Europe’s tough road ahead

Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up here.Germany’s next scheduled national [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. Germany’s next scheduled national election is still more than a year away yet it’s already clear that migration will dominate campaigning. The risk is that it becomes a distraction from the real challenges confronting Europe’s biggest economy. In a [fiery speech]( in parliament in Berlin today, Chancellor Olaf Scholz lashed out at opposition leader Friedrich Merz, accusing the likely conservative candidate for his job of chasing cheap headlines in the battle against irregular migration. In truth, both men are sounding tougher on immigration to try to check extreme forces on the right and left that want to slash migrant numbers. Frustration with Scholz’s coalition on the topic is [a key reason]( why the far-right AfD party won a recent regional election. Polls suggest that anti-immigration forces will again make gains in a Sept. 22 vote in Brandenburg, the state that surrounds Berlin and is home to Scholz’s Potsdam constituency. There are, in fact, plenty of reasons for German voter dismay. The economy is stagnating and Volkswagen yesterday scrapped decades-old job protections, a symbol of the deepening woes facing the country’s once all-powerful carmakers. Yet as Mario Draghi so meticulously documented in his report [published Monday]( all Europe must reform to better compete with the US and China. That means developing advanced technologies, meeting ambitious climate targets, bolstering defense capabilities and securing critical raw materials, among other European Union measures. WATCH: Draghi urges the EU to invest as much as €800 billion ($884 billion) extra a year to make the bloc more competitive. While diagnosing the bloc’s ills, his parallel proposal for the issuance of common EU bonds to help finance the cure [immediately ran into opposition]( from Germany, among others. As things stand, Merz and his CDU/CSU alliance are in pole position to win next September’s election. But he remains unpopular, and it’s unclear how a Merz-led coalition would do any better than Scholz in future-proofing the economy. For Germany, as for Europe, the road ahead looks anything but smooth.— [Iain Rogers]( Merz listens to Scholz speaking today at the Bundestag in Berlin. Photographer: Sean Gallup/Getty Images Global Must Reads Pop superstar Taylor Swift’s endorsement of Kamala Harris, calling her “[a steady-handed, gifted leader]( minutes after the end of the vice president’s showdown with Donald Trump, capped what most analysts called a positive debate for the Democratic candidate. Harris consistently managed to steer the encounter to spotlight Trump’s demeanor and his record, leaving [her opponent on the back foot](. Twice Trump declined in the debate to say whether he wants Ukraine to win the war against Russia, comments that may fan concerns in Kyiv and among European leaders that he will cut back or [even halt support]( for Ukrainian forces if he retakes the presidency. Harris also chided the former president for not protecting American [interests against China]( saying he “sold us out” during his time in office. WATCH: Harris and Trump clash over abortion rights during the ABC News Presidential Debate. Further Russian airstrikes against Ukraine’s energy grid may [trigger an emergency]( at one of the three operating nuclear power plants still under Kyiv’s control, the top Ukrainian energy official warned. At stake are 10 crucial nodes linked to nuclear plants, whose destruction could plunge the country into darkness and provoke a radiological emergency, Energy Minister German Galushchenko said in an interview. Israel proposed giving Hamas leader Yahya Sinwar safe passage out of Gaza in exchange for the group freeing captives and handing over control of the strip, Israeli hostage envoy Gal Hirsch told us, even as doubts deepen about [reaching a cease-fire accord](. Israel also said its military [probably killed an American-Turkish citizen]( last week by accident, prompting Washington to call for “fundamental changes” to how its forces operate in the West Bank. Mexico’s Senate voted in favor of President Andres Manuel Lopez Obrador’s plan to overhaul the judicial system by having all Supreme Court justices and about half of federal judges elected by popular vote in 2025. That will bring his ruling Morena party closer to [controlling the only branch of government]( that eluded the outgoing leader during his six-year term. Spanish Prime Minister Pedro Sanchez said the EU should reconsider its plan to impose additional tariffs of up to 36% on Chinese-made electric vehicles, saying the bloc [doesn’t need a trade war]( with Beijing. Venezuela’s bolivar has tumbled in unofficial markets as the supply of dollars the government pumps into the financial system dries up, suggesting that Nicolás Maduro blew [through a chunk of the money]( in a futile attempt to court voters and retain the presidency legitimately. South Africa may address outstanding shortcomings in tackling illicit financial flows needed to exit a global dirty-money list by either June or October next year, [according to a National Treasury official](. Ireland has landed a challenge most countries would envy: how to spend an almost €13.8 billion ($15.2 billion) windfall that Apple was [ordered to pay in taxes]( by the EU’s top court, money that the government in Dublin didn’t want. Washington Dispatch On a day when Washington could talk about little else but the presidential election debate, another politician once seen as a potential candidate, Andrew Cuomo, testified at a [combative House hearing]( over his response to the coronavirus pandemic when he governed New York. Cuomo defended his handling of the spread of the illness in nursing homes in the state when he appeared before the House Select Subcommittee on Covid-19. According to an interim report published this week by the Republican-controlled panel, the Cuomo administration mishandled the response and then withheld information about it from the public. The former Democratic governor repeated past claims that he was following federal guidance while blaming then-President Trump for downplaying the danger from the pandemic. Cuomo resigned in 2021 after facing sexual harassment allegations, which he has denied. The hearing unfolded amid speculation that he’s considering a comeback, possibly with a run for mayor of New York City next year. One thing to watch today: President Joe Biden, Harris and Trump will take part in a ceremony in Manhattan marking the anniversary of the Sept. 11 terror attacks. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television. Chart of the Day China’s central government in May urged more than 200 cities to buy unsold homes to ease oversupply. More than three months later, only 29 have heeded the call. The glacial pace of implementation — driven in large part by the unattractive economics of the plan for municipal governments — [underscores the challenge]( President Xi Jinping faces as he tries to arrest a record property slump that’s threatening to undermine the country’s growth targets. And Finally Fences, guards, dogs — even bees — are among the security measures Ugandan farmers are deploying to [protect their coffee plots from thieves]( at a time when prices are soaring. It’s another example of how food and drink have become lucrative targets for criminals in recent years, affecting products from African cocoa beans and Spanish olive oil to ham and donuts. Coffee has drawn attention as drought in key grower Vietnam and strong demand squeezed global supplies, making it much more expensive. Workers harvest coffee berries on a plantation in western Uganda. 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