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 international counterparts for a G20 summit overshadowed by Donald Trump and the US president-elect’s international acolytes’ preparations for his administration.

Immediately, I temporary you on what to anticipate from the gathering, and Laura and our Moscow correspondent report on the fuel 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 search out joint options to large points resembling 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, shouldn’t be 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 international chief to satisfy Trump in individual since his victory, has threatened to dam the Rio summit’s joint conclusions resulting from references to taxing the super-rich, local weather change coverage and gender points, officers stated. He has pitched himself as Trump’s closest accomplice in Latin America and his ally in a worldwide tradition conflict towards the so-called “woke” left.

That has dismayed European diplomats who see in Milei the upcoming shadow of Trump’s influence on different governments and the long run crumbling of worldwide pacts aimed 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,” stated 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 growing nations resembling 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 decide and select their stance on particular person points relying on a slim imaginative and prescient of nationwide advantages somewhat than by way of multinational compromise, officers say rivals resembling China and Russia may 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,” stated 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. Comply with the FT’s ballot tracker right here.

Transitory

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

Context: Europe has largely weaned itself off Russian pipeline fuel 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 by way of Ukraine.

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

“It is not surprising that Putin and his henchmen are once again using energy as a weapon,” stated Austria’s international 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 stated. “Agreements are only valid as long as they suit the Kremlin’s political calculations.”

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

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

However Gazprom stated yesterday that the general every day provide to Europe by way of 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 by way of Ukraine is because of expire on the finish of this yr, as Kyiv has refused to barter an extension, which means the remaining Russian provides would run dry anyway.

Schallenberg stated 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 stated.

What to observe at the moment

1. G20 leaders summit in Rio de Janeiro.

2. EU international ministers meet.

3. EU agriculture and fisheries ministers meet.

Now learn these

• Ratio rivals: Secret analysis by the European Central Financial institution exhibits capital necessities for giant EU banks are a lot decrease than for his or her Wall Avenue 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 worldwide glut of low cost materials.