(Bloomberg) -- Welcome to the Brussels Edition, Bloomberg’s daily briefing on what matters most in the heart of the European Union. Sign up here to get it in your inbox every weekday morning.

Europe is staking its economic future on an environmental clean-up that will overhaul the way it regulates businesses, polices finance and manages trade relations. Under the “Green Deal” that European Commission President Ursula von der Leyen will present today, the EU’s transition to climate neutrality would start next year and involve all aspects of the bloc’s economy. It means stricter emissions limits for industries,  revamped energy taxes, new rules on subsidies for companies, greener farming and possibly an environmental import tax. The plan will no doubt trigger political tussles between EU members, starting at the leaders’ summit tomorrow.

What’s Happening

Fine Print | EU government envoys in Brussels are meeting this morning to decide whether to accept a deal with the European parliament that’s the centerpiece of the bloc’s push into sustainable finance — a list setting out which investments can really help fight climate change. A compromise reached last week included some significant concessions from both sides, so more negotiations could still be needed.

Trade Allies | China is in preliminary talks to support the EU’s backup plan for settling international trade disputes after Donald Trump’s administration scuttled the WTO’s role in such conflicts. While the conversations are still preliminary, the arbitration mechanism seems to be gaining some momentum.

Secret Wish | What sort of outcome does the EU want from Britain’s general election tomorrow? The thinking in Brussels is that a strong parliamentary majority will help get Brexit over the line and ease future trade negotiations — and it looks like Boris Johnson is the only leader who can achieve that. It’s quite a turnaround as many in Brussels could barely conceal their contempt for Johnson just a few months ago.

Bellwether Vote | Bologna’s traditional allegiances are being tested by Matteo Salvini’s relentless campaign to convince the jewel in the left’s crown to switch tribes in regional elections next month. If he succeeds, it would mark a watershed moment and rock the country’s fragile government. Here’s why.

Vacillating Investors | A scan of analyst research notes is all that’s needed to conclude investor uncertainty is running high about what to expect from the European Central Bank’s final policy meeting of the year this week — which is also Christine Lagarde’s first as president.

In Case You Missed It

Green ECB | Lagarde is discovering that her grand ambitions for fighting climate change will have to take a back seat to her new job of reviving inflation. The new ECB chief at first pledged to bind environmental concerns much more closely into policy decisions, but now she’s refining her message after a clamor of warnings from colleagues that their scope is limited by their mandate.

Tension in the Med | The discovery of sizable natural gas fields beneath the eastern Mediterranean was behind the idea to get the region’s nations cooperating to exploit the reserves. They would enrich themselves, while exports would help Europe reduce its dependence on Russian gas. But Turkey wasn’t part of the picture, and with an active navy in the region, it’s playing the part of spoiler. Here’s how.

German Hopes | Investors no longer see Germany’s growth outlook deteriorating, marking a turnaround in sentiment after months of pessimism over Europe’s largest economy. While the latest data come amid broader signals that growth momentum will increase, the economy has yet to demonstrate a revival from months of manufacturing gloom.

Czech Anger | Tens of thousands of Czechs marched in renewed protests against the country’s billionaire prime minister, Andrej Babis, who’s embroiled in an investigation into alleged fraud. The rally is part of a wave of the largest anti-government demonstrations since the fall of communism.

Chart of the Day

Months of soul-searching by Germany’s ruling parties hasn’t pulled Chancellor Angela Merkel’s coalition out of its funk. After the Social Democrats elected new leaders, the party wants to eek out concessions from Merkel’s bloc otherwise it may pull the plug on the government, plunging the country into turmoil.  Here’s a guide on how we got here and what could happen next. 

Today’s Agenda

All times CET.

• 1 p.m. European Commission President von der Leyen briefs reporters in Brussels

• 2:30 p.m. Von der Leyen unveils European Green Deal proposals

• 4 p.m. EU climate czar Timmermans briefs reporters on Green Deal proposals

• College of Commissioners to sign off on upgrade of Trade Enforcement regulation

• EU Court to publish preliminary position on border dispute and arbitration between Slovenia and Croatia

• Bulgaria’s parliament likely to approve new head of anti-corruption commission

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--With assistance from Alexander Weber, Nikos Chrysoloras and Ian Wishart.

To contact the author of this story: Viktoria Dendrinou in Brussels at vdendrinou@bloomberg.net

To contact the editor responsible for this story: Emma Ross-Thomas at erossthomas@bloomberg.net, Iain Rogers

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