Germany’s Chancellor Friedrich Merz compared Russian President Vladimir Putin to Adolf Hitler in a speech Saturday evening, warning that the Kremlin leader’s ambitions won’t stop with Ukraine. “Just as the Sudetenland was not enough in 1938, Putin will not stop,” Merz said, referring to a part of Czechoslovakia that the Allies ceded to the Nazi leader with an agreement. Hitler continued his expansion into Europe after that. “If Ukraine falls, he won’t stop there,” Merz said, referring to Putin. German, British and French officials are set to meet in Berlin this weekend to discuss proposals to end the war in Ukraine. U.S. envoy Steve Witkoff is also expected to meet with Ukraine’s President Volodymyr Zelenskyy. The talks are in preparation for a planned summit of leaders including Merz, Britain’s Keir Starmer, France’s Emmanuel Macron and Zelenskyy on Monday over stopping Russia’s aggression against Ukraine. A U.S.-backed 20-point peace plan is in the works, which includes territorial concessions on Ukraine’s part. Under one proposal being discussed, the Donbas region would be made into a free-trade zone were American companies can freely operate. Merz was speaking at a party conference of the Christian Social Union of Bavaria, which is closely aligned with his own party, the Christian Democrats.

BRUSSELS — The European Commission will provide a financial band-aid next year to Baltic nations suffering collateral economic damage from EU sanctions against Russia. The region is being hit particularly hard because of falls in tourism and investment, along with the collapse of cross-border trade. Regions Commissioner Raffaele Fitto is leading the plan, which aims to kickstart the economies of Finland and its Baltic neighbors, according to diplomats and Commission officials who were granted anonymity to speak freely. The intended recipients are also heading to Brussels with a lengthy wish list, hoping Fitto’s plan will reignite their economies. Their concerns will take center stage during a summit of leaders from Eastern European countries in Helsinki on Dec. 16. “We want to have special attention to our region — the eastern flank, including Lithuania — because we see the negative impact coming from the geopolitical situation,” Lithuania’s Europe minister, Sigitas Mitkus, said in an interview with POLITICO earlier this month. “Sometimes it’s difficult to convince [investors] that … we have all the facilities in place.” But skeptics warn that any immediate financial support Fitto can provide will be meager, given the scale of the challenge and with the bloc’s seven-year budget running low. The EU has agreed 19 sanction packages against Moscow in a bid to cripple the Russian war economy, which has bankrolled the Kremlin’s invasion of Ukraine since February 2022. In doing so, Finland, Estonia, Latvia, and Lithuania have all taken a hit. While the threat of a Kremlin invasion has deterred tourists and investors, the sanctions have choked off cross-border trade with Russia, and everything has been made worse by skyrocketing inflation after the pandemic. Dwindling housing prices have also made it more difficult for businesses to provide collateral to secure loans from banks. “People who had cross-border connections with some economic consequences have lost them,” Jürgen Ligi, Estonia’s finance minister, told POLITICO. A native of Tartu on Estonia’s eastern flank, Ligi has witnessed these problems first-hand as he owns a house only four kilometers from the Russian border. “Estonia’s economy has suffered the most from the war [which caused] problems with investments and jobs,” Ligi added. According to the Commission’s latest forecast, Estonia is expected to grow by only 0.6 percent in 2025 — well below the EU average — even though economic activity is expected to pick up in 2026 and 2027. The EU has agreed 19 sanction packages against Moscow in a bid to cripple the Russian war economy, which has bankrolled the Kremlin’s invasion of Ukraine since February 2022. | Sefa Karacan/Getty Images In another sign of financial strain, Finland breached the Commission’s spending rules in 2025 due to excessive spending and an economic slowdown caused by the war. “We will be acknowledging the difficult economic situation Finland is facing, including the geopolitical and the closure of the Russian border,” EU Economy Commissioner Valdis Dombrovskis, said on Tuesday. SCRAPING THE BARREL But Fitto’s options could be limited until the bloc’s new seven-year budget, known as the multi-annual financial framework (MFF), is in place by 2028. “My sense is that the communication won’t come with fresh money but with ideas that can be pursued in the next MFF,” said an EU diplomat who was granted anonymity to discuss upcoming legislation. Mindful of dwindling resources in the EU’s current cash pot, Lithuania’s Mitkus is demanding that Baltic firms get preferential access to the EU’s new funding programs from 2028 — something that is currently lacking in the Commission’s budget proposal from July. Officials from the frontline states are exploring other options. These include Brussels loosening state aid rules so they can subsidize struggling firms, and getting the European Investment Bank to provide guarantees to companies that want to invest in the region. While the upcoming strategy will draw attention to these problems, officials privately admit that it’s unlikely to mobilize enough cash to solve them immediately. “It will build the narrative that in the next MFF you can do something for [pressing issues for Eastern regions such as] drones production,” said the EU diplomat quoted above. But until 2028, “I don’t expect any new money.”

