Thursday, March 27, 2025

Brussels Edition: Ukraine's EU hopes turn critical

Trump's push for Ukraine's resources risks undermining Kyiv's push for EU membership
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Welcome to the Brussels Edition, Bloomberg's daily briefing on what matters most in the heart of the European Union.

Ukraine's bid to secure accession to the EU risks being undermined by US President Donald Trump's push to secure critical minerals in the country. His administration is demanding the "right of first offer" on investments in all infrastructure and natural resources projects under a revised partnership deal with Kyiv, according to a draft of the document we've obtained. The agreement would grant the US first claim on profits transferred into a special reconstruction investment fund that would be controlled by Washington. Aid provided by the US would be seen as its contribution to the facility, effectively compelling Ukraine to pay for all the American support provided since the start of the war. If that wasn't enough, Brussels would likely see the unprecedented expansion of US economic influence as hampering its membership bid.

John Ainger

What's Happening

No Let-Up | A coalition of European leaders rejected the possibility of easing sanctions on Russia, one of Vladimir Putin's demands to agree to a partial ceasefire with Ukraine. That determination risks becoming a major point of tension with Trump as he pushes for a quick end to the conflict in Ukraine.

Car Crash | Europe's carmakers have been left scrambling following Trump's tariff announcement. Porsche will potentially take the biggest hit as it only makes cars in Germany. Alongside Mercedes, the two automakers face a €3.4 billion hit as a result. Ferrari meanwhile, plans to raise its prices in the US by as much as 10%.

Green Concern | The EU must resist pressure to weaken climate targets in order to aid carmakers after Trump said he would slap a 25% tariff on auto imports, Germany's outgoing Environment Minister Steffi Lemke told us. The car industry has already succeeded in winning some concessions.

Euro Renaissance | Trump has piqued Emmanuel Macron's interest in currency markets. After the euro jumped against the dollar, the French president quizzed central bank chief Christine Lagarde on the outlook for the exchange rate in private conversations in Brussels last week, we've learned. The hope is the currency could finally come of age

Around Europe

Free Trillion | Germany is getting €1 trillion in additional funding virtually for free after bond markets reacted positively to its "historic" spending bill, Deutsche Bank Chairman Alexander Wynaendts said. Now it needs to spend the money wisely and advance structural reforms to ensure it stays that way, he added. 

Arrest Warrant | Bosnia-Herzegovina's top court issued an international arrest notice for the country's Serb leader, escalating a conflict with a controversial figure who has threatened to secede from the Balkan nation. Milorad Dodik, the leader of Republika Srpska, Bosnia's ethnic-Serb dominated entity, took steps this month to sever ties with the central government in Sarajevo, stoking concern in Brussels

Carbon Conundrum | France has proposed fine-tuning the design of the EU's carbon markets to avoid high prices and volatility. At a meeting of EU environment ministers in Brussels, the country called for bolstering price-stabilization mechanisms in the bloc's new planned carbon market. Alongside Italy, the country also called for changes to the EU's carbon levy.

Jail Sought | French prosecutors said that ex-President Nicolas Sarkozy should be found guilty and sent to jail for seven years over allegations his 2007 winning campaign was covertly funded by millions of euros from the late Moammar Qaddafi's regime. The Paris criminal court is expected to rule in the coming months. 

Here to Stay | ECB Governing Council member Peter Kazimir may retain his post for some time, despite efforts in his homeland of Slovakia to replace him. The country's two biggest ruling parties are divided on whether he should be reappointed for a second six-year term when his current stint June 1, leaving a potential stalemate. 

Chart of the Day

Austria's economy is set to contract for a third consecutive year in a blow to plans to narrow the budget deficit that are a cornerstone of the country's new coalition government. Gross domestic product is forecast to decrease by 0.3% in 2025, according to revised estimates from the Wifo research institute in Vienna that form the basis of federal fiscal planning. The deteriorating outlook will make the administration's goal of bringing the output gap below the EU limit of 3% of GDP harder to reach amid higher energy costs, and a slump in consumption and exports.

Today's Agenda

All times CET

  • 2:20 p.m. Financial services commissioner Maria Luis Albuquerque speaks at BetterFinance event on the savings and investments union in Brussels
  • 4:30 p.m. European Parliament President Roberta Metsola and Andrej Plenkovic, Croatia's prime minister, speak to reporters in Zagreb
  • EU ministers in charge of cohesion policy meet in Brussels

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