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Greetings from Day 2 of the leaders’ summit in Copenhagen, where the EU has been joined by heads of state from across Europe, including British Prime Minister Keir Starmer and Ukrainian President Volodymyr Zelenskiy.

The European Political Community, as the gathering is known, was conceived by President Emmanuel Macron as a forum for non-EU and EU countries to get together and discuss shared challenges. First convened in the shadow of Russia’s invasion of Ukraine in 2022, its power is as much symbolic as yielding concrete deliverables, but its focus is still very much on Ukraine. 

“It is our war, and if Ukraine loses it means our failure,” Polish Prime Minister Donald Tusk told the gathering as he took the stage in a friendly fireside-chat format alongside Starmer, Macron and Moldovan President Maia Sandu, fresh from her election victory last weekend. Tusk warned that if Russia wins against Ukraine, Poland knows “it’s the end of our country.”

Macron highlighted the progress Europe has made against Russia, noting that Finland and Sweden’s decision to join NATO had been a “big strategic defeat” for Moscow. 

Denmark's Prime Minister Mette Frederiksen walks with Volodymyr Zelenskiy in Copenhagen, on Oct. 1. Photographer: Mads Claus Rasmussen/Getty Images

But beneath the show of unity, cracks were evident. The European Commission’s plan for a drone wall got a lukewarm reception from countries yesterday, with Italy and Spain arguing that defense plans must help the entire continent — not just the EU’s eastern flank.

German Chancellor Friedrich Merz clashed with Hungarian leader Viktor Orban during the meeting over the latter’s overtures to Moscow, our Bloomberg team reported overnight.

This morning, Belgian Prime Minister Bart de Wever doubled down on his resistance to the EU’s plan to tap up to €185 billion in Russian assets held in his country for reparation loans for Ukraine.

The EU’s plan entails “huge amounts of money,” requiring guarantees for “a very long time,” he told journalists in Copenhagen. His comments come as Russia warned that it may nationalize and swiftly sell off foreign-owned assets  in retaliation for any European moves to seize Russian holdings abroad.

Separately, France confirmed that it had detained the captain of an oil tanker linked to Russia that was close to the Danish coast. Macron said it was important to identify and act on so-called shadow fleet vessels that have been evading sanctions, describing the business model as “totally industrialized.” “I suggest that in the framework of the coalition of the willing, with close coordination with NATO, we work to see how to optimize this common action,” he told the summit. 

The Latest

• The EU plans to hike tariffs on its steel imports to 50%, according to a draft proposal seen by Bloomberg. The move will align the bloc’s rate with the US, which has sought to push back against overcapacity from China.
• The return of substantial initial public offerings to Europe this autumn shows the market is turning a corner, and bankers say excitement is building for bigger deals.
• French unions are holding a new round of anti-austerity protests today, maintaining pressure on Prime Minister Sebastien Lecornu as he struggles to pull together a budget proposal.
• Soaring renewables output in Spain is weakening gas’s grip on electricity prices, setting the country apart from much of Europe, where fossil fuels still dictate the cost of power.
• Banca Monte dei Paschi di Siena’s purchase of rival Mediobanca could mark the start of a new wave of consolidation for Italy’s banking sector, Monte Paschi CEO Luigi Lovaglio said in an interview for Bloomberg’s Italian-language podcast “Quello Che i Soldi Non Dicono

Seen and Heard on Bloomberg

Europe should pursue a joint and integrated approach as it defends itself from hostile drones rather than building separate air shields for different threats, the head of Norwegian arms manufacturer Kongsberg Gruppen Geir Haoy told Bloomberg Television in an interview. “For me, it’s a part of the entire air defense system,” he said in Copenhagen, where EU leaders are meeting to talk about European defense. “It’s not one system for that and another system for another.”

Chart of the Day

Chinese carmakers grabbed a record 9.8% of Europe’s hybrid-vehicle sales in August, making further strides in a segment that’s gaining importance among car buyers and manufacturers. The monthly showing marks the fourth time this year that Chinese brands have reached a new peak for the share of hybrid cars, based on figures from researcher Dataforce. 

Coming up

• Press conference after the European Political Community summit in Copenhagen this afternoon
• EU Economy Commissioner Valdis Dombrovskis meets US Ambassador to EU Andrew Puzder tomorrow
• EU Trade Commissioner Maros Sefcovic meets Irish Prime Minister Micheal Martin, Irish Finance Minister Paschal Donohoe tomorrow, takes part in Institute of International & European Affairs event on trade and economic security in Dublin. 

Final Thought

An Airbus A321neo operated by Play Air. Photographer: Sigga Ella/Bloomberg

The collapse of Iceland’s last remaining budget airline this week has put an abrupt end to the volcanic island’s pit stop for frugal transatlantic travelers. Fly Play ceased operations this week after four years because of poor ticket sales and an unsuccessful turnaround plan. Thousands of passengers were stranded, and hundreds of people lost their jobs. Meanwhile, legacy airlines such as Ireland’s Aer Lingus are raising their game by offering competitive pricing and expanding their networks.

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