DRIVING THE DAY — RUSSIA THREAT LOOMS
DRUMBEAT OF WAR: Inconclusive is a method of placing it; pointless is one other. Per week since the begin of an intensive bout of diplomacy to stave off additional escalation by Russia in Ukraine, Europe and the West have little to indicate from their dalliance with Moscow. Russia walked away from conferences in Geneva, Brussels and Vienna commanding the narrative, claiming to have hit a “dead end” in the talks, and leaving the U.S. and its allies questioning about its subsequent transfer.
Hybrid threat: The West obtained a preview on Friday, when Ukraine was hit by a cyberattack concentrating on round 70 authorities web sites. “At the moment we can say that all evidence points to Russia being behind the attack,” Ukraine’s digital improvement ministry stated on Sunday. Kyiv additionally pointed the finger at a gaggle linked to Belarusian intelligence, suggesting the involvement of Russia’s key ally in the area.
Quelle shock: Kremlin spokesman Dmitry Peskov stated Russia had “nothing to do with it” — and the Belarusian involvement could permit Russia to assert cowl for the assault.
Intelligence stories: Meanwhile, the U.S. warned that Moscow is making ready to orchestrate a false flag assault on Russia by its operatives in Ukraine, which it will use as justification for one more invasion. The New York Times additionally reported Russia could possibly be making ready to maneuver nuclear missiles nearer to the U.S. — Deputy Foreign Minister Sergei Ryabkov didn’t rule out shifting army infrastructure to Venezuela or Cuba in an interview on Russian tv.
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Nordics on alert: Sweden over the weekend despatched a whole bunch of troops to the strategically vital island of Gotland in the Baltic Sea, whereas Denmark final week expanded its presence in the area, sending a frigate and personnel to Lithuania. Like Finland, Sweden is just not a NATO member, however the present Russian build-up on the Ukraine border has sparked renewed dialogue about whether or not it ought to be part of the alliance. Swedish Foreign Minister Ann Linde stated on Friday at the casual assembly of EU international ministers in Brest that the nation reserves the proper to resolve “whether we want to join a military alliance.”
From Berlin to Moscow: Against a background of continued pressure, German Foreign Minister Annalena Baerbock flies to Moscow for a gathering along with her Russian counterpart Sergey Lavrov on Tuesday. A joint Franco-German go to to the battle zone in Ukraine can be on the playing cards, as Paris and Berlin search to restart talks via the Normandy format, which has been successfully moribund since 2019.
Working the telephones: Contact between allies continued over the weekend: U.S. Secretary of State Antony Blinken spoke with EU High Representative Josep Borrell on Saturday and French Foreign Minister Jean-Yves Le Drian on Sunday about the Russian army buildup, vowing to “respond swiftly and strongly to any further Russian invasion into Ukraine.”
Brussels below strain: European Commission President Ursula von der Leyen is in common contact with capitals as Brussels attracts up a listing of potential sanctions ought to Russia escalate. The EU is coming below intense strain from Washington to decide to sanctions, as officers negotiate what could be thought of a pink line. Technical discussions will proceed this week forward of the subsequent assembly of international affairs ministers on January 24.
FINANCE MINISTERS MEET
THE NEW KIDS: There shall be a number of new faces round the desk when eurozone finance ministers meet for in the present day’s Eurogroup in Brussels. Germany’s Christian Lindner and Dutch Finance Minister Sigrid Kaag will attend for the first time, as will their new colleagues from Austria and Luxembourg. On Tuesday, when all 27 EU finance ministers collect for the ECOFIN assembly, the variety of newbies will develop to eight — primarily attributable to a quirk that has seen the form of a number of new governments fall into line in current weeks.
Dinner date: Playbook hears finance ministers from the “Hanseatic League” — a gaggle of northern nations, primarily Nordic and Baltic members — shall be assembly tonight for dinner to take inventory of discussions on fiscal coverage, forward of the ECOFIN.
FRUGAL NORTH NO MORE? While there shall be a lot focus at in the present day’s Eurogroup on the new personalities in the gang, the actual query is that if the adjustments of personnel will result in any shift in coverage, as Brussels gears up for a vital debate this yr about reform of the Stability and Growth Pact. (POLITICO’s Bjarke Smith-Meyer has extra.)
