Good morning. Today, the leader of Europe’s liberals tells our parliament correspondent that the EU must take more steps to prevent third countries from evading sanctions on Russia. And my colleague in the Balkans reports on how Serbia’s president was convinced not to visit Russia this week.

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Mind the gap

With Ukraine facing a tough third winter of war, Europe’s liberals are pressing the EU to lean on countries which still allow military goods to reach Russia, writes Andy Bounds.

Context: Despite 14 rounds of sanctions the EU is struggling to stop Moscow procuring technology for its war machine, says Valérie Hayer, leader of the Renew Group in the European parliament, and it is time to end the “blind spot of sanctions evasion”.

“The Russian economy is not down, despite the 14 sanctions packages we have implemented. They have affected it, but not enough,” she said in an interview with the Financial Times in her office in Strasbourg.

“And we can see that among the blind spots is the evasion of sanctions, especially by countries in Central Asia. 

“Just look at the numbers. Between 2021 and 2023, exports between Kazakhstan and Russia increased from €40mn to €2.2bn . . . It’s all the prohibited products, chemicals, semiconductors, drones, computer hardware.”

Hayer, who is close to France’s President Emmanuel Macron, wants to review the EU’s Central Asia strategy, now five years old. 

She envisages carrots and sticks to draw the region, once part of the Soviet Union, closer to the EU and reduce its reliance on Russia, including holding regular summits.

“We must demand that the European Union push so that . . . there are systematic elements on the requirement that sanctions against Russia be respected.”

She hopes to enlist the help of the G7 and European businesses. 

“They all know that they should not sell to Russia. So everyone must assume their responsibilities and European companies must respect these sanctions,” she said.

MEPs cannot make sanctions policy but they can shape the debate. Renew was among the first to call for the EU to stop Russian oil and gas imports at the beginning of the war. That was initially laughed off by some as unfeasible, but is now considered an eventuality.

Chart du jour: Barnier’s budget

After 50 years of failing to balance its budget, France plans €60bn-worth of tax rises and spending cuts next year. But that belt-tightening poses a risk to growth in an economic climate as fragile as the country’s government.

With friends like these

Serbian President Aleksandar Vučić has declined an invitation from his Russian counterpart Vladimir Putin to attend this week’s summit of the Brics countries in Russia, electing instead to spend the time with European Commission president Ursula von der Leyen and other EU leaders, writes Marton Dunai.

Context: Vučić, who has straddled the fence between Russia and the west since the start of the full-scale invasion of Ukraine, had been invited to become a member of the group named for Brazil, Russia, India, China and South Africa, but declined. He has now reinforced that decision with his no-show at this week’s summit in the city of Kazan.

His European meetings — which include hosting fellow centre-right European People’s party leaders Donald Tusk of Poland and Greece’s Kyriakos Mitsotakis tomorrow — show Vučić angling for acceptance from the western mainstream at the same time as currying favour with Putin. Von der Leyen will visit Serbia on Friday.

While Serbia has opposed EU measures such as sanctions against Russia, Vučić said he had told Putin he was not in a position to join the Brics leaders, saying the busy schedule was a reason but not an excuse for skipping.

“I told [Putin] that it would be difficult [to join the Brics summit] even without all of this, but that we would send a delegation of four of our ministers,” Vučić said, recounting a conversation which was one of the rare occasions the two leaders have spoken directly.

The delegation to travel to Moscow will include such pro-Russian figures as deputy premier Aleksandar Vulin and Nenad Popović, a minister without portfolio and owner of ABS Electro, a large technology group that caters to Russian clients.

And Vučić may soon be paying an individual visit.

“I talked with President Putin about the 80th anniversary of the victory over fascism, which will take place [on May 9] next year,” he said. “It will be, I assume, the biggest show in history after the second world war on the Red Square in Moscow.”

What to watch today

1. European Commission president Ursula von der Leyen visits Albania, meets Prime Minister Edi Rama.

2. Turkish President Recep Tayyip Erdoğan meets Russia’s Vladimir Putin.

Now read these

• Deglobalisation risk: A fragmented approach to global bank rulemaking could unleash destructive “economic nationalism,” warns UBS chief Sergio Ermotti.

• Peace sign: Russia ending aerial attacks on Ukrainian energy targets and cargo ships could “signal” negotiations, Volodymyr Zelenskyy has said.

• Unfrozen asset: Russian oligarch still owned Italian luxury holiday resort months after being sanctioned, according to documents seen by the FT.

Join Kimberley Dondo and Jordan Sriharan, Fund Manager at Canada Life Asset Management, as they discuss the current market landscape and the impact of global trends on the UK.

In this episode, Jordan shares his revised outlook, outlines strategies for mitigating risk, and identifies potential opportunities for UK investors.

Tune in for valuable insights and actionable takeaways to help you navigate the turbulent waters and guide your clients through these challenging times.

