Brussels Edition: Meloni touts free-trade zone

Italy's Giorgia Meloni tells Bloomberg that EU and US should forge free-trade zone

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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. As Europe continues to analyze the impact of last week's Supreme Court ruling invalidating a swath of US tariffs, Italian Prime Minister Giorgia Meloni has a suggestion to get EU-US relations back on track: a free-trade zone between the two trading behemoths. "I consider the tariffs between Europe and the US a mistake," Meloni told Bloomberg in an interview this week. "We should go in a diametrically opposite direction — we should move toward a free-trade area." The EU and US abandoned talks on a free-trade zone in 2016 after efforts to substantially decrease levies and reduce non-tariff barriers triggered a backlash in several member states. Among the sticking points in those talks, known as TTIP (Transatlantic Trade and Investment Partnership), was agriculture. Italian Prime Minister Giorgia Meloni Photographer: Alessia Pierdomenico/Bloomberg Meloni's suggestion comes as the European Parliament has paused ratification of the EU-US trade deal agreed last year, though Brussels says it's still committed to the agreement. German Chancellor Friedrich Merz is to discuss the issue with Trump next week during a visit to Washington. "Like the European Commission, the German government wants to stick to the EU-US tariff deal," spokesman Sebastian Hille told reporters today in Berlin. Meloni also told Bloomberg that the government's role in Banca Monte dei Paschi di Siena has ended, indicating her administration will not be involved in the lender's future governance and strategic decisions. It was "one of those complex dossiers that we inherited and that we managed successfully," she said, describing the bank's rescue and restructuring as "very ambitious." The lender now is "a solid institution," she added. Her remarks come at a sensitive time as the bank prepares to renew its board, a process that could prove decisive for its next strategic phase. Monte Paschi said today it plans to return about €16 billion ($19 billion) to investors through 2030 as it seeks to reap benefits from the acquisition of Mediobanca SpA. Meloni said that while she remains in favor of creating a "third banking hub" in Italy to balance the country's largest lenders, such an outcome "does not depend on us," given the state's reduced holding and its decision not to retain control. The Latest The EU will provisionally apply its trade deal with the Mercosur group of South American countries, European Commission Chief Ursula von der Leyen announced today. Rotterdam, EU's biggest port, is increasingly exposed to geopolitical risks related to trade with China, with around a quarter of all containers arriving from the country, CEO Boudewijn Siemons told us. Hungarian Prime Minister Viktor Orban signaled he may be open to resolving a dispute with EU partners over funding for Ukraine, even as he escalated rhetoric against the government in Kyiv. Poland is moving ahead with a new legislation that would ban social media for children under 15 years old, setting the stage for a potential battle with some of the biggest US tech companies. The Ukrainian military wants to accelerate the production of anti-ballistic missiles for Patriot air-defense systems to help protect against Russian attacks, according to Defense Minister Mykhailo Fedorov. Seen and Heard on Bloomberg IAG has seen a rebound in the North Atlantic demand since the third quarter of last year, and in particular "strong premium leisure demand that we didn't have before," CEO Luis Gallego told Bloomberg TV. "We are positive about the demand this year in North Atlantic." Transatlantic routes are the most lucrative for IAG given that group members British Airways, Aer Lingus and Iberia all operate long-haul flights between the continents. The company today reported an adjusted operating profit of €5.02 billion for fiscal 2025, compared with the €4.99 billion average of analyst estimates compiled by Bloomberg. Chart of the Day Inflation quickened more than anticipated in France and unexpectedly accelerated in Spain — supporting the ECB's stance that further cuts in interest rates aren't needed. Consumer prices in France rose 1.1% from a year ago after a 0.4% increase the previous month — well ahead of the 0.8% median Bloomberg survey of economists. In Spain, inflation inched up to 2.5% from 2.4%. Analysts had forecast a retreat to 2.3%. Price data for the euro area as a whole are due next week. Coming up German Chancellor Friedrich Merz speaks at CDU campaign event in Volkmarsen later today Credit rating decisions including for Poland by Fitch Ratings, and Serbia and Slovenia by Moody's tonight OPEC meeting Sunday Final Thought For decades, Finland allowed Russian investors to buy real estate. While many of the transactions were simple purchases of homes, holiday properties or investment assets, some were close to military bases, airfields, and strategic infrastructure, raising concerns. Bloomberg spoke with more than a dozen people with knowledge of Finland's security architecture, who all expressed alarm about Russian-owned properties. 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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