Background: The EU suspended its fiscal guidelines throughout the pandemic, however many nations need Brussels to loosen the purse-strings on a long-term foundation. French President Emmanuel Macron and Italian Prime Minister Mario Draghi fired the opening salvo in a joint article final month, calling for higher flexibility and exemptions for sure investments from the spending guidelines. As ever, all eyes are actually on how far Germany is ready to stray from its intently held precept of fiscal prudence.
Lindner takes a seat: Lindner has despatched out combined messages since succeeding Olaf Scholz in the position of Germany’s finance minister. The chief of the pro-business FDP get together signaled an openness to extra public funding in his first speech to the German parliament final week, however he has additionally stated the emphasis ought to be on making the EU’s €800 billion restoration fund a hit slightly than reviewing the S&G pact. It’s additionally value noting that Lindner is representing a three-member coalition authorities, and shall be certain by the views of the extra left-leaning S&D and Green events.
Will the actual Dutch view please get up: The same dynamic is at play on the subject of the new Dutch authorities, shaped after 9 months of painstaking negotiations. Kaag, a former diplomat and international minister, is the nation’s first feminine finance minister. A member of the D66 liberal get together, her instincts might be for extra flexibility. But once more, she shall be representing a multi-faceted Dutch authorities — and Wopke Hoekstra, the hawkish former finance minister who has switched to her previous position at the international ministry, nonetheless has a seat at the Cabinet desk.
TAX TALKS: Tuesday will even see the first large dialogue of the Commission’s proposal to transpose Pillar Two of the two-pronged OECD company tax deal — a brand new minimal company tax fee of 15 p.c — into EU laws, unveiled over the Christmas interval. The file is a key precedence for France throughout its six-month stint at the helm of the Council.
Pillar One upside: As our POLITICO Financial Services Pro colleagues reported final week, Commission officers will current nations with a proposal displaying how a levy on the world’s greatest multinationals (a part of Pillar One of the OECD deal) could possibly be used to repay the large debt the EU is elevating to finance the €800 billion restoration fund.
IN OTHER NEWS
WEBER BACKS BERLUSCONI: Silvio Berlusconi, the 85-year-old former Italian prime minister famed for his “Bunga Bunga” events and huge media empire, has picked up a brand new endorsement in his bid for the Italian presidency: Manfred Weber, the head of the center-right European People’s Party (EPP) group in the European Parliament. Weber described Berlusconi, presently an MEP in his EPP group, as a “strong leader” in an interview with Corriere della Sera.
Not blissful: German MEP Jens Geier from the Socialist and Democratic (S&D) group, who slammed Weber, telling Playbook it’s one other instance of the EPP’s drift additional to the proper. “EPP members of the CDU have patted Viktor Orbán on the back for years,” he stated referring to the Hungarian prime minister. Geier known as on CDU Chairman Friedrich Merz to distance himself from Weber’s feedback.
POLISH AMBASSADOR EYES NEW POST: A transfer to place Poland’s EU Ambassador Andrzej Sadoś in a high Brussels publish has sparked a backlash amongst diplomats and officers, report our colleagues Lili Bayer and Zosia Wanat. Some Commission officers and EU diplomats informed Lili and Zosia that the appointment of Sadoś as the high civil servant at DG NEAR would ship the fallacious message to nations in the Western Balkans aspiring to affix the Union, who’ve been informed by Brussels to undertake larger democratic requirements.
SPEAKING OF THE BALKANS — BEWARE RUSSIANS BEARING CAVIAR: Albanian Prime Minister Edi Rama stated his nation would “never give up on Europe and on the EU, whatever the shape of the EU in the future,” in an interview with the FT. While some nations (as an example Russia, China and Turkey) are trying to win affect in the area, Rama warned: “The others can convey cash, investments, possibly even caviar, however they gained’t be capable to convey what you have to construct a functioning free nation.”
DAVOS GOES VIRTUAL: It could have fallen sufferer to the pandemic for the second yr working, however the World Economic Forum’s annual winter gathering goes forward this week in a digital format. Chinese President Xi Jinping will ship the opening tackle this morning, whereas Indian Prime Minister Narendra Modi is the different large title to observe in the present day. From a European perspective, the key appearances shall be German Chancellor Olaf Scholz on Wednesday and Ursula von der Leyen pencilled in for Thursday.
