Why the G20 is a harbinger of the EU’s courageous new diplomatic world

Good morning from Rio de Janeiro, the place Europe’s strongest leaders are gathering with world counterparts for a G20 summit overshadowed by Donald Trump and the US president-elect’s overseas acolytes’ preparations for his administration.

At present, I transient you on what to anticipate from the gathering, and Laura and our Moscow correspondent report on the gasoline battle between Austria and Russia.

Bonfire of the diplomacies

European leaders making ready for the G20 summit in Rio this morning are waking as much as an uncomfortable new actuality: transactional geopolitics is again.

Context: The gathering unites the world’s 20 greatest economies, and was fashioned to seek out joint options to huge points similar to managing the worldwide financial system, local weather change and growth finance. From the European continent, France, Germany, Italy, Turkey and the EU are members; Spain is a everlasting invitee.

Donald Trump, who will take management of the White Home in simply over two months, just isn’t a fan of multilateral frameworks such because the G20. He prefers bilateral negotiations and quid professional quo preparations. And his acolytes are already laying the groundwork for his regime.

Argentina’s ultra-libertarian President Javier Milei, who final week turned the primary overseas chief to satisfy Trump in individual since his victory, has threatened to dam the Rio summit’s joint conclusions as a result of references to taxing the super-rich, local weather change coverage and gender points, officers mentioned. He has pitched himself as Trump’s closest companion in Latin America and his ally in a world tradition conflict towards the so-called “woke” left.

That has dismayed European diplomats who see in Milei the approaching shadow of Trump’s impression on different governments and the long run crumbling of worldwide pacts geared toward aligning financial insurance policies within the spirit of compromise.

“This is simply not the sort of gathering likely to benefit from the impending change of politics in the White House,” mentioned Ian Lesser, fellow on the German Marshall Fund.

Of equal concern to European capitals is a extra everlasting fracturing of teams just like the G20, which has served as a bridge to creating nations similar to Indonesia, South Africa and Mexico, and stored them loosely aligned with western international locations.

Within the extra transactional world envisaged by Trump, the place international locations choose and select their stance on particular person points relying on a slender imaginative and prescient of nationwide advantages moderately than via multinational compromise, officers say rivals similar to China and Russia might search to strengthen various groupings and undermine western alliances.

“Many of these countries are very comfortable with essentially a non-aligned posture . . . and this has come back into vogue,” mentioned Lesser. “It’s also clear that countries like Russia and China are looking to take advantage of that to build coalitions of their own.”

Chart du jour: Rightward swing

The German federal election on February 23 will decide the destiny of Europe’s largest financial system. Observe the FT’s ballot tracker right here.

Transitory

Austria has hit again at Russia after Kremlin-controlled Gazprom shut off its gasoline provides to Vienna, elevating fears about power disruptions as temperatures cool in Europe, write Laura Dubois and Anastasia Stognei.

Context: Europe has principally weaned itself off Russian pipeline gasoline following Moscow’s full-scale invasion of Ukraine. A handful of nations together with Hungary, Slovakia and the Czech Republic are nonetheless shopping for some being pumped via Ukraine.

Austria was one among them — however Gazprom shut off provides to its power firm OMV on Saturday, after an arbitration court docket dominated the Russian power large owed OMV €230mn.

“It is not surprising that Putin and his henchmen are once again using energy as a weapon,” mentioned Austria’s overseas minister Alexander Schallenberg.

“The fact that Gazprom stopped its deliveries overnight because it didn’t like an arbitration court ruling shows once again the state of the rule of law in Russia,” Schallenberg mentioned. “Agreements are only valid as long as they suit the Kremlin’s political calculations.”

Schallenberg insisted that Austria’s power provide is safe, and storage amenities virtually at capability.

Warnings about Gazprom’s transfer despatched European gasoline costs to their highest stage in virtually a yr on Friday, as analysts feared disruptions to Europe’s general provides.

However Gazprom mentioned yesterday that the general each day provide to Europe through Ukraine would stay unchanged at 42.4mn cubic metres, in keeping with information company Tass, indicating that the quantities that Austria had been receiving — round 17 mcm per day — discovered new European consumers.

The transit contract via Ukraine is because of expire on the finish of this yr, as Kyiv has refused to barter an extension, that means the remaining Russian provides would run dry anyway.

Schallenberg mentioned Europe wanted to proceed minimising its dependencies by working with “like-minded” international locations. “Only in this way can we set the course for the future,” he mentioned.

What to observe in the present day

1. G20 leaders summit in Rio de Janeiro.

2. EU overseas ministers meet.

3. EU agriculture and fisheries ministers meet.

Now learn these

• Ratio rivals: Secret analysis by the European Central Financial institution reveals capital necessities for giant EU banks are a lot decrease than for his or her Wall Road rivals.

• Bombing Russia: Washington has given long-awaited approval to Ukraine to make use of long-range US missiles to strike targets throughout the border.

• Plastic panic: European plastics producers are closing crops as they wrestle to compete with a world glut of low-cost materials.