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

It’s the first day of a two-day summit dedicated to conveying the image of a more assertive Europe. EU leaders will vow to make the bloc strategically autonomous, reducing their dependence on imports from countries like China. Speaking of which, they will welcome (and give themselves credit for) Xi Jinping’s commitment to carbon neutrality. The draft communique we have echoes Donald Trump a bit, stressing “the need to rebalance the economic relationship and achieve reciprocity,” while also lambasting Beijing’s human rights record. Leaders will also seek a carrot and stick approach with Turkey. But unlike China, there’s no real consensus. The discussion could go either way, and Cyprus’s insistence that it won’t sign off on sanctions against Belarus unless the EU agrees to punitive measures against Turkey, means the summit could end up exposing the bloc’s divisions instead of highlighting its assertiveness.

Nikos Chrysoloras andJohn Ainger

What’s Happening

Recovery Woes | Fraught negotiations over the terms attached to the EU’s jointly-financed economic recovery package continue, with no breakthrough in sight. Germany warns it’s very likely things won’t be up and running come Jan. 1, delaying the flow of much-needed cash to the continent’s battered economies. Whether all of this is theatrical tactics, remains to be seen.

Inflation Overshoot | ECB President Christine Lagarde says it’s worth examining a Federal Reserve-style strategy that allows inflation to temporarily rise above the institution’s target. Here’s how the policy looks in the U.S. and what it means for the value of the money in your pocket.

Time Bomb | Italy’s market crisis may have subsided, but the debt worries that caused it will haunt Europe for a while. That’s the bleak outlook that

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

The fight over Europe’s money is about to get even uglier. Hungary has already rejected a proposal to tie the disbursement of 1.8 trillion euros from the bloc’s new budget and jointly-financed recovery fund to rule-of-law standards. It’s also demanding that the EU official charged with upholding those norms be sacked for calling the country a “sick democracy.” To add fuel to the fire, the Commission will today release a damning report about judicial independence. The document alleges that “prosecution of high-level corruption” is “very limited” in Hungary, further exacerbating fears among richer governments that they risk bankrolling Viktor Orban’s cronies. If there’s no solution to the spat, the threat of delays in the flow of much-needed EU funds to countries such as Italy and Greece will become very real. Unless someone is bluffing.

Stephanie Bodoni and Alexander Weber

What’s Happening

Carbon Bill | European companies are scurrying to sort out how to pay for the region’s ambitious climate goals. More-advanced technologies are expensive, and the prices of permits to emit greenhouse gases are nearing record highs just as the global economy shrivels because of the Covid-19 pandemic.

Brexit Moves | The U.K. sought to unblock stalled trade negotiations with the EU by submitting a new round of proposals on state aid rules. While one diplomat in Brussels said insufficient progress has been made for the talks to head into the intense phase — known as a tunnel — at the end of this week, the Irish are upbeat about a deal. Meanwhile, a vote at the House of Lords could complicate an already chaotic situation.

Merkel’s Foe | Chancellor Angela Merkel’s long-time political adversary is working the phones these