| The firewall between the mainstream parties and the far-right Alternative for Germany is under pressure |
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| Welcome to the Brussels Edition, Bloomberg's daily briefing on what matters most in the heart of the European Union. As the German election campaign heats up, the traditional firewall between the mainstream parties and the far-right Alternative for Germany is being tested. Friedrich Merz, the Christian Democratic front-runner for chancellor, is proposing a migration policy shift that echoes some elements of the AfD's views, including permanent border checks and expedited deportations. Over the weekend, some 100,000 people gathered at the Brandenburg Gate to protest against what they termed a "shift to the right." While Merz's proposed bill also included a passage critical of the AfD, he wouldn't object to the party's support in passing the bill through parliament. He's the latest European politician to blur the boundaries in a bid to capture votes. — Kevin Whitelaw | |
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| Wartime Mindset | NATO is moving toward sharing more classified data with the defense industry as it pushes for increased European production, we're told. The data would include highly classified capability targets, which show what what kind of weapons and equipment countries need. The step would require consensus among member states and could happen in the coming months. Pressuring Orban | EU foreign ministers meeting today hope to overcome Hungary's resistance to extending sanctions on Russia for another six months. Budapest has been blocking the move, which requires the backing of all member states, saying at first the decision should wait for Donald Trump's inauguration. Hungary then tied its position to energy security and Ukraine allowing Russian gas to transit to Europe. Another Cut | The euro-area economy's sub-par performance is convincing the European Central Bank that it can lower interest rates for a fourth straight meeting this week. Analysts we surveyed expect data later this weel to show that gross domestic product rose by only 0.1% in the fourth quarter. End of Endgame? | Bankers and regulators are seeing positive signals that the commission may be open to further delaying stricter capital standards for lenders' trading businesses. The shift is being driven by concerns that the Trump administration may scrap plans to update stricter capital standards known locally as Basel Endgame. | |
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| Cable Cut | Another subsea data cable in the Baltic Sea was damaged over the weekend, this one between Latvia and Sweden. Criminal proceedings have been initiated in Latvia and NATO is involved. Latvia's armed forces sent a patrol vessel to inspect a ship allegedly involved in the incident, which follows two others recently. Paschi Pounces | Mediobanco's CEO is preparing to respond to what it considers a hostile €13.4 billion offer from smaller rival Monte Paschi. The bank's board will meet tomorrow to consider its response. The bid shows the bank is now "perfectly healed," according to Prime Minister Giorgia Meloni, after the last acquisition spree sent it on the road to collapse and nationalization in 2009. Lone Survivor | A year ago, Europe had multiple AI startups that could plausibly compete with OpenAI and Google. Now it has Mistral. Other well-financed European startups have sputtered, leaving the French firm alone to convince customers, investors and politicians that Europe can hold its own on the critical technology. Slovak Shift | Slovakia's Robert Fico is at risk of losing his majority in parliament amid a backlash over his policy shift toward Russia. Four coalition lawmakers refused to vote until their demands are met, putting the populist premier short of the votes needed to control the assembly. Fico refused to resign over the weekend after a about 100,000 protested in 20 cities. | |
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| Rising office vacancies are an issue throughout Germany. Yet in the country's banking capital, one of the few cities on the continent with a business district skyline, these empty spaces are increasingly visible. Vacancy rates in Frankfurt grew from nearly 7% in 2019 to just below 10% in the third quarter of last year. This number could grow to as much as 20% by 2028, according to real estate broker Cushman & Wakefield. | |
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| All times CET - 2:15 p.m. NATO Secretary General Mark Rutte and Portuguese Prime Minister Luis Montenegro deliver press statements in Lisbon
- 3 p.m. Commission President Ursula von der Leyen, College of Commissioners take oaths of office at the European Court of Justice in Luxembourg
- EU foreign ministers meet in Brussels, with foreign policy chief Kaja Kallas holding a news conference around 4:45 p.m.
- Von der Leyen meets Luxembourg Prime Minister Luc Frieden in Luxembourg
- Trade Commissioner Maros Sefcovic receives representatives of European steel lobby group EUROFER
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