This is an audio transcript of the FT News Briefing podcast episode: ‘Europe takes the lead on Ukraine peace deal’
Kasia Broussalian
Good morning from the Financial Times. Today is Monday, March 3rd and this is your FT News Briefing. UK Prime Minister Keir Starmer led a summit yesterday to discuss Ukraine, and the European Central Bank has been worried about Germany’s biggest lender. Plus, crypto prices started climbing again on Sunday. I’m Kasia Broussalian and here’s the news you need to start your day.
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Senior European leaders met in London yesterday to talk about, well, what happened in Washington on Friday.
Audio clip of Donald Trump
You’re not acting at all thankful and that’s not a nice thing. I’ll be honest, that’s not a nice thing.
Kasia Broussalian
The explosive meeting between US President Donald Trump and his Ukrainian counterpart Volodymyr Zelenskyy made one thing pretty clear.
Audio clip of Donald Trump
All right, I think we’ve seen enough. What do you think?
Kasia Broussalian
The gap between America and Europe is widening and fast. My colleague Ben Hall has been following the break-up and he’s here with me now. Hey, Ben.
Ben Hall
Hi.
Kasia Broussalian
So tell me more about what happened at this summit on Sunday. What are the details?
Ben Hall
So British Prime Minister Keir Starmer gathered together more than a dozen European leaders, including President Volodymyr Zelenskyy, to try and find a way forward and essentially to try and win over the support of Donald Trump after Friday’s bust up. That was the objective. There was frankly scant detail from the outcome of this meeting. Starmer gave a brief press conference at the end. He stated that Britain and France would work together to come up with a joint plan in consultation with Ukraine on the ways in which it can guarantee a future peace settlement. But he was very emphatic that this would have to be done with America.
Kasia Broussalian
Still, the last few weeks have felt like a significant rupture with the US foreign policy from, you know, the Biden administration that we saw previously. So I guess I’m wondering what sort of choices does Europe need to make now in order to support Ukraine?
Ben Hall
It’s been a rupture on a number of fronts, including obviously on Ukraine and the sense really, I think that is dawning on many Europeans that they’re on their own now. And of course, they are going to have to substantially increase their own defence spending. They can still do this, but there are going to be big gaps in security if America decides to sort of really drastically scale back or even remove its commitment to collective self-defence within Nato.
Kasia Broussalian
So it sounds like, you know, the big realisation here for many countries in Europe is that it really needs to arm and arm fast. And a lot of that is in order to help support Ukraine. But is everyone in Europe on board with that?
Ben Hall
No. Not exactly. Hungary’s Viktor Orbán in particular is increasingly against more EU support for Ukraine. Although he has gone along eventually with all of the EU aid packages that have been granted, or most of them and gone along with EU sanctions, he is potentially a major obstacle. On the other hand, I think what we are talking about here, particularly with Britain, which is obviously no longer a member of the EU, is essentially a sort of coalition of the willing to help Ukraine, which might involve Norway and other non-EU state. In that sense, the Europeans can get around the Hungarian roadblock.
Kasia Broussalian
And one thing that you’ve made pretty clear here, Ben, while we’ve been talking, is that there’s this feeling that President Trump is kind of washing his hands of the post-world war two security structure on the continent. You know, he’s basically saying that if a country there needs protection, it better look to its neighbours and not the US. But can Russian aggression be stopped without America?
Ben Hall
I think it’s going to be very difficult in the short term, not least because American help is fundamentally important for Ukraine in terms of intelligence and targeting, and as well as some crucial military capabilities, in particular on air defence. Then after that, there is the fundamental question of whether the Europeans can really fill the gap that America would leave behind if they were to step back from European security. The biggest thing of all, of course, is the nuclear deterrent. The nuclear deterrent is the ultimate safeguard for Europe. And Europe has lived under that security umbrella for decades. If America were to completely abandon Europe, then you are left with a much smaller British deterrent and a much smaller French deterrent. And that is an enormous question that very few policymakers are even beginning to grapple with.
Kasia Broussalian
Ben Hall is the FT’s Europe editor. Thanks, Ben.
