull through the gap and if they can then get behind Russian lines and take them from the rear, then what has so far been this very strong but brittle Russian defence could break. 

Sonja Hutson
Why haven’t the Ukrainians been as successful as they thought they could be? 

John Paul Rathbone
So there was a lot of criticism by anonymous, often US officials in the US press about how everything was going slower than planned and expected. And that’s true and that’s because the Russian defences were that much stronger than anyone had anticipated. But it’s also true that nobody has fought this kind of war, neither in the west or really anywhere since the second world war. So the calibration was kind of wrong. And another problem was that Ukraine was using newly trained soldiers to mount this offensive. And I think that if you or I or most of our listeners were plucked out of the streets and given four weeks of training on a Bradley armoured infantry vehicle, we’d also have not done so well. 

Sonja Hutson
So have western officials backed off on their calls to take a different approach? 

John Paul Rathbone
I’d say that the wind of opinion has kind of shifted over the past 10 days or so. There had been this wave of criticism. And last week, Kirby, who’s one of the US defence’s spokesman’s, acknowledged that there had been a kind of a breakthrough. And Stoltenberg, who is the head of Nato, had said, listen, let the Ukrainians fight the way they know how to fight. But it’s been very, very gradual progress.

But the kind of success it’s been having isn’t the kind of success that can be measured on a map. It’s measured in terms of Russian lines of communication, Russian ability to resupply their front lines. And the open question at the moment is, now that Ukrainians have seemingly punctured one of these first line of defences, if they can get through to the second and third lines. And the supposition is that the Russians have put all their troops forward into this first line, and if the Ukrainians can keep on pushing through, that the second and third lines of defence will be much less well-staffed by troops. And if that is the case, then the Ukrainians may be able to push through. 

Sonja Hutson
What does success for the counteroffensive look like now? 

John Paul Rathbone
The idea that this could be a decisive push that recaptures a significant amount of territory, that hope has been kind of abandoned and a more realistic assessment has set in. A realistic gauge of success would be that the Ukrainians manage to puncture a significant hole in the south east, that they manage to pull some of their reserve troops through that gap, that they manage to disrupt and widen that hole and push the Russians back and potentially reach the Sea of Azov. If they do that, then they can sever Russia’s logistical connections between the mainland and Crimea and at the same time continue to repel Russian attacks in the north east of the country. 

Sonja Hutson
John Paul Rathbone is the FT’s defence and security correspondent. Thanks, JP. 

John Paul Rathbone
Thank you. 

[MUSIC PLAYING]

Sonja Hutson
Before we go, you know the saying “if you can’t stand the heat, get out of the kitchen”? Well, the former head of Uber, Travis Kalanick, is dealing with something like that right now. Sources tell the FT that Kalanick’s start-up called CloudKitchens fired workers and closed locations this year. The company leases food prep space to restaurants, but these sources say that CloudKitchens had only leased half of their building space by the end of the first quarter. Apparently, CloudKitchens is trying to tighten its belt as it deals with higher interest rates and the end of the free money era. The briefing actually did a whole segment about Kalanick and these ghost kitchens last year. If you want to hear that episode, we have a link to it in the show notes.

[MUSIC PLAYING]

And you can read more on all these stories at FT.com for free when you click the links in our show notes. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news. 

[MUSIC PLAYING]