Crypto News: Brussels Edition: Undoing Merkel's legacy

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

If Friedrich Merz takes power after Germany's federal elections next year, the center-right leader would not only repudiate the policies of Chancellor Olaf Scholz, a Social Democrat. He would also try to erase the legacy of fellow conservative Angela Merkel. The pro-business candidate would start by reversing Merkel's open-door immigration policy and trying to reactive nuclear plants. With the German economy in the doldrums and expected to contract further, a recent poll found that 47% of Germans trust Merz to manage the economy, while only 16% trust Scholz. Meet Herr Merz.

— Gian Volpicelli

Ceasefire Rejection | Israel has rebuffed US and EU calls for a cease-fire in Lebanon, and carried on its bombardment of the country. "There will be no cease-fire," Foreign Minister Israel Katz said. US President Joe Biden and France's Emmanuel Macron had been pushing for a three-week truce between Israel and Hezbollah amid concern that Israel is preparing for a ground invasion.

Cash Dearth | The reluctance or inability of Western allies to increase financing to Ukraine risks leaving Kyiv with too few military supplies in 2025, we're told. As Ukraine prepares to confront its third winter since Russia's 2022 invasion, the country's leaders are struggling to convince Western allies to live up to their promises and help Kyiv acquire ammunition, missiles and other hardware.

Spain's Spats | Pedro Sanchez is tussling with leaders all over Latin America. The Spanish prime minister's row with Mexico's President-elect Claudia Sheinbaum — who snubbed Spain's King Felipe VI in her inauguration guest list — follows squabbles with the presidents of Argentina and Venezuela. The tensions are mostly ideological, but their consequences could go beyond that: Spain is one of the region's largest investors.

Pay Pals | The EU's biggest banks have spent years quietly creating a new way to pay that could finally allow customers to ditch their Visa Inc. and Mastercard Inc. cards — the latest sign that the region is looking to dislodge two of the most valuable financial firms on the planet. Wero, as the project is known, is now rolling out across much of western Europe.

US Kitty | The US said it would add $20 billion to a Ukraine aid package backed by the Group of Seven, provided that the EU changes its Russian sanctions regime. In June, G-7 countries agreed to give Ukraine a $50 billion non-refundable loan that would be repaid by frozen Russian assets. Now, the US is demanding that the EU ensure the assets stay immobilized. At the moment, the sanction scheme needs to be renewed every six months.

Deal Maker | Italy's industry minister threw his support behind a potential takeover of Commerzbank AG by Milan-based UniCredit SpA, weighing in on a deal that has threatened to sour relations between Berlin and Rome. "It's a good deal," Adolfo Urso said on Thursday. Large banks that go beyond borders would help create a much-needed banking union, Urso added.

Swiss Bank | Swiss National Bank President Martin Schlegel said the institution is set to continue along its path of easing. In an interview with Bloomberg, Schlegel said that "further cuts could follow" in light of the current situation. On Thursday, the SNB lowered borrowing costs for a third time in a row, sticking with a quarter-point pace and reinforcing that it's willing to do more if needed.

Getting Real | For the past two years, landlords and real estate investors in Europe have been dealing with the bitter fallout of the end of the cheap-money era. But now, signs of recovery are finally appearing: in many European markets, there are signs that valuations are stabilizing or that the rates of decline are at least slowing.

Investors are demanding a higher yield for holding French bonds than Spanish debt for the first time since 2007 as investors question France's ability to plug a hole in public finances. The new government has promised to take tough action to ensure credibility, warning that public deficit risks exceeding 6% of gross domestic product in 2024.

EU foreign affairs head Josep Borrell co-chairs the Global Counterterrorism Forum Ministerial Plenary meeting at the UN general assembly in New York
EU Agriculture Commissioner Janusz Wojciechowski meets with G-7 agricultural ministers in Syracuse, Italy
Pope Francis meets King Philippe of Belgium and Prime Minister Alexander De Croo in Brussels
10.40 a.m. German President Frank-Walter Steinmeier, Italian President Sergio Mattarella joint news conference after talks in Berlin

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