Good morning from Brussels.

In his inauguration yesterday, Donald Trump reiterated his threat to tariff and tax third countries to “enrich” US citizens.

If Europe ultimately becomes his target, American consumers may end up with more money in their pockets, but they will be deprived of their favourite products.

This explains the remarkable surge in EU wine and cheese imports since the day after Trump’s reelection in November, Sofia Sanchez Manzanaro reports.

In Brussels, “no one is in charge,” and the political EU leadership has adopted an appeasement approach, stressing the need to work with Washington.  

But bureaucrats know what is on the horizon. 

The head of the eurozone rescue fund said Trump’s protectionism would likely increase borrowing costs and further damage the bloc's anaemic economy.

MEPs will discuss allegations that Hungary's intelligence services spied on EU staff. The debate will open Pandora’s Box regarding Europe’s spyware legislative vacuum. 

In the energy field, a coalition of left-wing MEPs calls on the European Commission to extend the EU's gas price cap, which expires on 1 February. Europe's winter gas stores are running low.

Lastly, the EU executive reiterated its refusal to rule out confiscating hundreds of billions of euros worth of frozen Russian assets on Monday, despite Belgium’s warnings that such a move could be illegal and jeopardise the eurozone's financial stability.

BERLIN

German carmakers, key US trading partners, are openly optimistic about trade under the new Trump administration, even as surveys point to a gloomier outlook. Read more.

New momentum for EU defence bonds as Germany's Merz signals openness. German election frontrunner Friedrich Merz said he is open to all methods, including new debt, to finance a pan-European military build-up, boosting momentum for joint EU funding initiatives. Read more.

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PARIS

Francophone companies split on sustainability reporting rule changes. The French Association of Large Companies (AFEP) has called for major changes to EU sustainability reporting rules, but the proposal has sparked differing opinions within its own ranks. Read more.

MADRID

Sánchez lashes out at Trump, Musk, Zuckerberg. Spanish Prime Minister Pedro Sánchez lashed out at US President Donald Trump and what he called the "tech caste", clearly referring to billionaires Elon Musk and Mark Zuckerberg. Read more.

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ROME

Italian deputy PM wants stronger European role in Palestine. In the first high-level European visit to Israel and Palestine since the ceasefire, Italian Foreign Minister Antonio Tajani called for greater European involvement in peace efforts in the region. Read more.

PRAGUE | BERLIN

Masses of fibreglass debris from wind turbine blades and aircraft parts were illegally transported from Germany to a small Czech municipality, prompting investigations and calls for a European solution, as it was not an isolated case. Read more.

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WARSAW

PiS candidate vows 'unrealistic' referendum on EU Green Deal. Karol Nawrocki, the presidential candidate backed by the PiS (ECR) party, promised to hold a national referendum on the European Green Deal if he wins the election on 18 May. Read more.

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BRATISLAVA

Experts warn of dangerous rhetoric as Smer MP questions Slovakia’s EU future. Slovak political scientists have warned of a dangerous shift in public discourse after Smer MP Tibor Gašpar hinted at the possibility of Slovakia leaving the EU and received support from fellow party member and Prime Minister Robert Fico. Read more.

STOCKHOLM | WARSAW

Polish defence spending as a source of inspiration. Poland could be an "inspiration" for Sweden when it comes to defence spending, Swedish Defence Minister Pål Jonsson told a press conference on Monday.

Sweden, NATO's newest member, already spends more than 2% of its GDP on defence, as required by the Alliance, and is on track to reach 2.4% by 2025. Meanwhile, Poland has increased its defence spending from just under 3% of GDP to almost 5% this year. 

Polish Defence Minister Wladislaw Kosiniak-Kamysz visited Sweden and the Berga naval base on Monday to discuss, among other things, security in the Baltic Sea and the defence of seabed infrastructure. (Charles Szumski | Euractiv.com)

SOFIA

The number of companies with Russian participation in Bulgaria started to increase sharply at the end of 2024, according to data from the Bulgarian Commercial Register. Read more.

• EU: Economic and Financial Affairs Council convenes to discuss competitiveness and regulatory burden, Recovery and Resilience Facility, and more;
• Informal meeting of education ministers expected to focus on inclusive education, evidence Informed policy in education, and more;
• Commission President Ursula von der Leyen delivers special address at World Economic Forum in Davos, Switzerland;
• High Representative for Foreign Affairs and Security Policy Kaja Kallas hosts Former President of Ukraine Petro Poroshenko;
• Commission Vice President Henna Virkkunen participates in Parliament debate on “need to enforce Digital Services Act”, “need to detect and counter sabotage by Russian shadow”;
• Economy and Productivity Commissioner Valdis Dombrovskis meets Finance Minister of Ukraine Serhiy Marchenko;
• Internal Affairs and Migration Commissioner Magnus Brunner meets with Canary Islands President Fernando Clavijo;
• Parliament President Roberta Metsola meets with Foreign Affairs Minister of Egypt Badr Abdelatty; Addresses conference of EU Outermost Regions Presidents;
• Parliament plenary votes on agreement with Serbia to deploy European Border and Coast Guard Agency forces.

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[Edited by Sarantis Michalopoulos, Daniel Eck, Alice Taylor-Braçe]