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.

The EU has long had an image problem when it comes to regulation. Fabled stories about bans on bendy bananas highlighted excess Brussels bureaucracy and fueled decades of British euroskepticism.

More recently, the bloc has taken on board complaints that the regulatory regime is too onerous and stifling investment and innovation. Before starting her second term, European Commission President Ursula von der Leyen promised to reduce burdens on companies.

This morning, two of the EU’s flagship regulations faced scrutiny.

As John Ainger reports, the Commission will today sign off on changes to its landmark deforestation law. Companies will have six months of leeway to comply. Despite the delay, it’s a win of sorts for environmental campaigners, given that the bloc had originally planned to delay implementation by a year.

But the changes — which need to be endorsed by the European Parliament and the Council — show how good intentions on climate are confronting demands of businesses and concerns about about competitiveness.

Meanwhile over in Luxembourg, one of the EU’s marquee tech regulations got a drubbing at the General Court in Luxembourg, as Apple presented one of the most far-reaching legal challenges of the bloc’s Big Tech antitrust regime.

The new iPhone 17 smartphone. Photographer: Angel Garcia/Bloomberg

As Sam Stolton reports, Apple contested the 2023 Digital Markets Act at the EU’s second-highest court on three fronts, including obligations to make rival hardware work with the iPhone and submitting the hugely-profitable App Store to the rules. The EU countered by claiming that Apple’s “absolute control” over the iPhone has allowed it to generate “supernormal profits in complimentary markets where its competitors are handicapped.”

The two stories illustrate how the EU is on the defensive when it comes to regulation.

Hanging over all the discussion is the wary eye of the White House and the risk of renewed tensions. Donald Trump has made no secret of his disdain for Europe’s tech laws, and the EU-US trade deal agreed to this summer included a promise from Brussels to address American concerns about the deforestation rules.

The EU may be proud of the Brussels Effect — the influence that the EU exerts by shaping rules and standards that are adopted around the world — but its aim to be the world’s regulatory policeman is facing its toughest challenge yet. 

The Latest

• European leaders said they “strongly support” an immediate halt to Russia’s war in Ukraine along current battle lines as they try to renew momentum toward ending the war.
• The US is balking at an EU-led plan for G-7 nations to expand the use of frozen Russian assets to support Ukraine, Bloomberg’s Kamil Kowalcze and Alberto Nardelli report.
• Swelling defense budgets in Europe have fueled a new generation of startups on the continent, with a handful valued at over a billion dollars and others coming up fast. Read our report on eight defense tech startups to watch.
• Italy has expressed readiness to pay for US weapons purchases for Ukraine as part of a special procurement program that’s essential to Kyiv’s efforts to fend off Russia’s full-scale invasion.
• Swiss watch exports fell 3.1% from a year earlier to 2 billion Swiss francs ($2.5 billion) in September, hurt by the Trump administration’s 39% tariff on imports from Switzerland to the US, the industry’s largest market.
• Poland detained three individuals in a joint operation with NATO ally Romania on suspicion of collaborating with Russia’s secret services.

Seen and Heard on Bloomberg

Ahead of European leaders descending on Brussels later this week, a new YouGov poll shows voters in several countries think the EU is doing a “bad job” managing the bloc’s economy and expect to keep struggling. While there was some divergence of views across the nine countries surveyed, YouGov Associate Director Jemma Conner told Bloomberg Radio’s Stephen Carroll in Brussels that there was one interesting area of agreement: artificial intelligence. A majority of those polled were “absolutely certain that the AI industry should be regulated,” she said.

Chart of the Day

Germany needs immigrants to maintain economic momentum and make up for demographic decline, according to Bundesbank President Joachim Nagel. “I know this is a very complicated political discussion at the end, but my institution, in my role, I will do everything to put a lot of emphasis on that and say, ‘well, we need this qualified immigration to Europe, to Germany and we have to have open economies, open countries, tolerant countries’,” he said yesterday, speaking to students at the New York University Stern School of Business.

Coming Up

• EU European Affairs Ministers press conference in Luxembourg this evening
• European Commission President Ursula von der Leyen, Council President Antonio Costa, Egypt’s President Abdul Fattah al-Sisi take part in EU-Egypt Summit in Brussels tomorrow
• EU Financial Services Commissioner Maria Luis Albuquerque meets Borsa Italiana CEO Fabrizio Testa in Milan tomorrow

Final Thought

Nicolas Sarkozy waves to supporters on Oct. 21. Photographer: Julien De Rosa/Getty Images

Nicolas Sarkozy entered Prison de la Santé this morning after his conviction for criminal conspiracy last month, marking the first time a former French president goes to jail. Convicted on Sept. 25 after aides allegedly sought electoral funding from Libyan leader Moammar Qaddafi’s regime, he has consistently denied any wrongdoing. Sarkozy is unlikely to serve the full five-year sentence and can immediately file a release request, which typically takes a month to process. He will be held in solitary confinement for security reasons and plans to write a book.

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