Brussels Edition: Climate stepping stone

A heatwave battering Europe shows what's at stake for EU officials set to propose one of the bloc's most ambitious climate targets to date.

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Welcome to the Brussels Edition, Bloomberg's daily briefing on what matters most in the heart of the European Union. A record-breaking heatwave battering Europe shows just what's at stake for EU officials who are set to propose one of the bloc's most ambitious climate targets to date. As promised during Commission President Ursula von der Leyen's run for a second term, the EU's executive branch will today put forward a binding law to slash emissions by 90% until 2040 as a stepping stone to reach climate neutrality by the middle of the century. That doesn't mean securing support for it will be easy. Europe's leaders now have other priorities they deem more pressing, like scaling defense spending, fighting trade wars and bringing down energy costs for industry. And while they'll be offered sweeteners to agree — like using controversial international offsets — the stage is set for months of tense talks. The world will be watching to see if Europe is still willing to lead ahead of the COP30 climate summit in Brazil.  — Gian Volpicelli and John Ainger

What's Happening

Tariff Acceptance | The EU is willing to accept a trade arrangement with the US that includes a 10% universal tariff on many of its exports, as long as the US commits to lower rates on sectors such as pharmaceuticals, alcohol, semiconductors and commercial aircraft. Brussels has until July 9 to cut a deal. Shutting Off | Poland will impose temporary border checks with Germany in a clash over irregular migration. The new controls are a response to tougher border checks introduced by Berlin last month, leading to the expulsion of some migrants back to Poland. The stricter checks, which start Monday, will also apply to Lithuania. Security Risks | An information-sharing system used by EU border forces to flag illegal immigrants and suspected criminals in real time was rife with software and security vulnerabilities, according to our joint investigation with Lighthouse Reports.  Phone Rapprochement | French President Emmanuel Macron and Russian counterpart Vladimir Putin agreed to coordinate on Iran in their first phone call since 2022. The call is part of an effort to forge a common approach between the five permanent members of the UN Security Council on Iran, we're told.

Around Europe

Hot Week | Europe's heat wave is set to peak over the coming days, triggering red alerts from France to the Swiss Alps, with the top of the Eiffel Tower shut to visitors. The hot and dry conditions have spurred wildfires in Greece, France, Portugal and Turkey. Tax Ax | Sweden is scrapping a tax on air travel in a bid to revive its commercial aviation industry. Just six years after the tax was created, the about-face highlights waning public support for environmental activism, including flight shaming. Plant Attack | Ukraine said it struck a military plant that produces anti-aircraft systems in the Russian city of Izhevsk. The strike comes as Moscow escalates its own aerial offensive, having fired a record 537 missiles and drones against Ukraine on Sunday. Euro Rally | The euro yesterday touched the highest level against the dollar since September 2021. The common currency's rally stalled later in the day as US data failed to support an imminent interest-rate cut by the Federal Reserve. IPO Bets | Dealmakers hope that European initial public offerings will pick up after the slowest first half in over a decade, with investor interest rekindled by the prospect of increased defense spending and fiscal stimulus. IPOs raised roughly $5.52 billion so far in 2025, a 60% decline from a year ago.

Chart of the Day

Tesla CEO Elon Musk has assumed oversight of sales in Europe and the US, following the departure of longtime deputy Omead Afshar. Musk's focus on Europe is noteworthy, considering he's called the region the EV maker's weakest market. The company's new-vehicle registrations across Europe fell 28% in May and plunged 37% through the first five months of the year.

Today's Agenda

Commission President Von der Leyen meets with the premier of the German state of North Rhine-Westphalia and his entourage of industry representatives European Parliament President Roberta Metsola chairs meeting of heads of the parliament's political groups, with the participation of European Council President Antonio Costa and NATO Secretary General Mark Rutte

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