Brazil’s January 6 — Swedes cont’d — Ukraine war latest

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What’s driving the day in Brussels.

By NICHOLAS VINOCUR

with ZOYA SHEFTALOVICH

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GOOD MORNING, and welcome back to those of you just returning to your desks. This is Nick and I’m just back from Paris or, should I say, the place where they film “Emily in Paris” (walking tour, anyone?). Brussels is getting back into gear, Brazilian democracy is teetering and Russia’s war on Ukraine is entering its second year. Off we go.

DRIVING THE DAY: BRAZILIAN DEMOCRACY UNDER THREAT

BRAZIL’S JANUARY 6: Police have arrested hundreds of people at the presidential grounds in Brasília after supporters of former President Jair Bolsonaro stormed their country’s congress, presidential palace and the supreme court in scenes reminiscent of the January 6 invasion of the U.S. Capitol. Watch footage here, here and here.

As of this morning, authorities said they had managed to retake the three government buildings (though it remains unclear whether protesters have been fully cleared out). Brasília’s Governor Ibaneis Rocha said at least 400 people had been arrested — before he himself was suspended from his job (more below).

Lula safe; blames Bolsonaro: Speaking from São Paolo, President Luis Inácio Lula da Silva blasted police, accusing them of having “just let the protesters in” to the presidential grounds. He called the invaders “fanatics” and said they would be found and punished “with all the force of the law,” per the Guardian. Lula also blamed Bolsonaro for the events, saying “This genocidist … is encouraging this via social media from Miami … Everybody knows there are various speeches of the ex-president encouraging this.”

Bolsonaro: Who, me? “I repudiate the accusations,” Bolsonaro said in a Twitter thread. He also condemned the violence, saying that while peaceful protest was a part of democracy, “depredations and invasions of public buildings as occurred today … escape the norm.”

Key background: The protesters who overran the presidential grounds reject the results of the October election that saw Lula narrowly beat Bolsonaro for the presidency. Many have been camping out near military barracks in the hope of enlisting the army in a coup. Bolsonaro himself is in Florida, where he flew soon after losing to Lula. The assault took place two years and two days after Trump’s supporters invaded Capitol Hill.

Court orders: Reuters reports that Brazilian Supreme Court judge Alexandre de Moraes has ordered Facebook, Twitter and TikTok to block accounts of those spreading anti-democratic propaganda. Moraes also ordered Rocha be suspended from Brasília’s governorship for 90 days over what he said were security flaws that facilitated Sunday’s attack. The judge also ruled that the protestors’ camps outside military bases should be removed within 24 hours and roads and buildings should be unblocked.

European reactions: French President Emmanuel Macron tweeted in Portuguese to say “The President @Lulaofficial can count on the unconditional support of France.” The EU’s top diplomat Josep Borrell said he was “appalled by the acts of violence and illegal occupation of Brasilia’s government quarter by violent extremists today.” German Foreign Minister Annalena Baerbock said: “What happened in #Brasilia was a cowardly and violent attack on democracy.” European Parliament President Roberta Metsola said: “Democracy must always be respected.”

US reactions: U.S. President Joe Biden tweeted Sunday evening: “I condemn the assault on democracy and on the peaceful transfer of power in Brazil. Brazil’s democratic institutions have our full support and the will of the Brazilian people must not be undermined.” U.S. National Security Adviser Jake Sullivan and Secretary of State Antony Blinken echoed that sentiment. Here’s a write-up.

SWEDISH PRESIDENCY

LARS DANIELSSON, PART 2: Sweden will work hard to avoid a rancorous debate over industrial policy during its Council presidency — because there’s simply too much at stake to divide Europe, Sweden’s Ambassador to the EU Lars Danielsson told Brussels Playbook and my trade colleague Barbara Moens in the second part of our conversation.

Heading north: We spoke to Danielsson as commissioners were checking their winter gear ahead of their Thursday trip up to Kiruna, northern Sweden, to mark the start of Stockholm’s presidency this week. Topping their agenda: trade, migration (read part 1 of our chat here) and Europe’s response to U.S. President Joe Biden’s Inflation Reduction Act (IRA).

Brrrrrrr. Here’s what the hosts told visitors about what to expect: “In January, the average temperature in the Arctic is normally around -20C, and short segments of the program in Kiruna will take place outside. Being properly dressed will be key to enjoying the experience, so please bring warm clothes and appropriate shoes for the cold climate. Dressing in layers is recommended.” Yikes!

VDL + Kristersson: The question of how Europe should respond to Washington’s big splurge on green subsidies will be a key focus of a conversation between Commission President Ursula von der Leyen and Swedish Prime Minister Ulf Kristersson, Danielsson said.

