Brussels Edition: Call for unity

EU officials and leaders are rushing to strengthen their ties

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Welcome to the Brussels Edition, Bloomberg's daily briefing on what matters most in the heart of the European Union. EU officials and leaders are rushing to strengthen their ties as concerns loom that Donald Trump will make good on his pledge to put "America First" by trying to divide and conquer the bloc through tariffs. The commission urged member states in a private meeting last week to remain united, with some comparing the situation to Brexit negotiations, we're told. At that time, the UK tried to undercut the bloc's strength by seeking bilateral deals. As many European countries struggle with economic angst and political paralysis, Germany's Olaf Scholz, France's Emmanuel Macron and Denmark's Mette Frederiksen have traveled around the region in recent weeks to discuss the risks that a weakened EU might face from the new US administration.  — Andrea Palasciano

What's Happening

Supporting Ukraine | When it comes to finding money for Ukraine, financial services commissioner Maria Luís Albuquerque told us that the EU "should keep an open mind on every possible solution" — including confiscating Russian central bank assets mostly held by Euroclear. Her remarks came as a debate heats up over the assets, with some countries warning of the consequences of a seizure. ECB Rate Cut | The European Central Bank is set to lower interest rates for a fifth time. Such a move would reflect confidence that inflation will soon converge with the bank's 2% target. Policymakers hope that it could also breathe life into the region's sluggish economy at a time when political uncertainty is weighing on business investment and keeping shoppers at home. EV Setback | China's big push into Europe's EV market fizzled in 2024 due to a combination of trade barriers and a slowdown in demand. After an investigation determined that China's EV industry had unfairly benefited from state aid, the EU imposed extra tariffs at the end of October. Months of talks didn't resolve the dispute, leading Brussels to tack new fees onto an existing 10% import duty. Musk Meddling | Elon Musk is stirring up Germany in advance of its federal election next month. The billionaire's enthusiastic endorsement of the far-right Alternative for Germany party — as well as his flirtations with Nazi symbolism — have unsettled the country's establishment at moment of political and economic vulnerability. Polls suggest that the nationalist party is gaining ground.

Around Europe

Not Bothered | ASML CEO Christophe Fouquet brushed off concerns that demand for the Dutch company's chipmaking machines might falter as a result of the market shakeup caused by China's DeepSeek. "Anyone that lowers cost is good news for ASML," he said, announcing strong fourth-quarter results fueled by the AI boom. Sans Budget | A parliamentary committee convenes in France today to hammer out a compromise budget capable of generating enough support to avert another government collapse. Lawmakers will attempt to modify the 2025 finance plan to reflect concessions made by the administration of Prime Minister Francois Bayrou, who faces a no-confidence vote next week. Better Ties | Switzerland will remove the EU from its stock market protection list, rolling back a measure imposed in 2019. The move comes after both parties agreed to revamp their relationship. The bloc removed restrictions last year on EU firms trading in Swiss equities, and Switzerland agreed to a deal that would ensure its access to Europe's single market. Darkest Hour | ESG investors are not having an easy time. Funds complying with the EU's strictest ESG standards suffered record outflows last quarter. In the US, ESG fund managers just had their worst-ever year. And a record number of funds have now decided to scrub ESG from their names altogether.

Chart of the Day

Spain's economy showed the strongest performance among the biggest members of the euro zone in 2024. Record tourism and domestic demand propelled GDP to jump 3.2% last year, beating expectations and extending a growth streak that began in 2020. Germany, France and Italy will release their GDP numbers today. But their output is either shrinking or rising slowly.

Today's Agenda

All times CET 10:30 a.m. EIB press conference announcing annual results 1 p.m. Commission executive vice-presidents Raffaele Fitto and Roxana Minzatu speak at a conference on growth in Krakow, Poland 2:45 p.m. Press conference following ECB governing council meeting in Frankfurt

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