Europe scrambles to salvage Ukraine peace hopes

Today’s agenda: Trump tariffs update; crypto prices jump; Israel halts Gaza aid; the stock market’s America bubble; Martin Wolf on defence spending; and Netflix chief’s private ski resort

Good morning. We start the working week in London, where European leaders are scrambling to salvage hopes for peace in Ukraine after an explosive clash between Donald Trump and Volodymyr Zelenskyy.

What’s being proposed now: Britain and France are to lead a European plan to end the war. This includes an initial one-month truce with Russia, covering air, sea and infrastructure. Europe would deploy a “coalition of the willing” to secure any ceasefire, said UK Prime Minister Sir Keir Starmer, but the “effort must have strong US backing”. Another part of the plan involves Kyiv signing a proposed minerals deal with the US, giving Washington an economic stake in a peace settlement. Trump had wanted Zelenskyy to sign the agreement in Washington last Friday, before their meeting fell apart.

Will the plan succeed? There are several challenges. While Starmer has said the UK is prepared to send troops, many European states are reluctant to commit — so far Germany, Spain and Poland have not offered to help. Another is the toxic relationship between Zelenskyy and Trump, which Starmer and his French and Italian counterparts plan to circumvent by acting as intermediaries. Ukraine’s president has also rejected calls for a ceasefire without detailed security guarantees. Starmer and French President Emmanuel Macron have so far been unsuccessful in persuading Trump to provide US cover for any peacekeeping force.

Here are more details from the new plan, and we have more analysis on the situation below:

• Go deeper: Starmer and Macron have made it clear that Europe has to prove to Trump that it is part of the solution to the crisis on its own continent, not part of the problem.

• Trump TV: The president’s comment that his bust-up with Zelenskyy would “make great television” was quite telling, writes Jemima Kelly.

• A real peace: Negotiations over Ukraine are missing a human dimension, writes Nobel Peace laureate and human rights lawyer Oleksandra Matviichuk.

And here’s what else we’re keeping tabs on today:

• Economic data: The US, EU, UK, Canada, France, Germany and Italy issue manufacturing purchasing managers’ indices, while the EU also releases its preliminary harmonised index of consumer prices for February.

• Jes Staley trial: The former Barclays CEO will argue the bank had a “clear understanding” of the extent of his ties with Jeffrey Epstein in a landmark trial opening in London today.

• Nuclear weapons: The States Parties to the Treaty on the Prohibition of Nuclear Weapons meets at the UN in New York.

• Mobile World Congress: The world’s largest mobile telecoms industry convention returns to Barcelona.

Five more top stories

1. Donald Trump will impose tariffs on Mexico and Canada tomorrow but is still deciding on the levels, the US commerce secretary has said. The president has also vowed to impose an additional 10 per cent levy on China the same day, which is “set”, said Howard Lutnick. Here’s the latest on Trump’s tariff plans.

• Market reaction: Currency markets are increasingly dismissive of Trump’s tariff threats, raising the risk of big swings if he follows through on them this week.

2. Cryptocurrency prices jumped yesterday after Trump named tokens that would be included in a US strategic reserve. The president said bitcoin and ethereum would be “the heart of the reserve”, adding that it would also include Solana, XRP and Cardano. Here’s how moves to build the national crypto stockpile are progressing.

3. Exclusive: Deutsche Bank clashed with the European Central Bank throughout 2024 over concerns the German lender may be underestimating how many loans would sour, people familiar with the matter told the Financial Times. The ECB flagged concerns over Deutsche’s credit risk management and its risk models on multiple occasions. Olaf Storbeck and Florian Müller have more details from Frankfurt.

4. A close ally of Vladimir Putin has been engineering a restart of Russia’s Nord Stream 2 gas pipeline to Europe with the backing of US investors. According to people aware of the discussions, the efforts were the brainchild of former spy Matthias Warnig, who until 2023 ran Nord Stream 2’s parent company for the Kremlin-controlled gas giant Gazprom. Read the full story.

5. Israel has halted all humanitarian aid to Gaza after Hamas rejected a revised proposal to extend the ceasefire that lapsed early yesterday and condemned the latest plan as “manipulation”. The proposal, purportedly drafted by US special envoy Steve Witkoff, would have extended the truce for another six weeks. Here are more details on the terms.

News in-depth

How big is the stock market’s America bubble? US stocks’ huge surge since the global financial crisis means they account for almost two-thirds of the world’s investable market, driven in recent years by the artificial intelligence boom. But a recent pullback in tech shares has underlined the growing nervousness around soaring valuations in a market that has swallowed an ever-larger share of global investors’ allocations.

We’re also reading . . . 

• US Congress: America’s first branch of government should be acting as a check on Trump’s power grab, writes our editorial board. Instead, it has been missing in action.

• Tariffs: The iconic Chevrolet Silverado has been one of the US’s most popular pick-up trucks for decades, but it could now become one of the biggest victims of Trump’s trade war.

• Premier League: Richard Masters, CEO of the world’s most-watched football league, speaks to the FT on keeping the peace between its 20 ultra-competitive clubs.

• Nuclear energy: Countries want to squeeze more electricity from ageing power plants to help meet global demand, but the strategy has its own challenges.

Chart of the day

The “peace dividend” has ended with the return of war to Europe. Britain can and must spend more on defence, writes Martin Wolf, if it is to have a voice in the joint defence of its continent or even defend itself.

Take a break from the news . . . 

Reed Hastings, the billionaire founder of Netflix, has created a members-only ski resort on Utah’s Powder Mountain. He is walking a gentrification tightrope — and a ski industry in flux is watching every step.