two years ago, russia invaded ukraine. one year ago it looked like putin had made a big mistake. today, russia is gaining some territory, its economy is growing. is the conflict now frozen? president zelensky is asking washington for ammunition. the us congress is stalling on funding as they wait for the possible return of donad trump to the white house.

is it any surprise putin is sounding confident? the tone on the ukrainian side is very different. we're live in kyiv. despite everything, this is a country which mostly still wants to fight because it sees the war as a battle for survival. meanwhile, russia is still exporting over half a billion pounds of oil and gas a day, and some of that is finding its way to europe. and it has turned itself into a war economy. why aren't sanctions working? it is critical again

that we have corporate sector buy—in, where we have corporate sector responsibility. you cannot expect a few hundred government employees to be able to chase each individual transaction. we'll bejoined by a ukrainian refugee, an mp from the country's opposition party, a russian economist and a former top us diplomat to ask what needs to be done to save ukraine from defeat. over the past two years, tens of thousands of civilian casualties, hundreds of thousands of soldiers killed, six million refugees, tens of billions of dollars spent by the kremlin and tens of billions in aid from the us and europe to ukraine. the war in ukraine set off an economic shock — including a generational surge in inflation to double digits — as the world's biggest energy exporter invaded one of its biggest food producers. ukrainian sovereign territory has been annexed by russia. but no corner of europe — no household, company or government — has been unaffected by the aftershocks of this war. and right now, as we stand

here on the two—year anniversary, it shows no signs of ending. it appears frozen in a stalemate with some signs, if anything, of moves in russia's direction. first up, here'sjoe inwood's report on the state of play, which contains some graphic images of war. and with those words, this war began. president putin's three—day "special military operation" has now lasted two years. it began with remarkable ukrainian defiance in the face of seemingly overwhelming odds. soon, stories of brutality — beyond even the expected carnage of war.

but ukraine did not fall. kharkiv became known as a fortress city — holding out under siege. with his army on the back foot, president putin took a step previously unthinkable. the harsh ukrainian winter meant the front lines would not move. but that did not mean an end to the suffering. ukraine has always refused to say how many fighters it has lost — but the toll is huge.

initially, western allies have been reluctant to back ukraine as fully as kiev wanted. eventually, that changed. we've committed nearly 700 tanks and thousands of armoured vehicles. 1000 artillery systems, more than two million rounds of artillery ammunition. volodymyr zelensky had been defiant throughout the start of the war. as the first year drew to a close, he sounded optimistic. the year of the return to peace, the year of the liberation of our land and our people from russian captivity. there was no such optimism to be found in the eastern town of bakhmut. it had become a meat grinder. civilians like natalia are caught in the middle. ukraine's desire to be closer to the european union was in some ways behind russia's original 2014

invasion of the east. nine years on... today is a historic day because today the commission recommends that the council opens accession negotiations with ukraine and with moldova. while eu membership would not come any time soon, financial support was gearing up. this is a clear signal that ukraine will withstand and that europe will withstand. but for all the talk of unity and victory, the war is not going ukraine's way. the frontline town of avdiivka was lost to the russians, and the country's popular head of the armed forces was replaced after falling out with the president. president putin sounds more secure, more confident as the war grinds on.

president putin has seemingly always believed russia's weight of numbers and the ability to endure suffering will tell in this war. as it enters its third year, could he be right? well, let's cross over to the bbc�*s ukraine correspondent james waterhouse, who's in kyiv tonight. what is a mood like? it is difficult- _ what is a mood like? it is difficult. when _ what is a mood like? it is difficult. when we - what is a mood like? it is

difficult. when we travell what is a mood like? it 3 difficult. when we travel through different cities, the streets feel hollow, in some areas there are fewer men visibly about, it is mostly the elderly or women and children. the overarching emotion is fatigue, tiredness. two years off the back of eight years of russian aggression is a long time to live with uncertainty. the looming threat that your life might be turned upside down at any given moment. there are people who have loved ones fighting on the frontline and men worried about being mobilised, who are not killers, they say, not cut out for the unimaginable conditions of the front line in the avoid being seenin of the front line in the avoid being seen in public. there are those who are volunteering to get ahead of the draft in the hope they will be able to choose where they are deployed. things are incredibly difficult and there are those who have had enough, who say the loss of life and

