Crypto News: Brussels Edition: Split on next steps for Ukraine

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

NATO allies are wrestling with how to deepen ties to Ukraine, short of immediately making it a member as long as Russia presses its invasion. While the eastern flank is pushing for a more concrete membership roadmap, the US and other allies instead stress the need for practical support. Countries are cautious given that NATO's Article 5 security guarantees would involve them in the war. The alliance's foreign ministers will discuss the question today as they continue their meetings in Oslo. They want to lay the groundwork for a leaders' statement in July that moves beyond repeating a 2008 promise that Ukraine will eventually become a member.

— Natalia Drozdiak and Lyubov Pronina

Stability Risk | Higher interest rates are testing the resilience of households, companies, governments and property markets, the ECB said yesterday in its Financial Stability Review. That leaves investors potentially exposed to disorderly adjustments, it cautioned.

China Discord | The US and the EU are still struggling to agree on specific ways to slow China's technological rise and limit its coercive trade practices even as both have signed onto the need to "de-risk" their relationships with Beijing. The two sides emerged from a high-level trade meeting in northern Sweden with a joint document that largely avoids mentioning Beijing.

AI Divide | Biden administration officials are divided over how aggressively new artificial intelligence tools should be regulated. Competition chief Margrethe Vestager said the EU is working on new, voluntary plans for AI regulation with the G-7, Indonesia and India. She's handed a copy over to US Commerce Secretary Gina Raimondo to review.

Raw Need | EU members are considering requiring at least half of the bloc's critical raw-material needs to be produced domestically, in an effort to better prepare for the clean-energy transition. We're told that a proposal put forward by Sweden, which holds the rotating presidency, would boost the requirement from 40% initially laid out by the commission.

Strike Stance | The US and European allies urged caution on whether Ukraine should have the right to strike inside Russia, amid concerns that a potential escalation could drag them into a broader war. Countries supporting Ukraine are taking varying stances on how it should beat back Moscow's invasion, as Russian territory is increasingly targeted.

Palm Lobby | Indonesia and Malaysia, the world's top palm-oil producers, stepped up their lobbying over the EU's new deforestation rules, saying they are harming their economies. The rules will ban commodities ranging from palm oil to cocoa, as well as some manufactured products like furniture, if they come from deforested land.

Debt Burden | Emmanuel Macron's economic transformation of France is starting to show cracks as its massive debt burden becomes ever harder to manage. The president's reliance on growth-enhancing reforms to curb borrowings and his frequent recourse to crisis spending are meeting increasing skepticism from ratings firms.

Landmark Step | Latvia's parliament elected long-time Foreign Minister Edgars Rinkevics to be the Baltic nation's new president, making him the EU's first openly gay head of state. Appointed by Prime Minister Krisjanis Karins's ruling party earlier this month, he has been a consistent advocate for supporting Ukraine and a strident critic of the Kremlin.

Takeover Probe | The Dutch government will start an investigation into the takeover of a local chipmaker by a Chinese-owned firm as the Netherlands steps up controls of the industry amid a chip spat with the Asian nation. The country will get new powers to stop foreign takeovers of Dutch companies on national security grounds under a law taking effect today.

Criticism Pushback | Polish President Andrzej Duda hit back at criticism from the US and the EU over a law that would potentially put the country's opposition leader Donald Tusk under investigation ahead of a crucial election, saying the objections are unjustified. Duda offered to speak with US President Joe Biden directly to explain new legislation that would create a special committee to probe alleged Russian meddling in Poland.

French inflation eased to its lowest level in a year and Germany's fell more than expected, though Italy overshot analyst expectations, underlining the challenge for the ECB as it nears the end of its unprecedented campaign of interest-rate hikes. Money-market traders trimmed rate bets and are no longer fully pricing another 50 basis points of hikes this year. While the retreats in headline inflation will be welcomed by the ECB, Italy's above-estimate reading and signs that core price pressures excluding energy and food costs remain elevated mean policymakers can't relax.

All times CET

11:30 a.m. ECB President Christine Lagarde speaks at German Savings Banks Association congress in Hanover
NATO foreign ministers meet in Oslo, with alliance chief Jens Stoltenberg holding news conference at 1 p.m.
European Political Community leaders meeting in Moldova
EU transport ministers meet in Brussels
European Parliament debates position on expediting ammunition deliveries to Ukraine
Two-day meeting of foreign ministers from the Council of the Baltic Sea States begins in Wismar

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