Crypto News: Brussels Edition: A coalition for Ukraine

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

UK Prime Minister Keir Starmer gathered Ukraine's allies in London in a show of support in an intense weekend of diplomatic maneuvering to try and mend the rift between Volodymyr Zelenskiy and Donald Trump. With Europe facing a transatlantic rift, Starmer called it a "once-in-a-generation moment" to reshape security on the continent. The goal is to quickly present the US president a "plan to stop the fighting," including "Europe-plus" security guarantees by a so-called "coalition of the willing," including Canada and Turkey. Now for the hard part: EU leaders will meet in Brussels to try to come up with the billions needed to jumpstart the region's neglected defense industry. Will the Oval Office bust-up be enough to trigger a meaningful response?

— Andrea Palasciano

What's Happening

Rearmament Bank | The idea of a new financial institution aimed at rearming Europe is taking shape. Called the Defence, Security and Resilience (DSR) Bank, this £100bn initiative launched today is meant to provide funding for Europe's rearmament.

Buy Together | Europe needs to coordinate spending on armaments and include Norway and the UK, Norwegian Prime Minister Jonas Gahr Store told Bloomberg TV. He said Norway is ready to work more closely on buying arms together with other European nations and deepening its defense cooperation with the rest of the Nordic members of the NATO alliance and the UK.

Trouble Ahead | Hungary's Viktor Orban urged the EU to enter into direct talks with Russia and pointed to "strategic differences" in the region's approach to Ukraine. The bloc will have to find a way to move past Budapest's opposition if it is to move forward decisively.

Last Cut? | Thursday's widely anticipated reduction in the ECB's deposit rate to 2.5% is likely to be the last step of the central bank's interest rate-cutting cycle that it can easily agree on. Squabbling over how much further to push — and how quickly — is already under way with borrowing costs nearing neutral.

Around Europe

Eastern Resistance | German chancellor-elect Friedrich Merz needs to act fast to make good on a campaign promise to invest more in defense. In the new parliament, parties that oppose increasing military spending in support of Ukraine could block a change to constitutional limits on borrowing. The resistance is mainly in the country's unsettled east.

Putin Pressure | Finland's President Alexander Stubb said neighboring Russia won't stop with Ukraine if it's not countered with strength in any negotiations over a ceasefire or peace. "The only thing that Vladimir Putin understands is power," Stubb said in a Bloomberg TV interview on Sunday in London.

Luxury Purchase | Prada is moving closer to buying Versace after agreeing to a price of nearly €1.5 billion, we've been told. The Milan-based company could finalize the deal for the Italian luxury clothier this month.

Papal Health | Pope Francis is in a stable condition in a Rome hospital, showing signs of improvement days after he suffered a breathing crisis.

Chart of the Day

Global shippers, which logged windfall earnings last year, may see a reversal of fortunes in 2025 as a potential reopening of the Red Sea route and punitive US tariffs loom. Trump's plans to introduce new import levies are damaging trade, while the prospect of a lasting ceasefire in the Middle East could redirect traffic back through the Suez Canal, driving rates lower.

Today's Agenda

All times CET

11:30 a.m. Commission President Ursula von der Leyen participates in a dialogue on the future of the European automotive industry
NATO Secretary General Mark Rutte receives European Parliament's President Roberta Metsola at his residence in Brussels
Tech Commissioner Henna Virkkunen attends the World Mobile Congress in Barcelona

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