THE WEST’S NEW ARMS RACE: SELLING PEACE TO BUY WAR Military spending is rising faster than at any time since the Cold War, but the retreat from diplomacy and foreign aid will come with a price. By TIM ROSS in London Illustrations by Nicolás Ortega for POLITICO In 1958, British Prime Minister Harold Macmillan observed that “jaw, jaw is better than war, war.” Talking, he meant, is preferable to fighting.  Macmillan knew the realities of both diplomacy and military action: He was seriously wounded as a soldier in World War I, and as prime minister, he had to grapple with the nuclear threats of the Cold War, including most critically the Cuban missile crisis. John F. Kennedy, the U.S. president during that near-catastrophic episode of atomic brinkmanship, also understood the value of diplomatic channels, as well as the brutality of conflict: He severely injured his back serving in the U.S. Navy in 1943. Andrew Mitchell, a former Cabinet minister in the British government, worries that the wisdom of leaders like Kennedy and Macmillan gained from war has faded from memory just when it is most needed.  Advertisement “The world has forgotten the lessons of the first World War, when millions of people were slaughtered and our grandfathers’ generation said we can’t allow this to happen again,” he said. One school of academic theory holds that era-defining wars recur roughly every 85 years, as generations lose sight of their forebears’ hard-won experience. That would mean we should expect another one anytime now. And yet, as Mitchell sees it, even as evidence mounts that the world is headed in the wrong direction, governments have lost sight of the value of “jaw-jaw.” The erosion of diplomatic instinct is showing up not just in rhetoric but in budgets. The industrialized West is rapidly scaling back investment in soft power — slashing foreign aid and shrinking diplomatic networks — even as it diverts resources to defense.  U.S. aircraft carrier USS Gerald R. Ford, the world’s largest warship, makes its way into Oslo’s fjord in September. | Lise Åserud/NTB via AFP/Getty Images At no point since the end of the Cold War has military spending surged as fast as it did in 2024, when it rose 9.4 percent to reach the highest global total ever recorded by the Stockholm International Peace Research Institute. By contrast, a separate report from the Paris-based Organization for Economic Cooperation and Development found a 9 percent drop in official development assistance that same year among the world’s richest donors. The OECD forecast cuts of at least another 9 percent and potentially as much as 17 percent this year.  “For the first time in nearly 30 years, France, Germany, the United Kingdom, and the United States all cut their ODA in 2024,” the OECD said in its study. “If they proceed with announced cuts in 2025, it will be the first time in history that all four have cut ODA simultaneously for two consecutive years.”  Diplomatic corps are also shrinking, with U.S. President Donald Trump setting the tone by slashing jobs in the U.S. State Department.  Advertisement Global figures are hard to come by, and anyway go out of date quickly; one of the most extensive surveys is based on data from 2023. But authorities in the Netherlands, the United Kingdom, and the European Union’s headquarters are among those who have warned that their diplomatic staff face cuts.  Analysts fear that as industrialized economies turn their backs on aid and diplomacy to build up their armies, hostile and unreliable states like Russia, China and Turkey will step in to fill the gaps in these influence networks, turning once friendly nations in Africa and Asia against the West.  And that, they warn, risks making the world a far more dangerous place. If the geopolitical priorities of governments operate like a market, the trend is clear: Many leaders have decided it’s time to sell peace and buy war.  SELLING PEACE, BUYING WAR Military spending is climbing worldwide. The Chinese defense budget, second only to that of the U.S., grew 7 percent between 2023 and 2024, according to SIPRI. Russia’s military expenditure ballooned by 38 percent. Spurred in part by fears among European countries that Trump might abandon their alliance, NATO members agreed in June to a new target of spending 5 percent of gross domestic product on defense and security infrastructure by 2035. The U.S. president — cast in the role of “daddy” — was happy enough that his junior partners across the Atlantic would be paying their way.  In reality, the race to rearm pre-dates Trump’s return to the White House. The war in Ukraine made military buildup an urgent priority for anxious Northern and Eastern European states living in the shadow of President Vladimir Putin’s Russia. According to SIPRI, military spending in Europe rocketed 17 percent in 2024, reaching $693 billion — before Trump returned to office and demanded that NATO up its game. Since 2015, defense budgets in Europe have expanded by 83 percent. One argument for prioritizing defense over funding aid or diplomacy is that military muscle is a powerful deterrent against would-be attackers. As European Commission President Ursula von der Leyen put it when she announced her plan to rearm Europe in March: “This is the moment for peace through strength.” Some of von der Leyen’s critics argue that an arms race inevitably leads to war — but history does not bear that out, according to Greg Kennedy, professor of strategic foreign policy at King’s College London. “Arms don’t kill. Governments kill,” he said. “The problem is there are governments out there that are willing to use military power and to kill people to get their objective.”  Ideally a strong military would go hand in hand with so-called soft power in the form of robust diplomatic and foreign aid networks, Kennedy added. But if Europe has to choose, it should rebuild its depleted hard power first, he said. The risk to peace lies in how the West’s adversaries — like China — might respond to a new arms race.  Advertisement Few serious politicians in Europe, the U.K. or the U.S. dispute the need for military investment in today’s era of instability and conflict. The question, when government budgets are squeezed, is how to pay for it.  