Welcome to the Brussels Edition. I’m Sam Stolton, European competition reporter with Bloomberg, bringing you the latest from the European Union. Make sure you’re signed up.

US President Donald Trump won scores of European plaudits today, as he declared that “war is over” after sealing a landmark 20-point agreement to halt hostilities between Israel and Hamas. European Commission President Ursula von der Leyen praised the accord as “a moment of relief for the entire world,” and EU leaders including French President Emmanuel Macron, German Chancellor Friedrich Merz, and Italian Prime Minister Giorgia Meloni descended on Egypt’s Sharm el-Sheikh to commemorate the occasion.

The first phase of the Middle Eastern Peace Plan has earned Trump broad acclaim in the court of public opinion, evinced in his latest batch of red-cap campaigning: a new model emblazoned with the words ‘Trump The Peace President’ and adorned on the heads of exultant supporters in Israel’s Parliament. And while the accord has been tactfully led by Trump and brokered alongside Egypt, Qatar and Turkey, Europe is keen to ensure it isn’t sidelined.

After the curtain falls on the ceremonial theater playing out in Egypt today, Europe’s eye is on the day after, with von der Leyen pitching the bloc as somewhat of a financier of peace. Earlier today, she reaffirmed the EU’s continued support through the Palestinian Donors Group and pledged more funding for the reconstruction of Gaza. 

If Trump is being lauded as the president of peace — Israel’s Benjamin Netanyahu presented him with a golden dove — Europe could contribute as its architect. But some deft geopolitical tact may be required to get any seats at the table of the international ‘Board of Peace’ that’ll oversee a committee of Palestinians responsible for public services.

Any future EU participation could land on the desk of the bloc’s foreign affairs chief, Kaja Kallas, who has previously jockeyed for the union’s involvement in the board. She wasted no time in signaling her resolve this morning, highlighting how Trump’s plans require strong international backing to succeed and that the “EU stands ready to do its part.”

Israelis react as they watch the release of Israeli hostages by Hamas. Photographer: Kobi Wolf/Bloomberg

The Latest

• Trump said he’d consider arming Ukraine with long-range Tomahawk missiles that would allow strikes deeper into Russia, but said he may first talk to Russian President Vladimir Putin about it in a bid to end the war. 
• France’s Macron announced a new cabinet yesterday as pressure builds for him and his reappointed prime minister, Sebastien Lecornu, to head off the country’s growing political crisis and pass a budget.
• The Dutch government has taken control of Nexperia, the European semiconductor unit of China’s Wingtech Technology, to address concerns about losing domestic access to crucial technology. 
• Swiss and Chinese foreign ministers agreed that the two nations will accelerate negotiations on upgrading their free-trade agreement to expand cooperation in areas such as AI, green development, the digital economy, finance, and trade in services.
• Serbian President Aleksandar Vucic said he was “very disappointed” with Russia’s decision to offer only a gas deal that runs until the end of the year, after months of talks over a longer agreement. 
• Slack car demand and new competitors like China’s BYD could force Europe’s manufacturers to shed as many as eight factories as the industry moves through a painful reset, according to consultancy AlixPartners.

Seen and Heard on Bloomberg

French President Emmanuel Macron Photographer: Nathan Laine/Bloomberg

France’s Macron is playing Russian roulette with his legacy, writes Bloomberg Opinion columnist Lionel Laurent. While still aiming to court the center-left with policy concessions, avert snap elections and pass a budget that will achieve stability on the road to 2027 presidential elections, Macron seems to be willing to put his reform legacy on the line to get there including by freezing the pension reform.

Chart of the Day

Germany’s soul-searching over how to revive its moribund economy is running into a hard truth: a sprawling welfare state is part of the problem, Alexander Weber and Kamil Kowalcze report. A key role for the state since such support was first pioneered under Chancellor Otto von Bismarck in the late 19th century, it is becoming the next bone of contention for Merz’s coalition. Social spending rose to 1.3 trillion euros last year, or 31.2% of GDP, pushing German labor taxes to the second-highest place within the OECD.

Coming up

• EU Parliament committees hold hearing with European Central Bank Supervisory Board Chair Claudia Buch this afternoon
• EU justice ministers meet in Brussels today
• EU trade ministers hold informal meeting in Horsens, Denmark today and tomorrow

Final Thought

A protester outside the presidential palace in Vilnius in October. Photographer: Peter Guest/Bloomberg

The Lithuanian Interdisciplinary Artists’ Association has turned a former boarding school into a space for studios and exhibition spaces, which has become a headquarters for a movement against the populist Dawn of Nemunas party. The movement is protesting the appointment of one of the party’s representatives as minister of culture, with tens of thousands of people signing a petition and major institutions joining them. Read our report by Milda Seputyte and Peter Guest on how the movement is drawing inspiration from the country's history of resistance to Soviet rule.

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