Brussels Edition: Euro-area boost

New GDP data today showed that the euro-area economy grew more than expected last quarter

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Welcome to the Brussels Edition. I'm Suzanne Lynch, Bloomberg's Brussels bureau chief, bringing you the latest from the EU each weekday. Make sure you're signed up. There was some welcome news for the European economy today as new GDP data showed the euro-area grew more than expected at the end of last year. Some of the EU's economic behemoths shrugged off the trade turmoil unleashed by US President Donald Trump to post better-than-expected growth. Overall, the euro zone grew by 0.3 per cent in the last quarter of 2025. Germany, Italy and Spain all surpassed estimates, with the latter once again the standout performer with an expansion of 0.8%. At 0.2%, meanwhile, France matched forecasts. The positive news comes as markets digest Trump's pick of Kevin Warsh to succeed Jerome Powell as chair of the Federal Reserve. Confirmation of who will take over one of the biggest jobs in banking when Powell's term ends in May has given some direction to markets after a whirlwind week. Warsh, who will need Senate approval, has aligned himself with the president in recent months by arguing publicly for lower interest rates, a position that belies his longstanding reputation as an inflation hawk. The main market impact so far has been a bump for the dollar, reversing an extended slide, while gold and silver also fell this morning in anticipation of the Warsh announcement. The dollar's rise is likely to be welcomed on this side of the Atlantic, as the European Central Bank looks ahead to its rate-setting meeting next week. Though analysts expect the ECB to keep rates steady, the recent dollar rout this month has given food for thought to decision-makers. The euro briefly traded above $1.20 on Wednesday – the highest since 2021. That's a potential headwind for the euro zone economy given the bloc's dependence on exports. German inflation also edged past 2% ahead of next week's meeting. Separately, in a sign of potential waning enthusiasm for the US investment case, Dutch pension fund PME is pivoting toward more European opportunities, especially in the technology sector. The US is "no longer the reliable ally it once was," PME Chairman Alae Laghrich said yesterday. While Laghrich acknowledged that the US economy can't be ignored, he listed Trump administration policies such as trade tariffs, as well as what he called "threats and not upholding existing agreements" as reasons for the fund's decision. Whether PME's move is a bellwether for a broader investment shift is yet to be seen. The Latest The EU must resist China's pull in clean technologies, even as it confronts the reality that deteriorating relations with the US may be "permanent," the bloc's climate chief Wopke Hoekstra told us. The EU is nearing an agreement on how Ukraine can use the proceeds from a €90 billion loan from the bloc, particularly with regard to how non-EU countries can participate in purchases that use funds from the loan. The number of Russian soldiers killed in action in the war on Ukraine has jumped in recent weeks, a dynamic that — if sustained — could make it hard for the Kremlin to replace troops without some form of mobilization, according to European estimates.  Leaders from three mainstream Dutch political parties agreed on a coalition accord that will pave the way for a new minority government to take office as soon as next month. Seen and Heard on Bloomberg Hungarian Prime Minister Viktor Orban will continue to oppose Western financing to Kyiv and block Ukraine's potential future accession to the EU, according to Foreign Minister Peter Szijjarto. "We will not let the money of the European people be sent to Ukraine as long as we are in office," he told Bloomberg Television. He also defended the country's growing consumption of Russian energy. "Hungary is in a very dangerous, vulnerable situation with the Russian gas and oil being phased out," Szijjarto said of the EU plan. "This is an extremely harmful decision." Chart of the Day Chinese automakers built nearly one in 10 passenger cars sold in Europe last month, a record share that caps a year of rapid growth led by brisk sales of hybrid and battery-powered vehicles. Chinese brands accounted for 16% of Europe's electrified car market in December, and 11% for all of 2025, more than doubling from 2024. Coming up Meeting of European People's Party in Zagreb, through Saturday. German Chancellor Friedrich Merz, European Commission President Ursula von der Leyen and European Parliament President Roberta Metsola among those attending S&P credit rating decision on Italy tonight Final Thought The Wallenberg dynasty is corporate royalty in Sweden, known for its strict hierarchy, sense of civic duty and firm-handed guidance. It is undergoing a succession effort, with the fifth generation leadership nearing retirement age and the next generation of leaders set to inherit a $40 billion business. Bloomberg's Francine Lacqua sits down with Peter Wallenberg Jr., one of the three men leading Sweden's Wallenberg family empire, and in charge of succession planning. Like the Brussels Edition? Don't keep it to yourself. Colleagues and friends can sign up here. How are we doing? We want to hear what you think about this newsletter. Let our Brussels bureau chief know. We're improving your newsletter experience and we'd love your feedback. 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