Mind the credibility gap

One step forward, two steps back. That’s a pattern that has clouded the European Union’s policy efforts all too often, and the way it’s trie [View in browser]( [Bloomberg]( One step forward, two steps back. That’s a pattern that has clouded the European Union’s policy efforts all too often, and the way it’s tried to meet the latest challenges is no exception. EU ambassadors found a way to allow Ukraine to get $19 billion from the bloc after Hungary stopped objecting to the package as part of a separate dispute over the rule of law. But it’s a preliminary agreement, and Hungary won’t be able to tap Covid-recovery funds or suspended so-called cohesion money before meeting a set of EU conditions. Key reading: - [EU Seeks to Break Deadlock Over Capping Natural Gas Prices]( - [EU Breaks Logjam on Ukraine Aid With Deal on Funds for Hungary]( - [EU-Qatar Bribery Probe Widens as Police Seize €750,000 in Cash]( - [EU Needs to Prepare for Winter 2023, Belgian Minister Says]( - [EU Parliament to Demote Lawmaker Tied to Qatar Corruption Probe]( Meanwhile, member states are still at loggerheads over measures to cap natural gas prices, just as a winter freeze sweeps over the region. Germany and some other countries want a cautious approach, while a group including Italy and Greece favor a more aggressive tool to intervene in the market. In a blow to Brussels’s efforts to play down a public image of entitled officials and boost the EU’s popularity across the bloc, a corruption investigation has come to light, featuring lawmakers of the European Parliament and the Gulf state of Qatar. According to prosecutors, their probe involves large sums of money being paid to influence the parliament’s decisions. Police have seized the equivalent of at least $790,000 in euros, as well as several hundred thousand euros stuffed in a suitcase. The investigation needs to be pursued “with the full force of the law,” German Foreign Minister Annalena Baerbock said. She added that “this concerns Europe’s credibility.” When they gather for a summit in Brussels on Thursday, EU leaders will be under pressure to tie up more than a few loose ends — and boost that credibility. — [John Follain]( Hungarian Prime Minister Viktor Orban Photo Credit: Bloomberg Click [here]( to follow Bloomberg Politics on Facebook and if you’re enjoying this newsletter, sign up [here]( for Balance of Power. Global Headlines Covid delay | China is [delaying]( a closely watched economic policy meeting due to start Thursday after Covid-19 infections surged in Beijing, sources say. There’s no set timetable for when the Central Economic Work Conference, usually attended by President Xi Jinping, will be rescheduled. - China warned it faces a [surge]( in Covid cases as it rapidly dismantles pandemic controls and embraces a faster reopening than some experts had expected. - The Covid wave is rippling through the [financial industry](, with currency volumes falling as traders call in sick and banks activate backup plans to keep operations running smoothly. - Hong Kong is [scrapping]( some of its remaining Covid restrictions following China’s shift from a zero-tolerance approach. Chip diplomacy | China is “willing to work with South Korea to adhere to the general direction of good-neighborliness and friendship,” Foreign Minister Wang Yi said in a video meeting with his counterpart Park Jin. Beijing is [courting]( the US ally and microchip producer amid Washington’s campaign to curb China’s access to advanced semiconductor technology. - Japan and the Netherlands have agreed in principle to join the US in [tightening controls]( over the export of advanced chipmaking machinery to China, sources say. Strikes and industrial action had the [biggest impact]( on the UK in 11 years in October — two months before the latest protests crippled public services. Train drivers, nurses, ambulance drivers and border guards are among those planning to [walk off the job]( in protest that their wages are falling further behind inflation. Sudden unfollow | Twitter dissolved its Trust and Safety Council last night, the Washington Post reported, citing an email sent to members of the council. It said the development came [less than an hour]( before members of the council expected to meet with the platform’s executives via Zoom to discuss recent developments. - The social network resumed selling its Twitter Blue premium offering, which gives users a blue verification badge by their names, following a weeks-long pause because some subscribers were using the paid service to [impersonate]( well-known accounts. - The White House called attacks by [Twitter owner Elon Musk]( on outgoing top medical adviser Anthony Fauci “disgusting” and “incredibly dangerous.” Best of Bloomberg Opinion - [Who Unplugged South Africa?: Antony Sguazzin]( - [Elon Musk Is Ruining Trump’s Presidential Campaign: Joshua Green]( - [India Is in Danger of Missing Its Big G-20 Moment: Pankaj Mishra]( Resuming trade | Satellite images indicate Russia and North Korea have resumed trade over a rail link suspended for almost three years due to Covid-19. The reopening could raise concerns about international [sanctions violations](, with North Korea facing punishment over its pursuit of nuclear weapons and Russia hit with penalties following its [invasion]( of Ukraine. Explainers you can use - [What the Breakthrough in Fusion Energy Means]( - [Italy’s Meloni Wants Bigger Role for the State in Key Businesses]( - [Fentanyl Drives Fatal New Phase in US Opioid Epidemic]( Brazil unrest | Supporters of President Jair Bolsonaro [clashed]( with police in Brazil’s capital late yesterday after the arrest of an indigenous leader who sought to stop the certification of president-elect Luiz Inacio Lula da Silva. They were the latest demonstrations by Bolsonaro backers challenging his narrow defeat in October, in some cases calling for military intervention. Bolsonaro supporters confront military police in Brasilia. Photographer: Evaristo Sa/AFP/Getty Images Bloomberg TV and Radio air Balance of Power with [David Westin]( on weekdays from 12 to 1pm ET, with a second hour on Bloomberg Radio from 1 to 2pm ET. You can watch and listen on Bloomberg channels and online [here](. News to Note - China’s military sent its biggest daily sortie of bombers into the Taiwan Strait in at least two years, an apparent show of [displeasure]( over a visit by a key member of Japan’s ruling party. - Indian and Chinese troops [clashed]( in India’s northeast border state of Arunachal Pradesh last week, Defense Minister Rajnath Singh said, confirming the first skirmish between the neighbors in about two years. - South African governing party lawmakers agreed they will reject an advisory panel’s report that found President Cyril Ramaphosa may have a [case of impeachment]( to answer, Minister in the Presidency Mondli Gungubele said. - Chilean political parties agreed to revive the process to write a new [constitution](, following September’s overwhelming vote to reject a first proposal. - Hong Kong [criticized]( Google, saying it failed to ensure the city’s correct national anthem features prominently on its search page. - An Islamic State offshoot claimed responsibility for a bomb [attack]( at a Kabul hotel popular with Chinese diplomats and businessmen, the first assault in Afghanistan targeting citizens from one of the few countries with good ties with the Taliban government. And finally ... It took the war in Ukraine and nationwide blackout warnings to soften the long resistance of residents in the Bavarian town of Niederaichbach to a high-voltage line crucial for transport of Germany’s renewable energy. While the change of attitude is good news for Germany’s slow-moving efforts to expand alternative power sources, it’s a reminder of [bubbling opposition]( across Europe to potentially disruptive projects. Niederaichbach Mayor Josef Klaus carries an umbrella under high-voltage power lines, where it was reported that walkers received light electric shocks. Photo Credit: Picture Alliance Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. 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