MUNICH, Germany — NATO members on Saturday weighed the U.S.’ possible withdrawal from the military alliance if Donald Trump returns to the White House, with Hillary Clinton saying he would waste no time in quitting if re-elected.

Clinton urged delegates at the Munich Security Conference to take her one-time presidential rival’s tough talk “literally and seriously” as anxiety mounts over the future of the U.S.-led pact.

“He will pull us out of NATO,” Clinton told attendees during a lunchtime session.

Trump stoked fresh concerns over the U.S.’ commitment to NATO last weekend when he said he would “encourage” Russia to attack any member that doesn’t meet its spending targets. He has long criticized the alliance’s failure to ensure members make good on their obligation to contribute 2% of gross domestic product to defense.

Amid such rhetoric, the U.S. Congress passed a bill in December aimed at preventing any U.S. president from unilaterally withdrawing from the alliance without congressional approval.

U.S. Republican Senator Jim Risch, ranking member of the Senate Committee on Foreign Relations, on Saturday dismissed talk of the U.S. quitting NATO, saying: “We have answered that question.”

“It would take a two-thirds vote in the United States Senate to get out — that is never going to happen,” he told CNBC in Munich.

Clinton said, however, that Trump could actually just refuse to fund the alliance. “The U.S. will be there in name only,” she said.

Concerns over the U.S. and Europe’s continued military coordination have dominated discussions at this year’s annual defense summit in Germany, as the specter of a second Trump presidency looms large and a contentious aid package for Ukraine hangs in the balance in the U.S. House of Representatives.

Dutch Prime Minister Mark Rutte earlier Saturday referenced constant “moaning and whining” at the event about the future of NATO under Trump.

“Stop moaning and whining and nagging about Trump,” he said.

He was one of many European voices, including that of German Chancellor Olaf Scholz and Danish Prime Minister Mette Frederiksen, who said that Europe needed to become self-sufficient in the face of a more uncertain future with its closest diplomatic ally.

“No matter what happens in the U.S. … we have to be able to protect ourselves,” Frederiksen said.

Indeed, Germany’s defense minister said that his country’s commitment to spend 2% of GDP on defense should be just the start, noting that the threshold could rise to 3.5% if necessary.

NATO Secretary-General Jens Stoltenberg struck a more sanguine tone on transatlantic coordination, however, saying that believes the U.S. will remain “a staunch and committed NATO ally” whatever happens in the upcoming election.

“I expect that regardless of the outcome of the U.S. elections in November, the U.S. will remain a staunch and committed NATO ally,” he told CNBC’s Silvia Amaro. “It is in the security interests of the United States to have a strong NATO.”

Stoltenberg acknowledged Trump’s frustration with member spending, but said “that is now changing.” On Wednesday, NATO announced that 18 of the alliance’s 31 members will meet the 2% spending target this year.

NATO member countries first committed to minimum spending targets in 2006, but by 2014 only three had met the threshold.

The alliance will mark its 75th anniversary this year at an annual summit to be held in Washington in July. Senator Risch said he would like to see all members committing to meeting their target by that point.

“Talk about it happening years in the future isn’t now, and we’re always interested in now,” he said. “That’s helpful to the relationship: everybody keeping the commitments that they made.”

LONDON — European stocks started the final session of 2023 higher, marking a positive end to a solid year.

The regional Stoxx 600 index was up 0.26% in mid-morning trade, with all sectors in the green. Thin trade is expected, while London markets close early.

Spanish pharmaceutical group Grifols was the biggest stock mover, climbing 8.9% after announcing it will sell a 20% stake in Shanghai RAAS, a blood products firm, to China’s Haier for approximately $1.8 billion.

The blue-chip benchmark Stoxx is set to have gained more than 12% in 2023, according to LSEG data, just about reversing its 2022 loss.

Germany’s DAX has risen nearly 20% despite the country’s gloomy economic picture, while France’s CAC 40 and the U.K.’s FTSE 100 have gained 16.3% and 3.64%, respectively.

In the U.S., the S&P 500 index is chasing a new record high to cap off the rally of the last two months.

