Welcome to the Brussels Edition, Bloomberg’s daily briefing on what matters most in the heart of the European Union.

President Donald Trump is doubling down against one of his favorite targets in the increasingly hostile tit-for-tat of tariffs between the US and EU: wine, champagne and spirits. Trade Commissioner Maros Sefcovic is due to speak to his US counterpart later today to try to deescalate the situation, after president Trump threatened levies of 200% on French and other European alcoholic products, a sector he also targeted in his first term. The measure would be a response to the EU’s own retaliatory measures — the bloc has promised to hit whiskey and bourbon over the US’s tariffs against European steel and aluminum, which took effect earlier this week. The EU’s foreign policy chief, Kaja Kallas, told us that China stands to gain from the trade fight between allies. 

— Max Ramsay

What’s Happening

Ceasefire Talks | Russian President Vladimir Putin said he supports “the idea of ending this conflict by peaceful means” but wants to discuss a proposed ceasefire in Ukraine with Trump. During a White House visit by NATO Secretary General Mark Rutte, Trump said he would love to talk to Putin, adding, however, that if Russia doesn’t sign on to the truce “that’ll be a very disappointing moment for the world.” The Russian president also suggested energy cooperation with the US could boost flows to Europe, sending gas prices falling. 

Rearming Europe | It may take more than 10 years for European NATO members to bolster their defense sectors, according to an analysis from Bloomberg Intelligence. It found the 15 largest European members of the alliance may need to ramp up investment by $340 billion-$720 billion annually and large-scale rearmament will be slowed down by contractors’ huge backlogs. 

Merz’s Test | German lawmakers from across the political spectrum attacked prospective chancellor Friedrich Merz for seeking to push through a debt-fueled financing package before the new parliament is seated. The conservative leader defended his plans as a necessary response to weaker transatlantic ties under President Trump. Germany’s top court meanwhile rejected a suit seeking a recount of the votes cast in last month’s election.

Targeting Tycoons | The EU is nearing an agreement to extend sanctions on individual Russians, including a number of billionaires, after Hungary dropped its opposition. The bloc has started a so-called written procedure lasting until Friday morning, paving the way for a six-month prolongation of sanctions after three names were de-listed as requested by Budapest, we’re told.

Chinese Mafia | Chinese organized crime syndicates are defrauding the EU out of billions of euros in tax and customs revenue, according to the bloc’s chief public prosecutor Laura Kovesi. These groups are using sophisticated networks of fake companies that exploit regulatory blind spots, Kovesi told us. 

Around Europe

Voting Again | Portugal will hold an early election on May 18, its third in just three years, after parliament toppled Prime Minister Luis Montenegro’s center-right minority government in a confidence vote. The collapse may delay some key decisions, including a plan to privatize state-owned airline TAP SA this year and investments in infrastructure. 

Greece’s Turnaround | Greece could be about to rid itself of the last vestiges of its debt crisis. A credit rating upgrade later today by Moody’s Ratings — the only major ratings company that doesn’t have Greece at investment grade — would be a symbolic end to the junk territory it entered 15 years ago. 

Dutch Turmoil | Dutch Prime Minister Dick Schoof said he held “constructive talks” with the coalition parties, signaling a compromise within the government over the EU’s latest defense spending proposals, holding off a government crisis. “I had good and constructive discussions” with the parties, Schoof said in a Thursday evening statement. 

Egg Shortage | EU wholesale egg prices have climbed to the highest level in more than a decade, up 12% since late December. Higher feed costs have added to a shortage caused by bird flu outbreaks. The US is also battling soaring prices and seeking supplies from across the globe. 

Demographic Dilemma | Eastern Europe is experiencing its lowest birth rates in 250 years. As the issue becomes increasingly urgent, the Croatian government is among the most active looking for solutions — and one of the most willing to accept migration as part of efforts to find a fix.

Chart of the Day

France’s long-term borrowing costs are nearing the highest level in over a decade, after rising more than 40 basis points this month due to a selloff in European bond markets ignited by Germany’s spending plans. Later today the country may get a downgrade of its sovereign rating, with Fitch Ratings scheduled to review its AA- credit score. 

Today’s Agenda

All times CET

• 9:40 a.m. EU financial services commissioner Maria Luis Albuquerque gives a speech at a Spanish Banking Federation event in Madrid
• 2 p.m. EU industry chief Stephane Séjourné gives a press point while on a visit Taragona, Spain