Ben Hall
Thank you.
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Kasia Broussalian
The FT has learned that Deutsche Bank clashed multiple times with the European Central Bank last year over its credit risk management. The ECB warned Germany’s top lender that it might be underestimating how many loans would go sour. Now, ultimately, Deutsche issued two warnings to investors that provisions for bad loans would be higher than it originally thought. By the end of 2024, Deutsche had earmarked more than €5.5bn for potential losses. It had initially expected 1.5bn. The bank said that this was all normal and that it felt comfortable with its risk management.
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Cryptocurrencies were on the move again yesterday. The price of all sorts of digital assets jumped after an announcement from President Donald Trump. Here to unpack what happened is Philip Stafford. He’s the FT’s digital finance news editor. Hey, Philip.
Philip Stafford
Hi. Can I say, how are you doing?
Kasia Broussalian
Doing well. Thanks. All right. So what exactly did Trump say yesterday?
Philip Stafford
Yes, it was a quiet Sunday until Donald Trump said on his Truth social media account that the executive order that he announced back in January was looking at some other cryptocurrencies that could be used potentially in a strategic cryptocurrency reserve for the US. These are things like Cardano, XRP and Solana. The idea of a strategic reserve had sort of died down, and it’s very much back to the forefront now because of this announcement. It had quite an effect on the market.
Kasia Broussalian
Yeah. What happened to the price of some of these lesser known coins after Trump’s post?
Philip Stafford
Straight away, the prices of Solana, of XRP, of Cardano all pretty much rocketed. And then a little bit later on, Trump updated his post and added, furthermore, that he still loves Bitcoin and other tokens, which of course sent the price of bitcoin rising as well. That was up 10 per cent. And what this really is done is really given a bit of a jolt because really, ever since Trump came back to office in January, there’s been a quite a downer on the industry. There’s been kind of an absence of good news, I would say. There’s been a couple of high-profile scandals, and there was a hack on one of the exchanges that reminded everybody that cryptocurrency and crypto trading is still quite a high-risk assets. So this definitely put a floor under it and it’s all positive as far as the industry is concerned.
Kasia Broussalian
So prices have jolted up now because of this. But walk me through the explanation for that. I mean, what would a US strategic reserve for digital assets ultimately mean for traders?
Philip Stafford
Well, the whole idea is it’s quite an interesting one in the sense that it never really been considered until Trump came to office, really. Now, the US has quite a few strategic reserves of different things. It has an oil strategic reserve, you know, things that can be rolled out if for whatever reason, and there was an acute shortage. But how does that work for digital assets is something else, because it’s not something that the general populace of the US needs in quite the same way. The general thinking is that this would act as a sort of a store of value, something that in case of a rainy day, it could be wheeled out and sold. But that would mean that the US government is effectively using tax dollars and buying bitcoin, which would be kind of the ultimate 180 degrees from bitcoin and other cryptocurrencies, actually starting off as a way to bypass governments. And, you know, you could potentially end up with the US government of all people actually holding it.
Kasia Broussalian
Yeah. What would need to happen to get this kind of reserve off the ground?
Philip Stafford
Well, obviously you need to have a buy in from all the interested parties, which will include the Treasury, the Federal Reserve probably would have something to say about it, given its interest in the dollar. Back in January, Trump signed an executive order saying that he was direct a working group to have a look at the viability. And because it’s still so very vague, I think it would still be some time off yet.
Kasia Broussalian
That’s the FT’s Philip Stafford. Thanks, Philip.
Philip Stafford
Thanks.
Kasia Broussalian
The American housing market has been a bit of a stinker lately. High interest rates have kept buyers on the sidelines and sellers in their homes. But now another rusty nail is poking through. Home improvement projects are also taking a hit. Share prices for companies that supply things like doors and windows, water heaters and plywood are all down. Interest rates are again part of the problem here, but there are also concerns about President Trump’s deportation plans. Undocumented workers play a big role in construction companies, and it’s a big deal because residential remodelling and construction makes up about 4 per cent of US GDP. You can read more on all of these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Check back tomorrow for the latest business news.
