Evening Briefing: Europe

Poland neutralized a drone flying over government buildings on Monday evening and detained two Belarusian citizens over the incident. Prime Minister Donald Tusk said that the drone had been spotted over the Belweder Palace, an official presidential residence, and government buildings in the center of the Polish capital. An investigation into the incident continues, he said in a post on X.

State Protection Services spokesman Boguslaw Piorkowski told Bloomberg News that the drone was secured with “no shots fired.” It comes less than a week after Poland’s airspace was violated by around 20 Russian drones, prompting widespread concern about the bloc’s ability to fend off future incursions.

There is also heightened tensions on NATO’s eastern flank, as Belarus hosts Russian troops for a series of military drills known as Zapad.

Last week, Poland requested additional air defense systems and counter-drone technology from its European allies. Several have offered assistance, with the UK recently announcing that its fighter jets will fly air defense missions over Poland to counter aerial threats from Russia as part of the alliance’s Eastern Sentry mission. — Joao Lima

What You Need to Know Today

BlackRock is among a group of money managers to have lost credit mandates from one of Europe’s largest pension funds, according to people familiar with the matter. PFZW, a €250 billion ($295 billion) sustainability-focused pension fund in the Netherlands, has removed BlackRock and Janus Henderson Group from its list of external managers overseeing the credit portfolio. The changes come amid a broader overhaul at PFZW, which has made clear it wants its asset managers to treat sustainability risks on an equal footing with other financial considerations.

Citigroup’s family office clients are seeking out risky bets in private markets to drive returns, even amid heightened global trade uncertainty. Almost three-quarters of investment firms for the world’s super-rich are looking to acquire stakes directly in companies, with startups among the most popular areas, Citi found in a survey of 346 global family offices representing an average of $2.1 billion in net worth. Private equity saw the most notable bullish shift, with 36% of respondents saying they increased their allocations to the asset class over the last year, while only 10% cut back.

US auto safety regulators opened an investigation into whether some Tesla vehicle doors are defective, citing incidents in which exterior handles stopped working and trapped children inside. The National Highway Traffic Safety Administration said today it’s opening a preliminary evaluation of Tesla’s electrically powered door handles becoming inoperative due to issues with certain vehicles’ low-voltage batteries. While the probe specifically focuses on an estimated 174,290 Model Y SUVs, the regulator said the investigation could widen.

The exterior handle of a 2023 Tesla Model Y. Photographer: Sarah Anne Ward/Bloomberg

Israel started a long-threatened push into the heart of Gaza City after US President Donald Trump’s top diplomat warned Hamas there’s a “very short window” for negotiations to end the war. The Israel Defense Forces said its troops have begun an “expanded” ground operation in the de facto capital of the Palestinian territory after weeks of airstrikes and incursions into the outskirts of the city. Meanwhile, a United Nations-commissioned report concluded Israel is committing genocide against Palestinians in Gaza, and called for the international community to fulfill its legal obligations to end it and “punish those responsible.”

Smoke rises following an Israeli strike in Gaza, on Sept. 16. Photographer: Menahem Kahana/Getty Images

The EU is moving too slowly in its efforts to boost economic competitiveness, with the region “failing to match the speed” of a changing global order, former ECB President Mario Draghi said. A year after presenting a report mapping out how the 27-member bloc can leverage its economic strength into greater competitiveness and prosperity, Draghi said Europeans are “disappointed” by the pace of change in a fragmented region. Citizens see that the EU is failing to keep up with global rivals, he said.

The euro hit its strongest level in four years as traders prepared for an interest-rate cut from the Federal Reserve this week that will cement its diverging trajectory from the ECB. The common currency climbed to its highest since September 2021 on Tuesday, gaining as much as 0.7% to $1.1847. It’s up about 14% in 2025, set for the best nine-month performance on record. The prospect of three full 25 basis-point Fed rate reductions by year-end, combined with expectations that the ECB won’t cut further, is set to narrow the gap between the two central banks’ key rates.

US President Donald Trump signaled he was open to some concessions to the UK on trade to help ease implementation of their tariff deal ahead of a trip to the country. “They want to see if they can refine the trade deal a little bit,” Trump told reporters today at the White House as he prepared to leave for London for a second state visit. “We’ve made a deal, and it’s a great deal, and I’m into helping them.” Britain was the first country to strike a trade deal with the US that saw it avoid some of the higher tariffs that Trump has levied on other trading partners, but the initial agreement was short on many key details, leaving those to further negotiations.