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

EU leaders in Brussels will today discuss how to support Ukraine in its defense against Russia’s war of aggression. But as the conflict nears its third anniversary, EU countries still struggle to realize that the bloc is effectively at war with Moscow — one incident at a time. Intelligence agencies point at Russia’s steady escalation of its confrontation with Europe. Moscow stands accused of pushing asylum seekers into EU countries to destabilize them. Romanian elections were marred by Russian meddling. Berlin has foiled a Russian plot to kill a German arms manufacturer. But the EU’s  lack of a united foreign policy is the Achilles heel that Putin has been able to exploit.

—By Gian Volpicelli

What’s Happening

Scale Back | The chancellor candidate from far-right Alternative for Germany proposed shrinking the EU back to a free-trade zone. Alice Weidel, whose party is polling second ahead of the Feb. 23 snap election, accused the bloc of destroying Germany’s auto industry. “We don’t need all of these bureaucrats who have no clue what they’re doing,“ she said in a Bloomberg TV interview.

Power Vacuum | Luxembourg’s prime minister said that the EU is suffering from political instability in Germany, France and elsewhere, putting Europe’s ability to prepare for Donald Trump’s second presidency at risk. “There are very few — at least in the region I’m coming from — very few stable governments right now,” Luc Frieden said in an interview with Bloomberg TV in Brussels yesterday.

Tech Tussle | The commission has pressed Apple to further open up the iPhone operating system to rivals, prompting the company to complain about requests from Meta that it says will undermine privacy. The commission instructed Apple on Wednesday to rework the iOS operating system so that it’s more compatible with smartwatches, earbuds, headsets and other devices from competitors. 

Climate Cover | As extreme weather incidents increase in frequency, the European Central Bank proposed a two-pronged approach to increase insurance coverage for floods, storms and other disasters fueled by climate change. It includes a voluntary public-private reinsurance mechanism, and a mandatory EU fund to pay reconstruction costs. 

Around Europe

Bank Row | Berlin effectively called on UniCredit to sell its stake in Commerzbank after the Italian bank increased its holding. “UniCredit itself emphasizes that the participation in Commerzbank has so far been a pure investment, which could also be dissolved at any time,” a government spokesman said yesterday. “The German government expects UniCredit to make use of this option.”

Russian Escort | Denmark warned that Russia’s navy may start escorting the so-called shadow fleet tankers through Danish straits to escalate provocations against NATO countries, according to the country’s defense intelligence service.

Sick Stocks | In 2025, European healthcare stocks will face the double jeopardy of US politics and high-stakes trial results for new drugs. The Stoxx 600 Health Care Index  has tumbled 12% since hitting a record high at the end of August. Investors will be seeking clarity after Donald Trump nominated health officials, including a prominent vaccine skeptic. 

Sarkozy’s Sentence | Ex-French President Nicolas Sarkozy lost his last-ditch bid to overturn a criminal conviction after the nation’s top court upheld the sentence. The Cour de Cassation yesterday backed a one-year prison term after he was found guilty of offering to help a magistrate land a prestigious job in return for a favor. The sentencing is now final.

Gas Flows | European natural gas fell as Slovakia’s push to keep the fuel coming through Ukraine adds optimism about the region’s supply next year. After talks with Moscow and Kyiv, Prime Minister Robert Fico said, “We have solutions so that Ukraine does not transit Russian gas, but instead, it will be gas owned by someone else.” 

Chart of the Day

Fitch Ratings signaled it may cut Romania’s credit grade, citing high political uncertainty that’s likely to delay plans to reduce the EU’s highest budget deficit ahead of a presidential election re-run next year. Romania’s pro-European forces aim to forge a government to stave off political turmoil from the rise of the far right and address a ballooning budget deficit.

Today’s Agenda

All times CET

• EU Leaders summit in Brussels
• 1 p.m. European Parliament President Roberta Metsola holds a press conference.
• Commissioner Valdis Dombrovskis attends videoconference of G-7 finance ministers and central bank governors

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