(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.

Forget the lost years of banking union bust-ups and haggling over deficits: the EU is about to embark on a green revolution. Leaders meeting in Brussels next week may sign up to a radical overhaul of the entire economy in the most ambitious package of policies ever implemented to arrest and adapt to climate change. A draft communique commits the bloc to zero emissions and to adjusting all legislation to achieve this goal. Everything will change — from rules prohibiting state aid to the way imports are taxed. Crucially, leaders will promise to put their money where their mouth is. Because transition is not going to come cheap for anyone.

— Nikos Chrysloras and Ewa Krukowska

What’s Happening

Birthday Bashing | NATO leaders gather in London for an anniversary celebration that may raise doubts the alliance can last another 70 years. Donald Trump and European leaders are at loggerheads over burden sharing and arms control, while Emmanuel Macron’s “brain death” remark lingers. All this while the alliance expands to outer space and addresses the challenges posed by China.

5G Unity | The EU’s telecoms ministers are due to formally adopt a common position on 5G — a move that could embolden certain member states to shun China’s Huawei from its networks. Officials are expected to agree that suppliers should be evaluated based on their home country’s laws.

Budget Battle | Government envoys in Brussels will today debate the latest proposal by the Finnish Presidency of the EU on the bloc’s budget. The Finns suggest a financial envelope of 1.09 trillion euros, at least a quarter of which will be spent on climate objectives, while the infamous euro-area budget will be less than 13 billion euros. Expect another long fight.

WTO Crisis | The problems for the global trade body could reach a crescendo next week when one of the three final members of its appeals panel plans to step down. That will effectively paralyze the most important function of the 25-year-old institution at a time when it has never been needed more.

Tech Tariffs | The U.S. proposed tariffs on roughly $2.4 billion in French products in response to a tax on digital revenues that hits large American tech companies. The U.S. move is a setback for efforts to stop a conflict over the digital levy from intensifying and will likely make for an awkward meeting between Donald Trump and Emmanuel Macron on the sidelines of a NATO summit today.

In Case You Missed It

Lagarde Lines | In her first testimony to the EU parliament in her current role, ECB President Christine Lagarde said that the institution would be “resolute” in hitting its inflation mandate and stated that an upcoming strategy review would be “open-minded” Here are a number of options Lagarde and co. may look at in the next few months.

Coalitions Crumbling | The marriages of convenience governing Germany and Italy are on rocky ground. Here’s what the main protagonists want in Europe’s biggest economy. Down south, things are looking even more precarious, raising the prospect of a Salvini return.

Babis Defiant | The billionaire prime minister of the Czech Republic  vowed to fight back against allegations of having a conflict of interest relating to his media, agriculture and chemical empire. The EU audit makes Andrej Babis the latest in a growing line of Eastern European leaders in conflict with the bloc over the rule of law.

Greek Power | Speaking of the complexities of adapting to climate change, Greece’s aging lignite plants put the country in a Catch-22. Shutting down the dirty facilities could starve the fragile economy of power, but the country can ill afford the money required to overhaul its electricity sector.

Mamma Mia | It’s something that would make Nonna turn in her grave, but Italian pasta is increasingly being made using wheat from the U.S. and Canada after foul weather hurt domestic crop yields. The question is whether it will continue, given frosty trade relations, and if it doesn’t, what will it mean for mamma’s meatballs.

Chart of the Day

Further evidence has emerged that ECB rules designed to alleviate the drag of negative rates on bank profitability are pushing deposits out of Germany into more cash-strapped areas like Italy and France. Balance-sheet data for national central banks in the euro area should provide a clearer picture of what’s going on today.

Today’s Agenda

All times CET.

  • 11 a.m. Eurostat to release industrial producer prices reading for October
  • 6:30 p.m. ECB Executive Board member Benoit Coeure speaks in Brussels
  • EU justice ministers meet in Brussels to discuss environmental crime, negotiations with the U.S. and the Council of Europe on e-evidence
  • Commission Vice President Valdis Dombrovskis meets Gordon Sondland, U.S. ambassador to the EU
  • European Parliament’s Economic and Monetary Affairs Committee will vote on two legislative measures to reinforce the fight against VAT fraud in e-commerce
  • European Parliament hearings with ECB Executive Board candidates Fabio Panetta and Isabel Schnabel

Like the Brussels Edition?

Don’t keep it to yourself. Colleagues and friends can sign up here. We also publish the Brexit Bulletin, a daily briefing on the latest on the U.K.’s departure from the EU. 

For even more: Subscribe to Bloomberg All Access for full global news coverage and two in-depth daily newsletters, The Bloomberg Open and The Bloomberg Close.

How are we doing? We want to hear what you think about this newsletter. Let our Brussels bureau chief know.

--With assistance from John Ainger, Jonathan Stearns, Zoe Schneeweiss and Natalia Drozdiak.

To contact the authors of this story: Nikos Chrysoloras in Brussels at nchrysoloras@bloomberg.netEwa Krukowska in Brussels at ekrukowska@bloomberg.net

To contact the editor responsible for this story: Heather Harris at hharris5@bloomberg.net, Chris Reiter

©2019 Bloomberg L.P.