Brussels Edition: Merz and Macron’s united front

Merz, Macron present a united front amid divisions on dealing with the EU's competitiveness woes.

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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. German Chancellor Friedrich Merz and his French counterpart Emmanuel Macron made quite the entrance as they arrived at the 16th century Alden Biesen castle in Belgium for an EU leaders' retreat this morning. In an unusual move, the leaders of the bloc's two biggest economies arrived and spoke to the press together. When it comes to competitiveness and the EU single market, "I'm happy that Emmanuel Macron and I agree with each other – as almost always," Merz told reporters standing alongside the French president. The display of bonhomie comes amid divisions between the two European powerhouses about how to deal with the EU's competitiveness woes. Macron used his speech at the Industrial Summit in Antwerp yesterday to make a renewed push for his Buy Europe agenda, arguing that Europe should prioritize local resources in strategic sectors like chemicals, chips and tech. It came ahead of the announcement of the EU's Industrial Accelerator Act next month, which will stipulate the percentage of European inputs that should be included in products and lay out new rules on foreign investment. Minutes after Macron's speech Merz pushed back, warning against a "narrow" approach to "Made in Europe" and arguing that European preference rules should only be used as a last resort. Macron and Merz speak to journalists at an EU retreat in Rijkhoven, Belgium. Photographer: Simon Wohlfahrt/Bloomberg Paris and Berlin are also divided on the issue of common debt, with Macron making the case this week that collective EU borrowings should help bankroll a boost in much-needed investment. Asked about the Franco-German divisions on his way into the summit, Belgian Prime Minister Bart de Wever expressed confidence that a solution would be found, adding that finding compromise is a Belgian speciality. The divisions between the bloc's largest members are not the only points of contention as leaders huddle east of Brussels. Given that the EU is a club of 27 countries with very different economies, agreeing on how best to spur European investment and innovation is a challenge.  Small, advanced economies like the Nordic countries and Ireland, which thrive on free trade and don't have the resources or the desire to reindustrialize, are wary of the bloc turning too protectionist. "Certainly we need more self reliance in core areas... but we must protect the open free trade ethos of the European Union," Irish leader Michael Martin said ahead of today's discussion, capturing the views of many. The Latest Euro-area finance ministers will discuss options to promote the use of the common currency in issuance and transactions at a meeting on Monday, part of the bloc's push to strengthen the euro's global role and assert Europe's financial independence. The EU's top court should invalidate a decision by the European Commission to release more than €10 billion in funds to Hungary over judicial reforms, according to the court's adviser.  EU carbon prices plunged after Merz said the bloc should be open to revising or delaying its carbon market. Thousands of people fled their homes in central Portugal after rising waters burst through the banks of the Mondego River. The crisis has intensified scrutiny of Prime Minister Luís Montenegro's government. The Italian government approved measures aimed at establishing naval blockades to curb migrant arrivals under extraordinary circumstances, hardening its stance on illegal migration. China finalized import tariffs on some dairy products from the European Union at as much as 12% following an anti-subsidy investigation, lower than preliminary rates outlined late last year. Seen and Heard on Bloomberg Siemens expects the boom in artificial intelligence for industry and related software solutions to keep fueling its business, after data center and automation demand rose. Speaking after the company reported first-quarter results that beat expectations, Chief Executive Roland Busch told Bloomberg TV that he was confident that demand for data centers would continue through 2026. "Will those high growth rates keep on going for the next five years or so? I don't know. No one has a crystal ball." Chart of the Day Shares in Mercedes-Benz Group fell today after the German car-maker warned that margins will remain under pressure this year amid tariffs and fierce competition in China. The company has been losing ground to rival BMW of late in the luxury car market, particularly in the sales of electric vehicles. Coming up Press Conference following EU Leaders' Retreat later today at Alden Biesen castle Norway's Central Bank Governor Ida Wolden Bache delivers annual speech Munich Security Conference begins tomorrow Final Thought French far-right leader Marine Le Pen will learn in July whether she convinced judges to overturn an election ban — a decision that will shape who leads the National Rally into the presidential election next year. The Paris court of appeals said it would deliver the crucial ruling on July 7 over embezzlement accusations dating back to Le Pen's time as a member of the European Parliament. At the heart of the case is whether aides, paid with European funds, worked to further her party's domestic agenda rather than focusing on matters in Brussels. Le Pen, ahead of a confidence vote at the National Assembly in Paris, on Oct. 16, 2025. 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