Russian president Vladimir Putin is hosting the annual BRICS summit in the city of Kazan, amid Russia facing increasing isolation from the West. But Putin aims to show that Russia is far from marginalised, while trying to push for a Global South alliance to defy the US-controlled global financial system that enables the heavy sanctions on Russia’s economy.

However, this summit extends beyond Russia’s agenda. It marks the growing dissatisfaction of the Global South with the current world order, which is dominated by Western Bretton-Woods institutions, such as the IMF, World Bank and the US dollar in international trade.

While not a formal institution, the BRICS group has grown in influence. Its expanding membership includes ever-more emerging powers from the Global South that seek greater economic parity and political clout. This leaves the EU at a critical juncture. The EU cannot afford to cede influence to China and Russia as they position themselves as key allies for the Global South.

As the EU navigates its relationships with these nations, the Kazan summit is a reminder of the need to forge strategic partnerships with the Global South on equal footing. This is essential if the EU wants to secure access to critical resources, such as energy and raw materials, and strengthen its economic sovereignty while advancing the green transition.

BRICS: United in diversity

BRICS, originally formed in 2006 as a geo-economic alliance of the emerging economies Brazil, Russia, India and China, with South Africa joining in 2010. Since then, it has evolved into a non-formal political and economic coalition seeking to reshape the global multilateral order.

The bloc’s primary goal has always been to challenge the dominance of Western-led institutions by pushing for reforms in the UN and Bretton-Woods institutions. Here, the BRICS members aim to address the longstanding imbalance in the multilateral framework that often disadvantages the Global South.

Earlier this year, BRICS expanded its membership by adding Iran, the UAE, Egypt and Ethiopia, with many more countries in line to join. Now officially referred to as BRICS+, the group accounts for roughly 37 percent of global GDP, making it a significant economic force compared to the EU’s 14.5 percent.

While the new members contribute only four percent the bloc’s total GDP – making their economic impact negligible – the addition of these countries mean that BRICS has boosted its energy reach. This means that the bloc has nearly doubled its share of global oil and gas production to around 40 percent. Moreover, the continuous expansion shows that BRICS+ stands as a vehicle for political representation and advocacy for the Global South.

Challenging the dollar

For Russia, the Kazan summit is an opportunity to showcase its influence on the global stage despite sanctions and Western isolation. Putin’s primary goal is to push for an alternative platform for international payments and settlements, following Russia's exclusion from SWIFT after its invasion of Ukraine.

Such a system would enable Moscow to bypass sanctions and reduce its dependence on the US dollar by encouraging trade in currencies within BRICS. But his chances of success are low as other members remain deeply embedded in the global financial system and have much less to gain – and more to lose – compared to Russia. Still, the push for de-dollarisation is in line with the broader ambitions of the bloc.

At the heart of BRICS is the desire to position the Global South as an equal player in the international multilateral system. These nations seek greater sovereignty and co-decision making, moving away from the historically punitive nature of IMF and World Bank policies that have often exacerbated debt crises in the Global South. As BRICS continues to grow in reach and scale, it highlights a collective rejection of Western hegemony and a demand for a more balanced global financial system.

Similarly, the bloc challenges the dominance of the US dollar in global trade and finance. To this end, the New Development Bank, founded by BRICS in 2014, was established as an alternative to the Western-dominated financial institutions. It provides funding for infrastructure and development projects in emerging markets without the severe conditions typically imposed by the IMF and World Bank, albeit still at a comparatively low level – and, notably, transactions are conducted in US dollars.

And it is not the typical autocratic foes of the West – Russia, China and now Iran – but democratic nations, such as India and Brazil, that are adamant about reform. For instance, Brazil’s president Lula da Silva has called to an end of dollar-dependency in global trade a priority for BRICS.

In this context, China has expanded its efforts to promote the renminbi through its global swap line network, as well as advancing the use of its digital currency, the e-yuan. Although a full-scale de-dollarisation may not happen anytime soon, China is now exploring alternative payment systems among BRICS members. For example, Brazil has agreed to back Argentine payments for its goods in renminbi. Meanwhile, Saudi Arabia – which is strongly considering to join the bloc – is reportedly considering using the Chinese currency for oil transactions.