Latest data releases, including Thursday’s on jobless claims, continue to suggest U.S. economic growth is slowing without grinding to a halt. Market bets currently place a 72.8% probability on the Federal Reserve beginning rate cuts as soon as March 2024, CME’s FedWatch shows.

In the final readings of the year, U.S. annual headline inflation had slowed to 3.1% in November from 6.4% in January.

That compared with a drop to 2.4% from 8.5% in the euro zone, and to 3.9% from 10.1% in the U.K. — both of which have also fueled expectations of rate cuts next year amid sharp economic slowdowns in both economies.

“The apparent loss of U.S. economic momentum in late 2023 suits the view that the full impact of aggressive US Federal Reserve rate hikes may still be in the pipeline,” economists at Berenberg said in a note Friday.

“Nevertheless, the Fed remains on track to pull off the usually elusive feat of a soft landing in 2024. The easing of underlying inflation has encouraged bond and equity markets to play the Fed pivot theme,” they added, though they do not expect the first cut until May 2024.

Data on Spanish inflation will be released on Friday.

U.K. house prices recorded a 1.8% fall in the year to December, according to lender Nationwide, a bigger drop than recent polls suggested but significantly lower than calls made for a fall of up to 10% earlier in 2023.

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German automaker BMW on Saturday launched a hotly anticipated electric concept car, saying the so-called “Vision Neue Klasse” represents the dawn of a new era for the company.

BMW’s latest design showcases a platform that will underpin the brand’s next generation of electric vehicles. The first electric vehicles based on the Neue Klasse — or new class — architecture are set to enter production in 2025.

The new line-up of electric vehicles includes BMW’s sixth generation of battery cells, which the company says will improve both the charging speed and range of the Neue Klasse platform by up to 30%. As a result of these measures, BMW said the overall vehicle efficiency would increase by up to 25%.

“With the BMW Vision Neue Klasse, we put every innovative force that BMW has on the electric side, on the digital side and, of course, that car will also be prepared for the industry of circularity,” BMW CEO Oliver Zipse told CNBC’s Arabile Gumede.

“In only two years’ time, these cars will hit the road, and with that, overall, we lead BMW to a new era of innovation and sustainability. That’s the purpose of our show at the IAA,” Zipse said.

The Vision Neue Klasse is set to make its public debut in the coming days at the IAA motor show in Munich, which also serves as the headquarters of BMW. The IAA show is one of the world’s largest mobility trade fairs.

“We believe that electromobility will be the largest growth segment in the world for the automotive industry and we want to be a leading force here,” Zipse said.

The BMW chief executive projected that battery electric vehicles will represent 15% of the carmaker’s worldwide sales by the end of 2023 and that “we will increase that further next year and the year after next.”

Frank Weber, member of the Board of Management of BMW responsible for development, said the Neue Klasse range represents a “major technological leap” for the carmaker.

In early August, BMW said that it expected ongoing challenges from supply chain issues and stubbornly high inflation to persist over the coming months. It nevertheless lifted the annual outlook for its margin on earnings before interest and taxes in the automotive segment.

Shares of BMW are up around 13% year-to-date.

Asked about the presence of Chinese electric vehicle giants at the Munich motor show and whether he was worried about Chinese exports into Europe impacting BMW’s business, Zipse replied, “No, we are not afraid at all.”

“That is a sign of attractiveness when global players like the Chinese, which is the largest car market in the world, come here to Munich and showcase what they want. It is far more than auto, this is a tech show, this is an innovation show,” Zipse said.

“And I think to have everyone here, the Americans, the Europeans and now also the Chinese, is super exciting. You hear it in my words already, I’m more excited, and I’m not afraid at all, and it is good that we have a show which attracts a lot of competition. That’s super.”

India is poised to become the world’s second-largest economy by 2075, leapfrogging not just Japan and Germany, but the U.S. too, says Goldman Sachs.

Currently, India is the world’s fifth-largest economy, behind Germany, Japan, China and the U.S.

On top of a burgeoning population, driving the forecast is the country’s progress in innovation and technology, higher capital investment and rising worker productivity, the investment bank wrote in a recent report.

“Over the next two decades, the dependency ratio of India will be one of the lowest among regional economies,” said Goldman Sachs Research’s India economist, Santanu Sengupta.