Here, again, Trump’s second term has set the tone. Within days of taking office, the U.S. president froze billions of dollars in foreign aid. And in February he announced he would be cutting 90 percent of the U.S. Agency for International Development’s contracts. The move — billed as part of Trump’s war on “woke” — devastated humanitarian nongovernmental organizations, many of which relied on American funding to carry out work in some of the poorest parts of the world. According to one estimate, Trump’s aid cuts alone could cause 14 million premature deaths over the next five years, one-third of them children. That’s a decision that Trump’s critics say won’t be forgotten in places like sub-Saharan Africa, even before cuts from other major donors like Germany and the U.K. take effect. Diplomatic corps are also shrinking, with U.S. President Donald Trump setting the tone by slashing jobs in the U.S. State Department. | Anna Moneymaker/Getty Images In London, British leader Keir Starmer and his team had prepared for the whirlwind of Trump’s return by devising a strategy aimed at appealing to the American leader’s self-interest, rather than values they weren’t sure he shared.  As Starmer got ready to visit the White House, he and his team came up with a plan to flatter Trump with the unprecedented honor of a second state visit to the U.K. Looking to head off a sharp break between the U.S. and Ukraine, Starmer also sought to show the U.K. was taking Trump seriously on the need for Europe (including Britain) to pay for its own defenses.  On the eve of his trip to Washington in February, Starmer announced he would raise defense spending — as Trump had demanded allies must — and that he would pay for it in part by cutting the U.K.’s budget for foreign aid from 0.5 percent of gross national income to 0.3 percent.  For a center-left leader like Starmer, whose Labour predecessors Gordon Brown and Tony Blair had championed the moral obligation to spend big on foreign development, it was a wrenching shift of gear.  Advertisement “That is not an announcement that I am happy to make,” he explained. “However, the realities of our dangerous new era mean that the defense and national security of our country must always come first.” The U.S. government welcomed Starmer’s move as “a strong step from an enduring partner.” But Starmer returned home to political revolt. His international aid minister Anneliese Dodds quit, warning Starmer his decision would “remove food and health care from desperate people — deeply harming the U.K.’s reputation.”  She lamented that Britain appeared to be “following in President Trump’s slipstream of cuts to USAID.”  EASY TARGETS  In the months that followed, other major European governments made similar calculations, some citing the U.K. as a sign that times had changed. For cash-poor governments in the era of Trumpian nationalism, foreign aid is an easy target for savings. The U.K. was once a world leader in foreign aid and a beacon for humanitarian agencies, enshrining in law its commitment to spend 0.7 percent of gross national income on ODA, according to Mitchell, the former Cabinet minister responsible for the policy. “But now Britain is being cited in Germany as, ‘Well, the Brits are cutting their development money, we can do the same.’”  In Sweden, the defense budget is due to rise by 18 percent between 2025 and 2026, in what the government hailed as a “historic” investment plan. “The prevailing security situation is more serious than it has been in several decades,” Sweden’s ministry of defense said, “and Russia constitutes a multi-dimensional threat.”  But Sweden’s international development cooperation budget, which was worth around €4.5 billion last year, will fall to €4 billion by 2026.  In debt-ridden France, plans were announced earlier this year to slash the ODA budget by around one-third, though its spending decisions have been derailed by a spiraling political crisis that has so far prevented it from passing a budget. Money for defense was due to rise dramatically, despite the overall squeeze on France’s public finances.  In Finland, which shares an 800-mile border with Putin’s Russia, the development budget also fell, while defense spending escaped cuts.  The country’s Development Minister Ville Tavio, from the far-right populist Finns Party, says the cuts provided a chance to rethink aid altogether. Instead of funding humanitarian programs, he wants to give private businesses opportunities to invest to create jobs in poorer countries. That, he believes, will help prevent young people from heading to Europe as illegal migrants.  Advertisement “If they don’t have jobs, the countries will become unstable, and the young people will radicalize. Some of them will start trying to get to Europe,” he said. “It’s a complete win-win if we can help the developing countries to industrialize and create those jobs they need.” Not all countries are cutting back. Ireland plans to increase its ODA budget, while Denmark has pledged to keep spending 0.7 percent of its gross national income on foreign aid even as it boosts investment in defense. But Ireland has enjoyed enviable economic growth in recent years and Denmark will pay for its spending priorities by raising the retirement age to 70. In any case, these are not giant economies that can sustain Europe’s reputation as a soft power superpower on their own.  STAFF CUTS The retreat from foreign aid is only part of a broader withdrawal from diplomacy itself. Some wealthy Western nations have trimmed their diplomatic corps, even closing embassies and bureaus.  Again, Trump’s America provides the most dramatic example. In July, the U.S. State Department fired more than 1,300 employees, among them foreign service officers and civil servants. In the eyes of European officials watching from afar, Trump’s administration just doesn’t seem to care about nurturing established relations with the rest of the world.  According to the American Foreign Service Association’s ambassador tracker, 85 out of 195 American ambassador roles were vacant as of Oct. 23. Part of this reflects confirmation delays in the U.S. Senate, but nine months in office, the administration had not even nominated candidates for more than 60 of the empty posts.  The result is a system stretched to the breaking point, with some of the most senior officials doing more than one job. Marco Rubio, the secretary of state, is still doubling up as Trump’s national security adviser (and he’s also been tapped to head the national archives). With key posts left open, Trump has turned to loyalists. Instead of drawing on America’s once-deep pool of diplomatic expertise, the president sent his friend Steve Witkoff, a lawyer and real estate investor, to negotiate personally with Putin and to act as his envoy to the Middle East.  In Brussels, EU officials have been aghast at Witkoff’s lack of understanding of the complexities of the Russia-Ukraine war. One senior European official who requested anonymity to speak candidly about diplomatic matters said they have zero confidence that Witkoff can even relay messages between Moscow and Washington reliably and accurately.  