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Hello, it’s Mared Gwyn writing from Brussels, where temperatures are slowly easing off as the heatwave which has gripped Europe in recent days moves eastwards. In store for you this morning: the still sizzling debate on whether Europe needs to bet big on air con to deal with climbing temperatures, the latest on the brewing trade tensions between Beijing and Brussels, and more.
Stars, Stripes, VIPs and Protests: But first, a flavour of the United States’ independence day bash hosted by the US embassy in Brussels’ Cinquantenaire Park last night.
Spotted among the thousands of VIPs in attendance were Belgian Prime Minister Bart De Wever, NATO Secretary General Mark Rutte (described by the host, US Ambassador to Belgium Bill White, as the best NATO chief “ever”), and European Parliament President Roberta Metsola.
Guests tried their hand at baseball, rode a mechanical bull and participated in line dancing. The festivities also featured music (which many of our Brussels readers may have heard from afar), performances, a ceremonial flyover concluding with a drone and firework show. More.
To AC or not?: The brutal heat that has in recent days shattered previous temperature records from Denmark to the Czech Republic is again exposing the political fault lines around how Europe should respond to increasingly common heatwaves – and what role air con should play.
The debate has been notably heated in France, where Marine Le Pen of the far-right Rassemblement National has seized the opportunity to reignite calls for a mass national roll-out of air conditioning – known as “plan clim” – ahead of crunch presidential elections taking place next year.
The €40 billion rollout plan is expected to be presented at the National Assembly during this week, but is already being slammed by critics as lacking substance, transparency and cost estimates, with senior party officials often citing inconsistent figures.
But the pressure has prompted even the pro-climate Ecologist party to somewhat shift its stance, with party leader and presidential candidate Marine Tondelier recognising that there should be a role for AC, particularly in hospitals and schools.
France saw schools and energy sites close and critical infrastructure damaged amid soaring temperatures last week, with estimates suggesting that the country has seen at least 1000 excess deaths due to the heat. The picture is similar across the continent.
The debate is fast becoming cultural and political – amid a recognition that several parts of Europe are unprepared for extreme heat, and that this could come at a human cost. But the social and scientific questions are far more nuanced, as my colleagues Tamsin Paternoster and Estelle Nilsson-Julien explain here.
Commission HQ outage: Sizzling conditions in Brussels also forced the shutdown of the AC systems in most of the European Commission’s HQ, known as the Berlaymont, on Friday, according to an internal message seen by Euronews.
Crucially and coincidentally, the top floors where Ursula von der Leyen and her top team of Commissioners work were spared the outage.
EU-China talks: The European Commissioner for Trade, Maroš Šefčovič, is set to meet his Chinese counterpart Wang Wentao in Brussels today against a backdrop of rising tensions between the EU and China, our trade reporter Peggy Corlin writes in to report.
Despite repeated threats of retaliation from Beijing over recent EU efforts to protect the bloc’s market from Chinese overcapacity, the 27 member states have urged the European Commission to keep engaging with the Asian giant. But they have also given Commission President Ursula von der Leyen a mandate to assess the EU’s trade defence instruments and come up with new ones.
Facing a €1 billion-a-day trade deficit with China, Europeans want to maintain a dialogue with their rival while also preserving leverage in case tensions escalate. But it’s a difficult balancing act and tensions are brewing on the surface. Scroll down to our top story below for more from Peggy on the complex trading relationship between both sides.
Also happening today: The Sintra Central Banking Forum opens in the resort town west of Lisbon, with big hitters including Federal Reserve Chair Kevin Warsh and European Central Bank President Christine Lagarde in attendance. The main action will come later this week on Wednesday, when Lagarde and others discuss monetary policy outlooks.
The forum will also mark the first public speech by Trump-appointed Warsh outside of the US financial markets, and investors will be keen to see whether he can establish his own path, keeping the Fed independent, or align with President Trump, who has persistently pushed for lower interest rates, meaning cheaper borrowing costs.
But the war in Iran has thrown a curveball the Fed’s way, as the closure of the Strait of Hormuz has pushed energy prices higher and led to an uptick in inflation. Warsh has indicated he takes inflation seriously and the ECB, for its part, raised interest rates in May.
What’s the future path for inflation, and what does it mean for monetary policy? A question that will dominate the must-watch conference, our Europe editor Maria Tadeo writes.
Europe depends on China. Here’s where China still depends on Europe — more than you’d think
We know that the EU is trapped by its dependencies on China, but what about China’s dependencies on the EU? Peggy Corlin looks into the technological sectors where China remains dependent on Europe.
Semiconductors, aerospace, pharmaceuticals, automotive chips, robotics, quantum computing… A few dependencies remain, but experts say the EU has little leverage to exploit them as trade tensions with Beijing escalate.
One expert tells Peggy that China’s monopoly over rare earths – essential for Europe’s green technologies, cars and defence industry – will always be a more powerful tool than export controls in the sectors where China remains dependent.
On top of that, China, which has made technological self-reliance a top priority of its industrial strategy by 2030, is rapidly closing the technological gap.
Peggy hasthe full read.
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We’re also keeping an eye on
- The EU’s foreign policy chief Kaja Kallas and the European Commissioners for Enlargement and Migration, Marta Kos and Magnus Brunner, begin their two-week visit to Turkey, where they’re set to hold talks with Foreign Minister Hakan Fidan.
- European Investment Bank (EIB) President Nadia Calviño is in Brussels
- Employment, Social Policy and Health ministers gather in Brussels
- Sintra Central Banking Forum kicks off in Portugal
That’s it for today. Peggy Corlin and Maria Tadeo contributed to this newsletter.
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