Tuesday, May 27, 2025

Brussels Edition: Poland's political test

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

Poland's presidential runoff is exposing underlying cracks. While the economy is thriving and the country has reestablished its place in the European mainstream, energy costs, surging taxes and EU funds that have yet to make a tangible impact remain important considerations for local businesses. The vote on Sunday — where government-supported candidate Rafal Trzaskowski faces nationalist Karol Nawrocki — is increasingly seen as a referendum on Prime Minister Donald Tusk's record since he returned to power in 2023 following eight years of populist rule. At stake is whether Tusk's coalition will have a partner in the next president or one who may seek to block its pro-EU agenda. US President Donald Trump's administration has made clear which outcome it would prefer.

Michal Kubala
 

Editorial Note: Brussels Edition will take a pause over the long holiday weekend and resume on Monday, June 2.

What's Happening

Strategy Rethink | The EU's new strategy to avoid US tariffs focuses on critical sectors as well as tariff and non-tariff barriers, we're told. The bloc could adopt this two-track approach as a trade thaw bought it six weeks to strike a deal with Trump, who said he's encouraged that negotiations are speeding up. 

Pitching Europe | Emmanuel Macron is trying to position Europe as a viable partner for Southeast Asian countries wary of US-China tensions. The French president has already struck billions in deals and defense cooperation to Vietnam, with stops in Indonesia and Singapore still ahead.

Content Crackdown | The EU has launched an investigation into major adult content sites over concerns about child protection and inadequate age verification. The commission plans to introduce its own age verification tool this summer to strengthen online safety for minors.

Paring Research | HSBC has dismissed more than two dozen analysts, we've learned, including global fixed income head Steven Major. The move by Europe's biggest lender mirrors broader industry trends as big banks scale back the number of research employees. 

Around Europe

Weapons Exports | Germany is weighing restrictions on military exports to Israel, Chancellor Friedrich Merz said during a visit to Finland. Fueled by growing concerns over civilian suffering in Gaza, such a move would be a major shift in policy for one of the Israel's biggest weapons providers.

EU Pushback | EU member states have urged Hungary to reverse its latest anti-LGBTQ law and called on the commission to take action if Budapest refuses. The legislation, which authorities have started using to ban LGBTQ gatherings, is seen by critics as part of Viktor Orban's crackdown on dissent ahead of next year's election.

Naturalization Rollback | Germany is set to scrap a fast-track naturalization path that allowed well-integrated migrants to gain citizenship after just three years. The move aims to curb the country's appeal among migrants and undo reforms introduced under former Chancellor Olaf Scholz to address a labor shortage.

Pushing AI  | Nicolai Tangen, CEO of Norway's $1.8 trillion sovereign wealth fund, says employees who resist using AI can forget about promotions. Read here how the head of the world's biggest fund urges his staff to use AI, insisting it's mandatory for driving efficiency in asset management.

Chart of the Day

France's inflation rate dropped to an annual 0.6% in May — its lowest level since December 2020 — adding momentum to calls for further interest rate cuts by the ECB. Price data from the 20-nation euro zone's biggest economies are all expected to come in below the ECB's 2% target for the first time in eight months.

Today's Agenda

All times CET

  • 11:40 a.m. NATO Secretary General Mark Rutte holds press conference with Icelandic Prime Minister Kristrún Frostadóttir at NATO HQ in Brussels
  • 2:15 p.m. Commission President Ursula von der Leyen gives speech in Aachen, Germany
  • 3:00 p.m. Enlargement commissioner Marta Kos speaks at EPC event
  • Trade commissioner Maros Sefcovic takes part in EU-UAE investment roundtable and meets UAE trade minister in the UAE
  • European parliament international trade committee visiting DC to discuss trade and tariffs
  • European Parliament President Roberta Metsola in Italy

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