That’s partly why European leaders are so keen to speak directly to Trump, as often and with as many of them present as they can, the senior European official said. And while Washington’s diplomatic corps is hollowed out in plain sight, other governments in the West follow Trump’s lead, only more quietly. Advertisement British diplomats face staff cuts of 15 percent to 25 percent. The Netherlands is reducing its foreign missions budget by 10 percent (while boosting defense) and plans to close at least five embassies and consulates, with more likely to follow.  Even the EU’s flagship foreign department — the European External Action Service, led by the former Prime Minister of Estonia Kaja Kallas, a Russia hawk — is reducing its network of overseas offices. The changes, which POLITICO revealed in May, are expected to result in 10 EU delegations being downsized and 100 to 150 local staff losing their jobs.  “European diplomacy is taking a back seat to priorities such as border control and defense, which are getting increased budget allocations,” one EU official said. The person insisted the EU is not “cutting diplomacy” — but “the resources are going elsewhere.” Privately, diplomats and other officials in Europe confess they are deeply concerned by the trend of reducing diplomatic capacity while military budgets soar.  “We should all be worried about this,” one said.  JAW-JAW OR WAR-WAR? Mitchell, the former British Cabinet minister, warned that the accelerating shift from aid to arms risks ending in catastrophe. “At a time when you really need the international system … you’ve got the massive resurgence of narrow nationalism, in a way that some people argue you haven’t really seen since before 1914,” he said.  Mitchell, who was the U.K.’s international development minister until his Conservative Party lost power last year, said cutting aid to pay for defense was “a terrible, terrible mistake.” He argued that soft power is much cheaper, and often more effective, than hard power on its own. “Development is so often the other side of the coin to defense,” Mitchell said. It helps prevent wars, end fighting and rebuild nations afterward.  At no point since the end of the Cold War has military spending surged as fast as it did in 2024. | Federico Gambarini/picture alliance via Getty Images Many ambassadors, officials, diplomats and analysts interviewed for this article agree. The pragmatic purpose of diplomatic networks and development programs is to build alliances that can be relied on in times of trouble. “Any soldier will tell you that responding to international crises or international threats, isn’t just about military responses,” said Kim Darroch, who served as British ambassador to the U.S. and as the U.K.’s national security adviser. “It’s about diplomacy as well, and it’s about having an integrated strategy that takes in both your international strategy and your military response, as needed.” Hadja Lahbib, the European commissioner responsible for the EU’s vast humanitarian aid program, argues it’s a “totally” false economy to cut aid to finance military budgets. “We have now 300 million people depending on humanitarian aid. We have more and more war,” she told POLITICO.  The whole multilateral aid system is “shaking” as a result of political attacks and funding cuts, she said. The danger is that if it fails, it will trigger fresh instability and mass migration. “The link is quite vicious but if we are not helping people where they are, they are going to move — it’s obvious — to find a way to survive,” Lahbib said. “Desperate people are more [willing] to be violent because they just want to save their lives, to save their family.” Advertisement Countries that cut their outreach programs also face paying a political price for the long term. When a wealthy government closes its embassy or reduces aid to a country needing help, that relationship suffers, potentially permanently, according to Cyprien Fabre, a policy specialist who studies peace and instability at the OECD.  “Countries remember who stayed and who left,” he said.  Vacating the field clears space for rivals to come in. Turkey increased its diplomatic presence in Africa from 12 embassies in 2002 to 44 in 2022, Fabre said. Russia and China are also taking advantage as Europe retreats from the continent. “The global bellicose narrative sees big guns and big red buttons as the only features of power,” Fabre said.  Politicians tend to see the “soft” in “soft power,” he added. “You realize it’s not soft when you lose it.”  Nicholas Vinocur contributed to this report.

American top diplomat Marco Rubio said late Wednesday that the U.S. is running out of options to sanction Russia after hammering the Kremlin’s biggest oil giants last month. “Well, there’s not a lot left to sanction from our part, I mean, we hit their major oil companies, which is what everybody’s been asking for,” Rubio said before a meeting of G7 foreign ministers. Last month, the U.S. slapped sanctions on Rosneft and Lukoil and their subsidiaries, in a bid to reduce Russia’s oil revenues — its main financing source for the war on Ukraine — and push Moscow to the negotiating table in a bid to end the Kremlin’s aggression. Sanctions come into full force on Nov. 21, but several countries are already thinking about asking for exemptions. Hungary already got a one-year extension from the U.S. “Sanctions have to be enforced, so you know we don’t put sanctions and then not enforce them. We’re interested in enforcing them as well,” Rubio added. The sanctions’ success ultimately depends on the enforcement progress. One of the enforcement mechanisms is sanctioning the Russian shadow fleet — hundreds of oil tankers illegally transporting sanctioned Russian oil around the world. “Shadow fleet has come up because I do think there are things that the Europeans can do on shadow fleet since a lot of these are happening in areas much closer to them,” Rubio said. The EU has leveled 19 packages of sanctions against Russia, hitting Russia’s LNG, banks, crypto trading, further clamping down on the shadow fleet that clandestinely moves sanctioned goods, and more, aiming to reduce the Russian war economy. The Ukrainian government said it knows there’s more to sanction and is ready to work with partners to show them. “Regarding Rubio’s statement about exhausting sanctions options … there are absolutely more objective options out there. More oil majors, banks, and  fleet/infrastructure. And components and defense. And payments. And the Arctic,” said Vladyslav Vlasiuk, Ukrainian President Volodymyr Zelenskyy’s sanctions envoy. “We continue to work with American partners, and with the G7, and with others. There will be more sanctions,” Vlasiuk added.

