Bracing for impact as Davos looms

Jan 14, 2025

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WELCOME to the first Global Playbook of 2025! Suzanne Lynch here, coming to you from a chilly Brussels.

If 2024 was the year of elections, 2025 is the year of the fallout.

First up is Donald Trump’s inauguration. His swearing-in next week will have profound implications not just for the United States but for the world, with everything from the wars in Ukraine and the Middle East to global trade and the future of international institutions like the WHO and the United Nations in the balance. Powered by a supercharged economy and a decisive electoral mandate, Trump has promised change. The question dominating the early weeks of 2025 is whether the world is ready for it.

Things are far from calm on the other side of the Atlantic. Europe’s beleaguered economic powerhouse, Germany, is gearing up a snap election next month, with polls putting Angela Merkel’s old party the CDU out in front under leader Friedrich Merz — despite X-owner Elon Musk’s best efforts to whip up support for the far-right Alternative for Germany (AfD).

Next door in France, new Prime Minister François Bayrou is struggling to get a budget through a fractured national parliament, amid political paralysis triggered by President Emmanuel Macron’s ill-fated decision to call a snap election last summer.

Here in Brussels — the heart of the European Union and headquarters of NATO — the year has started with a whimper not a bang. As the EU launches into a new five-year mandate, the Union’s top executive body, the European Commission, has been left rudderless after its boss Ursula von der Leyen contracted severe pneumonia.

Compounding the situation: The revelation that von der Leyen spent a week in hospital — something the Commission failed to disclose, despite continual, direct questioning by the press. The omission will do nothing to help the Commission’s reputation as an opaque and unaccountable body.

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DAVOS CALLING

HITTING THE SLOPES: Luckily, the global elite — i.e. the lucky folks who can pay for it — can shrug off the concerns of the day and indulge in some feel-good, high-level networking at 5,000 feet. The World Economic Forum kicks off next Monday, with thousands of corporate types, politicians and advocacy groups making the trip to the Magic Mountain.

Timing matters: This year’s gathering begins on Jan. 20 — the same day as Trump’s inauguration — guaranteeing the discussions will be dominated by the incoming U.S. administration.

FIRST, A MEA CULPA FROM SOMEONE WHO KNOWS A THING OR TWO ABOUT DAVOS: Skybridge founder Anthony Scaramucci. “I’m going to say something that doesn’t reflect well on me,” the former White House communications director told Global Playbook. “I made a prediction at Davos last year that Trump was going to lose the election.” Twelve months on, we all know how that turned out.

Blame groupthink: Scaramucci, who will be back at Davos again this year, says he made his prediction based on what he calls the “Davos contra indicator.”

“Everybody in Davos in 2024 thought Trump was going to win the election. That’s the very same group that thought Hillary Clinton was going to win in 2016, and thought Donald Trump was going to win in 2020. So I made the call that this group is always wrong about this stuff, because they’re always searching for the rich man or rich woman’s consensus, which is typically not the right answer. They got it right. I got it wrong.”

Now here’s the news you can use: Scaramucci’s legendary wine tasting party, now in its 14th year, is due to take place next Tuesday. But unless you’ve already bagged an invitation, you’re out of luck — it’s waiting-list only.

RUMOR MILL IN FULL SWING: There’s feverish speculation that Trump himself could make an appearance in Davos as locals and early-bird attendees scour the town for signs of unusual Secret Service activity, a giveaway of an imminent presidential visit. Trump confidante Elon Musk is rumored to be attending, several attendees told Playbook.

THIS MORNING: Join POLITICO's Playbook team for The First 100 Days event at Union Station. Get a front row seat to lively conversations on the issues driving the agenda with the stakeholders at the helm of the transition. Hear from Speaker Mike Johnson, Sen. Chuck Schumer (D-NY) and more! Register here to attend virtually or in-person.

ACCESS ALL AREAS

NEW REGIME IN TOWN: This year’s WEF is the first since contentious new rules were adopted by the city of Davos last year. As first reported in POLITICO, local residents voted for new regulations curtailing who can rent out buildings during the annual gathering, which brings thousands of attendees and hangers-on to the tiny town.

Background: The proposed new regime was supported by the World Economic Forum as a way of clamping down on the unofficial event scene that has sprung up around Davos in recent years, with WEF piggy-backers swamping the town to hold side events.

Knock-on effect: The new rules — which passed by 82 percent in a plebiscite last summer — have had a mixed reaction in Davos, with some residents concerned they could impact the lucrative annual subletting market. (Apartments and shop spaces command rents of thousands of Swiss francs per week during the forum.)

Trouble brewing: At least one lawsuit against the new rules has been filed, with the outcome pending. But Davos city officials insist the new rules will stand. Only three categories of visitors can rent out space alongside the central promenade running through the town: invited guests and partners of the World Economic Forum, NGOs and national representations.

New rules: The WEF has introduced a new system to address the reality of unofficial sideline activities. The new “Davos Accredited Programme,” with its associated “Accredited Badges,” is tailored for official participants’ entourages, allowing attendees to host their own events outside the main Congress Center.

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DAVOS PREP

ON THE AGENDA: The theme of this year’s World Economic Forum is “Collaboration for the Intelligent Age” — the latest in a string of grandiose catchphrases beloved by the WEF. It means the burgeoning artificial intelligence scene is likely to feature heavily in programming this year.

