Topsy-turvy Europe

Unsettled Europe is full of surprises [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. Cast your eyes on Europe right now and no country seems to be behaving as you’d expect. The Dutch are [rethinking their permissive attitude to sex](, drugs and corporate profits in elections tomorrow that could see far-right, anti-Muslim populist Geert Wilders in government. Germany, the continent’s economic motor, has morphed into the sick man of Europe, mired in messy and unstable coalition politics and showing a [lax attitude toward the accounting]( of its public finances. Unstable governments and fiscal laxity are more characteristic of Italian behavior. Yet in Rome, Giorgia Meloni has a string of wins under her belt. Moody’s pulled the nation’s credit rating outlook back from the brink of junk. Investors are appeased. Her allies are on tight leashes and she’s replenishing the state coffers by selling a stake in the nation’s oldest bank, a move markets considered unviable even six month ago. Italians could be forgiven for a spot of Schadenfreude, but ultimately the European Union needs a strong Germany lest one forget who bailed out Greece after the 2008 financial crisis and helped save the euro. Most countries have room for improvement in the EU’s latest assessments of which countries are complying with the bloc’s budget rules. France is on the naughty step, as are Germany and Italy. Together they account for almost two-thirds of the euro economy. Judging by this week, everything is turned upside down in the old continent, which heads into 2024 in a state of flux. It may well start the year limping from a recession and, should Donald Trump return to the White House — all signs in the US point to an incredibly tight race — Europe could find itself far more isolated in the world than it’s used to. In such circumstances, Europe will badly need to find its mojo. — [Flavia Krause-Jackson]( Amsterdam’s Red Light District. Photographer: Nicolas Economou/NurPhoto/Getty Images Global Must Reads Hamas chief Ismail Haniyeh said his group is close to reaching a “truce agreement” with Israel helped by Qatar. His comments came after US President Joe Biden said yesterday that Israel and Hamas [are nearing a deal]( to free a group of hostages taken when the militants stormed Israel on Oct. 7, killing about 1,200 people in an attack that prompted the current Israeli invasion of Gaza. Protesters call for the release of hostages in Jerusalem on Saturday. Photographer: Gil Cohen-Magen/AFP/Getty Images As Argentina’s banks open today after a holiday weekend, concern is growing about the potential for a wave of withdrawals of pesos to buy US dollars. That follows the presidential election victory of Javier Milei, a little known libertarian congressman just a few months ago, who won over Argentines and investors by pledging a radical economic overhaul and a [signature proposal to scrap the peso]( and replace it with the greenback. A new front in the US-China conflict over high-end chips is about to open up. Biden will shift the focus to an emerging arena of the contest for technological supremacy: [the process of packaging semiconductors]( that’s increasingly seen as a path to achieving higher performance. Yet China, too, is capitalizing on an area that isn’t subject to sanctions by racing to capture global market share. Averting a potential tit-for-tat tariff war between Europe and China is the main goal of French Foreign Affairs Minister Catherine Colonna’s visit to Beijing this week. It comes after an anti-subsidy probe championed by Paris into Chinese electric vehicles [raised trade tensions with Asia’s biggest economy]( and as European leaders seek to boost independence without losing access to China’s massive market. Norway’s plan to use wind to power offshore oil platforms is much about clinging to the past. It’s betting that lowering emissions from fossil fuel production will help it meet climate targets while future-proofing an industry that’s made it one of the richest countries in the world. The catch is that exports will [continue to have a devastating impact]( on the Earth when they’re burned overseas. Japanese Prime Minister Fumio Kishida called on North Korea to halt its [plans to launch a satellite]( after Tokyo received a notice about where debris from a rocket may fall. Philippine President Ferdinand Marcos Jr. said the Southeast Asian nation’s [joint patrols with the US]( in the South China Sea started today amid tensions in the disputed waters. South Africa is likely to prioritize energy security over its decarbonization aspirations to [avoid further damage to its economy](, said James Mackay, the chief executive officer of the Energy Council of South Africa. Washington Dispatch Biden will convene a meeting today intended to speed up a campaign to combat the smuggling of fentanyl, a powerful and inexpensive synthetic opioid that has touched off [a drug abuse crisis across America](. The White House sees the session as building on a counternarcotic accord announced last week after Biden’s meeting in San Francisco with Chinese President Xi Jinping, in which Beijing agreed to a crackdown on the shipment of chemical ingredients used to make the drug as well as pill presses. More than 150 people in the US die each day from overdoses related to synthetic opioids, the Centers for Disease Control and Prevention says. Fentanyl has already become an issue in the presidential campaign, with Republican candidates attacking Biden administration policies as ineffective and weak. Trump and Florida Governor Ron DeSantis have pledged to deploy the US military against drug operations in Mexico. One thing to watch today: Existing home sales in October will be reported by the National Association of Realtors. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 5pm ET weekdays on Bloomberg Television. Chart of the Day Americans like buying new cars. Between 2011 and 2021, the number of registered vehicles increased 12%. But over the past 10 years, the average age of a car on the road rose to 12.2 years, threatening to [lengthen the time]( it will take for the US to electrify its entire fleet, especially since the newest gas cars are some of the most reliable. And Finally Elon Musk’s X has been going through tough times. Posts purportedly showing graphic violence in the Israel-Hamas war in real-time went viral on the platform — much of it false. Then Musk’s [endorsement of an antisemitic post]( prompted some advertisers to flee. Now, a new analysis by Bloomberg and interviews with misinformation experts show his Citizen Notes program designed to flag inaccurate information while allowing all kinds of free speech to continue has operated slowly and inconsistently. Elon Musk. Source: X More from Bloomberg - [Bloomberg Opinion]( for a roundup of our most vital opinions on business, politics, economics, tech and more - [Next Africa](, a twice-weekly newsletter on where the continent stands now — and where it’s headed - [Economics Daily]( for what the changing landscape means for policy makers, investors and you - [Green Daily]( for the latest in climate news, zero-emission tech and green finance - Explore more newsletters at [Bloomberg.com](. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Want to sponsor this newsletter? [Get in touch here](. 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. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](