In December European Commission President Ursula von der Leyen accidently revealed the cost to Ukraine of the war in a speech. “It is estimated that more than 20,000 civilians and 100,000 Ukrainian military personnel have died to date,” she said. The comment drew a sharp rebuke from Kyiv which has made casualty figures a state secret. The EC quickly deleted the comments from video recordings of the address and reissued the press release of von der Leyen’s comments with the numbers expunged. But Leyen’s comment tallies with other estimates and shows just how much Ukraine is paying for Russia’s invasion. Prior to the war in the eight years of fighting in Donbas against separatists, Ukraine had lost a total of some 14,000 people. It is widely reported that “Ukraine is winning the war with Russia” but a more accurate description is that against all expectations it is not losing. The West has supplied Ukraine with powerful, but largely defensive weapons that have been enough to prevent Russia from rolling over the Ukrainian army. However, the West has balked at providing powerful offensive weapons, afraid that it would escalate the war and pull Nato forces into a direct confrontation with Russia. After the spectacular successes of Ukraine’s September counteroffensive by December the frontline had stabilised as Russia’s new top General Sergey Surovikin withdrew from Kherson and redeployed his forces in a new multi-layered defensive positions. Some 180,000 of the 300,000 fresh troops mobilised in September have been deployed to firm up the Russian frontline and the remaining 120,000 are held in reserves in the rear allowing the Russian troops to rotate and recover from the fierce fighting. At the time of writing the main military clash was around the town of Bakhmut where neither side is able to gain an advantage. Russia has made some incremental advances but increasingly the war is being compared to WWI trench warfare fought with infantry and artillery. Few smart weapons have been deployed in this fight as both sides are running low. In parallel Russia continues to bombard Ukraine’s energy infrastructure, including two very large barrages over the New Year’s Eve holidays in an effort to demoralise Ukrainian civilians. That strategy is not working. Analysts are widely predicting a big Russian counteroffensive in the coming months once the ground freezes and Russia has had time to train and equip its new forces. Ukraine intelligence are also predicting that Russia will close its borders in January, declare martial law and launch a mass mobilisation. Clearly the war will continue much longer than anticipated. From September the Kremlin began to signal that it was ready for peace talks, but those are unlikely as the positions of the two sides remain so far apart. The Kremlin is insisting that Kyiv concede the four regions annexed by Russia in September before talks start. Bankova is insisting that Russia withdraw to at least the 2014 borders, and would prefer Russia retreat to the 1991 borders, before it will contemplate peace negotiations. Kyiv has called for a UN sponsored peace summit in February, but this will likely end simply as a forum for the international community to express its outrage over Russia’s invasion of Ukraine but won’t produce any concrete results. Despite the death toll, Ukrainians remain almost universally committed to continuing the war until they win. Ukraine has some million people in uniform -- many women have also volunteer, and for frontline duty too — with several hundred thousand in active service in the fight. They face around 400,000 Russians serving in the Russian army, but with a new mobilisation being prepared – probably for around April when the weather improves – this war could last for years. Ukraine has lost an estimated 20% of its territory. At least 22% of Ukrainian farmland is under Russian control. These areas are a large part of the territory identified in the Minsk II agreement that were to be governed as autonomous districts. As of today, it appears Russia has come close to achieving some of its minimalist goals, including capturing the greater Donbas region. If Russia completes this objective then that would represent an obvious point for Putin to declare victory and for the war to stop. In the near term that is the most likely scenario that could bring the fighting to an end. In the meantime, Ukraine’s economy is suffering massive damage. The Ministry of Economy of Ukraine was forced to return to its original forecast of a 32-33.5% fall in real gross domestic product this year due to Russian attacks on energy infrastructure, First Deputy Prime Minister Yulia Svyrydenko, Minister of Economy, said at a briefing on December 2. But following the barrage targeting the energy infrastructure that started in October, the contraction is likely to be much more severe. From the initial estimates of $100bn of physical damage done by Russia over the summer, the estimates rose to $400bn by autumn and are likely to almost double again by the end of the year, up to $700bn. Missile strikes have destroyed 50% of Ukraine’s energy facilities. World Bank Vice President for Europe and Central Asia Anna Bjerde told Austrian newspaper Die Press that the cost of rebuilding Ukraine’s infrastructure damaged or destroyed by Russia since February 24 will cost from €500bn to €600bn ($527bn to $632bn). "According to our estimates, which have been verified by the World Bank, the amount of damage caused to the Ukrainian economy as of June 1 is $350bn. By the end of the year, this amount will obviously double. We understand this, as the destruction continues," Ukraine’s Prime Minister Denys Shmygal said at the economic forum in Paris in December. At the same time, the prime minister said that all sectors of the country's economy are suffering because of the war. President Vladimir Zelenskiy said in a call with US President Joe Biden on December 9. US President Joe Biden has said he has no intentions to talk to Putin for now. Biden is not planning to speak to Russian Putin about ending the war in Ukraine war as Putin has shown no inclination for dialogue. Ukraine received a total of $27.2bn in financial aid from Western allies in 2022, the country’s Deputy Finance Minister Roman Ermolichev said. Ermolichev added that in 2023 the amount of assistance will increase up to about $38bn to cover the budget deficit. Ukraine’s Prime Minister Denys Shmygal noted that his country is also expecting the US Congress to approve allocation of financial aid worth $37.7bn next year. US Army plans ‘dramatic’ ammo production increase amid Russia’s invasion of Ukraine. The US Army is seeking a “dramatic” increase in monthly production of 155mm artillery shells over the next three years as donations to Ukraine are “straining allied munitions stockpiles,” Doug Bush, the assistant secretary of the US Army for acquisition, told Defence News, a US media outlet. However, during Zelenskiy’s visit to Washington DC in December Biden repeated that the US will not send “lethal weapons” (offensive weapons) to Ukraine in 2023. In the same week German Chancellor Olaf Scholz made similar comments: he reiterated Germany’s support for Ukraine, but said that Germany will not send any tanks to Ukraine in 2023.