Good morning.

The 41-day U.S. federal shutdown—already the longest on record—looks set to end today after the Senate’s 60-40 vote and an expected House nod. Roughly 800,000 federal employees have missed two pay cycles, while Moody’s estimates the stoppage has shaved about 0.3 percentage-points (≈ $6 bn) off quarterly GDP. Markets are cheering: Asian equities rose 0.4 % and Brent barely budged, signalling relief rather than exuberance. (reuters.com)

Yet the “victory” is hollow. The deal punts the fight over expiring Affordable Care Act tax credits—worth $16 bn a year to 15 million Americans—to an uncertain December vote. Washington has learned nothing from 2013 or 2019: weaponising basic governance now corrodes the fiscal credibility that underwrites the dollar’s reserve status and, by extension, global stability. Europe’s post-Maastricht budget rules may be technocratic, but at least they inoculate against this kind of legislative hostage-taking. (theguardian.com)

Seen in a longer arc, the shutdown saga exposes a deeper shift: fiscal brinkmanship is replacing the old bipartisan consensus on public goods. When the routine act of paying clerks and air-traffic controllers requires crisis diplomacy, the real deficit isn’t monetary—it’s institutional. As political scientist Yascha Mounk warns, “democracies don’t collapse in a moment; they erode through repeated assaults on basic norms.”¹

— The Gist AI Editor

¹ Y. Mounk, The Great Experiment, 2022.

EU Chip Strategy Falters

Brussels is scrambling to rework its microchip strategy after acknowledging scant progress in building a secure supply chain (Politico.eu). The admission comes as both the U.S. and China increasingly weaponize valuable semiconductor supply chains. This setback undermines the EU’s ambition for strategic autonomy in a sector vital for everything from artificial intelligence to electric vehicles, with a European Court of Auditors report describing the goal of capturing 20% of the global market by 2030 as “very unlikely” to be met.

Brussels’ Voluntary “Democracy Shield”

The European Commission is set to unveil its “European Democracy Shield,” a strategy to combat foreign election interference and disinformation online. However, a draft of the proposal reveals that participation for EU member states will be voluntary, raising significant questions about its effectiveness (Politico.eu). This opt-in approach suggests a fragmented and potentially weak response to coordinated disinformation campaigns, a stark contrast to the binding regulations often favored by Brussels for economic matters.

Trump Signals US Energy Pivot

President Trump is preparing a significant energy policy shift, planning to authorize oil and gas drilling off the coast of California for the first time in decades (WSJ). The proposal would offer six offshore lease sales between 2027 and 2030, directly challenging long-standing environmental protections and setting up a major confrontation with Sacramento. This “drill, baby, drill” approach signals a clear intent to maximize domestic fossil fuel production, a move with potential implications for global energy markets.

Ukraine’s Worsening Manpower Crisis

Kyiv Mayor Vitali Klitschko has issued a stark warning that Ukraine faces “huge problems” finding soldiers as a record number of men attempt to flee the country to avoid the draft (Politico.eu). He described Russian forces attacking in relentless waves, highlighting a severe personnel imbalance that is becoming a critical vulnerability. This manpower shortage threatens to shape the future trajectory of the conflict more than any single weapons delivery, hobbling Kyiv’s ability to sustain its defense.

Stay tuned for the next Gist—your edge in a shifting world.

The NHS is in crisis — should I pay for private medical insurance?
— Financial Times

‘Squid Game market’: the South Korean retail traders driving US meme stocks
— Financial Times

Chimpanzees are better at reasoning than we thought
— Financial Times

Ukraine faces ‘huge problems’ finding soldiers as men flee abroad, says Kyiv mayor
— Politico.Eu

Democratic Lawmakers Say Genesis Insider Sale May Abuse Bankruptcy System
— Wall Street Journal

Trump to Push for Oil Drilling off California Coast
— Wall Street Journal

China’s JD.com Ups the Ante in European E-commerce

Chinese e-commerce firm JD.com is escalating its European offensive with a proposed €2.2 billion public takeover bid for German electronics retailer Ceconomy, the parent of MediaMarkt and Saturn. The move signals a strategic pivot from cross-border shipping to establishing a significant physical and logistical footprint on the continent, directly challenging Amazon’s market dominance. By acquiring Ceconomy’s network of over 1,000 stores, JD.com gains an instant, mature retail network, aiming to replicate its “hour-level” delivery model from China. This escalation in competition is a welcome development for consumers, potentially driving down prices and improving service. However, it will also intensify scrutiny from Brussels, where regulators are already wary of the market practices of Chinese platforms like Shein and Temu and are considering tighter regulations on foreign tech companies.

Berlin Reverses Course on Agricultural Subsidies

Following significant protests from the agricultural sector, Germany’s new coalition government has decided to reinstate subsidies for agricultural diesel. The move, projected to cost €430 million annually, reverses a contentious decision made by the previous government. This policy shift underscores the considerable political influence of the farming lobby and represents a setback for fiscal consolidation and environmental goals. While providing immediate relief to farmers, the decision sidesteps the necessary broader conversation about market-based agricultural reforms and the long-term sustainability of subsidies, which can distort competition and hinder innovation within the sector. It is a pragmatic, yet economically questionable, response to concentrated political pressure.

Catch the next Gist for the continent’s moving pieces.

Christian Lindner hat einen neuen Job
— ZDF

En pleine affaire Shein, JD.com, un autre géant chinois de l’e-commerce, part à l’assaut du marché européen
— Le monde

Aktuelles zum Krieg in der Ukraine
— ZDF

Chrupalla: “Russland keine Gefahr für Deutschland”
— ZDF

Alemania restablece los subsidios al gasóleo agrícola tras las fuertes protestas del sector
— El Pais

Morto a 59 anni Escobedo, leader band del Jimmy Kimmel Live!
— Ansa