destruction is too much. let us try to cut a deal. but the majority view is that the fight must go on. this work, for the majority of ukrainians, is existential and if there was a peace agreement, in the eyes of ukrainians it would not be worth the paper it was written on because in several ways russia has betrayed ukraine and the actions it has carried out over the past decade and more. ., u, has carried out over the past decade and more. ., , ., . ., and more. you can see a clear a- etite and more. you can see a clear appetite to — and more. you can see a clear appetite to fight _ and more. you can see a clear appetite to fight on? - and more. you can see a clear appetite to fight on? there . and more. you can see a clear appetite to fight on? there is| appetite to fight on? there is absolutely — appetite to fight on? there is absolutely an _ appetite to fight on? there is absolutely an appetite - appetite to fight on? there is absolutely an appetite to - appetite to fight on? there is| absolutely an appetite to fight appetite to fight on? there is - absolutely an appetite to fight on but also an operational reality to that. when you head to the front line, what takes your breath away is the resources it takes to sustain the resources it takes to sustain the fight. it is the russians, as you have seen, who are throwing their weight around, with increased artillery fire on the figures we get given by the troops is five to number one terms of being outgunned

and ukraine is repelling constant russian attacks and armoured vehicles and soldiers trying to take whatever territory they can and at the moment they are hanging on in the moment they are hanging on in the talk is about not losing rather than liberation, which was the hope and the narrative this time last year. a lot has happened and a lot has been lost. but this is a country thatis has been lost. but this is a country that is no stranger to russian aggression, no stranger to war, and they would ratherfight aggression, no stranger to war, and they would rather fight in the attempt and hope of being free than be occupied or have vladimir putin prevail and install his puppet government in this country would fade into the darkness. it is government in this country would fade into the darkness.— fade into the darkness. it is seen as a binary _ fade into the darkness. it is seen as a binary choice. _ fade into the darkness. it is seen as a binary choice. thank - fade into the darkness. it is seen as a binary choice. thank you - fade into the darkness. it is seen as a binary choice. thank you for| as a binary choice. thank you for joining us. and there will be more second anniversary coverage across the bbc. joining me in the studio now is kseniia novikova, a ukrainian broadcaster who fled the conflict and now lives

here in the uk and ukrainian politician solomiia bobrovska who joins us remotely from kyiv. thank you so much forjoining us. to hear president putin crowing about taking territory and again, the americans are stalling and republicans installing in congress, is a in any way breaking the spirit of the ukrainian people?- is a in any way breaking the spirit of the ukrainian people? putin, he sa s are of the ukrainian people? putin, he says are so — of the ukrainian people? putin, he says are so many _ of the ukrainian people? putin, he says are so many times _ of the ukrainian people? putin, he says are so many times one - of the ukrainian people? putin, he says are so many times one thing l says are so many times one thing today and a different thing tomorrow. i would not trust any of his words. he makes everything only two excuses interest to get access to crimea and our see and he gets more territory and today he will say, he will blame the interests of the usa and tomorrow he will blame

the usa and tomorrow he will blame the ukraine and what else he will say the day after tomorrow? find the ukraine and what else he will say the day after tomorrow? and how tou~h has say the day after tomorrow? and how tough has it — say the day after tomorrow? and how tough has it been _ say the day after tomorrow? and how tough has it been for— say the day after tomorrow? and how tough has it been for you _ say the day after tomorrow? and how tough has it been for you and - say the day after tomorrow? and how tough has it been for you and your. tough has it been for you and your family? it tough has it been for you and your famil ? ., , tough has it been for you and your famil ? .,, ., . tough has it been for you and your famil? .,. , ._ family? it has touched me personally because for my _ family? it has touched me personally because for my family, _ family? it has touched me personally because for my family, the _ family? it has touched me personally because for my family, the war - family? it has touched me personally because for my family, the war in - because for my family, the war in ukraine did not start in 2022, it was 2014 because my home town was occupied for three months. in donetsk region. in that moment, in 2014, we were thinking the same, it will last for a few months and everybody can come back and my family could come back for a while when the army freed the city. but the eastern part, for about ten years, under occupation, it would not be easy to get us back anyway so i would not be expecting that it would be easy. because, not because

of the putin interests, the people who live there, they are so brainwashed, there are so desperate, and they already see only one away for a living. and they already see only one away for a living-— for a living. you are an mp and all an important _ for a living. you are an mp and all an important committee, - for a living. you are an mp and all an important committee, are - for a living. you are an mp and all an important committee, are you| an important committee, are you worried about international support and attention starting to diminish? a lot. i had assumed feeling i had a few years ago. this year, all of our partners, on the front line, we can see how aggressive the russians are, how they have got the advantage on the front line. we cannotjust how they have got the advantage on the front line. we cannot just fight with human resources, all asking for is ammunition, which is vital for

