Table of Contents
Welcome to the Brussels Edition, Bloomberg’s daily briefing on what matters most in the heart of the European Union.
EU government envoys in Brussels will today seek agreement on common thresholds for imposing bloc-wide travel rules (such as requiring quarantine or negative Covid-test results for visitors). Diplomats are optimistic that a deal is within reach, which could offer some relief to the continent’s battered airlines and travelers confused by the patchwork of country-by-country measures. One problem is that such a deal would be non-binding, and no-one can guarantee that some of the usual suspects won’t keep doing their own thing. An even bigger problem for airlines is that the epidemiological map of Europe shows no country as a whole and only a handful of individual regions are below the threshold that would trigger restrictions, according to rules set in the proposal under discussion (which we had here). So don’t start packing for your next holiday just yet.
Virus Update | France will place more cities on maximum alert, while new infections in Spain and Italy hit a six-month high. Chancellor Angela Merkel will discuss the pandemic with mayors of Germany’s biggest cities today. Leaders will discuss the flare-up of new cases when they meet in Brussels next week, with a vaccine unlikely this year. Here’s the latest.
Week-Ahead | Besides the virus, the two main topics of next week’s summit will be the bloc’s emissions reduction target (where no concrete decisions are expected as we’ve reported) and Brexit (with EU officials insisting it will only be a stock-taking discussion). The big news on climate policy next week is due Wednesday when the Commission announces its plan for the mass renovation of buildings across the continent to make them energy-efficient (and more stylish, apparently).
Budget Talks | Talks between European lawmakers and Germany, which represents EU governments, over the bloc’s 1.8 trillion-euro budget and recovery fund will resume next week Wednesday. The Parliament, which has an effective veto over the package, rejected the latest offer from Germany yesterday, and the tone of the public exchanges between the two sides suggests the risk of delays keeps rising.
Nagorno-Karabakh | As fighting rages between Azerbaijan and Armenia, EU foreign ministers will debate the bloc’s potential reaction in a meeting on Monday. Meanwhile, an intense propaganda war is also being waged for the moral high ground, boosted by Azerbaijani oil revenues, new media and Armenia’s large and vocal diaspora. Hollywood’s reality TV star Kim Kardashian West has weighed in on the conflict.
Screen Time | The newest weapon in the EU arsenal to protect European businesses from aggressive foreign competitors arrives this weekend. Rules to screen foreign direct investment on national-security grounds aims to shield “critical” infrastructure and technologies through the establishment of a bloc-wide “cooperation mechanism” over FDI, with EU governments retaining the ultimate power to approve deals.
In Case You Missed It
Brexit Fight | The post-Brexit transition period isn’t over yet, and antitrust watchdogs in Brussels and London are already fighting about who’s going to be the final arbitrator for business deals. This tussle shows why enforcing an agreement to maintain a “level-playing-field” between the two sides of the channel is going to be so hard.
ECB Talk | European Central Bank officials agreed at their latest policy meeting to avoid any complacency in their battle against the recession, and to counter investors’ perception that the euro would inevitably strengthen. Here’s what records show about last month’s debate among the euro area’s central bankers.
Nord Stream | Poland’s antitrust watchdog slapped a $7.6 billion fine on Gazprom over the Nord Stream 2 pipeline, opening a new front in the bitter battle over the natural gas project. We have a full explainer on the repercussions of this week’s surprise move and of the whole set of legal questions that it raises about the plan, which is teetering on the brink.
Greek Debt | If you are searching for proof that ECB’s policy works, look no further than Greek bond yields. Borrowing costs for the euro area’s most indebted state dropped to all-time record lows, against the backdrop of ECB bond purchases, and less dire recession projections.
Chart of the Day
The idea of a V-shaped recovery, where an economy returns to its pre-crisis path following a recession, is embedded in central bank models and entrenched in investors’ thinking. But a Bloomberg Economics analysis of 36 recessions since 1965 across the Group-of-Seven countries suggests an L-shaped recovery is more likely. It’s not good news…
All times CET.
- 11:45 a.m. EU justice ministers’ video conference
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— With assistance by Zoe Schneeweiss, and Zoltan Simon