Good morning. To start out: Overseas buyers, hedge funds and brokers are already scoping out trades on Russian bonds and the rouble, in a wager that Donald Trump’s rapprochement with Vladimir Putin will ship a wave of capital dashing again into Russia’s financial system.
At the moment, I unpack why EU capitals aren’t keen to agree on a proper goal for Ukraine support, and massive companies inform our tech correspondent they need an EU “sovereign infrastructure fund”.
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Doubling down?
4 months on from the election of US President Donald Trump on a pledge of suspending navy support to Ukraine, and two weeks on from him actually doing it, EU capitals are nonetheless bickering over a plan for them to step up and supply extra themselves.
Context: The EU offered round €20bn in navy support to Ukraine in 2024. Whilst US-led peace talks intention to succeed in a rapid ceasefire, Russian troops proceed to advance in jap Ukraine as Kyiv struggles with a scarcity of weapons, notably artillery and air and missile defence programs.
For weeks, EU diplomats have squabbled over a proposal from the bloc’s chief diplomat Kaja Kallas to place a determine on what they may collectively present this yr. The bloc’s 27 nationwide overseas ministers meet in Brussels at the moment, seemingly to squabble some extra.
The most important impediment to Kallas’s proposal to not less than match final yr’s complete — or higher nonetheless, double it to €40bn — is the unwillingness of some bigger nations to decide to figures proportional to their financial measurement.
The imbalance of help to Ukraine amongst EU economies is hanging. Whereas Germany, the EU’s largest financial system, can be its largest navy donor since Russia’s full-scale invasion in February 2022, the following largest are Denmark, the Netherlands and Sweden.
Certainly, Denmark (6mn individuals, GDP of €373bn) has offered more military aid to Ukraine than France, Italy and Spain mixed (174mn individuals, GDP of €7tn).
At a summit of EU leaders on March 6, all bar Hungary’s Viktor Orbán signed as much as the convoluted assertion of “welcom[ing] the readiness of Member States to urgently step up efforts to handle Ukraine’s urgent navy and defence wants”.
That’s a part of a promise to show Ukraine right into a “steel porcupine” with sufficient weapons to withstand future invasion.
However proponents of the Kallas plan argue that can solely work if capitals are held to fastened navy help targets.
“Everyone seems to be glad to decide to ‘step up’ and to pledge unwavering help,” stated one senior EU diplomat concerned in preparations for at the moment’s ministerial. “However many aren’t keen to decide to how.”
At a gathering of ambassadors on Friday, two-thirds gave their help to Kallas’s plan. She’ll be hoping to win over a couple of extra ministers at the moment, with the talk then shifting to a different leaders’ summit on Thursday.
Chart du jour: Peace dividend
Europe has saved a whole bunch of billions of euros a yr in latest many years — this benign state of affairs is now over. Learn the way authorities cuts might contribute to elevated defence spending here.
Tech help
Proton, Airbus and dozens of different European companies and associations are urging Brussels to take a position extra within the bloc’s digital infrastructure, writes Barbara Moens.
Context: Europe is waking as much as its heavy reliance on American digital infrastructure and companies. Simply because the bloc needs to take a position extra in its personal security and financial competitiveness, there are growing calls to concentrate on tech sovereignty, for which digital infrastructure is vital.
“Europe must get well the initiative and grow to be extra unbiased throughout all layers of its important digital infrastructure,” the companies and associations wrote in a letter to European Fee president Ursula von der Leyen and its tech chief Henna Virkkunen, seen by the Monetary Occasions.
“Time is of the essence and trade is ready to take a position if there are circumstances for viable returns,” they added.
The teams are pushing for a “sovereign infrastructure fund” to help areas corresponding to quantum computing and chips, which require excessive investments. Additionally they argue that public funding ought to concentrate on European producers, serving to to spice up demand for EU tech suppliers.
The letter follows a sequence of earlier initiatives to help Europe turning into extra self-reliant on the subject of digital and tech, corresponding to Eurostack, which goals to create a European tech infrastructure.
Nonetheless, critics argue such initiatives are pricey and time-intensive and that the bloc is best off specializing in a lot of particular tech industries the place it has a greater probability to catch up, corresponding to artificial intelligence.
What to observe at the moment
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EU overseas ministers meet.
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EU power ministers meet.
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UK minister for EU relations Nick Thomas-Symonds speaks on the UK-EU Parliamentary Partnership Meeting in Brussels.
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