NATO’s leaders will today declare that China’s increasingly assertive foreign policy, “coercive” practices and expanding nuclear capabilities present a systemic challenge they are determined to tackle. What is particularly troubling for the Western military alliance is Beijing’s ever closer ties with NATO’s traditional foe, Russia, according to the draft communiques that we have seen. The constant tweaks in the wording of the ultra-long statement suggest that, behind the assurances of unity, not everyone is on the same page on how to deal with Beijing —  an important trading partner and investor in several member states. On the sidelines of the summit, NATO leaders will seek to mend internal rifts. Bilateral meetings between Turkey’s president, Recep Tayyip Erdogan, U.S. President Joe Biden and Greek Prime Minister Kyriakos Mitsotakis are the ones to watch in this respect.

What’s Happening
Border Tensions | Meanwhile, a crisis is brewing in relations between the EU and the U.K. over the flow of goods into Northern Ireland post-Brexit. The spat will come to a head at the end of this month, when a grace period for chilled meats is due to expire. Here’s the latest.

Canada Calling | The heads of European institutions meet Justin Trudeau for an EU-Canada summit today. With German Chancellor Angela Merkel preparing to exit the stage, Trudeau will be the longest-serving leader of the G7. While he is positioning himself as the new elder statesman, no one sees him owning the role in the way the German chancellor did.

Cornish Comedown | Over the weekend, leaders of the Group of Seven failed to make good on a pledge of 1 billion additional vaccine doses they will donate to developing nations. And their climate commitments also leave something to be desired.

Not So Green | As the European Commission prepares to approve the first batch of EU-funded national recovery plans from Wednesday, many appear to fall short of a much-touted green target. Of 15 plans evaluated by the E3G and Wuppertal think tanks, 13 fail to reach a minimum 37% goal for climate-friendly spending — contrary to claims by governments that they meet the threshold. Only Finland at 42% and Germany at 38% get passing marks, with Italy judged the least green at 16%.

Greener Steel | Steel, which transformed everything from guns and bridges to cities and shipping at the end of the 19th century, is critical to the wind turbines, solar panels and electricity pylons needed to displace fossil fuels but is itself reliant on burning billions of tons of coal. Take a look at our deep dive into how weening the industry off cheap coal and onto more costly green technologies will require massive government support and concerted action from Tangshan to Indiana.

In Case You Missed It
Laschet’s Leanings | The head of Chancellor Angela Merkel’s party said he’d prefer to govern with the pro-business Free Democrats, rejecting higher taxes for top earners and criticizing the Greens in the buildup to Germany’s election in September. A new poll showed support for the Greens declining for a fourth consecutive week to 20%, while Merkel’s bloc gained one percentage point to 27%.

Nuclear Deal | Ebrahim Raisi, the hardline cleric widely tipped to replace Iranian President Hassan Rouhani, said he’ll continue talks aimed at reviving the 2015 nuclear deal if elected. European diplomats have warned for weeks that resurrecting the deal could become more complicated if an agreement isn’t struck before Iran’s presidential election on June 18.

Labor Resilience | European fears that the pandemic will have a lasting impact on the labor market are starting to subside. Economists are becoming more confident that permanent damage to employment — so-called scarring — from the coronavirus-induced recession will be less severe than after the 2008-2009 financial crisis, Catherine Bosley reports.

Al Fresco Fight | As Rome seeks to revive its economy after the pandemic, authorities have inadvertently ignited a fierce battle for the city’s streets — or to be more precise, its curbs. With indoor seating still restricted, Rome’s administration allowed cafes and restaurants to set up seating in public areas. This means that there’s now nowhere to park.

Chart of the Day

The skyrocketing price of shipping goods across the globe may hit your pocketbook sooner than you think — from that cup of coffee you get each morning to the toys you were thinking of buying your kids. Companies are facing rising costs, which will likely have to pass on to consumers sooner or later.

Today’s Agenda
All times CET.

9:15 a.m. NATO leaders meet in Brussels
10:05 a.m. NATO Secretary General Stoltenberg speaks at the GMF's Brussels Forum
10:45 a.m. Estonian Prime Minister Kallas and Canadian Prime Minister Trudeau speak at Brussels Forum
11 a.m. Eurostat to publish industrial production reading for April, report on impact of Covid-19 crisis on industrial production
11:30 a.m. German Chancellor Merkel speaks at Brussels Forum
2:45 p.m. Turkey’s President Erdogan, Greece’s PM Mitsotakis speak at Brussels Forum
3:30 p.m. Ukrainian President Zelensky speaks at Brussels Forum
Trudeau meets chiefs of EU institutions in Brussels
Signing ceremony of the EU digital Covid certificate regulation