Crypto News: Brussels Edition: Europe’s tipping point

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

The challenges dragging down the European economy have been building for years but officials have been slow to catch on. As the EU wakes up to its lack of competitiveness, the question of how to jump-start the economy will dominate a leaders' summit in Brussels this week. After decades of warnings, a barrage of evidence is making it undeniable that decline could become unstoppable. A divided Europe is now at a tipping point. Northern countries prioritize streamlining the internal market, France and Italy want more investment, and eastern states are focused on defense. Apathy or pushback after Mario Draghi's wake-up call to combat feeble productivity growth underscore how the region risks giving up trying.— Gian Volpicelli

Paris Pitch | European carmakers Stellantis, Renault and Volkswagen are showcasing their latest cheap electric vehicles at the Paris auto show — in a bid to turn around a sales slump triggered by dwindling incentives to ditch combustion engines. The companies are up against competition from cheaper Chinese EVs — and stand to pay fines of up to €15 billion if they fail to meet stricter fleet emissions-reduction targets.

Labor Blues | Worries over the euro-zone labor market are nudging the European Central Bank toward faster interest rates cuts. Europe is enjoying record-low joblessness, but policymakers are noticing signs of a reversal that would justify a reduction in borrowing costs this week. The ECB lacks the US Federal Reserve's twin targets of price stability and full employment, but turmoil in the jobs market affects its inflation outlook.

Lithuania Elections | Lithuania's Social Democratic Party secured its first victory in parliamentary elections in 12 years as voters turned to the opposition party hoping it will close soaring economic disparities in the Baltic nation — one of NATO's most vocal critics of Russia's war in Ukraine. The Social Democrats got about 20% in yesterday's ballot, according to final results from the first round of voting, but their return to office is likely to be complicated by a fragmented parliament.

Snap Vote | Iceland's Prime Minister Bjarni Benediktsson broke up his coalition government and called a snap election for late November. Dissent has been fomenting in the three-party alliance for some time, culminating in Benediktsson's announcement.

Fresh Tensions | Ukrainian President Volodymyr Zelenskiy clashed with Polish Foreign Minister Radoslaw Sikorski in a meeting last month, as the latter put a damper on Kyiv's hopes for fast-tracked EU accession. Sikorski tied Ukraine's membership talks to demands that victims of World War II-era massacres of ethnic Poles be exhumed from Ukrainian land. The rift coincides with mounting war fatigue among Kyiv's Western allies.

Sour Outlook | France's credit outlook was cut to negative by Fitch Ratings a day after Prime Minister Michel Barnier presented his 2025 budget, delivering a rapid critique of his efforts to deal with a sharp deterioration in public finances. Belgium's outlook was also cut to negative by Moody's Ratings on debt concerns and political uncertainty.

Climate Stance | EU member states today will put the finishing touches to their negotiating position for the COP29 climate summit in Azerbaijan next month. But the remaining disputes on the role of nuclear energy and 2040 emissions goals have little to do with what will actually dominate proceedings at the conference: money.

Acid Attack | In 2018, Bernhard Günther, a chief financial officer for German company Innogy, was left disfigured by an acid attack. Günther suspected that a former colleague — known as Mr. X — had commissioned the hit to take him out as a competitor for a prestigious job. When German police failed to make any headway, Günther decided to take matters in his own hands.

German Chancellor Olaf Scholz's Social Democrats are considering fresh subsidies for electric vehicles as a cornerstone of their economic policy in campaigning for the national election due next September. The center-left party wants to boost EV sales by re-introducing a purchase premium for battery-powered cars, providing tax rebates for electric corporate cars, and putting EV quotas in place for leasing providers.

All times CET

2 p.m. Commission President Ursula von der Leyen and German Chancellor Olaf Scholz hold joint news conference at Berlin Process Summit in Berlin
3 p.m. European Parliament committee annual hearing of European financial supervisory authorities: ESMA's Verena Ross, EBA's José Manuel Campa, EIOPA's Petra Hielkema
6 p.m. Scholz, Bill Gates speak at World Health Summit in Berlin
EU foreign affairs ministers meet in Luxembourg with UK Foreign Minister David Lammy attending
EU environment ministers meet in Luxembourg
Major European football leagues and FIFPRO Europe will file a formal EU antitrust complaint against world governing body FIFA

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