Crypto News: Brussels Edition: Risk of a split

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

Emmanuel Macron's push to enlist China to sketch out parameters for talks between Russia and Ukraine has drawn criticism from some allies who think such an effort is premature and could undermine European unity. Macron's strategy, which envisions a framework for talks between Moscow and Kyiv as soon as this summer, may muddy the waters over Ukraine's demand that Russia relinquish all Ukrainian territory, according to officials in European capitals. Paris has zeroed in on Chinese President Xi Jinping's claim during Macron's Beijing trip earlier this month that he's ready to work toward a negotiation. But some have expressed skepticism that China can serve as a neutral intermediary given its "no-limits friendship" with Russia.

— Lyubov Pronina

Fiscal Deal | The EU will reach an agreement on the review of its common fiscal rules because "we need to and we have to," Eurogroup chief Paschal Donohoe said at an event we hosted near Dublin. He also said relations with China will continue to be an important feature of how the global economy develops in spite of US pressure to decouple from Beijing.

Unfreezing Grain | Ukraine's Black Sea crop shipments resumed after a brief halt that sparked fresh concerns about future cargoes from the key exporter already contending with import bans from some of its EU neighbors. The bloc is looking to allow five countries to ban domestic sale of Ukraine's grain but ensured that exports can transit through.

London Calling | The UK is set to join EU nations in pledging to scale up production of renewable energy in the North Sea as it works to mend relations after Brexit. It will sign a declaration next week to accelerate offshore wind projects, including energy islands, at the Belgian city of Ostend alongside eight other countries, including Germany and France.

Green Team | The EU will form a "green alliance" with Norway to bolster cooperation in clean industries like carbon capture and storage and hydrogen as they look to strengthen the region's potential as an energy technology hub. Carbon capture and storage has emerged as a key path for the bloc to become climate neutral by 2050.

Brexit's Worst | The UK economy is yet to feel the worst impacts of Britain's divorce from the EU, Citibank Europe CEO Kristine Brade said, in spite of Prime Minister Rishi Sunak's efforts to smooth relations with the bloc. Ryanair's CEO Michael O'Leary said the divorce will continue to have a "net negative" impact over the short to medium term.

Chip Rethink | Italian officials hinted in private talks with Taiwan that they may be willing to pull out of a controversial pact with China as they sought to secure help with semiconductors, we're told. Officials from Rome's industry ministry discussed plans to increase cooperation on the production and export of semiconductors during recent meetings in Taipei.

Whisky Flow | International spirits brands have lost control over whether their stock is sold in Russia, due to a government scheme allowing drinks imports without the trademark owners' consent. Johnnie Walker whisky and Remy Martin cognac are widely available in Russia, even though producers stopped exporting to the country after its invasion of Ukraine.

German Money | The German government plans to set up a state fund of up to €2 billion to support mining of raw materials critical to its green transition, with the aim of securing access and cutting reliance on China. The new financing vehicle could start next year if the ruling coalition agrees on the funding, we've heard.

Lifting Veto | Hungary will no longer block the renewal of a legal framework between the EU and 79 countries in Africa, the Caribbean and the Pacific region, Foreign Minister Peter Szijjarto said. The Cotonou pact, which expires in June, will be succeeded by a new treaty that's been blocked until now by Viktor Orban over language related to migration and gender. The pact provides a legal basis for the EU's investment bank to mobilize billions of euros for projects as part of the Global Gateway program, the EU'answer to China's Belt and Road Initiative.

Auto sales in Europe jumped the most since May 2021 as supply of key components including semiconductors continues to improve. New-car registrations jumped 26% in March to 1.42 million, the European Automobile Manufacturers' Association said yesterday, extending the industry's growth streak to eight consecutive months. Carmakers are benefiting from orders accumulated during the worst of their supply crises and a weak year-ago showing.

Commission President Ursula von der Leyen participates in energy and climate forum hosted by US President Joe Biden
European Parliament votes on first EU rules on traceability to crypto-asset transfers

Don't keep it to yourself. Colleagues and friends can sign up here.

How are we doing? We want to hear what you think about this newsletter. Let our Brussels bureau chief know.