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 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 getting 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 huge points akin 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, 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 because 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 warfare in opposition to the so-called “woke” left.

That has dismayed European diplomats who see in Milei the approaching shadow of Trump’s affect on different governments and the longer term crumbling of world 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 growing nations akin to Indonesia, South Africa and Mexico, and saved them loosely aligned with western nations.

Within the extra transactional world envisaged by Trump, the place nations decide and select their stance on particular person points relying on a slim imaginative and prescient of nationwide advantages slightly than by multinational compromise, officers say rivals akin to China and Russia might search to strengthen different 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. 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 Ukraine.

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

“It is not surprising that Putin and his henchmen are once again using energy as a weapon,” mentioned 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 mentioned. “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 virtually at capability.

Warnings about Gazprom’s transfer despatched European fuel costs to their highest stage in virtually a 12 months on Friday, as analysts feared disruptions to Europe’s total provides.

However Gazprom mentioned yesterday that the general every 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 by Ukraine is because of expire on the finish of this 12 months, 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” nations. “Only in this way can we set the course for the future,” he mentioned.

What to look at immediately

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 reveals capital necessities for large 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 vegetation as they battle to compete with a world glut of low cost materials.