Crypto News: Brussels Edition: Sidestepping sanctions

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

Even though the EU has targeted Russia with 10 rounds of sanctions since its invasion of Ukraine, Moscow appears to be finding ways to secure crucial semiconductors and other technologies. Russian imports in general have largely returned to pre-war 2020 levels and we're told that analysis of trade data suggests that advanced chips and integrated circuits made in the EU and other allied nations are being shipped to Russia through third countries such as Turkey, the UAE and Kazakhstan. Shipments from China to Russia have also surged. The data imply that the real impact in some areas is falling short of what officials had hoped for.

— Kevin Whitelaw

Not So Fast | Luxury sports-car makers Porsche and Ferrari are surfacing in a debate over the EU's plan to kill the combustion engine, and are a key reason why Berlin and Rome are balking over a ban agreed on last year. The move shook Brussels, and reopened questions around e-fuels. Commission President Ursula von der Leyen and German Chancellor Olaf Scholz said yesterday that they're in constructive talks to resolve the dispute.

Green Talks | Von der Leyen will seek to clinch the outlines of a trade accord when she meets President Joe Biden in Washington this week. The talks — aimed at preventing a subsidies race and giving the bloc access to some benefits included in a US climate package — will focus on access to critical raw materials, labor and sustainability.

Inflation Battle | ECB President Christine Lagarde has her work cut out to bring inflation down to 2%. Traders are pushing up rate bets and sending key bond yields to decade highs. At the same time, a surge in long-term inflation expectations suggests the central bank is seen by some as not aggressive enough. Lagarde confirmed another half-point hike is "very likely" in its March decision.

Arms Spat | As NATO allies try to display unity in support of Ukraine, a rift between Germany and Poland risks undermining a joint effort to supply Kyiv's forces. Polish leaders are taking every opportunity to take aim at Berlin — a favorite target — as they argue over missiles, tanks and spare parts. Ammunition will top the agenda when EU defense ministers meet starting tomorrow in Stockholm.

French Protests | Strikes in France to protest against government pension reforms hit Electricite de France for a third straight day after workers cut output at a number of nuclear reactors. The labor strife, which is spreading to the trucking industry with action by freight haulers today, is a warmup to nationwide protests planned for tomorrow.

Estonia Vote | Estonian Prime Minister Kaja Kallas won a commanding victory in yesterday's election, fending off a challenge from a far-right party. Popular at home and abroad for her unwavering support for Ukraine, the 45-year-old outperformed pre-election polls and looked to be in a strong position to form a new government.

Pipeline Outage | Exports via a major pipeline, which delivers natural gas to mainland Europe from the UK through Belgium, have been shut due to an equipment failure. The halt to the link's export capacities, which comes during a cold snap, is expected to last until Wednesday. The pipeline is a key source of supplies to the EU after severe cuts in exports from Russia.

Meloni Defiant | Prime Minister Giorgia Meloni defended Italy's actions over a migrants shipwreck off the coast of Calabria. Meloni said she isn't planning to remove Interior Minister Matteo Piantedosi, who has been criticized over his handling of last month's disaster, in which at least 70 people, including children, lost their lives.

Among rich nations excelling at early-years child care, Iceland ranks second only to Luxembourg, according to Unicef. It balances affordability with high quality, in addition to generous leave policies for parents. Iceland spent 1.8% of its GDP on early-childhood education and care, more than double the average of other OECD nations.

2 p.m. Chancellor Scholz, Economy Minister Robert Habeck and Finance Minister Christian Lindner give a joint news conference after a two-day German government retreat in Meseberg north of Berlin
Von der Leyen takes part in a Saxony regional government cabinet meeting in Brussels
NATO General Secretary Jens Stoltenberg meets officials from the conservative CDU/CSU bloc in Berlin
Vice President Vera Jourova in New York for the 67th Commission on the Status of Women

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