Welcome to the Brussels Edition, Bloomberg’s daily briefing on what matters most in the heart of the European Union.

Trade talks between the EU and the US have intensified over the past week, aiming to secure at least a preliminary deal before Washington imposes a 50% tariff on nearly all EU exports. The best-case scenario would be agreement on the principles of an accord by July 9. Yet, we’re told European officials believe negotiations sealing the deal in full could extend beyond President Donald Trump’s deadline. Officials in Brussels remain cautious. While talks are taking place in a positive environment, they remain difficult — the EU believes the US is seeking one-sided concessions. US Commerce Secretary Howard Lutnick yesterday poured cold water on hopes for a swift accord, telling CNBC yesterday that Washington is prioritizing other partners and an agreement with the EU is likely to be the very last one that the US completes.

— Michal Kubala

What’s Happening

United Front | Europe is set to reaffirm its commitment to supporting Ukraine at a meeting today in Rome, according to a draft of a joint statement we’ve seen. Foreign ministers from nations including France, Germany, Italy and the UK, who’ll be joined by NATO chief Mark Rutte and their Ukrianian counterpart, are expected to agree that they stand ready to increase sanctions on Russia and improve enforcement of existing penalties, notably in the banking and energy sectors.

Czech President | Czech President Petr Pavel urged the US to give Europe more time and realistic goals to assume more responsibility for the continent’s security. Trump is right to demand that Europe significantly increase defense spending but it would take years to replace some protections provided by Washington, Pavel, a former top NATO general, told Bloomberg TV in Prague.

Defense Banking | The European Investment Bank wants to help finance the region’s defense industry. It will partner with major lenders, including Deutsche Bank, to provide €3 billion in funding, overcoming reluctance in the sector to participate in EU rearmament.

Tusk Victory | Polish Prime Minister Donald Tusk won a confidence vote yesterday as he attempted to assert his leadership after an ally lost a presidential election this month, sparking calls for him to step down and putting his pro-EU agenda into question. Ahead of the ballot, the Polish premier said he’d reshuffle the government in July.

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Around Europe

China Sanctions | The EU has proposed sanctioning two small Chinese banks for helping Russia circumvent trade restrictions, according to documents we’ve seen. The bloc’s financial institutions would be banned from conducting any transactions with the two lenders, which are based near China’s border with Russia.

Energy Line | Banks including Austria’s Raiffeisen Bank International continue to help some of the last European buyers of Russian pipeline gas pay for purchases, we’re told. Clients are using Western lenders’ Russian units or smaller non-sanctioned Russian banks to pay for the fuel.

Portuguese Prize | French banking group BPCE has emerged as the leading bidder  to acquire Portugal’s Novo Banco from investment firm Lone Star Funds, we’re told. A potential acquisition would help to further Europe’s cross-border banking consolidation at a time when governments have been hampering such deals.

Vatican Money | The Vatican Bank continued to draw in new cash in 2024, with its assets under management increasing to a 10-year high. It’s seeking to build on the record by showing it can keep beating its benchmarks even by sticking to investments in line with the ethics of the Catholic faith.

Gibraltar Agreement | The EU sealed a political agreement with the UK on Gibraltar, one of the last lingering issues of Brexit. If ratified, the deal will eliminate physical barriers, checks and controls on people and goods moving between Spain and the self-governing British territory.

Chart of the Day

Romania’s economy is poised for a boost following the election of a pro-European president, outweighing risks from fiscal imbalances and Trump’s tariff war, the head of the country’s biggest bank told us. That outlook is key for Banca Transilvania, which is a proxy for investors on the wider economy and which has doubled its market capitalization in the past two years to almost $7 billion.

Today’s Agenda

All times CET

• 10 a.m. EU Council President Antonio Costa attends ceremony for 40th anniversary of Portugal signing EU accession treaty in Lisbon
• 6 p.m. Costa meets Spanish Prime Minister Pedro Sanchez in Madrid
• 6:30 p.m. Parliament President Roberta Metsola addresses AmCham EU annual gala
• German Marshall Fund Brussels Forum
• Legal opinion issued at EU’s top court on Google’s €4.1 billion Android fine
• EU industry chief Stephane Sejourne to meet Finland’s Prime Minister Petteri Orpo in Helsinki