| Europe is confronting an uncomfortable fact: Its defenses would falter within weeks without US support |
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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 leaders agreed to explore long-term reform of its fiscal rules to boost defense spending, but the outcome of their emergency summit in Brussels will do little to alleviate concerns that Europe is highly vulnerable to attack if it can no longer rely on the US. Despite three years of war in Europe, the continent still lacks basics like sufficient production capacity for gunpowder. With insufficient troops, air defenses and ammunition, the continent is only equipped to repel an invasion on its frontlines for weeks at best without Washington, we've learned. The ramping up of defense spending led by Germany is underway, but hundreds of billions of euros more will be needed and replacing the array of support that the US provides could take more than five years. It's not clear that Europe can afford to wait. —John Ainger | |
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| Orban Isolated | Despite agreeing last night to boost defense spending, the EU had to leave Hungary behind as the remaining 26 leaders pledged continued aid to Ukraine and offered to help provide security guarantees as part of peace talks. The EU may need to consider moving ahead with coalitions of the willing, but Viktor Orban's vote is still needed to push through ambitious reforms — and key steps to help Kyiv. Bond Rout | Germany's biggest bond rout since just after the fall of the Berlin Wall is reverberating globally as markets process the country's defense spending plans. Those commitments have also sent the euro on its best run in a decade. German bond yields, however, remain the lowest in the euro area, reflecting years of fiscal conservatism. NATO Protection | Italy's Giorgia Meloni said Ukraine could be granted the security of NATO even without actual membership. While the Italian prime minister has been seen as a potential conduit between Europe and President Donald Trump, the proposal is unlikely to find the support of the US, which we're told is pressing Ukraine to pursue a quick truce with Russia before it signs a minerals deal with Ukraine. Rates Showdown | ECB officials are bracing for tough negotiations over whether to cut interest rates further or hold fire when they next set borrowing costs in April. Yesterday, they lowered interest rates for the sixth time since June. President Christine Lagarde said the institution doesn't have a role in helping governments finance more defense spending. | |
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| Dueling Launches | Europe took a key step toward reducing its reliance on Elon Musk's SpaceX after the European Ariane 6 rocket took off for its first commercial mission after several delays. The rocket, built by an Airbus-Safran joint venture blasted off from Europe's spaceport in French Guiana and delivered a military satellite to orbit 800 kilometers above Earth. Meanwhile, SpaceX's mammoth Starship spun out of control and broke apart during a test flight late yesterday, another setback less than two months after the company's last mission ended with an explosion.
Starlink Dependence | Ukraine is finding there is no easy way out from reliance on satellite communications from Musk's Starlink. The country is considering moving to European satellite providers, and setting up a mesh of antennas, modems and cables on the ground should they lose access, officials have told us. But the alternatives have drawbacks, and the country can't afford any delay, they said. Greenland Votes | In most other years, an election in a sparsely populated Arctic island would fly largely under the radar. But as voters in Greenland head to the polls on March 11, they'll be doing so under the shadow of Trump wanting to take control of the semi-autonomous territory from Denmark. Here's our explainer. Coup Probe | Romanian prosecutors detained six people suspected of plotting to overthrow the government amid fears of foreign meddling before a presidential vote. Investigations into far-right figures and mercenaries, some linked to frontrunner Calin Georgescu, have raised concerns about the extent of extremist networks in the country. | |
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| Trump's second term in office is pushing many countries to consider bolstering their nuclear deterrence, with the rules-based international order looking more fragile as the US government eschews multilateralism and diplomatic norms. On Wednesday, Emmanuel Macron announced in a televised address that France would open talks with its European allies on extending its nuclear umbrella over the continent over concerns the US might withdraw its protection. In an increasingly insecure world more countries are asking themselves whether they, too, need their own deterrent. | |
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| All times CET - 1 p.m. EU humanitarian aid commissioner Hadja Lahbib holds news conference on women's rights
- EU justice ministers meet in Brussels
- EIB Group Forum in Luxembourg
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