Welcome to the Brussels Edition. I’m Suzanne Lynch, Bloomberg’s Brussels bureau chief, bringing you the latest from the European Union each weekday. Make sure you’re signed up.

The EU’s 27 commissioners held their first weekly meeting of the new term today, with plenty to keep things busy. Top of the list: Mercosur. The long-stalled trade pact with four South American countries has finally reached the finish line and the commission hopes to win over skeptical nations like France and Poland with a sweetener.

As Bloomberg’s Jorge Valero and Ewa Krukowska reported this morning, the deal includes a special mechanism that will kick in if import volumes increase by 10% or fall by 10%.

It’s a bid to appease agriculture-heavy member states concerned about a flood of farm imports. Polish Prime Minister Donald Tusk has already said he’ll raise the issue with French President Emmanuel Macron tomorrow in Paris, but conceded that he has little power to block it.

That’s because most of the bloc — including heavyweight Germany — is happy with a deal that will open up South American markets to car and other exports. With the EU reeling from an increasingly protectionist US, a key priority for Brussels is finding trade deals with other partners. The EU also presented its trade deal with Mexico for adoption today, while the German foreign minister said he’s hopeful a long-stalled accord between EU and India can be concluded as soon as this autumn.

As for the EU’s much-criticized deal with the US struck earlier this summer, the bloc’s trade chief stood his ground. Speaking earlier this afternoon, Trade Commissioner Maros Sefcovic defended the accord as “the only responsible way forward” and said he would continue to engage with the US to secure further exemptions. 

Meanwhile, the EU received a rap on the knuckles from one of the wise old men of the Brussels bubble this morning — former Commissioner and ex-Italian Prime Minister Mario Monti. Kicking off the Bruegel think tank’s annual conference, he criticized the EU for delaying a fine on Google’s AdTech.

Monti speaks during a Bloomberg TV interview in 2019. Photographer: Alessia Pierdomenico/Bloomberg

As Sam Stolton reported yesterday, the EU has paused its plans to punish the US giant for abusing its dominance over advertising amid fears that US President Donald Trump could hit back on trade.

Monti will be the guest speaker at Bruegel’s glitzy dinner at the Royal Museum of Fine Arts in Brussels tonight, where attendees can browse the collection of Old Masters. Over in Paris, Macron will host Ukrainian Prime Minister Volodymyr Zelenskiy for dinner ahead of tomorrow’s meeting of defense allies.

Attention will turn to the White House this afternoon, where Trump is hosting Polish President Karol Nawrocki. The US leader backed his ideological ally, who scored a surprise election victory in June and has frequently clashed with Tusk. With about 10,000 US troops in Poland, Ukraine and defense are likely to top the agenda. Read our primer on what today’s meeting means here. 

The Latest

• The Italian government has ruled out counting spending for the construction of a €13.5 billion ($15.7 billion) bridge toward its NATO contribution, ending months-long speculation about whether the project to link the mainland to Sicily could be classified as military expenditure.
• France is pushing to elevate discussions on the EU’s next climate goal to leaders’ level, setting the stage for a clash over the speed and direction of targets ahead of this year’s COP talks in Brazil. 
• The EU’s General Court backed the bloc’s data transfer agreement with the US this morning, rejecting a legal challenge that argued American surveillance laws still fall short of EU privacy standards.
• France plans to get tougher on tax fraud and over-optimization by the wealthy, pledging to scrutinize more closely their holding companies and fortunes, Budget Minister Amelie de Montchalin said.

Seen and Heard on Bloomberg

Does Europe even know what competitiveness means? That’s the question posed by our Editorial Board in this Opinion piece. If there’s one thing EU leaders agree on, it’s the bloc’s need to regain competitiveness. Yet in when it comes to the banking sector, some are acting as if they don’t understand what the term really means.

Chart of the Day

France’s political situation is becoming increasingly unstable, with Prime Minister François Bayrou facing a confidence vote on Monday. The country’s fiscal worries and political dysfunction are causing investors to rethink French assets. French 10-year public debt is trading at similar yields to Italy, a remarkable development considering Rome used to be the byword for economic and political dysfunction our columnist Lionel Laurent writes. 

Coming up

• European Council President Antonio Costa visits Vienna and Bucharest today
• Poland’s Nawrocki meets Trump at the White House this afternoon
• France’s Macron meets Ukraine’s Zelenskiy over dinner in Paris this evening

Final Thought

Defense employers are widening the recruiting net to attract workers. Photographer: Sean Gallup/Getty Images

Rheinmetall has come up with a novel way to introduce itself to young job seekers. At recruiting events, executives from the German defense contractor have been known to hand out condom packages stamped with the company’s name and a message: “Safety counts. Always and everywhere.” It’s a sign of changing times in Europe, where weapons makers are going to extreme lengths to court a new generation of workers. 

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