A country’s dependency ratio is measured by the number of dependents against the total working-age population. A low dependency ratio indicates that there are proportionally more working age adults who are able to support the youth and elderly.

Sengupta added that the key to drawing out the potential of India’s rapidly growing population is to boost the participation of its labor force. And Sengupta forecasts that India will have one of the lowest dependency ratios among large economies for the next 20 years.

“So that really is the window for India to get it right in terms of setting up manufacturing capacity, continuing to grow services, continuing the growth of infrastructure,” he said.

India’s government has placed a priority on infrastructure creation, especially in the setting up of roads and railways. The country’s recent budget aims to continue the 50-year interest free loan programs to state governments in order to spur investments in infrastructure.

Goldman Sachs believes that this is an appropriate time for the private sector to scale up on creating capacity in manufacturing and services in order to generate more jobs and absorb the large labor force.

Spearheading India’s economic trajectory is also its progress in technology and innovation, the investment bank said.

India’s technology industry revenue is expected to increase by $245 billion by the end of 2023, according to Nasscom, India’s non-governmental trade association. That growth will come from across the IT, business process management and software product streams, Nasscom’s report indicated.

Additionally, Goldman predicted capital investment will be another significant driver of India’s growth.

“India’s savings rate is likely to increase with falling dependency ratios, rising incomes, and deeper financial sector development, which is likely to make the pool of capital available to drive further investment,” Goldman’s report stated.

The Achilles heel to the bank’s projection is the labor force participation rate — and whether it increases at the rate which Goldman projects.

“The labor force participation rate in India has declined over the last 15 years,” the report noted, underlining that women’s participation rate in the labor force is “significantly lower” than men’s.

“A mere 20% of all working-age women in India are in employment,” the investment bank wrote in a separate report in June, citing that the low figure could be due to women being primarily engaged in piecework, which is not accounted for by the economic measures of formal employment.

Net exports have also been a drag on India’s growth, because India runs a current account deficit, Goldman said. The bank highlighted, however, that services exports have been cushioning current account balances.

India’s economy is driven by domestic demand, unlike many more export-dependent economies in the region, with up to 60% of its growth mainly attributed to domestic consumption and investments, according to Goldman’s report.

S&P Global and Morgan Stanley have also predicted that India is on course to become the third-largest economy by 2030.

India’s first-quarter GDP expanded 6.1% year-on-year, handily beating Reuters’ expectations of 5% growth. The country’s full-year growth is estimated to come in at 7.2%, compared with 9.1% growth in the 2021-2022 fiscal year.

Ukraine’s relations with Germany have soured this week, with Kyiv asking why Berlin reneged on its promise to provide heavy weaponry.

Tensions over Germany’s provision of Leopard tanks and infantry fighting vehicles to Ukraine — or lack thereof — came to a head this week when Ukraine’s Foreign Minister Dmytro Kuleba publicly asked why Berlin was backtracking on a pledge made to send these weapons to Ukraine.

“Disappointing signals from Germany while Ukraine needs Leopards and Marders now — to liberate people and save them from genocide,” Kuleba said on Twitter, adding that there was “not a single rational argument on why these weapons can not be supplied, only abstract fears and excuses.”

“What is Berlin afraid of that Kyiv is not?” he added.

The Marder is a German infantry fighting vehicle designed to be used alongside Leopard battle tanks in combat.

Kuleba’s comments came as Ukraine launches counterattacks against Russian forces in both the south and northeast of the country. Ukraine’s counterattack in the northeast Kharkiv region was hailed as a particular success, with Russian forces withdrawing from towns and villages across the region, almost completely de-occupying it.

Ukraine is largely reliant on Western weapons systems to fight Russian forces. And its allies in the West, NATO members essentially, have individually sent Ukraine a vast range of military hardware.

In April, Germany promised to give Leopard tanks and Marders to Ukraine. Rather than deliver them directly, it proposed a swap scheme. The intention was that NATO members, Poland or Slovakia for example, could send Ukraine older Soviet-era tanks (such as Leopard 1s), and Germany would then replenish their stocks with its own more modern equivalent weapons (such as Leopard 2s).

