Can Trump extract concessions on Ukraine from Putin over the phone?

Good morning. Boosting defence spending through a borrowing binge encouraged by Brussels risks a new debt crisis, a key member of the Netherlands’ ruling coalition has warned, telling the FT that his country opposes common EU debt or an indefinite loosening of borrowing rules.

Here, our Moscow and Washington teams preview today’s critical call between the White House and the Kremlin, and our Berlin bureau chief lays out what’s at stake as Germany’s parliament votes on its new financial future.

Playing softball

One call to Vladimir Putin last month was all it took for Donald Trump to overturn decades of US policy on Russia, write Max Seddon and Felicia Schwartz.

Today, the US president will hold his second official conversation with his Russian counterpart since taking office. The looming question is whether he will extract any concessions from Moscow — or keep eroding decades of containment policy towards Russia.

Context: Trump’s drive for rapprochement with Moscow has led the US president to all but switch sides in the war in Ukraine at Kyiv and Europe’s expense. Earlier this month, the US briefly suspended military aid and intelligence sharing to Ukraine after an extraordinary Oval Office dust-up with President Volodymyr Zelenskyy.

Though Trump has demanded Ukraine make major concessions to Russia to expedite a quick peace deal, the US has so far put no such pressure on Moscow — even though Putin took a hard line on Trump’s proposal for a 30-day unconditional ceasefire last week, and seems unwilling to drop his maximalist demands for ending the war.

Despite that, US special envoy Steve Witkoff told CNN on Sunday that Trump expected a Ukraine deal in the coming weeks. Witkoff, who has met Putin twice this year, said Putin had indicated “he accepts that philosophy of President Trump” and wanted the war to end.

Mike Waltz, Trump’s national security adviser, said the US and Russia were discussing territorial concessions and the details needed to implement a ceasefire.

“There are regions that we all know the Russians are focused on. There is a nuclear reactor that supplies quite a bit of electricity to the country of Ukraine. That’s got to be dealt with. There’s access to ports. There’s the Black Sea potential agreement,” Waltz said on CBS’s Face the Nation on Sunday.

So far, at least, Russia has shown no willingness to make any concessions of its own.

“Right now, as we see, there is no negotiation table yet because Russia is not coming to the negotiation table,” the EU’s chief diplomat Kaja Kallas said yesterday after a meeting of the bloc’s foreign ministers.

Chart du jour: Road blocks

Transport emissions have begun decreasing thanks to electric vehicles, but rising air travel could undermine the decline, finds a new report by the NGO Transport & Environment.

Merzonomics

Will Germany’s old Bundestag adopt Friedrich Merz’s €1tn fiscal bazooka today? Fingers crossed, writes Anne-Sylvaine Chassany.

Context: Chancellor-in-waiting Merz has proposed a total overhaul of Germany’s fiscal straitjacket, with reforms designed to unlock unlimited borrowing for defence spending and inject €500bn into the country’s neglected infrastructure.

The future German leader yesterday sought to reassure investors and EU allies that this would be the case. He was “confident”, he said, that his spending package would secure the required two-thirds majority.

Overnight his Christian Democratic bloc (CDU/CSU), the Social Democrats, and the Greens, which agreed to back the deal last week, were racing to rally absentees and convince dissenters within their ranks, particularly outgoing lawmakers who may not feel bound by party discipline.

Merz, whose CDU/CSU won elections last month, has little choice but to use the outgoing Bundestag to loosen the country’s strict constitutional debt cap. The far-right Alternative for Germany and far-left Die Linke, who oppose Merz’s package, have secured a blocking minority in the new parliament which begins sitting next week.

“I can fully understand that there are questions and that there are doubts,” Merz said after meeting his parliamentary group yesterday. “I think we’ve convinced the critics,” he said, adding there were still “two or three” CDU MPs planning to vote against.

There are also last-minute legal challenges from liberal FDP lawmakers to prevent the vote from happening — although the constitutional court in Karlsruhe already rejected similar challenges last week.

Merz’s reforms, which would break from decades of German fiscal conservatism, have been hailed by European allies, security experts and economists as a decisive step to modernise the Bundeswehr and revive Europe’s largest economy, which has stagnated in the past five years.

The package will allow unlimited borrowing to better equip the military and supply weapons to Ukraine. It will also create a special €500bn, 12-year fund to modernise infrastructure, from power grids and hospitals to roads and railway networks.

What to watch today

1. French President Emmanuel Macron meets outgoing German Chancellor Olaf Scholz in Berlin.

2. EU general affairs ministers meet.

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