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European markets sink as Russia seizes Ukraine’s Zaporizhzhia nuclear plant

March 4, 2022, 11:55 AM UTC

Good morning. David Meyer here in Berlin, filling in for Alan.

European markets are plummeting this morning following Russia’s capture of Europe’s largest nuclear power station, Zaporizhzhia, in southeastern Ukraine. Germany’s DAX is down 3.2% at the time of publication, the FTSE 100 is down 3%, and the Borsa Italiana is down 4.4%. U.S. futures are in the red, but much less so; this is first and foremost a European crisis.

The seizure of Zaporizhzhia took place early this morning, following Russian shelling of the plant that caused a significant fire—thankfully in a training building rather than a reactor unit. Two security personnel were injured, but no operational staff. Radiation levels haven’t spiked, and there is no reported damage that should cause immediate alarm. Still, Europe is now facing more than one kind of nuclear threat from Russia.

“This night could have been the end of Europe,” Ukrainian President Volodymyr Zelenskyy said this morning, urging Russians to protest against their government. “Tell them you want to live,” he said. “You want to live on an Earth that isn’t radioactive. Radiation doesn’t know where the borders of your country are.”

Ukraine’s nuclear regulator has warned that, if the plant’s staff were to lose their ability to keep cooling the reactors safely—again, not something that’s happened yet—the resulting disaster could be worse than Chernobyl (the world’s worst, thus far) or Fukushima. There are other Ukrainian nuclear plants to worry about, too, such as Yuzhnoukrainsk in the south, whose three reactors are still in Ukrainian hands. And then there are the contained ruins of Chernobyl itself, which the Russians grabbed a week ago.

Rafael Grossi, the head of the International Atomic Energy Agency, this morning volunteered to personally visit Chernobyl for nuclear-safety–specific negotiations between the Ukrainian and Russian sides, neither of which has responded to his offer yet. “We are in completely uncharted waters,” he said.

Meanwhile, here’s some cause to believe sanctions are having a real effect: Russia’s second-biggest oil firm Lukoil, which just a couple of days ago said it was profiting handsomely from soaring energy prices, has begged the Russian government to stop the war. That’s possibly something to do with its oligarch owner, Vagit Alekperov, reportedly losing $6.9 billion of his personal wealth as a result of the crisis. Either way, it’s a big step for a Russian company of that size to criticize the invasion.

Speaking of Russian oil, please do read Sophie Mellor’s piece on what an embargo of the country’s fossil fuels would mean for the West. For the U.S., it would mean higher prices and inflation; in Germany, it could mean people freezing to death.

More news below, and have a safe weekend if the world allows it.

David Meyer
@superglaze

david.meyer@fortune.com

TOP NEWS

Consultants out

Accenture has axed its entire Russia business. McKinsey has stopped working for state-owned Russian entities and stopped taking on new client work in Russia, and BCG is suspending work with all Russian clients, while retaining its Russian staff for now. Financial Times

Chinese stance

The Asian Infrastructure Investment Bank (AIIB) has frozen all its activities with Russia and Belarus. This is particularly notable because the development bank is based in China, which holds more than a quarter of its voting power. (Bonus read: Fortune’s Yvonne Lau on how China can provide a SWIFT alternative for Russia, but may not want to.) Moscow Times

Starlink warning

After a researcher pointed out that the Starlink terminals SpaceX sent to Ukraine could accidentally provide beacons for Russian airstrikes, Elon Musk has warned users to only use the terminals when needed, to keep the antennas “as far away from people as possible,” and to camouflage them for good measure. Engadget

Amazon antitrust

Amazon has reportedly moved to force a decision by the Federal Trade Commission on its $6.5 billion MGM movie and television studio acquisition. After Amazon told the FTC it has provided all the information its antitrust investigators require, the agency will now need to make its call by mid-March, giving the companies more certainty. Wall Street Journal

AROUND THE WATERCOOLER

French taxes

French President Emmanuel Macron has finally launched his bid for reelection, promising tax cuts for businesses and more investment in areas such as electric vehicle batteries. Macron is quite justifiably pointing out that France faces a rare “accumulation of crises” right now. The centrist leader may also be helped by the fact that his far-right rivals were pretty cozy with Putin. Financial Times

Decentralized sanctions

NFT marketplace OpenSea and Ethereum wallet provider MetaMask have both said they are going to block and delete accounts based in U.S.-sanctioned countries such as Russia and Iran. Some in the “Web3” community say this violates the key principle of decentralization. Surprise! Fortune

Yandex woes

Yandex—the “Russian Google”—has warned it may default on its debt owing to its suspension from New York trading. Yandex isn’t sanctioned as such, but Nasdaq and the NYSE have suspended Russian listings. If the suspension lasts five days or longer, the company says, “the Yandex group as a whole does not currently have sufficient resources to redeem the notes in full.” CNN

A.I. watchdogs

Organizations that are expanding their use of A.I. really need to set up review boards that can identify the risks and tradeoffs, write BCG’s François Candelon and Maxime Courtaux, and INSEAD professor Theodoros Evgeniou, in this piece for Fortune: “With a purely advisory role unlikely to resonate with stakeholders anymore, the A.I. review board has to be made core, not peripheral, to the business.” Fortune

This edition of CEO Daily was edited by David Meyer.

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