In the last few years, the Centre may have focused on controlling the fiscal deficit, but Amitabh Kant, the former CEO of Niti Aayog, is concerned over the high fiscal deficit at the state level and has called for greater fiscal discipline by states.

“The Centre has controlled fiscal deficit. But the Centre and states together still have a high fiscal deficit. So there is a need for greater financial discipline by the state governments as well,” said Kant at the 14th Morningstar Investment Conference.

According to a recent study by the National Stock Exchange, the overall deficit for 21 states it studied, surpassed the budget estimates by 30 bps to 3.5 per cent of GSDP (gross state domestic product) last financial year. For FY25, the fiscal deficit is estimated to be lower at 3.2 per cent of GSDP, but still exceeding the 3 per cent recommended by the 15th Finance Commission.

Kant was not too supportive of redistributing funds among people. Rather he felt governments should focus on spending more on capital expenditure. “You need a huge focus on production and productivity. And that will happen with more money being put into these aspects of growth,” he said.

He noted that many countries like America and even countries in Europe had grown over the years through capital expenditure spending.

India is among the fastest-growing major economies in the world. Kant noted that India had moved from a ‘fragile 5’ economy to among the top five on the back of major structural reforms and infra development. While it is expected to continue growing, there are challenges ahead.

“India is confronted with three critical challenges like the geo-political conflict, breakdown of global supply chain, and emergence of new technologies like AI (artificial intelligence) and ML (machine learning), which are going to impact production, radically transform lives of citizens across the world. The challenge is that India has to confront these challenges and irrespective of these challenges, India has to grow,” said Kant.

According to him, 500 million people will move from rural to urban areas and therefore there was a need for sustainable urbanisation.

He also said India had to create more jobs and therefore manufacturing would be extremely critical. India has to grow its share of manufacturing to 25 per cent from the current 17.5 per cent, he added. 

HEAT pumps are an environmentally friendly way to keep your home warm and can reduce your heating bills significantly

And best of all, you might be able to get one installed for free.

1

Air source heat pumps take in cold air, raise its temperature and use this to heat a home, potentially saving billpayers £380 a year on their energy costs.

While heat pumps use electricity to heat the cold air, which normally comes from outside, they produce far more energy than they use and are around four times more efficient than a traditional gas or oil boiler.

And they last around five years longer than your standard gas boiler.

Ground source heat pumps are also available, which work in a similar way using the natural heat from the ground.

Exactly how much a heat pump could save you, depends on the heating system you’re upgrading from.

The Energy Saving Trust has estimated that replacing a G-rated heating system with a high performing heat pump in a semi-detached house could result in savings of £380 a year,

Even replacing a G-rated system with a low performing heat pump would save you around £200 a year.

Replacing an average heating system with a high performing heat pump in a semi-detached house could save you £210 a year.

An air source heat pump costs significantly more than a gas boiler on average, according to the National Infrastructure Commission (NIC).

But costs are coming down all the time and energy companies are offering some heat pumps for £500, with a government grant.

If you’re on a low income, you might even be able to get all costs covered as you upgrade.

These are the schemes available to get a free or discounted heat pump installed in your home:

Energy Company Obligation

The Energy Company Obligation is a government scheme that helps hard-up households install home upgrades that will tackle fuel poverty and reduce carbon emissions.

It requires medium and large energy suppliers to help low-income, fuel-poor and vulnerable households to heat their homes.

Energy suppliers can choose how they fulfil their obligations but many offer to cover the cost of installing heat pumps.

Some will even also install solar panels at homes to power the pumps, leading to further reductions to energy bills.

You might qualify for the help if you live in private housing and get one of the following benefits:

• Child Tax Credit
• Working Tax Credit
• Universal Credit
• Pension Guarantee Credit
• Pension Savings Credit
• Income Support
• Income-based Jobseeker’s Allowance (JSA)
• Income-related Employment and Support Allowance (ESA)
• Child Benefit
• Housing Benefit

If you own your home and are seeking help, it must have an energy efficiency rating of D, E, F or G.

Whereas if you rent from a private landlord, you can access support if your house has an energy efficiency rating of E, F or G.

You can check the energy rating of your home on the government website.

There is no cap on the funding that households can get, which means you may be able to get a grant to cover the total cost of installing a heat pump at your home.

The scheme also offers help with covering the cost of other energy efficient measures, like insulation.

To apply for the scheme you can contact your local authority or your energy supplier.

Different suppliers will offer funding for different projects, so you need to check with your provider.

The following suppliers all take part in the scheme:

• British Gas
• E (Gas & Electricity)
• E.ON
• Ecotricity
• EDF
• Octopus Energy
• Outfox the Market
• OVO
• Scottish Power
• So Energy
• Utility Warehouse
• Utilita

Boiler upgrade scheme

The Boiler Upgrade Scheme offers households grants up to £7,500 to install heat pumps in their homes.