Germany justified the proposal to send older weapons by saying Ukraine’s forces were used to Soviet-era weapons, and that it should only supply weapons they know how to use.

The only problem with the plan is that this exchange of weapons has largely failed to materialize and Germany is now facing a backlash from critics, both within Germany and externally — and not least of all, from a disappointed Ukraine.

Yuriy Sak, an advisor to Ukraine’s Defense Minister Oleksii Reznikov, told CNBC on Wednesday that Kyiv doesn’t understand Berlin’s reluctance to send it weapons that could prove decisive on the battlefield.

“It’s difficult to read their minds, but Germany’s words, during the last seven months on a number of occasions, have not been matched by their actions. And this is disappointing because there was a moment in time when they made this commitment that they would provide Ukraine with these tanks, it was a moment of hope and promise that we looked forward to,” he noted.

“If they’re afraid of some nuclear strikes or some other attacks on the nuclear power plant in Zaporizhzhia, which could result in major tragedy, it’s another story but as far as the situation on the battlefield is concerned, we don’t understand the logic behind it. It could be some internal political games as well,” he noted.

Ukraine’s need for more weapons comes as the war enters what could be a definitive phase in which the balance shifts in Kyiv’s favor.

Russia was seen to have been taken by surprise by Ukraine’s latest counterattacks, having redeployed some of its most effective fighting units to southern Ukraine after Kyiv signaled over the summer it would launch a counteroffensive to retake Kherson.

After what seemed like a brief period of stunned silence as it took in Ukraine’s rapid victories and advances in the northeast, Russian forces have begun their response to those wins, launching an intense series of attacks on energy infrastructure in the northeast, as well as missile strikes on the south.

All the while, Ukraine’s President Volodymyr Zelenskyy has called on Ukraine’s international allies to continue sending weapons to Ukraine, saying this is when it needs them most to maintain the momentum.

And it’s weapons like Germany’s Leopard tanks, and Marder infantry fighting vehicles, that Ukraine says could change the balance of the war definitively.

Among Ukraine’s NATO allies, Germany — the self-professed “leader of Europe” — has attracted criticism and even ridicule for its military assistance to Ukraine. Just before Russia launched its invasion on Feb. 24, Germany’s offer to send thousands of helmets to Ukraine was met with derision.

Analysts say that criticism is not entirely deserved, however, noting that after the U.S. and U.K., Germany has been one of the biggest donors of weapons to Ukraine.

Stijn Mitzer and Joost Oliemans run a Dutch open-source intelligence defense analysis website and keep a tally of weapons Germany has delivered to Ukraine.

They note on their site that, to date, these deliveries include a number of Gepard SPAAGs (self-propelled anti-aircraft guns), man-portable air-defense systems (known as MANPADS, they’re portable surface-to-air missiles), howitzers and anti-tank weapons, as well as hundreds of vehicles and millions of rounds of ammunition. The German government has also published a list of the military equipment it has sent to Ukraine, right down to 125 pairs of binoculars it has donated.

But when it comes to German tanks and infantry fighting vehicles, Germany has ostensibly dragged its feet, with no decision on the supply of such hardware, let alone deliveries, made despite Ukraine’s specific requests from Kuleba and other officials since March. Analysts say Germany’s good intentions have just not come to fruition.

“Germany has … attempted to entice other countries to send their heavy weaponry to Ukraine in a programme known as ‘Ringtausch’ (‘exchange’). Under this policy, countries can receive German armament free of charge in exchange for delivering tanks and infantry fighting vehicles from own stocks to Ukraine,” Mitzer and Oliemans noted in an article in early September.

“Although a promising scheme at first, the ‘Ringtausch’ programme has largely failed to live up to expectations as most countries expect to have their Soviet-era systems replaced by larger numbers of modern weapon systems than what Berlin is currently able (or willing) to offer,” they noted.

Pressure has been mounting on German Chancellor Olaf Scholz to make a decision on sending such weapons to Ukraine, but there appears to be reluctance at the top to take that decision. On Monday, Germany’s Defense Minister Christine Lambrecht said sending more heavy weaponry to Ukraine was “not so simple.”