Entente cordiale: Despite plain differences between the free-trading Swedes and the French, who are calling for a “Buy European Act,” Danielsson said he was “relatively optimistic” that an agreement could be found on “temporary measures” during the presidency. A meeting between Kristersson and Emmanuel Macron last week helped set the groundwork for debate — though Danielsson allowed that Paris is so far the “most articulate” among EU capitals on how Europe should respond to the IRA.

Opposites attract? “They are also a little bit one side of the spectrum, whereas we normally belong to the other end of the spectrum,” Danielsson said. “We have our starting points, which are sometimes a little bit different from the French. But we also see the need to do something, so I’m relatively optimistic.”

Back channels: Sweden plans to present a proposal to promote EU competitiveness to its guests in Kiruna, but it’s unlikely to be made public. Stockholm prefers to feed into a Commission proposal that is due to be presented later this month, Danielsson said.

Easy does it: Danielsson stressed that Brussels first needed a proper assessment of the impact of Biden’s IRA on the European economy before jumping to conclusions. He didn’t expect concrete proposals on the much-anticipated European Sovereignty Fund until after the Swedish presidency, which kicks the sensitive discussion on whether to fund this with new or old money to the Spaniards, who’ll take over the rotating Council presidency in July.

More flexible state aid: The European Commission’s proposal to relax the EU’s emergency state aid rules would allow capitals to pour more government money into industries affected by the massive U.S. green package. Danielsson said there is an “openness” for temporary measures, but warned that “some of us believe that we should always be very careful with state aid,” so as not to unnecessarily prevent the market from doing its thing. Whether EU countries can easily come to a consensus on the tweaked state aid rules will depend on what exactly the Commission proposal looks like, Danielsson said.

Big picture: “Everyone sees the problem, everyone sees the need to do something, but the first measure should be to see exactly how far we can get with the Americans. Then we can discuss what we do.”

The hard part: The most difficult hurdle won’t be a compromise on relaxing state aid rules but earmarking money to finance the EU’s response, he said.

Meanwhile, Internal Market Commissioner Thierry Breton is at work rallying EU capitals for a collective response to the IRA, among other aims. After meetings with Belgian Prime Minister Alexander De Croo and Polish PM Mateusz Morawiecki, he’s headed to Spain today to meet with several senior ministers, including Economy Minister Nadia Calviño.

On further sanctions for Russia, Danielsson was cautious. “We don’t exclude working on a new sanctions package but we also say that for very natural reasons it’s more difficult to agree,” he said, adding that the presidency would focus on an oil price cap, confiscating frozen assets and accountability for Russian war criminals.

NOW READ THIS — SPONSORED (DIS)CONTENT: Stockholm has opened the door to sponsorship for its EU presidency, reports Sarah Wheaton.

**POLITICO’s exclusive interview with Dara Khosrowshahi, CEO of Uber, will take place on Thursday, January 19 at 7:30 p.m. CET – live from the Davos mountaintop. Register today to join us online.**

RUSSIAN WAR LATEST

A NEW YEAR IN UKRAINE: As Russia’s full-scale war on Ukraine nears its one-year anniversary, Ukrainian President Volodymyr Zelenskyy hailed the planned delivery of combat vehicles from key Western allies as Russian President Vladimir Putin rang in Orthodox Christmas completely alone in a church that had been vacated for his benefit.

‘500,000 conscripts’: The contrast summed up the situation as Russia, increasingly isolated, sinks ever more troops and resources into its attempted invasion. According to Ukrainian military intelligence, Putin intends to call up a further 500,000 conscripts in the new year to attempt a springtime offensive that could come from the north, my colleague in Ukraine Veronika Melkozerova reports.

Big cities, big risk: The new conscription drive, which would be larger than last fall’s draft of 300,000, would include a push in big cities, including some strategic industrial centers in Russia, Andriy Cherniak, an official with the Main Military Intelligence Directorate of the Ukrainian defense ministry, told Veronika over the weekend. That would be a risky move for Putin, who has thus far avoided drafting the sons of wealthier and more powerful Russians in places like Moscow and St Petersburg, instead leaning heavily on the poorest and more remote parts of his empire.

Cyber offensive: Victor Zhora, one of Ukraine’s top cyber officials, told POLITICO that Russia’s cyberattacks on critical and civilian infrastructure could amount to war crimes. Story here.

EU CANDIDACY UPDATE: Six months since Ukraine was granted EU candidate status, the country’s Deputy Prime Minister for European and Euro-Atlantic integration Olga Stefanishyna has this update on negotiations.

THE CLASSROOM FRONT: After reopening in fall 2021, following the lifting of COVID restrictions, Ukrainian schools moved mostly online again following Russia’s full-scale invasion in February. From bombs to blackouts to displacement to occupation, millions of Ukrainian children and young adults face an education interrupted, with teachers struggling to work under desperate conditions, Lily Hyde reports from Kyiv.

