Putin tests Europe’s resolve

Europe is tightening its collective belt in the energy confrontation with Russian President Vladimir Putin, who’s counting on a winter of ec [View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( Europe is tightening its collective belt in the energy confrontation with Russian President Vladimir Putin, who’s counting on a winter of economic pain and social distress to weaken the continent’s resolve in opposing his war in Ukraine. European Union leaders have already earmarked almost $280 billion to ease the crisis but face mounting pressure to do more to curb soaring energy bills. Key reading: - [European Energy Soars as Pressure Mounts on Leaders to Ease Pain]( - [Cost of UK’s Winter Triples as Energy Price Cap Leaps]( - [Germany to Rethink Gas Levy After Outcry Over Energy Profits]( - [Goodbye Hot Showers. Here's How Europe Is Slashing Energy Use]( - [A Corner of Europe Learns to Live With Power Blackouts Again]( Thermostats are being dialed down and lights dimmed to reduce consumption as record prices intensify an inflation spike and roil economies. UK consumers learned today it will cost almost three times as much to heat their homes this winter compared to last year. Putin is calculating that material comforts matter more to Europeans than Ukraine’s fate, that hot showers and warm homes will trump questions of freedom and democracy in undermining support for leaders who are standing up to him. The months ahead will test that strategy. Already, German Chancellor Olaf Scholz’s approval ratings are sinking, while French President Emmanuel Macron lost his National Assembly majority in June. Italy is awaiting a snap election after Mario Draghi resigned as prime minister, and the UK replaces Boris Johnson with a new leader next month. While it’s braced for a hard winter, Europe is seeking alternatives to Russian energy that will resolve the crisis over the medium term, even as the Kremlin’s coffers bulge from surging prices now. By holding the continent to ransom in response to sanctions over the war, however, Putin has shattered Russia’s image as a reliable gas supplier, even during the Cold War. Supplying new markets will involve costly infrastructure and probably less lucrative contracts. The breach of trust with Europe likely will never be repaired. Russia, too, may be left counting the cost of Putin’s energy gamble. A generator powers a café during a blackout in Pristina, Kosovo, on Monday. Photographer: Ben Kilb/Bloomberg Click [here]( to listen to yesterday's Twitter Space discussing President Joe Biden’s student-loan relief problem and [here]( for this week’s most compelling political images. Also share this newsletter with others. They can sign up [here](. Global Headlines Blunt message | Biden cast Republicans as committed to “[destroying America](” and said he had no respect for adherents of former President Donald Trump. At a rally in Maryland kicking off his midterm election campaign with sharpened critiques of the GOP, Biden touted a recent stretch of legislative wins and told voters they needed to turn out to protect those policies. Call to arms | Putin ordered his army to [boost]( its troop total by 137,000 to 1.15 million, the highest level in more than a decade, as Russia digs in for its war against Ukrainian forces backed by the US and its allies. The decree didn’t explain the reason for the increase or where the new recruits would come from but avoided a mass mobilization and an official declaration of war. - Ukraine is working to prevent an [accident]( at the Zaporizhzhia nuclear plant after it lost its connection to the national grid, President Volodymyr Zelenskiy said, calling for pressure to force Russian troops there to withdraw. Japan is set to approve what could be its biggest increase in defense outlays since the end of World War II, putting it on a path to become one of the world’s top [military spenders](. Prime Minister Fumio Kishida’s party is looking to double spending over five years. Choppy waters | While Liz Truss has opened up a comfortable poll lead over Rishi Sunak in the race to be the UK’s next prime minister, [disagreements]( are emerging behind the scenes. As Truss’s camp starts to look beyond the Conservative leadership contest to taking power on Sept. 6, [Alex Wickham]( explains there are fundamental divisions over how to help Britons struggling with soaring prices this winter. - Truss said the “jury’s out” on whether Macron is a [friend]( or an enemy. Best of Bloomberg Opinion - [The Supreme Court Decides How to Punish US Expats: Andreas Kluth]( - [Listening to Electricity Traders Is Really Scary: Javier Blas]( - [The Faultline in China’s Economic Caution: Daniel Moss]( Keeping power | Angola’s ruling party maintained its 47-year [grip on power]( and secured a second mandate for President Joao Lourenco in the OPEC-member’s closest election since the end of a civil war two decades ago. The electoral commission said the MPLA won just over 51% compared with about 44% for the main opposition Unita party, which has threatened to refuse to concede defeat. Explainers you can use - [Europe’s Record Heat Wave Will Be Summer Norm by 2035]( - [Why Ukraine Debt Relief Isn’t Matching Funding Needs]( - [Why Ghana Went From Hero to Zero for Investors]( Stability pledge | Brazilian presidential front-runner Luiz Inacio Lula da Silva promised to run a stable and [credible administration]( if elected in October. During a prime-time interview on the nation’s most-watched news show, the former president who governed between 2003 and late 2010 sought to reassure voters who have doubts about a third mandate for the leftist. Bloomberg TV and Radio air Balance of Power with [David Westin]( weekdays from 12 to 1pm ET, with a second hour on Bloomberg Radio from 1 to 2pm ET. You can watch and listen on Bloomberg channels and online [here]( or check out prior episodes and guest clips [here](. News to Note - LastPass, a password manager used by more than 33 million people around the world, said a [hacker]( stole source code and proprietary information after breaking into its systems. - A judge in Florida ordered the US Justice Department to release a [redacted version]( of the affidavit laying out the government’s case for executing a search of Trump’s Mar-a-Lago home this month. - UN rights chief Michelle Bachelet vowed to release a [long-awaited report]( on human rights abuses in China’s Xinjiang, despite significant work remaining with six days left in her tenure. - French Transport Minister Clement Beaune said he’s looking into a tax on flights by [private jet]( to get companies and rich individuals to limit their use. - Merchant vessels have a [new route]( to reach three ports in Ukraine, a move that may further boost shipments of food via the Black Sea. - Pakistan has [appealed]( to international donors for help as unprecedented rains trigger a humanitarian crisis and threaten the economy of the South Asian nation. Pop quiz (no cheating!) In which country did the constitutional court order the prime minister to stop performing his duties until it rules on a petition by opposition parties seeking his removal on grounds that he exceeded an eight-year term limit? Send your answers to balancepower@bloomberg.net. And finally ... Rivers across the globe are [disappearing](. From the US to Italy to China, waters have receded, leaving nothing but barren banks of silt and oozing, muddied sand. Canals are empty. Reservoirs have turned to dust. While the reasons global waterways have dried to a trickle are complex, [Brian K. Sullivan]( explains that the biggest driver is simple: climate change. The dried up Guadiana River under the Puente de la Mesta medieval bridge in Villarta de los Montes, Spain, on Aug. 16. Photographer: Thomas Coex/AFP/Getty Images Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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