Multilateralism's stress tests

The heat waves in Europe and the U.S. this week are a stark reminder that international cooperation has never been more important — or more uncertain.

Why it matters: Even as the number of summit-level gatherings continues to rise steadily, it's becoming increasingly difficult to envisage a world where China and the U.S. can align where necessary — or even, for that matter, a world where the White House can align with a majority of the Senate.

The big picture: While global warming constitutes the existential threat, there are more immediate projects in the realm of finance that are severely testing the degree to which the international community can effectively coordinate.

• A slow-brewing sovereign debt crisis requires creditor countries to coordinate their response not only in Ukraine (that's the easy one) but also in debtor nations from Sri Lanka to Ghana. The much-vaunted G20 / Paris Club Common Framework, designed precisely for such debt workouts, seems to be going nowhere.
• Treasury Secretary Janet Yellen has launched an ambitious attempt to form an oil buyers' cartel; this week she tried to persuade officials from India, Australia, Saudi Arabia, Turkey, and other countries to agree to a price cap for Russian oil. So far, it's unclear how much progress is being made.
• The minimum corporate tax rate, announced with great fanfare more than a year ago, is now looking decidedly moribund, scuppered by a rogue Democratic senator.

What we're watching: Both public and private sector creditors seem willing to grant Ukraine the forbearance it needs on its debt servicing. But that's partly because Ukraine's debts to China are relatively small — and because of Ukraine's geopolitical importance. In less strategically important countries, especially ones where China is a significant creditor, debt workouts are likely to be much more fraught.

• Meanwhile, within Europe, countries that are reliant on Russian natural gas are asking the rest of the bloc to show some solidarity by cutting gas consumption by 15%. The answer? No.

Flashback: Even Russia's invasion of Ukraine didn't manage to unite the broader international community. Putin's aggression hasn't been condemned by either China or India.

The bottom line: As relations between the U.S. and China continue to be strained, the chances that they'll be able to agree or cooperate on just about anything are dimming fast.