Nato ministers to paper over Ukraine differences

Good morning and welcome to Europe Express.

An oversized, Communist-era building in Bucharest is once again the venue of a Nato meeting which touches upon Ukraine and the alliance’s own future — but things could not be more different than the previous time the Romanian capital hosted such an event. We will run you through the foreign ministers’ meeting agenda and why the united front is likely to hold despite some increasingly nuanced views.

In Brussels, EU ambassadors last night failed to agree on a price ceiling on Russian oil, with Poland and the Baltic states insisting on a much lower cap than the rest of the bloc (and G7 allies) are envisaging, even though the clock is ticking as the cap is supposed to enter into force in less than a week.

And with the incoming Swedish EU presidency warming up on the sidelines, we will hear from the country’s business confederation and why they have their eyes set on the US.

Return to Bucharest

It has been 14 years since Nato countries vowed in Bucharest that Ukraine would one day become a member of the western military pact. As the alliance returns to the scene of that pledge today, many will wince at the lack of progress made — and the constant Russian bombardment of Ukraine through 10 months of war, writes Henry Foy in Bucharest.

Ukraine will headline the two-day meeting of Nato foreign ministers in the Romanian capital, but the talks have a complex agenda. Ministers will seek to both reaffirm support for Kyiv and discuss ways to broaden the concrete assistance being provided, but also to take a step back and discuss other aspects of Nato’s purpose.

That will not be easy. While the US is keen to push its European allies to stiffen their attitude towards China, and many countries want Nato to think deeper about how to better support other vulnerable countries in Europe — such as Bosnia and Herzegovina, Georgia and Moldova — eastern member states still think the alliance is not doing enough for Ukraine, and are wary of attempts to shift the narrative.

“We should not lose sight of the main task — Ukraine has to win on the battlefield,” said Lithuania’s Gabrelius Landsbergis yesterday on a visit to Kyiv with six other European foreign ministers.

In public, the main talking points are crystal clear: There is no disagreement on support for Ukraine, alliance unity is rock-solid, and nobody is urging Kyiv into any diplomatic talks with Russia that they do not want. But behind the scenes, there are subtle nuances.

Nato capitals admit to growing weapon supply problems, and a major disconnect between the speed Ukraine is using donated arms, and the speed they can buy or manufacture new ones. This is not a question of politics or public support, but of mathematics.

Turkey’s doublespeak on Moscow is brushed aside in public by Nato officials with platitudes about Ankara’s role in a deal to get Ukrainian grain to global markets, but provokes ire and frustration in private. The same goes for Hungary’s lacklustre support for Kyiv (the ministers will be joined by Ukraine’s Dmytro Kuleba for dinner, because Budapest did not want him to come to a full formal session of the two-day meeting) and its block on the EU’s €18bn aid package for Ukraine.

And the US is keen to talk more and more about what it sees as the pre-eminent threat from China, which irritates some European allies which have a less confrontational relationship with Beijing, and feel like agreeing to label the country as a “challenge” in the alliance’s 10-year policy plan this summer was already a big step for them.

Do not expect to hear too much about these grievances from the public statements and speeches in Bucharest, though. Russia’s ongoing attacks on Ukraine will probably see ministers step up pledges to increase arms and humanitarian supplies. There is also a meeting of G7 ministers on the sidelines this afternoon, with talk of a separate declaration of support from them (and an opportunity to take stock of the oil price cap that should come into force next week).

“President Putin is now trying to use . . . winter as a weapon of war against Ukraine,” Nato secretary-general Jens Stoltenberg said yesterday. “One of the messages from the foreign ministerial meeting here in Bucharest will be the need to further step up . . . we need to help Ukraine to defend themselves against this horrific type of warfare.”

Chart du jour: Russia’s gamble

As the G7 oil price cap is due to kick in next week, this Financial Times explainer is looking at the impact of western sanctions so far, including which countries stepped up to fill the demand gap for Russian crude.

US-focused presidency

There is only one word on the lips of business executives in terms of what they think Sweden’s EU presidency should focus on: competitiveness, writes Richard Milne, Nordic and Baltic Correspondent.

Jan-Olof Jacke, director-general of the Confederation of Swedish Enterprise, hosted 40 member organisations of lobby group Business Europe last week in Stockholm ahead of Sweden taking over the EU presidency on January 1.

There was a clear demand that Europe come up with the right response on competitiveness in relation to the US, he told Europe Express, after Washington shocked EU policymakers with aggressive subsidies for green technologies as part of its Inflation Reduction Act.

“It’s blindingly obvious that we need an agenda for competitiveness. It’s clear things are happening in other parts of the world that use more of carrot and less of stick, and it’s the opposite in Europe. It’s clear that the US is very forward-leaning at the moment, and not only with actions that we necessarily appreciate,” Jacke added.

Sweden is one country that had stolen an early march on the green transition with the opening of Europe’s first homegrown battery gigafactory late last year by Northvolt, but many executives are worried that the EU might choose the wrong solutions as part of its response to the energy crisis.

Jacke outlined five priority areas: further enhancement of the single market, particularly in services and data flows; leading the green transition by pushing fossil-free electricity and faster permitting processes for wind, nuclear and solar installations; a push on digitalisation; a bigger focus on research and development; and a continued focus on free trade.

Some of these points are being picked up at least in some quarters of the European Commission, with officials pointing out that today internal market commissioner Thierry Breton is set to give a speech in Berlin arguing for faster permitting and clean tech funding to fight deindustrialisation.

“There is significant concern both over a race of subsidies and even worse a trade war. That would be to the benefit of no one. We absolutely have to strengthen the competitiveness of business in Europe to stop delocalisations. What we don’t want to see is a more closed and more protectionist Europe,” Jacke stressed.

What to watch today

1. Nato foreign ministers meet in Bucharest

2. European Commission tables strategy on drones

Notable, Quotable

With the UK no longer in the EU and Germany more focused internally, Macron is an important interlocutor for the Americans

• Macron to Washington: France’s president Emmanuel Macron is heading to the US tomorrow for a state visit, the first since Joe Biden became US president. But while the trip marks an important diplomatic moment in Franco-American relations, progress on trade and energy is expected to remain elusive.

• Carbon sort-of removal: EU plans to certify removals of carbon from the atmosphere are at risk of allowing greenwashing and fall short of what is needed to curb emissions to limit global warming, according to climate experts.