Brussels Edition
EU set to take on Italy over bank deal.
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Welcome to the Brussels Edition, Bloomberg’s daily briefing on what matters most in the heart of the European Union. We’re keen to hear your views on this newsletter. Please participate in our short survey

The EU has long lagged behind the US and China when it comes to big banks. With the bloc’s banking union still a work in progress, many in Brussels and beyond are calling for financial-industry consolidation to boost the competitiveness of European lenders. Invariably though, these efforts run into national resistance. EU regulators are currently preparing to send a letter to the Italian government, questioning its right to impose conditions on UniCredit’s planned takeover of Banco BPM, we’re told. The commission, which has already approved the deal, will likely say that under the bloc’s merger rules only Brussels has the legal power to impose such conditions on the acquisition. Observers will be watching closely how the clash plays out, which may have ramifications across industries at a time when there’s a push for consolidation in sectors ranging from banking to defense and transport.

Samuel Stolton

What’s Happening

Ukraine Fund | The EU is considering setting up a €100 billion fund to support Ukraine as part of its seven-year budget due to be unveiled next week, we’re told. The bloc has provided nearly €160 billion in support to Ukraine since Moscow’s invasion began 3 1/2 years ago.

Airbus Relief | The EU is closing in on a trade deal with the US that could spare Airbus from the brunt of new tariffs, as Brussels seeks carve-outs for key sectors. The bloc aims to finalize the agreement before massive tariffs are set to start kicking in Aug. 1. BMW and Mercedes-Benz may also get some tariff exemptions, we’re told.

Climate Goal | A week after the commission unveiled its ambitious target to cut CO2 emissions by 90% by 2040, the goal is already at risk. The far-right Patriots for Europe group managed to seize control of negotiations and much now rests on where the center-right EPP decides to position itself in a vote today. 

China Rebuke | Commission President Ursula von der Leyen demanded China rebalance its trade ties with Europe. The EU chief intensified her criticism of Beijing, accusing it of distorting global markets, restricting access for European firms and stifling fair competition.

Chemical Boost | The EU plans to use its trade defense powers and state aid tools to shield the continent’s chemicals makers. The aim is to secure supply chains, reduce import dependencies and support the production of critical chemicals within the bloc.

Around Europe

Eurozone Entry | EU finance ministers cleared Bulgaria's adoption of the euro next year, setting up the nation to become the 21st country to join the eurozone. Successive governments in Sofia have argued that euro adoption will help raise living standards in the EU’s poorest member state. 

Drone War |  Aero-HIT, a Russian company, partnered with Chinese firms to build drones for the Russian military, according to documents reviewed by Bloomberg. The move shows how Moscow capitalized on its friendly ties with Beijing to build drones to attack Ukraine.

Laser Incident | Germany has summoned China's ambassador after a Chinese warship allegedly targeted a German surveillance aircraft with a laser over the Red Sea. The aircraft, part of the EU's mission to protect shipping from Houthi attacks, was forced to abort its mission. 

Romania Rates | Romania's central bank has maintained its key interest rate amid the government's implementation of emergency tax hikes aimed at reducing the budget deficit. The measures are expected to lead to a temporary rise in inflation.

Chart of the Day

Hungarian energy company Mol is seeking access to a disused crude pipeline that runs from the Ukrainian port of Odesa as a way to wean itself off Russian oil. Mol, which has enjoyed an exemption from the EU’s Russian crude oil ban, wants the bloc’s help to enable it to eventually bring seaborne supplies to central Europe on a new route. The plan follows growing EU pressure on member states to decouple from Russian fossil fuels, and reflects regional efforts to bolster energy security.

Today’s Agenda

All times CET

  • 9:00 a.m. Von der Leyen and Council President Antonio Costa speak in parliament debate on last month’s European Council summit
  • 4:00 p.m. NATO Secretary Deneral Mark Rutte holds joint press conference with German Chancellor Friedrich Merz in Berlin
  • EU Economy Commissioner Valdis Dombrovskis meets Bank of Italy Governor Fabio Panetta and Italian finance minister Giancarlo Giorgetti in Rome
  • European Parliament holds third day of plenary sitting, including discussion of EU-US trade, in Strasbourg

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