Good morning from the Financial Times.
Today is Monday, March 3rd, and this is your FT News Briefing.
U .K. Prime Minister Keir Starmer led a summit yesterday to discuss Ukraine.
And the European Central Bank has been worried about Germany's biggest lender.
Plus, crypto prices started climbing again on Sunday.
I'm Kasia Boussalyan, and here's the news you need to start your day.
Senior European leaders met in London yesterday to talk about, well, what happened in Washington on Friday.
You're not acting at all thankful.
And that's not a nice thing.
I'll be honest, that's not a nice thing.
The explosive meeting between U .S.
President Donald Trump and his Ukrainian counterpart Vladimir Zelensky made one thing pretty clear.
All right, I think we've seen enough.
What do you think? The gap between America and Europe is widening and fast.
My colleague Ben Hall has been following the breakup and he's here with me now.
Hey, Ben. Hi. So tell me more about what happened at this summit on Sunday.
What are the details?
So British Prime Minister Keir Starmer gathered together more than a dozen European leaders, including President Volodymyr Zelensky, to try and find a way forward, and essentially to try and win over the support of Donald Trump after Friday's bust -up.
That was the objective.
There was, frankly, scant detail from the outcome of this meeting.
Starmer gave a brief press conference at the end.
He stated that Britain, France would work together to come up with a joint plan in consultation with Ukraine on the ways in which it can guarantee a future peace settlement.
But he was very emphatic that this would have to be done with America.
Still, the last few weeks have felt like a significant rupture with the U .S.
foreign policy from the Biden administration that we saw previously.
So I guess I'm wondering, what sort of choices does Europe need to make now in order to support Ukraine?
It's been a rupture on a number of fronts, including obviously on Ukraine and the sense really, I think, that is dawning on many Europeans that they're on their own now.
And of course, they are going to have to substantially increase their own defense spending.
They can still do this, but there are going to be big gaps in security if America decides to really drastically scale back or even remove its commitment to collective self -defense within NATO.
So it sounds like the big realization here for many countries in Europe is that it really needs to arm and arm fast.
And a lot of that is in order to help support Ukraine.
But is everyone in Europe on board with that?
No, not exactly. Hungary's Viktor Orban in particular is increasingly against more EU support for Ukraine.
Although he has gone along eventually with all of the EU aid packages that have been granted, or most of them, and gone along with EU sanctions, he is potentially a major obstacle.
On the other hand, I think what we are talking about here, particularly with Britain, which is obviously no longer a member of the EU, is essentially a sort of coalition of the willing to help Ukraine, which might involve Norway and other non -EU state.
In that sense, the Europeans can get around the Hungarian roadblock.
And one thing that you've made pretty clear here, Ben, while we've been talking is that there's this feeling that President Trump is kind of washing his hands of the post -World War II security structure on the continent.
He's basically saying that if a country there needs protection, it better look to its neighbors and not the US.
But can Russian aggression be stopped without America?
I think it's going to be very difficult in the short term, not least because American help is fundamentally important for Ukraine in terms of intelligence and targeting, and as well as some crucial military capabilities, in particular, on air defense.
And after that, there is the fundamental question of whether the Europeans can really fill the gap that America would leave behind if they were to step back from European security.
The biggest thing of all, of course, is the nuclear deterrent.
The nuclear deterrent is the ultimate safeguard for Europe.
And Europe has lived under that security umbrella for decades.
If America were to completely abandon Europe, then you're left with a much smaller British deterrent and a much smaller French deterrent.
And that is an enormous question that very few policymakers are even beginning to grapple with.
Ben Hall is the FT's Europe editor.
Thanks, Ben. Thank you.
The FT has learned that Deutsche Bank clashed multiple times with the European Central Bank last year over its credit risk management.
The ECB warned Germany's top lender that it might be underestimating how many loans would go sour.
Now, ultimately, Deutsche issued two warnings to investors that provisions for bad loans would be higher than it originally thought.
By the end of 2024, Deutsche had earmarked more than 5 .5 billion euros for potential losses.
It had initially expected 1 .5 billion.
The bank said that this was all normal and that it felt comfortable with its risk management.
cryptocurrencies were on the move again yesterday the price of all sorts of digital assets jumped after an announcement from president donald trump here to unpack what happened is philip he's the ft's digital finance news editor hey philip hi kisha how are you doing doing well Thanks.
All right. So what exactly did Trump say yesterday?
Yes, it was a quiet Sunday until Donald Trump said on his social media account that the executive order that he announced back in January was looking at some other cryptocurrencies that could be used potentially in a strategic cryptocurrency reserve for the US.
These are things like Cardano, XRP, and Solana.
The idea of a strategic reserve had sort of died down, and it's very much back to the forefront now because of this announcement.
It had quite an effect on the market.
Yeah, what happened to the price of some of these lesser known coins after Trump's post?
Straight away, the prices of Solana, of XRP, of Cardano all pretty much rocketed.
And then a little bit later on, Trump updated his post and added furthermore that he still loves Bitcoin and other tokens, which of course sent the price of Bitcoin rising as well.
that was up 10%. And what this really has done is really given a bit of a jolt because really ever since Trump came back to office in mid -January, there's been quite a downer on the industry.
There's been kind of an absence of good news, I would say.
There's been a couple of high -profile scandals and there was a hack on one of the exchanges that reminded everybody that cryptocurrency and crypto trading is still quite a high -risk asset.
So this definitely put a flaw under it And it's all positive as far as the industry is concerned.
So prices have jolted up now because of this.
But walk me through the explanation for that.
I mean, what would a U .S.
strategic reserve for digital assets ultimately mean for traders?
Well, the whole idea is quite an interesting one in the sense that it had never really been considered until Trump came to office, really.
Now, the U .S. has quite a few strategic reserves of different things.
It has an oil strategic reserve.
You know, things that can be rolled out if, for whatever reason, there was an acute shortage.
But how does that work for digital assets is something else, because it's not something that the general populace of the US needs in quite the same way.
The general thinking is that this would act as a sort of a store of value, something that in case of a rainy day, it could be wheeled out and sold.
But that would mean that the U .S.
government effectively using tax dollars and buying Bitcoin, which would be kind of the ultimate 180 degrees from Bitcoin and other cryptocurrencies, actually starting off as a way to bypass governments.
And, you know, you could potentially end up with the U .S.
government of all people actually holding it.
Yeah, well, what would need to happen to get this kind of reserve off the ground?
Well, obviously, you need to have a buy -in from all the interested parties, which will include the Treasury.
The Federal Reserve probably would have something to say about it, given its interest in the dollar.
Back in January, Trump signed an executive order saying that he would direct a working group to have a look at the viability.
And because it's still so very vague, I think it would still be some time off yet.
That's the FT's Philip Stafford.
Thanks, Philip. Thanks, Kesha.
The American housing market has been a bit of a stinker lately.
High interest rates have kept buyers on the sidelines and sellers in their homes.
But now another rusty nail is poking through.
Home improvement projects are also taking a hit.
Share prices for companies that supply things like doors and windows, water heaters and plywood are all down.
Interest rates are again part of the problem here, but there are also concerns about President Trump's deportation plans.
Undocumented workers play a big role in construction companies.
And it's a big deal because residential remodeling and construction makes up about 4 percent of U .S.
GDP. You can read more on all of these stories for free when you click the links in our show notes.
This has been your daily FT News Briefing.
Check back tomorrow for the latest business news.
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