not only the ukrainian army but ukraine. and if they say you wish you victory, but as words, but with actions... you are giving us... just to keep somehow... not to win, it is not about the victory or the fight, actually. that is my view on americans. it is not about helping ukraine. it is about fighting. what position they are still keeping. and military aid for ukraine. it will be

very unpleasant and very unexpected, the results in ukraine as well. is your fear that over the course of this year, if you had limits on support for your country, you will be forced into some sort of negotiation with russia, is that what you fear is where this is headin: ? , ., what you fear is where this is heading?— heading? they want to see the success. but at _

heading? they want to see the success. but at the same - heading? they want to see the i success. but at the same time, to show, to show the lack of a initial support. yes, we are exhausted. but there is no chance to fight. in any way. we will continue to fight. [30 way. we will continue to fight. do ou way. we will continue to fight. do you think vladimir putin is waiting perhaps for the return of president trump in the white house? i would sa russia trump in the white house? i would say russia was _ trump in the white house? i would say russia was two _ trump in the white house? i would say russia was two years _ trump in the white house? i would say russia was two years and - trump in the white house? i would say russia was two years and is - say russia was two years and is showing its strength. it is all about the changing of the political leaders in the us but that is about the gap between the capacity, russian capacity in the military production and the intelligence capacity because the network is actually very active in europe, and they are strong and the presidential change is only the top. that is one

of the puzzles. he is reaching this result. but despite this year has to be very black and white. there is no chance to see the grey colour. you like of our partners, it is time to say i am with ukraine for i am with russia or editors the coalition and it is ok for the international border. so far unfortunately it is a success for putin.— success for putin. let's bring kseniia back _ success for putin. let's bring kseniia back in. _ success for putin. let's bring kseniia back in. you - success for putin. let's bring kseniia back in. you said - success for putin. let's bring kseniia back in. you said you success for putin. let's bring - kseniia back in. you said you don't expect to go back to home part of eastern ukraine anytime soon but i wondered, there has been concern about changes for ukrainian refugee schemes, has it affected you or people you know in the uk? it is

still affecting — people you know in the uk? it is still affecting just _ people you know in the uk? it is still affecting just because of peopie _ still affecting just because of people. they need to know how they are supposed to live next year's, and if _ are supposed to live next year's, and if you — are supposed to live next year's, and if you know nothing about the stages of— and if you know nothing about the stages of your visa, and it is always— stages of your visa, and it is always something about temporary, a few months, another few months, and something _ few months, another few months, and something about non—sustainability and people who fled from the work, they already don't feel sustainable in a way— they already don't feel sustainable in a way that makes sense. this gets them _ in a way that makes sense. this gets them even _ in a way that makes sense. this gets them even extra stress. they are supposed — them even extra stress. they are supposed to know definitely what their fate is, supposed to know definitely what theirfate is, but supposed to know definitely what their fate is, but they are supposed to go. _ their fate is, but they are supposed to go, and especially it is the women, _ to go, and especially it is the women, people with disability, kids, but at _ women, people with disability, kids, but at the same time intelligent people — but at the same time intelligent people we are not any one place.

they— people we are not any one place. they already started trying to fit in this— they already started trying to fit in this society and work.- they already started trying to fit in this society and work. thank you for “oininu in this society and work. thank you forjoining us- _ when the west decided it wanted to do everything it could do to help ukraine, short of risking world war iii, it decided to focus on an economic counterattack, the financial theatre of war. the us president, joe biden, today announced more than 500 fresh sanctions saying the sanctions "will ensure" russian president vladimir putin "pays an even steeper price for his aggression abroad and repression at home". but while at first the impact of some tough sanctions appeared calamitous for the russian economy, with reserves seized and its banking system cut off, it's economy is now showing some resilience or more. here's ben chu. two years on from the invasion of ukraine, is russia winning the economic war? he certainly argues that. translation: the biggest number of sanctions in the world is applied | against this country. and we have become the biggest economy of europe over that period of time.

