Brussels Edition: Budget day

Welcome to the Brussels Edition, Bloomberg's daily briefing on what matters most in the heart of the European Union. We're keen to hear your

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Welcome to the Brussels Edition, Bloomberg's daily briefing on what matters most in the heart of the European Union. We're keen to hear your views on this newsletter. Please participate in our short survey. All eyes are on the European Commission today as it unveils its proposal for the EU's next seven-year budget which will govern spending between 2028 and 2034. Brussels is scrambling to find a balance between the need to bolster Europe's competitiveness and defense and the demands of traditional sectors like farming. Negotiations continued well into the night to try and strike a deal. Protesting farmers are expected to descend on Brussels as they try to maintain their share of the budget, which currently accounts for about a third of spending. One unknown is whether the controversial issue of joint debt will be included in the proposal. Trump's plan to allow the EU to pay for arms to Ukraine is piling pressure on Europe to find ways of financing the bloc's defense-spending ambitions. —Lyubov Pronina

What's Happening

Gas Safeguards | Commission President Ursula von der Leyen told Slovak Prime Minister Robert Fico in a letter we've seen that the bloc will further help Bratislava adapt to the planned ban on Russian gas. Slovakia has been blocking the EU's 18th sanctions package on Russia, though a deal could be reached as early as today. As we previously reported, the EU executive is considering a fresh proposal to lower the threshold on Russian oil as part of the package. New Stress | The ECB'S next stress test will ask lenders to come up with hypothetical situations in which risks like trade disruptions or wars could hit their financial strength, the head of the ECB's supervisory board, Claudia Buch, told MEPs in Brussels. Buch took over at the helm of the bank's watchdog last year. Prime Push | As revenue from prime brokerage is expected to hit a global record of $30.8 billion this year, European banks are hustling to get a bigger piece of that action. And BNP Paribas is deploying an army of 500 coders to help it grab more market share. Read our story here. Removing CO2 | The EU will define technologies to remove carbon dioxide from the atmosphere to meet its goal of being climate neutral by 2050, according to a document we've seen. The announcement, which could come as soon as today, will offer permanent solutions other than nature-based fixes such as reforestation, which rely on careful management over hundreds of years. Meta Threat | Meta risks an escalation in its clash with the EU over the Big Tech firm's compliance with the Digital Markets Act. EU regulators recently sent a letter to the  social network giant, highlighting their concerns - which could eventually pave the way for more fines.

Around Europe

Cutting Holidays | The French may get fewer holidays under a plan by Prime Minister Francois Bayrou to cut €43.8 billion in spending. The Easter Monday and May 8 holidays are most likely to get the chop as France seeks to pare back the euro area's largest deficit. Bayrou said France's debt is increasing by €5,000 every second, and that if nothing is done, interest costs will soar to €100 billion annually in 2029. Tariff Toll | The ongoing transatlantic trade dispute is beginning to bite. Ireland's Kerrygold butter maker has slowed its US investment as it waits for more clarity on President Donald Trump's trade deal with the EU. Tariffs on agricultural products are a challenge for the second-largest selling butter brand in the US. Succession Plan | Hungarian Prime Minister Viktor Orban, Europe's longest-serving premier, said his party could survive an eventual change of leadership. In an interview with pro-government newspaper Magyar Nemze, he broached the topic of succession after 15 years of uninterrupted rule as the opposition Tisza party has overtaken his Fidesz in polls. Startup Help |  The finance ministers of France and Germany have pledged to join forces to provide additional support for European startups in a joint op-ed published in Handelsblatt newspaper. It comes as the ministers of the euro area's two biggest economies are due to meet today near Berlin.

Chart of the Day

Investor confidence in Germany's economy improved in July, highlighting resilience in the face of US tariff threats as the government in Berlin ramps up spending. An expectations index by the ZEW institute rose to 52.7 from 47.5 the previous month, more than the 50.4 that economists in a Bloomberg survey had estimated. A measure of current conditions also rose. However, Germany's Economy Ministry warned Monday that the "recovery does not appear to be gaining further momentum in the second quarter" as industrial production and orders remain volatile.

Today's Agenda

All times CET 11 am Informal meetings of competitiveness ministers (research, innovation and industry) in Copenhagen Commission to present seven-year budget proposal 12:30 pm Commissioner Piotr Serafin debates EU's long-term budget at European Parliament Budget Committee

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