With the end of the Angela Merkel era approaching, many predicted a decline of her Christian Democrats. But yesterday’s state election in the eastern German state of Saxony-Anhalt, the final regional contest before September’s national vote, delivered an impressive victory for the CDU and its state premier Reiner Haseloff. The election was a key test for national CDU leader Armin Laschet, who was chosen as the conservative chancellor candidate to succeed Merkel after a bruising battle with Bavarian Premier Markus Soeder. For the Greens, whose popularity surged in other recent state contests, it was a disappointing evening, as a smaller-than-expected gain to just 5.9% of the vote threatened its role in the state government. After a series of declining ratings in national polls, the result was another setback for their chancellor candidate, Annalena Baerbock. For now, at least, it seems that reports of the CDU’s demise have been greatly exaggerated. - Arne Delfs and Nikos Chrysoloras

What’s Happening 

Time to Pay | Finance ministers of the Group of Seven industrial democracies secured a landmark deal that could help countries collect more taxes from big companies and enable governments to impose levies on U.S. tech giants such as Amazon and Facebook. But key details are still to be nailed down, more nations must sign on, and full implementation could take years.

Green Pledges | G-7 finance ministers also pledged to target environmental crimes with a move to push companies into disclosing the impact they have on the climate. The ambition of their vows leaves something to be desired and it remains to be seen whether the group’s leaders will deliver more when they meet on Friday.

French Reform | President Emmanuel Macron’s government isn’t abandoning its controversial plan to reform the French pension system, hammering home the argument that it’s key to attracting foreign investors. Read our interview with France’s Delegate Minister for Foreign Trade, Franck Riester.

Southern Promise | Every Italian leader promises to fix the country’s South. Mario Draghi is staking his reputation on finally pulling it off. But such is the scale of the task — decrepit infrastructure, corruption, chronic unemployment, Kafkaesque red tape — that you have to wonder why this time would be different, John Follain and Alessandra Migliaccio report.

ECB Decision | European Central Bank officials will debate whether to prolong the elevated pace of emergency bond-buying this week, a judgment that rests on how fragile they determine the economy’s recovery to be. Confidence is the strongest in three years, prices at factory gates are jumping by the most since 2008, and inflation is technically above target. Yet multiple policy makers have signaled that’s not enough to change course.

In Case You Missed It

Greek Bonds | Written off by most investors after a debt crisis over a decade ago, Greece’s stunted bond market is making a roaring comeback. For investors nimble enough to navigate these illiquid yet high-yielding securities, they’re proving a powerful proxy to wager that the ECB will extend its phase of faster bond-buying when it sets policy on Thursday.

Talking Jobs | Employment is one of 13 areas of study in the ECB’s policy review, its first in almost two decades. Yet a year and a half into the process, the decision-making Governing Council hasn’t yet formally discussed the topic and doesn’t plan to do so until this month, just before the whole exercise is scheduled to wrap up. Insufficient attention to job markets carries risks for the central bank, Carolynn Look reports.

Frost’s Demands | In an article for the Financial Times, Britain’s Brexit minister David Frost urged the EU to drop its “legal purism” in the implementation of the Northern Ireland protocol of the Brexit deal, saying the current state of affairs is unsustainable. His demands for flexibility were swiftly rejected by Ireland and France.

Orban’s Offer | The controversial Chinese university campus in Budapest that prompted a protest in the Hungarian capital this weekend may be delayed. Prime Minister Viktor Orban’s government is ready to submit a plan for the project to Budapest voters in 2023, Mandiner weekly reported, defusing a major source of contention ahead of next year’s parliamentary elections.

Carbon Taxes | Researchers warn that the EU’s plan to put a levy on certain emissions-intensive commodity imports (you read the draft here first) may offer only limited protection against the relocation of production to countries with laxer climate policies. Here’s why.

Correction | We misspelled Viktor Orban’s name in Friday’s Edition. Our apologies.

Chart of the Day

The U.K. government is on the defensive following a policy U-turn on travel abroad that caught many vacationers off guard. The abrupt move echoes the disruption that took hold last summer, when sudden changes to quarantine rules forced vacationers to rush home at short notice. Still, bookings in continental Europe give reason to be optimistic for a better tourist season.

Today’s Agenda (All times CET.)

• 10 a.m. EU Justice ministers meet in Luxembourg to discuss how to combat illegal online content
• 3:15 p.m. German Chancellor Merkel takes part remotely in the opening of a Bosch semiconductor plant in Dresden