Crypto News: Brussels Edition: EU's Fiscal Rule Quagmire

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

The EU risks missing its target to reach a preliminary agreement on the reform of its debt-limit rules by March, with Germany particularly doubtful about some of the proposals. Talks at a technical level have not progressed well, we are told, amid criticism by some member states about the vagueness of the European Commission's initial plan. Berlin continues to oppose offering debt-reduction plans adjusted to member states and believes that there's a long way to go before a deal could be reached, German officials tell us. A return to the old fiscal rules next year could lead to severe budgetary adjustments in times of economic turbulence and more funds required in the global clean tech race.

— Jorge Valero

Major Reshuffling | Hungary's nationalist government ousted hundreds of senior military leaders in the most far-reaching overhaul since joining NATO. Defense Minister Kristof Szalay-Bobrovniczky told us the dismissals affect the top ranks, with colonels and lieutenant colonels making up the biggest share, though he said the purge is not about filling the military with political loyalists.

No Planes | NATO partners must cross yet another red line and send fighter jets and long-rage missiles to Ukraine, Lithuanian President Gitanas Nauseda said. But Kyiv's biggest allies are not willing to dispatch planes to the country. Meanwhile, Russia is likely trying to push for a new axis south-west of Donetsk in order to divert Ukrainian forces from the heavily contested Bakhmut sector, the UK defense ministry said. Read our rolling update.

Beijing Responds | China lashed out at the Czech Republic after incoming President Petr Pavel spoke with Taiwan leader Tsai Ing-wen, saying the move amounted to "serious interference" in its affairs. "This is a blatant violation of the Czech Republic's political commitment to the one-China principle," Foreign Ministry spokeswoman Mao Ning said in Beijing, referring to the government's position that Taiwan is part of China.

Fueling Hope | A $3 billion deal between a German auto supplier and semiconductor maker to produce chips for electric cars in Germany may bring some optimism to the automotive industry. On Wednesday, the country's leadership will join executives to celebrate the project, seeking to appease workers who may fret that the transition to electric vehicles risks locking them out of their jobs.

Hydrogen Push | France and eight other EU member states are calling to include hydrogen made by so-called "low carbon" technologies, like nuclear power, in the bloc's renewable energy directive, according to a letter we've seen. The debate over which fuels are used to produce hydrogen, key in the bloc's efforts to reach its carbon neutrality target, is threatening to undermine talks over boosting renewable energy.

Kept Afloat | The euro area is on course to avoid a recession after unexpectedly growing at the end of 2022. GDP edged up by 0.1% in the final quarter, Eurostat said Tuesday, partly thanks to France and Spain's expansion and stronger-than-anticipated data from Ireland. Despite the double-digit inflation, a mild winter has helped to calm energy markets and avoid a more severe economic impact.

Taking Note | China is closely watching Russia's war in Ukraine and learning lessons that may influence future decisions, NATO Chief Jens Stoltenberg said. "What is happening in Europe today could happen in east Asia tomorrow," he added during his visit to Japan. Japanese Prime Minister Fumio Kishida said that his country will consider taking part in various NATO meetings regularly.

Fair Game | Spanish judges warned FIFA and UEFA not to interfere in preparations for a breakaway European Super League. Threats to punish teams and players are "particularly serious" coming from organizations "holding a monopoly" and abusing their dominance in the football market, according to the decision that we've seen from Jan. 30.

Brexit Millionaires | The ramifications of the Brexit shift could be found in JPMorgan Chase's top earners. In 2015, the year before Britain voted to quit the EU, nobody at the bank's Frankfurt-based division took home more than €1 million. By 2019 there were nine and by 2021 the number had risen to 85. (OVERNIGHT STORY BY WILLIAM SHAW).

Catalan Saga | EU judges paved the way for the extradition of Catalan separatist leader Carles Puigdemont after ruling that a Belgian court could only block his return if there's a serious risk he might not get a fair trial in Spain or the court requesting the extradition lacks jurisdiction. Puigdemont led a botched independence campaign in 2017 and fled to Belgium.

Falling values are the latest headache for landlords in Europe who need to refinance their debt -- and for their lenders too. There's a gap of €51 billion between the amount owed by commercial property owners across Germany, France and the UK and the credit likely to be available for refinancing when the borrowings mature, according to researchers. That includes a shortfall of €32 billion predominantly caused by the decline in prices.

All times CET

9 a.m. Health Commissioner Stella Kyriakides speaks at Conference on cancer in Stockholm
2 p.m. Climate Chief Frans Timmermans speaks at European climate pact event
7:45 p.m. EU foreign policy chief Josep Borrell speaks to European Parliament on Afghanistan
College meets to adopt EU's Green Deal Industrial Plan.

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