Good morning. Today, I report on the surge in European angst in response to Donald Trump’s spat with Volodymyr Zelenskyy over Russian diesel supplies, and our tech correspondent reveals new research estimating Brussels’ push replace foreign cloud providers could cost more than €100bn over a decade.

Fuel on the fire

Donald Trump and Volodymyr Zelenskyy’s stand-off over Russian diesel supplies has unsettled the Ukrainian president’s European allies and reignited fears over the US president’s reliability at a moment of rising nervousness about Moscow’s intentions on the continent.

Context: Desperate to reduce diesel prices ahead of the US midterm elections, Trump has struck a deal to import Russian fuel, demanded Zelenskyy stop strikes on Russian refineries or risk losing US intelligence support or access to US weaponry, and claimed to have enforced an “energy ceasefire” between Kyiv and Moscow.

Zelenskyy yesterday belittled the impact of the Russia diesel deal on prices and said Trump should have instead done a “diesel deal” with Kyiv, boasting of the “influence” that it had on the fuel market as a result of Ukrainian strikes on Russian refineries and ships carrying exports.

Multiple European officials at the Warsaw Security Forum, where Zelenskyy made the remarks, said Zelenskyy’s riposte had made them wince; anxious about a spiralling dispute with Trump and the impact that could have on Ukraine and Europe’s security.

Defenders of Trump’s position said that while the deal with Russia and his anger at Ukraine were distasteful, they understood his domestic political priorities. They argued it was better for the White House to remain “engaged” in the Ukraine war than to abandon it.

But others said European angst at the tiff was nonsensical, and merely the latest example of being obsequious towards Trump instead of confronting the need to tackle the reliance on an untrustworthy US president whose geopolitical goals no longer align with the continent’s.

“The sense of reality is relatively high at an individual level, but close to zero collectively,” said Nathalie Tocci at the Institute for European Policymaking at Bocconi University.

She pointed out that while European officials applauded a speech in Warsaw by Nato’s supreme allied commander, US general Alexus Grynkewich, on how the alliance would repel a Russian invasion, they were ignoring the question of “whether his boss in the White House is actually into the plan”.

“The truth is that we remain just as baffled [by Trump] as we were two years ago,” Tocci added. “It’s not just confusion, but a deeper state of psychological breakdown in Europe.”

Over the next 12 months, four of the five biggest EU member states go to the ballot box. The election supercycle is set to drag Europe firmly to the right.

Cloud costs

Brussels’ push to reduce Europe’s reliance on foreign cloud providers could come with a hefty price tag, according to a new study seen by Barbara Moens.

Context: As part of its push to reduce reliance on American tech providers, the European Commission introduced its Cloud and AI Development Act before the summer. While the legislation would still allow foreign cloud providers, it sets out a framework of sovereignty requirements for governments.  

A new study by the European Centre for International Political Economy (ECIPE), commissioned by lobby group CCIA, whose members include several Big Tech companies, estimates the legislation could cost €115bn over a decade, a figure that could rise if the rules are implemented more strictly.

The study, seen by the FT, will be presented at a roundtable today in Dublin, where telecoms ministers are holding an informal meeting.

The authors argue the Commission has underestimated the costs in its own impact assessment. While Brussels estimated costs for public authorities at between €4bn and €18bn, ECIPE puts the bill at €33.3bn. 

But the bigger concern is the potential impact on the private sector. Article 31 of the proposed legislation allows sovereignty assessment to also reach private companies in critical sectors. “This is where the costs tend to explode,” ECIPE’s Matthias Bauer said.

ECIPE estimates this could cost private companies about €80bn over a decade as organisations could be forced to move workloads, replace software components and redesign parts of their IT infrastructure.

The study comes as the opposition is mounting beyond Big Tech. In a publication last week, German industry organisation BDI called for the removal of the possibility of extending the criteria to private companies.

“Private sector entities should remain free to use the framework,” BDI said.

A Commission spokesperson said the proposal was supported by a detailed impact assessment and that it is now “up to the co-legislators to finalise negotiations on the draft”.

1. EU General Affairs ministers meet in Luxembourg.

2. EU accession councils with Albania, Moldova and Ukraine

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• IMF warning: The world’s leading economies must take “urgent” action to reduce what are expected to be the biggest budget deficits since Covid-19, the IMF has said.

• Chinese cars: Western car executives have warned that the EU’s deal with Beijing to restrict hybrid imports will only offer “temporary” protection.

• Merz mess: The abrupt resignation of Germany’s labour minister has forced Chancellor Friedrich Merz’s struggling coalition into a reshuffle.