You can apply for the grant, which aims to cut carbon emissions, whatever your financial situation.

To get the help you must:

• live in England or Wales
• own the property you’re applying for
• be using the grant money to replace a fossil fuel heating system (such as oil, gas, electric or liquefied petroleum gas)
• have a valid Energy Performance Certificate (EPC)

An MCS certified installer will be able to give you a quote for installation and tell you if you are eligible for one of the grants.

You can find a list of MCS-certified installers by going on the msccertified.com website.

Once you’ve agreed a quote with the installer, they will normally apply for the grant on your behalf.

The value of the grant is then be deducted off the cost of installation.

So if the work costs £12,500, you would pay £5,000.

Other savings

Many energy firms also have special tariffs and offers for those installing heat pumps in their homes.

EDF offers customers with heat pumps access to a special tariff to enhance their savings.

It is also pledging to give free electricity throughout December 2025 to those that install the technology.

Octopus also has a tariff specially designed for heat pump users.

The provider said the Cosy Octopus tariff could save households £264 a year, compared to using a gas boiler.

Installing a heat pump through British Gas would make you eligible for its heat pump energy offer, which caps the price of energy used by the device at 14p per kWh for 12 months, potentially saving customers £456.

Before you look to have a pump installed it’s worth checking what your provider will offer and whether you need to install through them to claim.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

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The stories that matter on money and politics in the race for the White House

Donald Trump has filed a legal complaint against the UK’s Labour party, alleging “illegal foreign campaign contributions and interference” to help Kamala Harris in the US presidential election.

The complaint filed by Trump’s campaign to the independent Federal Election Commission accuses the Labour party of sending strategists and staffers to help the Democratic presidential candidate’s election campaign and says Harris has accepted the help. Prime Minister Sir Keir Starmer, however, defended the aides, saying they were volunteering in their spare time.

“When representatives of the British government previously sought to go door-to-door in America, it did not end well for them,” lawyers for the Trump campaign wrote in a letter to the FEC dated Monday, in a reference to the American Revolution.

Trump’s legal team cited media reports that Labour party officials — including Starmer’s chief of staff Morgan McSweeney; his head of strategy Deborah Mattinson; and Matthew Doyle, Downing Street’s director of communications — had travelled to the US in recent months to advise the Harris campaign.

The complaint also cites a now deleted LinkedIn post from Sofia Patel, head of operations at the Labour party, who wrote that “nearly 100” current and former Labour party staff would be travelling to the US in the coming weeks to help elect Harris, the Democratic vice-president. “[We] will sort out your housing,” the post added.

Trump’s lawyers argue such support amounts to “contributions” from foreign actors, in violation of US campaign finance laws.

The Republican candidate’s lawyers requested an “immediate investigation” into what they described as “blatant foreign interference” in the election by both Labour and Harris’s campaign.

But Starmer pushed back late on Tuesday, telling journalists en route to the Commonwealth summit in Samoa that party members “have gone over [to the US] pretty much every election”, adding: “They’re doing it in their spare time, they’re doing it as volunteers.”

Emily Thornberry, Labour chair of the House of Commons foreign affairs committee, questioned the Labour activists’ efforts, telling the BBC: “I actually don’t think that British politicians going over to America and telling the Americans the way they should vote really helps.”

She added she would not like it if “an American politician came here and told me how to vote”.

The Trump campaign’s complaint comes with less than two weeks to go in one of the tightest US election races ever. Trump and Harris are locked in a dead heat in the polls, according to the Financial Times’ tracker.

“In two weeks, Americans will once again reject the oppression of big government that we rejected in 1776,” said Susie Wiles, co-chair of Trump’s campaign. Wiles said Harris’s campaign was “flailing” and “seeking foreign influence to boost its radical message”.

Billionaire Elon Musk, a major donor to Trump who is actively campaigning for him, also claimed last week that on his social media platform X that Labour activists’ work for Harris was “illegal”.

Nigel Farage, the UK Reform party leader and member of parliament who has campaigned for Trump this year, also weighed in on X: “This is direct election interference by the governing Labour Party, and particularly stupid if Trump wins. Who is paying for all of this?”

A spokesperson for the Harris campaign did not respond to a request for comment.

Starmer and Trump met for the first time last month on the sidelines of the UN General Assembly in New York, where the men shared a two-hour dinner. Trump said ahead of the meeting that the prime minister was “very nice”.

On his way to the Commonwealth summit, Starmer told reporters he did not believe the row over Labour support for Harris risked jeapordising his ties to Trump, saying the two men had “established a good relationship” over dinner.

“We had a good, constructive discussion and, of course as prime minister of the United Kingdom I will work with whoever the American people return as their president in their elections, which are very close now,” he added.