Thursday, January 9, 2025

Brussels Edition: Leading on Ukraine

The EU's top diplomat says the bloc is ready to assume leadership in sustaining aid to Ukraine if the US pulls the plug
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Welcome to the Brussels Edition, Bloomberg's daily briefing on what matters most in the heart of the European Union.

The EU is "ready to take over leadership" on coordinating military aid to Ukraine if the US is no longer willing to do so under Donald Trump, the bloc's top diplomat, Kaja Kallas, said. Whether the incoming US administration continues to support the war-battered country against Russia — with Trump promising to end the conflict rapidly — was the big question hanging over a meeting of Ukraine's allies in Ramstein, Germany, the last one presided over by outgoing US Defense Secretary Lloyd Austin. While the future of the format is unclear, Volodymyr Zelenskiy warned it would be "crazy to drop the ball" on war support. Guidance might come from Italian Prime Minister Giorgia Meloni, who met Zelenskiy in Rome late yesterday, just days after she visited Trump in Mar-a-Lago.

Michal Kubala

What's Happening

Destination Florida | European Commission President Ursula von der Leyen is trying to schedule a meeting with Donald Trump in Florida ahead of the president-elect's inauguration, we're told. Their aides have held discussions, but the timing has been challenging and von der Leyen's severe case of pneumonia has made it more difficult. 

Ukraine Transit | Slovak Prime Minister Robert Fico still hopes his country will transport gas despite the termination of a transit deal to central Europe from Russia via Ukraine — a route that benefited Slovakia. Fico has intensified threats against Zelenskiy, highlighting losses in transit fees and higher energy costs facing Europe. 

Greenland Exploit | Greenland could benefit from Trump's interest in the Arctic territory. As Greenlanders have been increasingly pushing for independence, the affair might give islanders the possibility to play the two sides of the Atlantic against each other and possibly come out on top. 

Tariff Retaliation | A Chinese investigation concluded that the EU has imposed unfair trade barriers against its products, escalating tensions between the two economic sides. The finding comes in response to tariffs imposed by Brussels on Chinese-made electric vehicles after the EU determined that Beijing provided state subsidies to its EV industry, giving it an unfair edge.  

Leave Grid | The Baltic states have their eyes set on a clock in Vilnius that counts down the days until all three countries in the region disconnect from Russia's electricity grid. Lithuania, Latvia and Estonia, which were part of the Soviet Union until the early 90s, are now amongst the harshest critics of Moscow. Leaving the grid is yet another step to disentangle them from Russia. 

Around Europe

Preliminary Talks | Giorgia Meloni said Italy is in preliminary talks with Elon Musk's SpaceX, weighing a contract for secure telecommunications systems from Starlink. The Italian premier denied having discussed the matter with Musk directly, as attention turns to their ties, and said the deal would be based on the "national interest" — even as opposition leaders warn against it. 

Water Security | Finland is seeking to ban the sale of water to private investors in a proposal that seeks to both boost security of supply and safeguard critical infrastructure. Following years of Russian investment, the measures might also include the confiscation of real estate assets if they threaten national security. 

French Budget | Budget negotiations between the left and right in France's split parliament are "moving forward," Socialist leader Olivier Faure said. It's a development that could be important for new Prime Minister Francois Bayrou, who steps in after the previous government, under Michel Barnier, collapsed over a budget standoff. 

No Arrest | Poland's prime minister said Benjamin Netanyahu will have safe passage and not face arrest if the Israeli premier travels to the country to attend a commemoration of the 80th anniversary of the liberation of Auschwitz this month. 

Airspace Risks | The EU's agency for safe civilian air travel warned airlines against flying over several cities in five Russian regions. The advisory comes after a fatal crash of an Azerbaijani passenger jet that was likely shot down by Russian air defense forces. 

Chart of the Day

Rail Baltica, Europe's aspiring high-speed railway project linking the Baltic states and Poland will continue to face hurdles. The 870-kilometer line has seen cost estimates triple and a looming funding gap risks pushing back its planned completion. Once scheduled for delivery in 2026, even the new 2030 target seems ambitious. 

Today's Agenda

  • EU crisis management commissioner Hadja Lahbib holds video call with International Committee of the Red Cross President Mirjana Spoljaric

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