The EU is seeking to boost the bloc’s powers to board vessels in Russia’s shadow fleet for inspections, according to a document prepared for Monday’s meeting of EU foreign ministers and seen by POLITICO. The issue of ships transporting Russian oil sailing under different flags to escape EU sanctions has wide implications for the bloc as those vessels not only help to boost Moscow’s war economy but also “pose threats to the environment and to navigation safety,” according to the five-page document prepared by the European External Action Service, the EU diplomatic arm. The shadow fleet ships also are a risk for critical infrastructure and “can be used as platforms for hybrid attacks against EU territory,” the document states. The vessels are in some cases suspected to be launch pads for Russian drones used to reconnoiter critical Western sites and disrupt civilian airports. The EEAS this month initiated a discussion at the technical level on the basis of a draft declaration of the EU and its member states on reinforcing the International Law of the Sea framework, according to the EEAS document. That effort “would provide an additional tool to member states to boost the effectiveness of enforcement actions, including providing a basis to board shadow fleet ships,” the document says. The draft declaration proposes “possible bilateral agreements between the flag states and the EU on pre-authorized boardings for inspections,” the EEAS wrote in the document. The objective is to finalize the draft declaration by the end of November and to adopt it at the following meeting of EU foreign ministers. Once the declaration is be supported by member states, the EU’s top diplomat Kaja Kallas will “seek the authorization of the Council to open negotiations for bilateral agreements with identified flag states,” according to the document.    EU member states “increasingly demonstrate a renewed momentum for more robust enforcement actions tackling the shadow fleet,” according to the document, which makes the example of French soldiers that at the start of the month boarded an oil tanker, the Boracay, believed to be part of Russia’s shadow fleet, which was off the coast of Denmark when unidentified drones forced the temporary closure of several airports and also was anchored off western France for a few days. The EU “could support member states in their efforts if they agree to grant the EU the right to negotiate agreements on their behalf for pre-authorized boardings for inspections,” the document says.   The EU is already reaching out to priority flag states and coastal states that provide or enable logistical support and bunkering services to the shadow fleet and, among other actions, it also “aims to mobilize its various tools to provide support and incentives to flag states to deregister sanctioned vessels,” according to the EEAS document. Panama, the largest ship registry, “has agreed to deregister vessels sanctioned by the EU and recently decided to stop registering vessels older than 15 years,” the EEAS says in the document.   In terms of further sanctions, the EU “will continue to propose additional listings of vessels and shadow fleet ecosystem operators such as insurers and flag registries,” the document states, building on measures taken already in the current sanctions packages. And “possible additional measures could include targeting the provision of logistical support to shadow fleet vessels, such as oil bunkering,” the document says.  

“Details, details. Things to do. Things to get done. Don’t bother me with details, just tell me when they’re done.”  That’s Jimmy Price, a cocaine baron in the 2004 U.K. movie “Layer Cake.” But the mobster’s instructions to underlings, delivered in his Mar-a-Lago equivalent of a country club in the leafy outskirts of London, eventually shape the circumstances for his undoing.  Donald Trump also isn’t a details man — except perhaps when it comes to fashioning his luxury brand with a reported obsessiveness about the flashy décor of his hotels, golf clubs and casinos. While Trump may fidget about which curtains to hang in his hotel rooms, when it comes to diplomacy upon which tens of thousands of lives may hang, he has less interest in details, focusing instead on the personal interactions of leaders.  Details are for subordinates, like his Secretary of State “Little Marco” and his golfing pal and envoy-to-everywhere Steve Witkoff, who unfortunately also has a shaky grasp of details and displays a tendency to hear what he wants to hear. Trump is just waiting for them to tell him when peace is oven-ready.  Whether he knows it or not, Trump is a practitioner of the “great man theory,” an idea popularized by Victorian essayist and hero-worshipper Thomas Carlyle that sees history as driven by exceptional leaders. This eschews the more complicated dynamics of culture and history, politics and economics.  And for Trump, everything is individualized — and it’s all about personal chemistry.  During his meeting last week with half a dozen European leaders and Volodymyr Zelenskyy, Trump was caught on a hot mic explaining to France’s Emmanuel Macron that Putin wants to “make a deal for me.” “I think he wants to make a deal with me. Do you understand that? As crazy as it sounds,” Trump said. Hence his remark this week about the difficulties in arranging a bilateral summit between Vladimir Putin and Zelenskyy. Again, this is all about personal chemistry. His take is that Putin is averse to meeting his Ukrainian counterpart because he “doesn’t like him,” adding, “They don’t like each other, really.” Last week, Trump talked about them being like the immiscible liquids oil and vinegar. No doubt the pair don’t like each other. Zelenskyy has every right to despise Putin, the imperial czar responsible for an invasion of his country that’s featured war crimes and seen tens of thousands of Ukrainian combatants and civilians killed and injured, as well as around 20,000 children spirited off to Russia to be indoctrinated. Likely, too, Putin isn’t enthusiastic about Zelenskyy. After all, he’s the annoying leader of a country that refuses to give in, has defied mighty imperial Russia and whose spirit of resistance has so far been unbreakable. But that isn’t why Putin isn’t ready to meet Zelenskyy. For one thing, a summit meeting with the Ukrainian would confer political legitimacy to Zelenskyy when the Kremlin has long argued he has none — Russian Foreign Minister Sergey Lavrov had a flourish of that in his recent interview with NBC’s “Meet the Press,” suggesting Putin would not be able to strike a deal with him as Moscow considers him “illegitimate.” But there’s also another reason. Piling up obstacles to a summit is part and parcel of the Kremlin’s strategy of stringing Trump along while avoiding — or at least reducing, it hopes — sparking Trump’s wrath and possibly prompting him to follow through on his threat of “severe consequences” unless Russia is serious about ending Europe’s biggest war since 1945.  