Welcome to the Brussels Edition, Bloomberg’s daily briefing on what matters most in the heart of the European Union.

The leader of Germany's Christian Democrat-Social Democratic coalition, Friedrich Merz, suffered a shock defeat Tuesday in his bid to become chancellor after failing to secure a majority in a vote in the Bundestag.

Supporters of Mr. Merz, a former corporate lawyer, say he is well-prepared and thoughtful, but critics accuse him of failing to think more than one step ahead and breaking promises.