MERKEL’S NEXT STEPS: POLITICO’s Ryan Heath stories from New York that U.N. Secretary-General António Guterres has written to former German Chancellor Angela Merkel, asking her to guide a “high-level advisory board” on the right way to develop and handle world public items (resembling oceans or the ozone layer). Guterres remains to be ready for a reply, however some U.N. diplomats are additionally eager for Merkel to fill the position of U.N. local weather chief. That publish shall be accessible in the summer time, when Patricia Espinosa’s time period as head of the U.N. Framework Convention on Climate Change is up.
PACK YOUR BAGS FOR BASQUE: As Playbook reported final month, Spain introduced a brand new bundle of tax measures and incentives in December to assist entice international expertise and start-ups to the nation. Now the semi-autonomous Basque nation is making its personal transfer: The Biscay authorities will in the present day unveil a raft of tax breaks to draw companies and entrepreneurs.
Among the most eye-catching proposals is that those that relocate shall be entitled to 50 p.c of their earnings tax again for 11 years, (in comparison with the present 35 p.c for six years). Tax deductions are additionally supplied for prices incurred in the transfer. But don’t concern, Playbook gained’t be swapping Brussels for Bilbao any time quickly.
BORIS JOHNSON’S PARTYING SHOT: Boris Johnson laid the groundwork for a Whitehall blame sport as he seeks to salvage his premiership from allegations of a number of events at Downing Street throughout lockdown, however our colleague Annabelle Dickson reckons that technique may backfire, with Whitehall consultants warning that pinning the blame on officers is unlikely to defuse the anger at the PM.
MATTER OF OPINION: John Lichfield argues the French media ought to wean themselves off polls on this piece for POLITICO.
DJOKOVIC LATEST: Serbia’s Prime Minister Ana Brnabić described tennis star Novak Djokovic’s remedy by Australian authorities as “scandalous,” as the world No. 1 left Melbourne after a court docket rejected his problem of a authorities resolution to cancel his visa. In a chunk for POLITICO, Una Hajdari explains why Serbia will at all times love Djokovic.
— Agriculture and fisheries ministers meet in Brussels 10 a.m. Press convention anticipated round 6:30 p.m. Watch.
— Eurogroup assembly at 3 p.m. Press convention anticipated round 7:15 p.m. Watch.
— European Parliament plenary session begins in Strasbourg. Ceremony to mark the dying of the late President David Sassoli to happen at 6 p.m. Full agenda. Watch.
— Commissioners’ conferences: EU High Representative Josep Borrell holds videoconference with Indian External Affairs Minister Subrahmanyam Jaishankar … Valdis Dombrovskis meets new finance ministers of Germany, Austria, Luxembourg and the Netherlands … Borrell, Dombrovskis, Ylva Johansson and Johannes Hahn have conferences scheduled with Secretary-General of the Gulf Cooperation Council Nayef Falah M. Al-Hajraf, who’s in Brussels.
— NATO Secretary-General Jens Stoltenberg meets Deputy Prime Minister of Georgia David Zalkaliani at NATO HQ.
— World Economic Forum opens, addresses by Chinese President Xi Jinping (11 a.m.) and Narendra Modi (4 p.m.). Agenda. Watch.
STAY SAFE: Rogier metro station in central Brussels was the scene of a surprising incident on Friday night when a younger man pushed a lady onto the tracks in entrance of an oncoming prepare. The driver made an emergency cease and the girl escaped with minor accidents after shocked onlookers helped her off the tracks. A suspect has been arrested. The incident came about the identical weekend as a lady was killed in New York after being pushed in entrance of a subway prepare.
NEW JOBS: James Kanter has been appointed chief editor of EUobserver. The former New York Times journalist will take up his place on February 1, and proceed to supply the EU Scream podcast. Shada Islam will turn into the editor of the EUobserver journal.
BIRTHDAYS: Alba Pregja, founding father of WOMADE; MLex’s Cynthia Kroet; U.Okay. MP Damian Green; Carlsberg Group’s Christian Wulff Søndergaard; CEFIC’s Servet Gören; Former U.S. First Lady Michelle Obama.
MANY THANKS to our producer Grace Stranger.
CORRECTION: This publication has been up to date to appropriate the title of Ana Brnabić. She is Serbia’s prime minister.
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