Crypto News: Brussels Edition: Turbulent times for Rutte

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

Ukraine and Russia will be watching as Dutchman Mark Rutte becomes NATO's 14th secretary general. The task ahead is momentous for the former prime minister, who will have to keep the 32 allies together to continue supporting Kyiv while avoiding an escalation with Moscow. The outcome of the US election will be a test: a second Donald Trump presidency could shake the alliance despite the two men's good rapport. Rutte will also have the delicate task of smoothing wrinkles in NATO's relationship with the EU, as the bloc wants to boost its defense. For that, he's likely to draw on his long experience as an EU leader.

—Andrea Palasciano

Crisis Call | The bloc's top diplomat, Josep Borrell, called the growing crisis in the Middle East a "moment of truth" for Lebanon after chairing an emergency virtual meeting of EU foreign ministers. Repeating his pleas for an immediate cease-fire in a statement to reporters afterwards, he said that "any further military intervention will dramatically aggravate the situation and it has to be avoided." Israel has begun what it's described as "targeted ground raids" in southern Lebanon

Delivering Missiles | German Foreign Minister Annalena Baerbock expressed support for Ukraine's request for long-range Taurus cruise missiles in an interview with Bloomberg TV, putting her at odds with Chancellor Olaf Scholz who has ruled out sending the weapons over fears it could trigger direct conflict with Russia.

Pro Mergers | ECB chief Christine Lagarde reinforced her support for international banking tie-ups in the euro zone, saying they can produce many upsides including a greater ability to compete with foreign rivals. Asked about a potential takeover of Commerzbank by UniCredit, she said that if such steps produce larger and more agile institutions, they can have "lots of benefits."

All Answers | French politician Marine Le Pen promised to "answer all questions" during her ongoing Paris trial where she and her National Rally party are accused of diverting millions of euros in EU funds. Her influence on French politics has never been greater with her ability to wield a de-facto veto over policies set by new Prime Minister Michel Barnier.

Bond Rush | Swedish landlords are returning to the bond markets in numbers not seen since the 2021 boom, aided by the unwinding of tight monetary policies. Last year, they found themselves in the epicenter of a funding crisis that would ripple across the continent. Now, with interest rates moving in the opposite direction, the floodgates have begun to reopen.

Pay Overhaul | The Dutch government is re-assessing a cap on bank bonuses as lenders argue the restrictions make it harder to attract top talent. Banks have long cited the country's stringent pay regulations as a major impediment when hiring and retaining executives.

Workers Needed | Scholz said Germany must attract more skilled workers from abroad to help get the struggling economy back on track. Germany's potential output growth is expected to fall below 0.4% in coming years, largely because of an aging population. To fill the gap, Scholz's ruling coalition has tried to bring in more skilled laborers — an effort becoming difficult as anti-migrant parties have gained support.

Looming Cut | Lagarde said the ECB is becoming more optimistic that it will be able to get inflation under control, and will reflect on that at its October interest-rate decision. In the meantime, Italian inflation sank below 1% — heaping more pressure on the ECB to accelerate rate cuts.

Germany's government is poised to cut its forecast for Europe's biggest economy and now expects no expansion at all this year. Such an outcome would mean yet another lost year for an economy that has been weighed down by the weakness of an industrial sector hit by a Russian gas cut off after the invasion of Ukraine, feeble demand in China and its own struggle to pivot to electric vehicle production.

All times CET

9 a.m. Handover ceremony between Jens Stoltenberg and new NATO Secretary General Rutte, followed by a press conference
3 p.m. European Commission president Ursula von der Leyen speaks at a ceremony for CERN's 70th anniversary in Geneva

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