the invasion prompted an unprecedented barrage of economic sanctions on putin's regime from the west. it's estimated russia was subjected to more sanctions than iran, north korea and syria combined. but the results have been considerably more modest than expected. in the wake of the invasion, the imf projected an almost 10% contraction in russian gdp in 2022, in large part due to those sanctions. but in fact, the drop was considerably smaller in that year, and now the russian economy is forecast by the imf to grow more strongly than many western economies in the coming years. so why? does it mean sanctions aren't working? analysts argue there are major holes in the sanctions regime and their enforcement. russia has been able to source crucial western material and technological imports from friendly regimes in central asia. there is definitely scope for improvement on implementation on enforcement, but it's critical again that we have corporate sector

buy—in where we have corporate sector responsibility. and it can be achieved with carrots and sticks. you know, carrots in terms of explaining how to do it better — clear, harmonised procedures around the coalition countries. but also sticks — potentially multi—billion dollar fines. you can't expect a few hundred government employees to be able to chase each individual transaction. the high global price of oil — which russia has been able to continue to sell legitimately to friendly giants such as china and india — has also brought in considerable revenue to the kremlin. and, as newsnight has reported, moscow has used ship—to—ship transfers of oil — effectively a shadow fleet — to continue making money, even from the west. i think russia is increasingly more dependent on energy. and as you see, the composition of output is increasingly focused on the war economy. so indeed, it is a gas station that is now producing tanks. yet analysts also caution about overestimating the strength of the russian economy.

russian oil production has held up since the invasion in sanctions, but production of things like motor vehicles, auto parts and domestic appliances has crated. and the russian economy really has been overwhelmingly sustained by war spending — guns, planes, missiles, tanks. and analysts question how long this can be sustained, pointing to a risk of an inflationary overheating stemming from a shortage of workers — itself, a consequence of mass mobilisation and emigration. this militarisation of the economy also means household consumption is being severely squeezed and is likely eating into the country's long—term potential growth through a technological downgrading. the medium and longer—term outlook for russia is certainly quite poor. the outlook was quite poor even before russia's full—blown invasion of ukraine. and now the war has made it even worse.

be that as it may, the fact remains russia has shown much greater economic resilience than almost anyone expected. and for putin, it's likely any longer term economic damage or instability will matter far less than doing what he is achieving right now — staying in the fight. joining us tonight from washington, russian economist and academic dr vladislav inozemtsev and karen donfried, former us assistant secretary of state for european and eurasian affairs. vladislav, let's start with you. two years ago the rouble was collapsing and it looked like the russian banking system might as well, what has changed? aha, banking system might as well, what has changed?— has changed? a lot has changed. i would say the _ has changed? a lot has changed. i would say the russian _ has changed? a lot has changed. i would say the russian economy i has changed? a lot has changed. i l would say the russian economy and economic management was very sophisticated during these two years

and actually the russian economy was not so much prepared for the poor. i would say it was not prepared at all because a lot of russians are still in western jurisdictions and were arrested in the first days of the war, but the russian economy is mostly the private market economy, not like the soviet plant and state economy as many experts at the picket. this market economy i would say gets the momentum and the private owners of the companies adapted to the changing conditions. the russian government made a lot of fine regulation about the currency policies, they asked every exporter to sell their currency. then they

introduced a system of allowing the companies to buy goods from different intermediaries without any kind of guarantees and dieting else. you appear to be describing the transformation into a war economy and the question is in the west people are saying that can sustain you for a year or two but it can't last. do you think it can last? i think it can last several years. the most important point here is the timing. you cannot say the russian economy. by this kind of pressure ten years or more, but it definitely can for two or three years from this standpoint because i would remind our listeners, war not waged in your

territory, it produces economic growth. it was like in america, the first and second world war before the united states entered the war. it is beneficial for the economy because it is more money into the industrial sector and also ordinary people because of immobilised people came mostly from deprived and poor regions of the country. you came mostly from deprived and poor regions of the country.— regions of the country. you describe ve well regions of the country. you describe very well the — regions of the country. you describe very well the war _ regions of the country. you describe very well the war economy. - regions of the country. you describe very well the war economy. karen, l regions of the country. you describe | very well the war economy. karen, is realised here the sanction sounded tough they only go so far, they are a compromise understandable, the kremlin keeps on being funded with hard currency and that is because the g7 nations were prepared to collapse the world economy and captive though vast through china and india and this is the result of that. ~ , ., , and india and this is the result of that. ~ y., , , that. when you put in place sanctions — that. when you put in place sanctions you _ that. when you put in place sanctions you don't - that. when you put in place sanctions you don't want i

