Populism prompts European scramble

European leaders face a crucial year on Ukraine [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. European Union leaders are starting to make their moves to combat pressure from their populist rivals. French President Emmanuel Macron [pushed out his prime minister]( last night as he seeks to stem the rise of the nationalists of Marine Le Pen, who’ve been polling strongly ahead of June’s European elections. German Chancellor Olaf Scholz’s efforts to get the bloc’s biggest economy moving again have been [hit by protests]( from farmers — backed by the opposition conservatives and the far-right Alternative for Germany party — who are angry at losing a diesel subsidy. Ballots across the continent this year will mark a turning point for the bloc as Commission President Ursula von der Leyen’s first term comes to a close, triggering another scramble among member states and political groups to secure influential posts. That process has started earlier than usual after Charles Michel, who leads EU leaders’ summits as president of the European Council, announced that he will step down early to run in the European election. Unless leaders can agree on a replacement before the June vote, control of summit agendas will pass to Hungarian Prime Minister Viktor Orban, who’s consistently blocked EU efforts to help Ukraine and to manage immigration. Last year he traveled to Beijing to meet with Vladimir Putin. One place the populist drift has already been checked is Poland, where Michel’s predecessor, Donald Tusk, unexpectedly returned to power last month. He’s now battling to wrest control of the state broadcaster from allies of the previous nationalist government. As the power games play out and mainstream parties seek to counter the rise of populists, the specter of Donald Trump’s possible return to the White House looms large over the continent. — [Ben Sills]( Farmers park tractors at the Brandenburg Gate in Berlin yesterday to protest planned cuts to state subsidies. Photographer: Sean Gallup/Getty Images Global Must Reads A war over Taiwan could cost the world about $10 trillion, equal to about 10% of global gross domestic product. While few observers put a high probability on on an imminent invasion by China, the country’s rising economic and military heft, Taiwan’s burgeoning sense of national identity, and fractious relations between Beijing and Washington mean [the conditions for a crisis]( are in place. Taiwan’s Jan. 13 election is a potential flashpoint. The Pentagon is under growing pressure from US lawmakers to explain why Defense Secretary Lloyd Austin failed to notify the White House [about his hospitalization]( for four days. The Defense Department has not disclosed why Austin was admitted to Walter Reed National Military Medical Center, or whether he was unconscious at any time during his multi-day stay in intensive care. Houthi militants, a Yemeni group backed by Iran, mounted at least two dozen attacks in the southern Red Sea between Nov. 19 and Jan. 2, according to US Central Command, including dropping from a helicopter to hijack a vessel. Aaron Clark and Jack Wittels report on the [unprecedented dangers to ship workers]( as the Houthis target Israel-affiliated vessels carrying commodities to the country. A screengrab from footage released by Houthi rebels shows members aboard a vessel in the Red Sea on Nov. 19. Source: Getty Images This year will be so hot that some experts are already predicting it may beat 2023 as the warmest on record. While [climate change is primarily responsible](, a second year of El Niño is also a key factor, as sea surface temperatures and the air above heat up due to changes in ocean circulation and weather patterns. President Daniel Noboa has declared a 60-day state of emergency after one of Ecuador’s most notorious drug lords escaped from prison and renewed rioting broke out at penitentiaries across the Andean nation. Adolfo Macias’s breakout [is an embarrassment]( for the new administration that took office in November promising to control a crime wave. President Xi Jinping vowed there will be “no mercy” in his [government’s anti-graft campaign]( in several critical sectors, a move that risks China’s fragile economic recovery. President Hassan Sheik Mohamud of Somalia warned neighboring Ethiopia he would take “all necessary measures” to [defend his country]( should its neighbor make strides toward securing direct passage to the Red Sea via the breakaway region of Somaliland. South Korea’s parliament passed a bill to do away with [the consumption of dog meat]( through a rare unanimous vote on the legislation that President Yoon Suk Yeol has pledged to enact as law. Washington Dispatch Trump plans to [attend a hearing]( today at the US Court of Appeals for the District of Columbia on whether he should be granted immunity from prosecution in the special counsel’s case regarding his actions leading up to and on the Jan. 6, 2021, assault on the US Capitol. The hearing, taking place within two miles of the White House and less than a week before the Iowa caucuses, underscores the unprecedented nature of Trump’s latest run for the presidency: Although he’s far ahead in polls for the Republican nomination, proceedings in his criminal cases are increasingly crisscrossing with the 2024 election-year schedule. Trump contends he was acting within his official capacity as president. Even if the judges rule in his favor, Special Counsel Jack Smith can appeal to the full DC Circuit or the US Supreme Court. And that’s only one part of a legal thicket, which includes the federal case in Florida, also being prosecuted by Smith, accusing Trump of mishandling classified documents; state charges in Georgia over the 2020 election; and a New York State indictment on charges of falsifying business records to conceal payments to Stormy Daniels, an adult-film star. One person to watch today: Ron DeSantis takes part in a Fox News town hall, a day before he’s scheduled to debate fellow Republic presidential contender Nikki Haley on CNN. [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 Six of the top-10 performing economies in the world are forecast to come from sub-Saharan Africa this year, according to the International Monetary Fund. Their smaller size won’t be enough to make up for less-stellar performances by South Africa and Nigeria, which together account for two-fifths of Africa’s $2 trillion economy. But they [are helping to make a difference]( in a region that remains severely challenged by poverty and inequality. And Finally Johannesburg is facing an unprecedented housing shortage, with 400,000 families on a decades-long waiting list. The inability of South Africa’s biggest city to provide low-income housing has forced tens of thousands of people into the more than 600 so-called hijacked buildings — everything from abandoned high rises to derelict office buildings and factories — [living in slum-like conditions]( and paying rent and protection fees to criminal syndicates. A woman stands on the door of a room she shares with other five others in Johannesburg on Sept. 9. Photographer: Michele Spatari/AFP/Getty Images More from Bloomberg - Check out our [Bloomberg InvestigatesÂ](film series about untold stories and unraveled mysteries - [Bloomberg Opinion]( for a roundup of our most vital opinions on business, politics, economics, tech and more - [Next Africa](, a twice-weekly newsletter on where the continent stands now — and where it’s headed - [Economics Daily]( for what the changing landscape means for policy makers, investors and you - [Green Daily]( for the latest in climate news, zero-emission tech and green finance - Explore more newsletters at [Bloomberg.com](. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. 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