CHIPS

CHIP DECISION: January might be the month that the Dutch government decides whether (and how) it caves to a U.S. request to block the sale of advanced chip technology to China.

US, the Netherlands and Japan: After Washington imposed its own restrictions in October, the next step was to get the Netherlands — home base of ASML, which produces machines to manufacture semiconductors — and Japan on board. Some 90 percent of the global supply of semiconductor manufacturing equipment is from companies based in those three countries, which means any bans there could thwart China’s attempt to produce advanced semiconductors of its own.

National security vs. cash: Remarks made by the country’s ministers, and generally a tougher stance toward China, have shown that the Netherlands agrees, to an extent, with the national security argument made by the U.S. But the two countries differ on the threshold to define chip technology as advanced and thus strategically important. Read the full story by Pieter Haeck here.

IN OTHER NEWS

FUMIO IN PARIS: Japan’s Prime Minister Fumio Kishida will arrive in Paris today for his transatlantic tour as the new G7 chair, becoming the first Asian leader to visit Europe in 2023. Security will feature prominently in his meeting with Emmanuel Macron.

On the agenda: “Japan looks forward to deepening security cooperation with France through such activities as joint exercises,” Noriyuki Shikata, the Cabinet secretary for public affairs at Kishida’s office, told POLITICO. “Japan is also looking forward to promoting cooperation with France in the Indo-Pacific region, including in the South Pacific.”

China is the subtext: Beijing has been active in finding inroads into South Pacific diplomacy. Last year it signed a deal with the Solomon Islands, establishing Chinese police presence on an island strategically located between Japan and the U.S. on the one hand, and Australia on the other.

CHINA REOPENS TRAVEL: China removed quarantine requirements for inbound travelers on Sunday, effectively reopening its borders three years after the COVID pandemic led to strict travel restrictions. In addition to allowing travel to and from other countries, Beijing also reopened air and sea travel with the special administrative region of Hong Kong, allowing family and friends to reunite after years spent apart, Gian Volpicelli reports.

NEW COVID VARIANT: The EU’s disease control agency has good news and bad news when it comes to XBB.1.5, the coronavirus sub-variant nicknamed Kraken that is ripping through America. The bad news is XBB.1.5 is spreading quickly, most likely because it has some big advantages over the currently dominant Omicron strains. The good news is that Europe has some time to prepare for if and when cases go vertical, Carlo Martuscelli reports.

THE AGENDA

— Commission President Ursula von der Leyen is in Rome; delivers speech at the book launch of “La saggezza e l’audacia. Discorsi per l’Italia e per l’Europa” featuring selected speeches of the late President of the European Parliament David Sassoli at 11 a.m. (watch); meets with Italian Prime Minister Giorgia Meloni at 3 p.m.

— Commission Vice President Margrethe Vestager in Copenhagen; keynote speech at event to celebrate 50 years of Danish EU membership.

— Commissioner for Interinstitutional Relations and Foresight Maroš Šefčovič is in London for Brexit talks with U.K. Foreign Secretary James Cleverly.

— Internal Market Commissioner Thierry Breton in Spain; meets with Spanish Economy Minister Nadia Calviño, Defense Minister Margarita Robles and Science and Innovation Minister Diana Morant.

— Agriculture Commissioner Janusz Wojciechowski is in the European Parliament, participates in exchange of views with the Committee on Agriculture and Rural Development. Live on EBS at 5.30 p.m. (watch). Wojciechowski will also meet with MEP Dacian Cioloș.

— Innovation Commissioner Mariya Gabriel holds a conference call with Parliament VP Nicola Beer.

BRUSSELS CORNER

BIRTHDAYS: Former EU chief Brexit negotiator Michel Barnier; MEPs Adriana Maldonado López, Marek Belka and Maria Noichl; Former MEP Mirosław Piotrowski; Catherine, princess of Wales; Comms adviser Lina Aburous; World Economic Forum’s Elizabeth Caputo; Swiss politician Ruth Dreifuss.

Celebrated Sunday: MEPs Asger Christensen and Jonás Fernández; Former MEPs Francisco Assis, Brian Monteith and Stefan Eck; POLITICO alums Nirvi Shah and John Rega; Prince Vincent and Princess Josephine of Denmark; North Korean dictator Kim Jong-un.

Celebrated Saturday: MEP Inma Rodríguez-Piñero; Former MEPs Dieter-Lebrecht Koch and Sorin Moisă; European Commission’s Tove Ernst; European Australian Business Council’s Sarah Cumming; German Finance Minister Christian Lindner, a POLITICO 28 alum; Meta’s Nick Clegg, former U.K. deputy PM.

THANKS TO: Our producer Grace Stranger.