that. when you put in place sanctions you don't want to j that. when you put in place - sanctions you don't want to harm yourself— sanctions you don't want to harm yourself for — sanctions you don't want to harm yourself for the global economy more than russia, so if we were expecting the russian — than russia, so if we were expecting the russian economy was going to come _ the russian economy was going to come. because of these sanctions in export— come. because of these sanctions in export controls that perhaps wasn't realistic _ export controls that perhaps wasn't realistic i— export controls that perhaps wasn't realistic. i don't think we should forget _ realistic. i don't think we should forget the — realistic. i don't think we should forget the unprecedented nature of the sanctions starting with sanctioning the central bank of a 620 country. $300 billion of russian sovereign _ 620 country. $300 billion of russian sovereign assets are now present. i think— sovereign assets are now present. i think we — sovereign assets are now present. i think we should keep an eye on the commutative impact of the sanctions, particularly _ commutative impact of the sanctions, particularly once the word is over because — particularly once the word is over because this issue of the transition from _ because this issue of the transition from a _ because this issue of the transition from a war— because this issue of the transition from a war economy to something else, _ from a war economy to something else, i_ from a war economy to something else, ithink— from a war economy to something else, i think it will lay bare the impact — else, i think it will lay bare the impact of— else, i think it will lay bare the impact of the sanctions and export controls _ impact of the sanctions and export controls on — impact of the sanctions and export controls on russia and the fact that russia _ controls on russia and the fact that russia is— controls on russia and the fact that russia is now getting drones and missiles — russia is now getting drones and missiles from countries like iran and north— missiles from countries like iran and north korea speaks volumes about russia's_ and north korea speaks volumes about russia's own ability to produce those — russia's own ability to produce those. , ., , , ., , those. there is now this plan being floated around _ those. there is now this plan being

floated around the _ those. there is now this plan being floated around the g7 _ those. there is now this plan being floated around the g7 for _ those. there is now this plan being floated around the g7 for a - those. there is now this plan being floated around the g7 for a few - floated around the 67 for a few months that you don't seize the 300 billion but the proceeds, tens of billions a year, you could somehow divert towards ukraine, d think that is a good idea and a subtle way to ratchet up the pressure on the kremlin? ., ., ., , kremlin? you are right that there is a very active _ kremlin? you are right that there is a very active conversation _ kremlin? you are right that there is a very active conversation about - a very active conversation about what _ a very active conversation about what should happen to those of $300 billion— what should happen to those of $300 billion of— what should happen to those of $300 billion of russian sovereign assets. 0ne billion of russian sovereign assets. one idea _ billion of russian sovereign assets. one idea is — billion of russian sovereign assets. one idea is what you just shared and 0ne idea is what you just shared and another— one idea is what you just shared and another is _ one idea is what you just shared and another is the funds should be seized — another is the funds should be seized as _ another is the funds should be seized as such and used for ukrainian _ seized as such and used for ukrainian reconstruction. that would be for— ukrainian reconstruction. that would be for the _ ukrainian reconstruction. that would be for the countries who hold those assets _ be for the countries who hold those assets to _ be for the countries who hold those assets to decide but it does seem possible _ assets to decide but it does seem possible that one could say if a country — possible that one could say if a country for no reason without provocation seizes sovereign territory _ provocation seizes sovereign territory of its neighbour, that seems — territory of its neighbour, that seems a — territory of its neighbour, that seems a reasonable bar to suggest that sovereign assets held by others could be _ that sovereign assets held by others could be at— that sovereign assets held by others could be at risk. it that sovereign assets held by others could be at risk.— could be at risk. it sets a precedent _ could be at risk. it sets a precedent that _ could be at risk. it sets a precedent that worries . could be at risk. it sets a - precedent that worries some financial centres because other

countries will say whatever they come for us so there is a balancing act. , , ., , ., ., come for us so there is a balancing act. , y., , ., ., ., act. right, but if you plan to for no reason _ act. right, but if you plan to for no reason attack _ act. right, but if you plan to for no reason attack your _ act. right, but if you plan to for no reason attack your weaker i no reason attack your weaker neighbour and take no reason attack your weaker neighbourand take their no reason attack your weaker neighbour and take their territory, that might — neighbour and take their territory, that might be an appropriate threshold for countries to feel threatened.— threatened. vladislav, if the western nations _ threatened. vladislav, if the western nations were - threatened. vladislav, if the western nations were to - threatened. vladislav, if the western nations were to do | threatened. vladislav, if the - western nations were to do that and take the hundreds of billions and just sees it, start to use it and give it to ukraine, could that be a game changer that might change the resilience of the russian economy? it can be because russia never use these funds. the reserve fund, they were not using in the west economy. the surplus of the russian foreign trade went up to an all—time high and actually it was $252 billion more than a surplus in 2021. so actually russia got most of this

money back so it is a trade surplus. but