Despite their shared agenda, the bloc's heterogeneous nature, with countries representing vastly different political systems and regional interests, presents significant hurdles to forming a unified stance on global issues. For example, the inclusion of Saudi Arabia and Iran, two regional rivals, heightens the possibility of internal conflict within the group, as their foreign policy goals often clash.

Likewise, historical tensions between Egypt and Ethiopia, particularly over the use of Nile River resources, could complicate consensus-building within BRICS. While the bloc is united in its desire for a multipolar world, the political priorities of its members are often at odds. This could hinder its ability to speak with a cohesive voice on pressing international issues.

The EU and BRICS: Challenges and opportunities

BRICS nations have long had complex – and sometimes contentious – relationships with the EU, particularly on security issues and international diplomacy. The Middle East remains a hotbed of diverging interests, while differing stances on the war in Ukraine continue to strain relations.

China is Russia’s most important ally, but India has helped Russia circumvent sanctions, overtaking China as Russia’s top oil buyer, while Brazil and the EU frequently do not see eye to eye. This is mirrored in repeated setbacks in the Mercosur-EU trade negotiations. Turkey’s application for BRICS adds further complexity, raising concerns that Ankara may deepen its ties with non-Western powers. This could make its already fragile relationship with the EU even more complicated.

Despite these political challenges, economic ties between the EU and BRICS remain critical. However, BRICS is not a monolithic entity. While Russia and China are two systemic rivals to the West, the bloc reflects the broader dissatisfaction among Global South nations with Western cooperation models. By fostering strategic partnerships for mutually beneficial cooperation, the EU can rebuild credibility with the Global South, while advancing its own long-term goals.

The BRICS group and the broader Global South are already vital economic partners for the EU. BRICS nations serve as a key trading bloc for goods, especially energy and raw materials. As geopolitical fragmentation reshapes global value chains (GVCs), these regions will play an even more significant role in the EU’s economic future. While GVCs are not retreating, they are certainly adjusting, offering opportunities for the EU to diversify and strengthen its relationships with the Global South.

Ongoing geopolitical tensions, especially between China and the West, have increased uncertainty and disrupted trade, which could heavily affect European companies. In response, the EU must strategically diversify its value chains, anchoring parts of them in more aligned Global South countries. This diversification will not only reduce dependency on a single supplier, such as China, but help tie emerging economies more closely to European production networks, or else risking their alignment with systemic rivals.

To achieve this, the EU should build on its existing global investment and development frameworks. These include NDICI – Global Europe and the development initiative Global Gateway, which was specifically designed to rival China’s US$1 trillion Belt and Road Strategy. But these efforts need to go beyond development policy, fostering deeper and more meaningful partnerships with BRICS and Global South countries on equal footing, particularly in the context of the green transition.

By partnering and investing in sustainable industrial value chains, the EU can support its partners moving up the production ladder, from raw material extraction to refining and value-added production, while advancing shared environmental aims and its own strategic goals.

To make decarbonisation a true source of economic growth, as highlighted in the Draghi report, the EU should fully embrace the Clean Trade and Investment Partnerships, as proposed by Ursula von der Leyen as part of her 2024-2029 political priorities. This would mean creating a strategic framework for partnerships that unify economic and financial cooperation with targeted partnerships in specific sectors, such as renewable energy, green technology and critical raw materials.

Such partnerships, if structured around mutual benefit, will be pivotal in fostering the EU’s green industrial transition and economic sovereignty. Concurrently, these partnerships can present a tangible vision for BRICS and other Global South nations to transition to higher-value industrial activities, creating a cooperative framework centred on sustainable development.

About the author

Lucas Resende Carvalho is Project Manager at the Bertelsmann Stiftung in the Europe’s Future Programme.

Read more about BRICS and globalisation

BRICS: The Global South Challenging the Status Quo

Globalization Report 2018: What about the BRICS countries? - Global & European Dynamics

Global Gateway: The EU Maps a Different Path Than Belt and Road

How to Stay a Global Power: Competitiveness is the Keyword for the EU’s New Legislature

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