Trump hasn’t laid out what those consequences would be — “I don’t have to say,” he sniffed at a press conference on Aug. 13. Likely, if Trump ever intended to do anything, the consequences would entail secondary sanctions on countries trading with Russia in a bid to choke off the purchasing of Russian fossil fuels. That wouldn’t bring Russia to its knees — the effectiveness of sanctions is generally overestimated — but it would be highly inconvenient, with Russia’s economy heading into a recession and already having overshot its budget deficit target for the year. Trump was caught on a hot mic explaining to France’s Emmanuel Macron that Putin wants to “make a deal for me.” | Ukrainian Presidency/Handout/Anadolu via Getty Images Short of something Putin could call a victory, continuing with the war on Ukraine is useful for the Russian president. To end the conflict abruptly could imperil his regime, as a rapid shift out of a war economy would raise the prospect of some dangerous sociopolitical infighting. And, according to Ella Paneyakh, a sociologist and research fellow at the New Eurasian Strategies Centre think tank, this would trigger “cruel and vicious competition for diminishing resources at every level of society.” War is also helpful in justifying political repression — patriotism can be a helpful tool.  Prolonging the conflict also has the benefit of further straining cash-strapped European nations, and risks fracturing an already brittle transatlantic alliance. A weakened, distracted and divided West also serves the purposes of Putin’s ally Xi Jinping as he ponders how and when to swallow Taiwan. And with Ukraine’s severe manpower shortage, there’s always the chance there could be a frontline breakthrough that Ukraine is unable to reverse. In short, Putin could get more by persisting — more land, Western security guarantees so watered down they’re worthless, and a cap on the size of a postwar Ukrainian army. That would handily set the stage for a later resumption of Russian hostilities at a time of Moscow’s choosing. As Trump’s former Russia czar Fiona Hill argued, the Russian leader “wants a neutered Ukraine, not one that is able to withstand military pressure. Everybody sees this, apart from Trump.” So how best to play Trump along without stoking his anger while keeping him onside? You’ve guessed it: Entangle Rubio and Witkoff in details and never-ending complications — talk about the “root causes” of the war, pile on deflections and digressions and trot America’s interlocutors down rabbit holes in a drawn-out exercise of skillful manipulation that lugubrious Lavrov is masterful at accomplishing. All the while framing Zelenskyy and Kyiv for the failure of any progress toward ending the war. That was what Lavrov was doing in his “Meet the Press” interview — pointing the finger of blame at Zelenskyy and banking that the charge will stick with Trump, a man impatient of details.  Recall that it was Lavrov who soon after the invasion recited on Russian television “To the Slanderers of Russia” by Pushkin, a poet beloved by Russian nationalists, who wrote about how conflict between Slavic nations was a family matter and no one else’s concern. “T’is but Slavonic kin among themselves contending, An ancient household strife, oft judged but still unending, A question which, be sure, ye never can decide.” 

The European Union is drafting new measures designed to squeeze Russia’s ailing war economy. But, having already committed to a phaseout of oil and gas imports, the bloc is increasingly aware it is Washington, not Brussels, that is best placed to turn the screws. According to four European diplomats, granted anonymity to shed light on closed-door discussions, the latest round of sanctions is not expected to include major new restrictions on the energy sales that fund Russia’s war against Ukraine. The package, the 19th to be imposed on Moscow since it launched its full-scale invasion in February 2022, is set to be unveiled next month and will instead target ‘shadow fleet’ vessels and companies helping Russia circumvent existing rules. The most painful consequences for Moscow would come if secondary sanctions — on companies or countries that do business with Russia — are imposed, but the real impact of those will come from the U.S. Many observers argue Russian President Vladimir Putin only engaged with Donald Trump in Alaska after Washington introduced high tariffs against India over its purchase of Russia’s economic lifeblood: oil. The dramatic next step would be to escalate similar sanctions to throttle Russia’s all-important trade with China. Trump appears to be leaving this option on the table if peace talks fall through.  “Over the next two weeks, we’re going to find out which way it’s going to go. And I better be very happy,” Trump said on Friday, threatening  “massive sanctions or massive tariffs or both” if Moscow doesn’t play ball. RUNNING OUT OF THINGS TO SANCTION? EU member countries in June gave the green light to a lower price cap on Russia’s oil; a ban on fuel refined from its crude; and the blacklisting of companies linked to the Nord Stream gas pipelines. Along with a new roadmap to phase out all energy imports from the country, that leaves the bloc with few remaining tools of its own to squeeze Moscow harder. “We don’t expect there will be much room for any material Russian oil sanctions in the EU’s 19th sanctions package,” said Ajay Parmar, lead crude market analyst at commodities intelligence firm ICIS. “The last sanctions package was a significant one for Russian oil and we think there is little scope for further sanctions at this point.” Maria Shagina, a sanctions expert at the International Institute for Strategic Studies, said that while the Russian economy looks “superficially resilient,” it is already creaking under Western pressure. Many observers argue Russian President Vladimir Putin only engaged with Donald Trump in Alaska after Washington introduced high tariffs against India over its purchase of Russia’s economic lifeblood: oil. | Kremlin pool photo by Gavriil Grigorov via Sputnik/EPA “Lower oil prices, the stagnation in the military-industrial sector, looming banking crisis and ever-growing military expenses put the Russian economy on the course of recession,” she said. “Sanctions on the Russian shadow fleet is one of many factors.” Secondary sanctions of the kind that could be imposed by the U.S. on companies dealing with Russian firms “would dramatically exacerbate the existing problems of the Russian economy. However, the Kremlin doesn’t buy the Trump administration’s threats, so it thinks it can weather the storm for now.” ‘CARTHAGE MUST BE DESTROYED’ Yet, other measures to degrade Russia’s capabilities are being considered, including a ban on its diplomats being allowed to travel without restrictions around the Schengen free travel area. Proponents say that total freedom makes it harder to track intelligence officers who could be planning hostile acts far from the country that issued their visa. “Just like Cato the Elder kept repeating that Carthage must be destroyed, I will keep proposing to end the free movement of Russian diplomats in Schengen,” Czech Foreign Minister Jan Lipavský told POLITICO. “It is an unnecessary advantage we give to the Russian regime, and it is being abused to facilitate sabotage operations.” Foreign ministers from across the bloc will meet at an informal summit later this week, where a discussion is scheduled with the EU’s top diplomat, Kaja Kallas, on how to sharpen economic restrictions on Russia. In the meantime, Ukraine is taking concrete action to drain Moscow’s war chest, hitting refineries across Russia and tipping its key source of state funds into crisis. Over the weekend, drones hit a pumping station on the Druzhba pipeline, halting deliveres of Russian oil to Kremlin-friendly EU states Hungary and Slovakia. Budapest and Bratislava have written to the European Commission demanding it intervene to prevent future attacks. Officials have made it clear they are unlikely to weigh in. “What is important, is the suspension does not affect the security of supply, which was always a priority for the European Commission,” said spokesperson Eva Hrnčířová. While Slovakia and Hungary have consistently opposed the expansion of sanctions on Russia, and are fighting a political battle over the planned phaseout, diplomats are confident they can pressure them to give the unanimous support needed for the 19th package. “Just look at what’s happened the last 18 times,” said one envoy.

Russia’s saber-rattling in the Arctic is forcing Canada to deepen military cooperation with its Nordic NATO allies — a marked policy shift away from the United States. Prime Minister Mark Carney has dispatched two top Cabinet ministers to Sweden and Finland this week in pursuit of new defense deals — including a look at Sweden’s Saab Gripen fighter jet. Canada had previously decided on the Lockheed Martin F-35, a flagship export under President Donald Trump. But amid a trade war, at a time when other allies are turning away from the U.S. war plane, Canada is reconsidering its C$19-billion plan to buy a new fleet of F-35s. “Clearly, there are trade tensions [with the U.S.], and we want to become closer to our friends,” Industry Minister Mélanie Joly said Monday as Swedish Deputy Prime Minister Ebba Busch formally welcomed her to Stockholm. Canada’s Arctic defense strategy is shifting away from a bilateral relationship with the United States toward a broader NATO framework. With Sweden and Finland joining NATO after Russia’s February 2022 invasion of Ukraine — and in the wake of Trump’s tariff attacks — Ottawa is widening its foreign policy focus to align with NATO as the foundation of its Arctic security. Busch said she welcomed a strategic partnership, “focusing on security and defense, investment and competitiveness, digital innovation and energy raw materials.” Joly name-checked Canadian ties to Saab, as well as to Sweden tech giants Ericsson and ABB (Asea Brown Boveri). “We have the crown jewels of the private sector of Sweden already in our country, but we want to do more,” the minister said. On Tuesday, Canada added one more jewel when Roshel, a Canadian manufacturer of armored vehicles, signed a “strategic partnership agreement” with Swedish steel producer Swebor. Roshel said in a statement that the partnership will “establish Canada’s first facility dedicated to production of ballistic-grade steel” — a key ingredient in military vehicles. Earlier in the trip, Joly visited Saab, the Swedish manufacturer of the Gripen — at one time a runner-up on Canada’s shortlist to replace its aging fleet of CF-18s. Lockheed Martin won that contract, and will deliver 16 of the stealth fighters so far. Joly is joined on this week’s trip by Stephen Fuhr, Canada’s new secretary of state for defense procurement, as Ottawa contemplates whether it will buy 72 more F-35s. Later in the week, Joly is to cut the ribbon on a joint Finnish-Canadian shipbuilding venture that will begin manufacturing a new fleet of icebreakers for Canada’s Coast Guard. Meanwhile in Europe, Foreign Affairs Minister Anita Anand was scheduled to meet with Finland President Alexander Stubb on Tuesday. The tête-à-tête follows Stubb’s appearance at the White House Monday alongside other European leaders, supporting Ukrainian President Volodymyr Zelenskyy in the Trump-brokered negotiation with Russia’s Vladimir Putin to end the war in Eastern Europe. Anand said NATO, which was founded during the Cold War on the premise it was an eastward-facing European bulwark