“It’s not so simple just to say: I’ll just risk that we won’t be able to act, the defense of the country, by giving everything away. No, I won’t do that,” she said. “But we have other possibilities, from industry, with our partners,” Deutsche Welle reported.

CNBC contacted the German defense ministry for more comment, and a response to Kuleba’s comments, and is yet to receive a response.

Chancellor Scholz defended Germany’s record over weapons deliveries on Wednesday, however, telling reporters that “it can be said that the very weapons that Germany has now provided to Ukraine are decisive to the development of the conflict in eastern Ukraine, and they have also made the difference” in battle.

Germany’s reticence over certain arms deliveries has prompted some critics to look for ulterior motives for its reluctance, with some even suggesting that Germany does not like the idea of German tanks facing Russian tanks on the battlefield, as they did in World War II.

Rafael Loss, a defense expert at the European Council on Foreign Relations (ECFR), told CNBC Wednesday that the German government has put forward various explanations for not sending the weapons.

“The German government itself has put forward explanations for why not to do so, essentially, since the beginning of Russia’s war against Ukraine and even before that. We’ve heard concerns about the potential for escalation, that Russia might see the transfer of such weapons as some kind of red line.”

“We see concerns, mostly from the SPD (Scholz’s Social Democratic Party) about the images that German Leopard tanks might produce going toe to toe with Russian tanks in Ukraine. And we’ve also heard in the past arguments about the tight timeline as a reason for sending the Soviet-produced materiel first. I think that that is a legitimate argument. But it only holds up so long,” he said.

“At some point, Ukraine — and the countries that will be able to support Ukraine with these types of systems — will run out of them, and you can’t replace them as easily. So at some point, you need to start thinking about Western supply chains that are based on Western western systems.”

Loss characterized Germany’s stance toward Ukraine as one of “immense” resistance to sending weapons unilaterally, and that it would prefer some kind of European coalition that jointly sends arms and assistance.

“Over the past six or four months, we’ve seen an immense reluctance both from the Chancellery and from the Defense Ministry to be proactive, to take the initiative and they’ve always referred to ‘not going it alone’,” Loss said, adding that Germany appeared to want the U.S. to take the lead and for Berlin to follow.

While the pressure is mounting on Berlin to act, Germany’s stance is unlikely to change any time soon, or potentially at all, according to Anna-Carina Hamker, a Europe researcher at political risk analysis firm Eurasia Group. She said in a note Wednesday that Scholz’s government — a coalition of his Social Democratic Party, Greens and pro-business Free Democrats, uncomfortable bedfellows at the best of times — would likely continue to struggle over its Ukraine policy.

“Major adjustments to the government’s Ukraine policy are unlikely and the coalition will not significantly step up arms deliveries, despite Ukraine’s territorial gains over the last few days,” she said in a note.

As such, Ukraine has been left fuming and disappointed by Germany’s stance, leaving Kyiv to question Berlin’s commitment to supporting it as the war continues into the fall and likely the winter, unless there is a dramatic change of course from the Kremlin.

Ukrainian defense ministry official Yuri Sak summed up Kyiv’s frustrations toward Germany, noting that “one of the arguments is that they are afraid of further escalation — but that’s an invalid argument because it’s like, an escalation to what? It’s bad enough as it is.”

Russian President Vladimir Putin has sought to ratchet up the pressure on foreign buyers of natural gas, telling so-called “unfriendly” countries to pay in rubles from Friday — or have their supplies cut off.

Perhaps surprisingly, however, the leaders of Germany and Italy appear unfazed by Putin’s rhetoric.

That’s because they believe European customers won’t be bound by the Kremlin’s new mechanism and can instead continue paying for Russian gas in euros or dollars.

Putin on Thursday issued a decree insisting foreign buyers of Russian gas must pay in rubles from Friday by opening a Russian bank account or have their contracts for deliveries canceled.

Russia’s president has repeatedly demanded that so-called “unfriendly” countries make the currency switch for Russian gas, targeting those behind the heavy economic sanctions designed to isolate Russia over its unprovoked onslaught in Ukraine.

