Blow to Ukraine shows EU’s limits

Ukraine suffers a blow at the European Union summit [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. Russian President Vladimir Putin wasn’t at the European Union summit in Brussels, but he still made his presence felt. Hungary’s Kremlin-friendly premier, Viktor Orban, followed through on [his long-telegraphed threat]( and blocked the EU’s €50 billion ($55 billion) aid package for Ukraine. What amounts to a victory for Putin is another blow for Ukrainian President Volodymyr Zelenskiy, who returned empty handed from Washington yesterday having failed to convince the US to clear $61 billion in assistance to defend against Russia. It’s also a setback for the 27-nation EU, which is running up against the limits of its ability to become a geopolitical player when foreign-policy decisions require unanimity. That rule allows any one member to hold the bloc’s business hostage. Ukraine did score a symbolic victory, when Orban abstained on the issue of opening EU accession talks for Kyiv, effectively waving the process through. In practice, though, that still means many years of wrangling before membership would become a reality. Orban has angered the rest of the bloc with his antipathy toward Ukraine, and stunned western allies by holding talks with Putin in Beijing in October. Regardless of Orban’s motivations, however, he’s succeeded in exposing the EU’s double bind. In opening up the accession process to Ukraine plus Moldova, while granting candidate status to Georgia, the EU is sanctioning its expansion to at least 30 members. That can only render decision-making yet more tortuous and open to the vicissitudes of individual leaders. With skeptics of Ukraine’s defense having won recent elections in Slovakia and the Netherlands and the Putin-friendly far-right on the rise, the risk of more gridlock grows. Something has to give. —[Richard Bravo]( WATCH: Zoltan Simon reports on the deadlock from Budapest. Source: Bloomberg Global Must Reads US President Joe Biden urged Israel to “be more careful” in its military campaign in the Gaza Strip. It marked a [fresh American push]( to persuade Israel to scale back the scope of its strikes and adopt a vision for a post-war Gaza that includes the possibility of a Palestinian state. Children in a residential home after an Israeli airstrike in the Yabna refugee camp in southern Gaza yesterday. Photographer: Ahmad Salem/Bloomberg In August 2022, when Beijing responded to then-US House Speaker Nancy Pelosi’s visit to Taiwan with unprecedented military drills that simulated a blockade of the island, three Chinese musicians had songs at the top of the Taiwanese charts. As [this graphics-rich story shows](, the success of such singers, outperforming even international stars like Taylor Swift, is a demonstration of China’s soft power that defies geopolitical tensions. Top US regulators regard artificial intelligence as a looming vulnerability for financial stability, underscoring [Washington’s mounting concern]( over systemic dangers posed by the burgeoning technology. Treasury Secretary Janet Yellen yesterday signaled that US watchdogs will make AI, and the threats it could pose, a top priority in 2024. Italian Prime Minister Giorgia Meloni has a plan to send as many as 36,000 migrants trying to reach the EU to tourist areas in Albania. But as Alessandra Migliaccio and Gresa Kraja report, [the proposal faces a challenge]( from people who don’t want those seeking asylum to be forcibly sent there and from local people who don’t want them to come. Polls suggest that the party co-founded by Serbian President Aleksandar Vucic is headed for another comfortable victory in a parliamentary election this weekend. What is less clear is how the 53-year-old one-time ally of Putin, who critics accuse of cronyism, stifling opposition parties and curbing media freedom, achieves the legacy he wants as [the man who remade the Balkan nation](. The US Senate will delay its holiday break and return to Washington next week to [try to strike a deal]( on more aid for Ukraine. President Javier Milei still intends to eventually scrap Argentina’s peso in favor of the US dollar [after sharply devaluing the currency]( as part of an initial round of shock therapy, his economy minister said. North Korea may this month test launch a ballistic missile designed to [deliver a warhead]( to the US mainland, a top South Korean security official said. Washington Dispatch Donald Trump [will return to Iowa]( this weekend for two rallies with less than a month to go before the state’s caucuses — the starting gun in the race for the 2024 Republican presidential nomination. The former president remains far ahead in polls over his closest rivals, Nikki Haley and Ron DeSantis, and wants an overwhelming victory in Iowa that will propel him to dominance in New Hampshire, South Carolina and Nevada. Trump is planning more events before Christmas, and over the next four weeks dozens of his allies, including Representative Matt Gaetz of Florida and former Housing and Urban Development Secretary Ben Carson, will make appeals to Hawkeye State voters. Even as he prepares an onslaught intended to drive his opponents from the field, his campaign is taking no chances. In the 2016 race, he skipped a debate in Iowa and did little organizing, and Senator Ted Cruz won the caucuses. One thing to watch today: The jury deciding damages in the defamation case against former New York City Mayor Rudy Giuliani resumes deliberations in Washington. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 5pm ET weekdays on Bloomberg Television. Chart of the Day The world’s largest banks are [showing little or no progress]( when it comes to their promise to help the planet avoid the worst consequences of global warming. While the ratio of spending on low-carbon infrastructure relative to fossil fuels needs to reach 4-to-1 by 2030, according to researchers at BloombergNEF, at the end of last year, the so-called energy-supply banking ratio was 0.73-to-1 — worse than the 0.75-to-1 ratio reported in 2021. And Finally For years, China’s rich dominated wealth flows, but Dubai now offers one of the earliest signs yet of the potential impact India’s new millionaires can have overseas. The United Arab Emirates’ easy visa policies, low taxes and proximity are making it the biggest overseas beneficiary of the South Asian country’s ascent. A flood of [wealthy Indians]( are snapping up properties including villas in an exclusive residential district often dubbed the Beverly Hills of Dubai. Indian actor Vivek Oberoi made Dubai his second home three years ago and established Bricks n Woods real estate in the heart of the emirate. Photographer: Natalie Naccache/Bloomberg Pop quiz (no cheating!) Which two South American countries are in a dispute over an area rich in oil? Send your answers to balancepower@bloomberg.net. 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