against the Soviet Union, must confront Russia beyond Europe’s borders in the Far North. “NATO’s gaze also has to shift westward and north because of the changing geopolitical landscape, especially following Feb. 24, 2022,” Anand said Monday. “Our priority in terms of Canada’s Arctic foreign policy is to ensure that we leave no stone unturned to protect and defend Canada’s sovereignty,” she added. Anand said that will mean tens of billions of dollars of new spending on Arctic infrastructure. The minister added that it was no longer appropriate for civilian and military infrastructure projects to exist in bureaucratic “silos.” “When we talk about critical minerals in the north, yes, that’s an economic question, but it’s also a defense and security question, and it is embedded in our foreign policy,” Anand said. Anand met with foreign ministers from the Nordic 5 group of countries, including her host, Elina Valtonen, and their counterparts from Sweden, Denmark, Norway and Iceland. They later issued a joint statement of unwavering solidarity with Ukraine. “The Nordic countries and Canada are ready to play an active role in combining the efforts of the Coalition of the Willing with those of the United States to ensure the strength and credibility of these security guarantees,” Anand and her Nordic counterparts said. They emphasized that Ukraine’s borders must remain intact, and that Russia has no “veto” over Ukraine’s possible pathway to EU or NATO membership. They also called for the return of thousands of Ukrainian children who were taken to Russia after the war started. “For as long as Russia continues its war of aggression against Ukraine, we — together with partners and allies — will continue to maintain and increase pressure on Russia’s war economy,” the Nordic 5 said. “Russia poses a long-term threat to European security.”

European Commission President Ursula von der Leyen announced on Sunday that the European Union’s 19th package of sanctions against Russia is set to be unveiled in early September. “As long as the bloodshed in Ukraine continues, Europe will maintain diplomatic and, in particular, economic pressure on Russia,” von der Leyen said during a joint press briefing with Ukrainian President Volodymyr Zelenskyy at the Berlaymont building in Brussels. “We have adopted 18 packages so far, and we are advancing preparation for the 19th. This package will be forthcoming in early September,” she said. Von der Leyen stressed that existing measures have proven effective against Russian President Vladimir Putin’s war effort, highlighting that frozen Russian assets have already been redirected to support Ukraine. “We need to prepare the 19th package so that Russia sees that we are serious,” she said. “We must continue to limit Russia’s potential.” She added that the EU would keep targeting Russia’s war economy “to bring President Putin to the negotiation table.” Von der Leyen is set to be among the European leaders who will accompany Zelensky when he meets with U.S. President Donald Trump at the White House on Monday. “These are challenging times,” von der Leyen said. “Only Ukraine can choose its own destiny, but Ukraine can always count on Europe,” she said.

European Commission President Ursula von der Leyen took aim on Tuesday at China’s industrial overproduction, export restrictions and its support for Russia’s war against Ukraine. In a statement to the European Parliament in Strasbourg, Von der Leyen stressed that “our relations with China must be rooted in a clear-eyed assessment of the new reality.” The remarks set the stage for a contentious summit later this month at which EU leaders will raise Beijing’s “no-limits partnership” with Vladimir Putin’s Russia. “We can say that China is de facto enabling Russia’s war economy, and we cannot accept this,” she told European lawmakers. On the economic front, the relationship between Europe and China will need rebalancing, de-risking and a diplomatic boost when it comes to climate change and environmental issues, Von der Leyen argued.  She started by complimenting China as great global civilization that over the past 50 years has become a great global power. But her praise quickly gave way to criticism, as she accused Beijing of operating outside of international rules and flooding global markets “with subsidized overcapacity — not just to boost its own industries, but to choke international competition.” China runs “the largest trade surplus in the history of mankind,” she went on to say, while European companies were finding it harder to do business on the Chinese market where they faced systematic discrimination. The increasing barriers faced by European companies in China include requiring foreign companies to keep localized staff; host research and development functions; and keep all IT data in the country, according to an EU Chamber of Commerce in China survey. “I’ve always said it: Europe is fully committed to result-oriented engagement with China,” von der Leyen said, calling on Beijing to engage in a meaningful dialogue that leads to actual change. “If our partnership is to go forward, we need a genuine rebalancing.”  For all von der Leyen’s finger wagging, the EU is looking to copy some of China’s more successful industrial policies, including its own technology transfers and procurement laws.  Under its newly revised rules on state aid, EU governments are being encouraged to include European preference criteria in their bidding processes, as well as other forms of aid, particularly as the bloc looks to create a domestic battery sector. In the Automotive Action Plan — the EU’s strategy for making its carmakers competitive — the executive has said it would look into direct support for European manufacturers. The EU is making public funds available for battery makers, including for non-EU companies so long as they are in a joint venture with a domestic partner and sharing know-how, technical expertise and technology. The EU-China summit, called to mark 50 years of diplomatic relations, will be held in Beijing on July 24. A second summit day has been canceled. President Xi Jinping is not expected to attend, and the Chinese delegation will be led by premier Li Qiang.