More than 300 official sessions are on the WEF program (alongside hundreds of off-piste events), with celebs like David Beckham and leaders including Argentina’s Javier Milei expected to jet in. (Milei is set to arrive after attending Trump’s inauguration.)

Who’s coming: We’ll get a better idea later today, when reporters get a sneak preview of confirmed participants during a 2 p.m. press conference. (If you’re a hack, you can register to attend virtually here.)

STAY IN THE LOOP: POLITICO will keep you up to speed throughout the week, with Global Playbook coming to you from the slopes every day at 7 a.m. local time, and POLITICO’s Power Play podcast, hosted by Anne McElvoy, bringing you interviews and analysis each morning.

Place to be seen: We’re also hosting a range of events, including our invite-only party at the Schatzalp Hotel on Tuesday night, followed by the annual sledge run down the slopes. If you can’t come in person, join us virtually.

Place to be heard: POLITICO will also host an Oxford-style debate on Jan. 21 at noon tackling a question that has everyone at Davos buzzing: Does AI need a kill switch?

After all that … The team will co-host a nightcap on Thursday night at Goals House, which again promises to be one of the coolest venues in town.

READING MATERIAL: Organizations love to issue research to coincide with the WEF. Consultancy BCG was early out of the traps on Monday with its “Great Powers, Geopolitics, and the Future of Trade” report — stealing the march on what promises to be one of the central themes of this year’s WEF, given Trump’s tariff threats.

Changing times: The research suggests that though global trade in goods will grow by an average of 2.9 percent annually over the next decade, trade flow dynamics will change dramatically as China tilts its economic relationship away from the U.S. and Europe. Beijing is expected to deepen trade ties with India, Russia, Africa, ASEAN and Mercosur countries instead, BCG predicts.

Next up: On Wednesday, the WEF releases its annual Global Risks Report, a mainstay of the Davos calendar. It’ll be published online here.

EXIT INTERVIEW

TAKING STOCK: U.S. Ambassador to the European Union Mark Gitenstein has been sharing some thoughts as he prepares to leave his post Monday. President Biden’s man in Brussels has presided over something of a renaissance in EU-US relations as the two sides worked hand-in-glove on Ukraine policy, anchored by a strong relationship between Biden and von der Leyen.

Not all rosy: It’s also had its fair share of challenges, from Europe’s irritation at Biden’s Inflation Reduction Act, to differences over China policy.

Here are some of Gitenstein’s takeaways.

Transatlantic ties: “People ask me all the time: 'What is going to happen to the transatlantic relationship?' I’m an old school guy. I believe that what Harry Truman and later Ronald Reagan did with [European] leaders to build a strong transatlantic relationship is critical to our future, to citizens on both sides of the Atlantic,” he said Tuesday. “That relationship should not depend on who is president or secretary of state at any particular point in time. It should be in the joint security interests of the government and institutions on both sides of the Atlantic.”

Ukraine/Russia policy: “It was probably the most comprehensive and effective exercise of economic statecraft in 70 years between the U.S. and the EU. Has it been perfect? No. Has it been fully enforced? No, but the basic outlines — from economic sanctions to export controls — have been effective.”

Free media: “I strongly believe that not only the stability of the United States government, but the stability of the European Union is a function of the vibrancy of democracy. That’s part and parcel of free and independent, pluralistic media,” he said.

But he said he believes that there is a market failure in traditional media that needs to be addressed. “The business model is broken,” he noted. “I think the only long-term solution is new business models and equity investments. We’re not going to save much of media without some sort of new policies with respect to risk-mitigating factors that make it safe to invest in emerging journalism.”

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AROUND THE WORLD

ALL EYES ON CAPITOL HILL: Pete Hegseth, Trump’s nominee for defense secretary, faces lawmakers in Washington today as he aims to put the explosive controversy around his nomination behind him. The 44-year-old National Guard veteran and former Fox News host will appear before the Senate Committee on Armed Services, where Democrats are due to bombard him with questions about past accusations of sexual assault and heavy drinking. More on that here.

POLITE COMPANY: It will be a much chummier affair over at the Atlantic Council, where outgoing Secretary of State Antony Blinken will deliver remarks at a fireside chat today. His comments on the Middle East will be closely watched, amid signals from the outgoing Biden administration that a cease-fire in the Israel-Hamas war could be imminent.

CHINA WATCH: Chinese GDP figures for 2024 are due Friday. Trump has threatened to slap tariffs of 60 percent on imports from the world’s second-largest economy, with figures released Monday showing a surge in Chinese exports as buyers stock up ahead of the Jan. 20 inauguration. Leader Xi Jinping, who has been plowing stimulus into the economy, said last month that China will reach its target of 5 percent GDP growth.

BEST BUDS: Russian President Vladimir Putin and his Iranian counterpart Masoud Pezeshkian will meet in Moscow later this week to sign a “strategic partnership agreement,” the Kremlin announced. The meeting comes at a delicate moment for both the war in Ukraine, and Iran’s maneuvering in the Middle East.

NEW JOB: Alexander C. Feldman has joined the Asia Group as a senior adviser based in Singapore.

THANKS TO: Global Playbook editor Zoya Sheftalovich.

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