France’s embattled government may have just bought itself some wiggle room to survive a bit longer. Prime Minister Francois Bayrou said he will open the contested 2023 pension reform to renegotiation as he seeks the backing of lawmakers to stay in power and urgently agree to a budget. Labor and business unions will be tasked with brokering changes that could include halting the planned increase in the minimum retirement age to 64. Bayrou also set a target of bringing the deficit down to 5.4% of GDP — a decrease from present levels, but still above his predecessor’s goal of 5%. To avoid the same fate as former Michel Barnier, who lasted just three months as prime minister, Bayrou will need to convince lawmakers in a divided parliament to abstain from future no-confidence votes over the budget. Earlier, the head of the country’s Socialist Party, Olivier Faure, said they may be nearing a deal to support the government in return for concessions. 

What You Need to Know Today

Germany’s car industry isn’t in a good place. Volkswagen deliveries declined last year, battered by weak demand for electric vehicles and intense competition in China. BMW reported its own slide in sales, compounded by a costly recall. The threat of US tariffs, signs of persistent economic malaise in China and high living costs across Europe are adding pressure to carmakers. Last year, VW, Mercedes-Benz and BMW all issued profit warnings. 

A Gaza ceasefire appears to be in reach. Donald Trump, President Joe Biden and German Chancellor Olaf Scholz all agree that Israel and the Hamas militant group may be close to an agreement that could trigger the release of Israeli hostages. Israeli Prime Minister Benjamin Netanyahu’s negotiators presented a detailed outline to Hamas during indirect discussions in the Qatari capital of Doha. The sides still disagree on some implementation details, according to Qatar.

The European Union’s top diplomat said the bloc has a “clear crisis” that requires it to discuss the option of raising joint debt to finance higher defense spending. Kaja Kallas, the former Estonian prime minister, told Bloomberg TV that Europe also needs to put more political and economic pressure on Russia. One idea she discussed was lowering the cap on the price of Russian oil that can by purchased by the EU and the Group of Seven countries. “I’m really pushing for this,” she said. On the bright side, Ukraine’s European allies have become a bit more optimistic that President-elect Donald Trump won’t force Kyiv into premature negotiations with Russia, we are told.

NATO is committing to a new security effort in the Baltic Sea to help protect underwater infrastructure, including deploying a fleet of naval drones. The Baltic Sentry mission will also include navy frigates and military aircraft to boost surveillance. Leaders from the region pledged to introduce tools to track Russia’s shadow fleet ships, which is suspected in several incidents where undersea infrastructure links were cut. Earlier, the EU’s new digital chief, Henna Virkkunen, told us the repeated damage to undersea cables couldn’t be fully accidental. Watch her remarks.

NATO chief Mark Rutte; Kristen Michal, Estonia’s prime minister; Edgars Rinkevics, Latvia’s president; Olaf Scholz, Germany’s chancellor; and Donald Tusk, Poland’s prime minister, left to right, during the Baltic Sea NATO allies summit. Photographer: Roni Rekomaa/Bloomberg

The EU found that China’s procurement of medical devices discriminates against foreign firms, which opens the door to potential measures aimed at curbing Beijing’s future access to public tenders. After a nine-month probe, the bloc identified a complex network of laws, targets and practices that work to favor domestic companies over European ones. With the EU noting China hasn’t offered any potential correctives, the finding renews trade tensions that are still simmering over the EU’s tariffs on Chinese-made electric vehicles. On the US front, Trump’s incoming economic team is discussing ramping up tariffs month by month, a gradual approach aimed at boosting negotiating leverage while helping to avoid a spike in inflation.

As the UK struggles to reassure markets about the state of its public finances, Chancellor of the Exchequer Rachel Reeves insisted Westminster will meet its fiscal rules “at all times.” Gilt yields have hit their highest since the financial crisis in 2009 amid a selloff in British stocks that has also pushed the pound to its lowest level in 14 months. The Treasury is considering reducing public spending to address the situation, we’re told, but hasn’t been ready to say so publicly. 

Ares Management has pulled together a €30 billion ($30.7 billion) pool of capital for its latest European direct lending fund, the largest ever of its kind in the region. With €17.1 billion of equity commitments, Ares secured the highest level of investor-demand for any private credit fund on record, according to a statement we saw. Unlike many of its larger peers in Europe, Ares is still primarily a middle-market lender. 

What You’ll Need to Know Tomorrow

For Your Commute

The UK may be famous for fish and chips, but the classic pub favorite is showing up more often in the kind of London spots where they weren’t always welcome.  At a buzzy, Spanish-styled restaurant, the standout on a strong tapas menu is chips bravas, a notable tweak on the classic version made with diced potatoes. Across town, the chef at an exquisite fine dining spot says almost every table orders the £10 ($12) chips as a supplement to the three-course, £145 menu. Another thing powering the chip revolution: designer spuds. 

Enjoying Evening Briefing? Check out these newsletters:

• Markets Daily for what’s moving in stocks, bonds, FX and commodities
• Breaking News Alerts for the biggest stories from around the world, delivered to your inbox as they happen
• Balance of Power for the latest political news and analysis from around the globe
• Money Distilled for John Stepek’s daily newsletter on what market moves mean for your money
• The Brink for exclusive coverage of corporate distress, bankruptcies and turnaround stories

Explore all newsletters at Bloomberg.com.