Also: Russian reserves, hospital prices, and an Uber shift.
Good morning. David Meyer here in Berlin, filling in for Alan.
Much of the world celebrated Victory in Europe Day yesterday, but Russia celebrates its Victory Day on May 9th. And expectations were high regarding what President Vladimir Putin might do on this commemoration of Russia’s victory over the Nazis in 1945.
Would Putin formally declare war on Ukraine, thus unlocking vast reserves of former conscripts to prop up his faltering campaign? Would he declare victory, perhaps based on Russia holding much of Ukraine’s eastern Donbas region? Would the dictator take his nuclear threats to the next level?
As it turned out, no. Putin’s speech played like a greatest hits of his now-standard rhetoric: Kyiv is run by neo-Nazis and was trying to go nuclear; NATO was weaponizing territories on Russia’s border and the invasion was “a pre-emptive strike at the aggression”; the West has abandoned traditional values but Russia will never do so. At least at the time of publication, today has not proved to be the turning point in Russia’s war that many feared or hoped it might be.
Putin does not announce ‘a war’; nor claim any victory — instead says that Russia is forced to defend itself in the Donbas against Nazis, and that Ukraine had plans to acquire nukes.(!)
A commitment to persist in attack. The West must show similar resolve in Ukraine’s defence.
— Dr John Chipman IISS (@chipmanj) May 9, 2022 That fits with what we’ve been seeing in the last couple weeks. After a pretty escalatory few days in late April, where both Russia and West heated up their rhetoric, the conflict seems to be in a kind of holding pattern, in which Russia occasionally raises the specter of nuclear conflict but the West nonetheless refuses to back down—and in which Russia keeps bombarding Ukraine’s east with decreasing precision.
That decreased precision is down to the depletion of Russia’s high-end weaponry, according to the British defense ministry. And there’s the rub: Russia’s army is getting worn down and it can’t keep going forever, even if Putin is (as theorized by CIA Director William Burns in a Financial Times interview) convinced that his gamble might still pay off.
What rhetoric Putin used in his speech is immaterial. If he didn’t declare war, or a general mobilisation, that’s what important. Without concrete steps to build a new force, Russia can’t fight a long war, and the clock starts ticking on the failure of their army in Ukraine
— Phillips P. OBrien (@PhillipsPOBrien) May 9, 2022 Sometimes something not happening is an event in itself. And by the way, it’s comforting to see Burns say in that FT piece that the intelligence community sees no “practical evidence at this point of Russian planning, deployment or even potential use of tactical nuclear weapons”. More news below.
David Meyer
@superglaze
david.meyer@fortune.com
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Russian reserves
Hundreds of billions of dollars of Russia's reserves are currently frozen outside the country, and the EU's foreign policy chief thinks they should be seized, to pay for Ukraine's eventual reconstruction. Josep Borrell believes there's precedent to be found in the seizure of Afghanistan's central bank assets, though let's just say that was a pretty controversial move in itself. Financial Times
Treatment costs
Some major hospital chains would like to jack up their prices by as much as 15%, which would mean higher premiums. It's much more than typical increases, and the chains argue that their hand has been forced by rising nurse salaries. Wall Street Journal
'Different approach'
Uber CEO Dara Khosrowshahi has warned his youthful workforce that they were about to experience a different period to the bull run that's characterized their careers thus far. Hiring is now a "privilege" at Uber and the company's focus has shifted from profitability to free cash flow. Khosrowshahi: "In some places we’ll have to pull back to sprint ahead. We will absolutely have to do more with less." Fortune
Hong Kong
Pro-Beijing hardliner John Lee has been "elected"—he was the only candidate—as Hong Kong's new chief executive. Carrie Lam's replacement is her former security chief, who was instrumental in pushing the extradition bill that sparked massive protests in 2019, and who is still under U.S. sanctions for the authorities' heavy-handed response to those protests. BBC
Leading Through an Age of Discontinuity Over the next decade, businesses will likely experience several major discontinuities that are expected to reframe leaders’ perspectives and inform actions that sustain growth. Deloitte explores how business leaders can lead with courage, empathy, and creativity to help shape a better for future all. Learn more
Long COVID
Long COVID could affect over a billion people within a few years, according to COVID researcher Arijit Chakravarty (who also supports official warnings of 100 million U.S. infections this coming fall and winter). Fortune's Erin Prater: "Long COVID is likely an umbrella term for a combination of issues and conditions: People who have long-term COVID infections who are able to continue to spread the disease, people whose COVID after-effects clear up after a few weeks, and people with Long COVID itself, in which people aren’t infectious, but experience all kinds of symptoms for much longer." Fortune
Crypto 401(k) plans
Fortune's Shawn Tully on the dangers that await companies who give in to workers' demands for cryptocurrency-friendly 401(k) plans: "We're about to witness a tense tug-of-war between what companies think they can safely proffer in their retirement plans, and what workers want." Fortune
Bitcoin drop
Bitcoin and other cryptocurrencies are having a bad time, showing yet again how their trajectory is increasingly in sync with that of tech stocks. Fortune
Southeast Asia
Consumers in Southeast Asia could be particularly badly hit by rising food prices, said economist Mohamed Faiz Nagutha, who warned of widespread unrest if there's "a big shock jump". CNBC
This edition of CEO Daily was edited by David Meyer.
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