“Today I signed a decree that establishes the rules for trading Russian natural gas with the so-called ‘unfriendly’ states. We offer counter parties from such countries a clear and transparent scheme, in order to purchase Russian natural gas, they must open ruble accounts in Russian banks,” Putin said in a televised address, according to a translation.

“If these payments are not made, we will consider it a failure of the buyer to fulfill its obligations with all the ensuing consequences.”

Putin said existing contracts would be stopped if these terms were not met from Friday.

Germany, Europe’s biggest consumer of Russian gas, said Putin’s decree amounted to “political blackmail,” while the U.S. said the measure shows the financial “desperation” on the part of the Kremlin.

Instead of stoking panic in Berlin and Rome, German Chancellor Olaf Scholz and Italian Prime Minister Mario Draghi believe the decree does not apply to them.

Russia’s state-controlled gas giant Gazprom said Friday it was continuing to supply natural gas to Europe via Ukraine in line with requests from customers, according to Reuters. CNBC has contacted a spokesperson at Gazprom for further details.

A German government readout of a call between Scholz and Putin on Wednesday said the Russian president had informed Scholz that gas deliveries would have to be settled in rubles from April 1.

“At the same time, [Putin] emphasized in the conversation that nothing would change for the European contractual partners,” the readout said.

Payments would continue to be made exclusively in euros as usual to Russia’s Gazprombank, which is not affected by economic sanctions, and the bank would then convert the money into euros, the statement said.

Scholz did not agree to this procedure, and has since reiterated his stance that Germany would continue to pay for Russian gas in either euros or dollars under existing contracts.

“We have looked at the contracts on gas and other deliveries and … it is stated that the payment is in euros. Sometimes in dollars but usually in euros. And I told the Russian president that it will stay that way,” Scholz told reporters in Berlin on Thursday, according to a translation.

The Kremlin’s readout of the same call said the currency switch was necessary due to the fact that the foreign exchange reserves of the Bank of Russia had been frozen by EU member states. It was agreed that experts from Russia and Germany would continue to negotiate on this matter, the Russian statement said.

Meanwhile, Italy’s Draghi also held a call with Putin on Wednesday. And, speaking to reporters on Thursday about the outcome of those talks, Draghi said Italy does not expect a halt to the deliveries of Russian gas.

Existing contracts would instead remain in force and European firms would continue to pay in euros or dollars rather than rubles, Draghi said, according to Reuters. The Italian prime minister also indicated that he believed Putin had softened previous demands for gas payments in rubles.

“I think there has been a process of reflection within Russia that has led to a better definition of what it means to pay in roubles, as President Putin defined it yesterday,” Draghi said Thursday, Reuters reported.

“What I understood, but I may be wrong, is that the conversion of the payment … is an internal matter of the Russian Federation,” he added.

Kremlin spokesman Dmitry Peskov confirmed earlier in the week that Russia would not be seeking gas payments in rubles immediately, saying instead the switch was likely to be a “gradual process.”

Putin “demanded rouble payment for gas … quickly recognized he’s not in a position to make demands … and backed off,” Ian Bremmer, president and founder of Eurasia Group, a political risk consultancy, said via Twitter.

“Suspect we are going to see a lot of that going forward,” he added.

Germany, alongside the G-7, has signaled that gas supply agreements cannot be unilaterally modified, and European buyers of Russian gas say the Kremlin is not entitled to redraw long-term contracts.

Energy analysts believe it is unlikely Gazprom will violate its existing contracts by refusing to supply gas to customers who refuse to pay in rubles in the short term.

European countries’ dependence on Russian energy exports has been thrust into the spotlight since the Kremlin launched its invasion of Ukraine on Feb. 24, particularly as energy-importing countries continue to top up Putin’s war chest with oil and gas revenue on a daily basis.

Analysis from campaign group Transport and Environment shows Russia’s military might is being reinforced by $285 million in oil payments made every day by European countries.

Indeed, revenue from Russian oil and gas was seen to be responsible for roughly 43% of the Kremlin’s federal budget between 2011 and 2020, highlighting how fossil fuels play a central role for the Russian government.

The European Union receives roughly 40% of its gas via Russian pipelines and several of which run through Ukraine.