Brussels Edition: Girding for a fight

EU leaders are set to wrangle over the bloc’s next seven-year budget at a summit next week ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Read in browser

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. Ahead of next week’s summit in Brussels, member states are bracing for a fight over the EU’s next long-term budget. It’s 15 months since the European Commission published an initial blueprint for the seven-year financing framework, which will run through 2034. At a mammoth €2 trillion, the size of the package immediately triggered backlash from some nations alarmed at the EU’s ballooning costs. The budget has long been a source of tension, pitting the likes of thrifty Germany, Denmark and Austria to the north against southerners including Italy and Spain who favor more generous spending. German Chancellor Friedrich Merz hosts counterparts from Austria, Denmark and Finland in Berlin, Germany, on Thursday, Aug. 27, 2026. Photographer: Krisztian Bocsi/Bloomberg Tomorrow, Ireland, which holds the bloc’s rotating presidency, will unveil a compromise effort following consultations with countries over the past few months. The €2 trillion figure is virtually certain to be pared back, with Ireland’s Europe Minister, Thomas Byrne, due to announce details in a rare Saturday news conference in the Belgian capital. While focus will be on the numbers, equally important is how the pie will be shared out. For years, there have been growing calls for the EU to direct spending away from areas like agriculture and funding for poorer countries — about half of EU spending — to new priorities like research and innovation and defense. Currently, net contributors to the budget cough up most of the money, one of the reasons why richer states are reluctant to shell out more cash. At a time when countries are facing tough fiscal decisions, expanding the budget is a tough sell. Marine Le Pen, whose party is leading in voter polls ahead of next year’s French presidential election, has threatened to slash France’s net annual contribution if her far-right National Rally party wins power. How she would square budget cuts with a possible reduction in agricultural payouts to France through the common agricultural policy remains to be seen. Nonetheless, the prospect of a Le Pen victory in the spring is one of the reasons why the EU wants a budget agreement sooner rather than later, with Council President Antonio Costa hoping to get it done at the December summit. This week’s announcement of an early election in Spain at the end of November means meeting that timeline could be a challenge given the possibility that the EU’s fourth-largest economy may be in the midst of a political transition heading into the Christmas break. Around Europe The Commission will analyze the potential impacts of imposing a bloc-wide tax on windfall profits made by energy companies, as governments grapple with how best to cushion a price shock heading into winter. Germany wants its candidate for Isabel Schnabel’s vacancy at the European Central Bank to keep her financial-markets portfolio, sources told us. The ECB would like euro-area consumers to be able to use digital euros in all online shops, some physical stores and to make payments to each other right from the start, according to a presentation we’ve seen. EU finance ministers reached a deal over a revamp of markets supervision after a decade-long effort to bring down national barriers and spur private financing. Europe’s banking supervisors are meanwhile carrying out extra checks on the risks around lenders’ multitrillion portfolios of sovereign bonds, the head of the European Banking Authority told us. Seen and Heard on Bloomberg Revolut CEO Nik Storonsky said he wants the digital bank to compete with firms including JPMorgan and American Express in the US, as well as hold a primary listing in the country if it chooses to pursue a public offering. “That was always the target, given the deep liquidity of the US market,” Storonsky told Bloomberg TV. He has previously said he wants to take Revolut public, though that wouldn’t happen until at least 2028, through a dual listing in both the UK and the US. Chart of the Day European bonds stabilized after a week of dramatic swings, with falling oil prices bringing a measure of relief from budget worries. French bonds headed for their first weekly gain in six and Italian notes for their first in nine as yields across the region fell and Brent crude retreated toward $100 a barrel. The comparative calm follows moves that saw French 10-year yields whipsaw as much as 16 basis points lower and 18 basis points higher on successive days this week. Coming up Trade Commissioner Maroš Šefčovič due to brief reporters shortly after talks in Beijing News conference following meeting of EU Finance Ministers this afternoon in Luxembourg EU Ambassadors meet on Sunday Final Thought German spies haven’t always had the best reputation among Western peers. The arrest this week of the country’s former foreign intelligence chief on suspicion of treason is unlikely to help. Prosecutors accuse August Hanning, 80, of arranging access to around 2,000 highly classified documents and peddling the information for his consultant work, including in at least one case with a foreign service. The episode amplified longstanding concerns about Germany’s track record on safeguarding sensitive information. August Hanning Photographer: Michael Kappeler/DPA/AP 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. If something looks off, help us fine-tune your experience by reporting it here. Follow Us You received this message because you are subscribed to Bloomberg’s Brussels Edition newsletter. If a friend forwarded you this message, sign up here to get it in your inbox. Unsubscribe Bloomberg.com Contact Us Bloomberg L.P. 731 Lexington Avenue New York, NY 10022 |