The dark past stalking Europe

[Balance of Power]( From [Bloomberg Politics]( [FOLLOW US [Facebook Share]]([Twitter Share]( [SUBSCRIBE [Subscribe]](  As Angela Merkel prepares for a fourth term in power, a few former communist neighbors east of Berlin are quietly relishing the less-than-emphatic nature of her victory. Leaders in Poland, Hungary and the Czech Republic have been banging the drum against the German Chancellor’s open-door refugee policy for more than two years. Does the rise of the anti-immigration AfD from fringe protest group to the German Parliament vindicate them? The Polish interior minister thinks so, saying he hopes Germany and the European Union now learn from Merkel’s “mistake.” The rift between core EU states in western Europe and newer eastern members is likely to widen after next month’s Czech election, as [Bloomberg’s team in eastern Europe reports](. The party with an unassailable lead in the polls is fronted by a billionaire who blames refugees for terrorism and wants to run the country more like his business. Donald Trump-style populism still lurks in Europe. The question is whether Merkel and her allies in western capitals can keep a lid on it. - [Rodney Jefferson]( Hungarian Prime Minister Viktor Orban, Polish ruling party leader Jaroslaw Kaczynski and Czech billionaire Andrej Babis, head of the country’s most popular party. Photographer: Martin Divisek Global Headlines [U]([gly scenarios]( | Hours after North Korea’s top diplomat said the U.S. had issued a declaration of war — a claim denied by the White House — National Security Adviser H.R. McMaster said the Pentagon had gamed out four or five scenarios to resolve the crisis. The Army lieutenant general said “some are uglier than others” and that while conflict can’t be ruled out, he hopes it will be avoided. [Another tax-reform hurdle]( | Trump’s plan, set to be released tomorrow, may force dozens of Republican congressmen in New York, New Jersey and other states into a politically damaging vote to repeal a $1.3 trillion tax break that benefits their districts. Despite the mounting challenges, the president told a group of conservatives last night that he expects the House will pass a tax bill in October and the Senate by year’s end — an extremely rapid timeline.[Obamacare repeal flatlines]( | Turns out Senate Republicans were never really all that close to getting the necessary votes for their last-ditch Obamacare repeal effort. That became clear as the Sept. 30 deadline approached, and a wave of Republicans came out against the proposal. Now Majority Leader Mitch McConnell must decide whether to put his party through the spectacle of one more vote on a doomed repeal bill. [Hurricane Maria’s toll]( | Puerto Rico’s debt-ridden government is working to repair large parts of the island’s government-run electricity system that were destroyed by the storm. In the three decades that National Guard brigadier general Wendul G. Hagler II has served, he says, “it’s about as large a scale damage as I have ever seen.” Trump posted on Twitter that the U.S. territory is in “deep trouble” as pressure builds on Washington to extend additional aid. [An independent Kurdistan?]( | The vast majority of Iraqi Kurds who voted in a historic referendum yesterday are expected to have backed independence. The result won’t automatically trigger secession, or even immediate demands for it, yet repercussions would be felt far beyond Iraq and have the potential to open up another Middle East conflict. For more on the issues at stake, including borders, water and oil exports, click [here](.[And finally ...]( President Michel Temer’s austerity measures are hitting Brazil’s cosseted public sector, and workers at the National Mint may have to do without their lunchtime massages. The so-called train to happiness — Brazilians’ nickname for the perks enjoyed by government workers — has reached the end of the line as the authorities move to scale down a notoriously bloated bureaucracy following the worst recession on record. The train to happiness started rolling when Brasilia was created, bulldozed out of an arid plateau, with celebrated architect Oscar Niemeyer designing many of its grand, flowing structures - like this one, The National Congress building. Photographer: Dado Galdieri   Need to know every detail of what's happening in the federal government? Try Bloomberg Government. Delivering rich data, sophisticated tools and breaking news alongside original, in-depth analysis from policy experts, [BGOV helps government relations professionals]( perform at the top of their game.   You received this message because you are subscribed to the Bloomberg Politics newsletter Balance of Power. You can tell your friends to [sign up here](.  [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( Bloomberg L.P. 731 Lexington, New York, NY, 10022