(Bloomberg) -- Welcome to the Brussels Edition, Bloomberg’s daily briefing on what matters most in the heart of the European Union.
Christine Lagarde should get a formal nod from EU finance ministers today to succeed Mario Draghi atop the European Central Bank. But filling one job opened another, as her move to Frankfurt raises questions over who could take over from her at the helm of the International Monetary Fund. Europe is determined to keep the leadership of the IMF by jointly backing a single candidate, but the names suggested so far may struggle to get unified support. Officials say Jeroen Dijsselbloem has few fans in Europe’s South, Bank of England Governor Mark Carney isn’t seen as “European” enough, while other names floated don’t sound sufficiently senior.
What’s Happening
Schrems Reloaded | Max Schrems made his name as the Austrian privacy activist who took on Facebook and won an EU court case that toppled a transatlantic data transfer system used by the social media giant and some 4,000 other companies. Today he’s back in court, challenging a potentially even more important data transfer tool and questioning the safety of the EU-U.S. Privacy Shield.
ECB Stimulus | Financial firms including Goldman Sachs and Morgan Stanley are predicting that the ECB’s flagship crisis-fighting tool — quantitative easing — will soon make a comeback. Policy makers have been signaling their readiness to add monetary stimulus for the euro area, but indicated they’re not yet united on when or how to act.
Double Jeopardy | Turkey may soon be facing sanctions from both the U.S and the EU, adding to the country’s woes after the selloff caused by its president’s decision to fire the central bank governor. As Ankara braces for U.S punitive measures over its purchase of a Russian missile defense system, the Commission is about to circulate — as soon as today — options for sanctions over Turkey’s drilling activities off the coast of Cyprus.
Head-to-Head | As the competition to become next U.K. prime minister grinds on, the remaining contenders — Jeremy Hunt and favorite Boris Johnson — clash in the first TV debate since the race was narrowed to two. Voting opened to Conservative Party members on July 6, but the winner won’t be announced until July 23 so there’s still a long way to go.
In Case You Missed It
Mixed Signals | Economic reports yesterday showed conflicting data on the state of the euro area. The Bank of France cut its growth estimate for the second quarter and said confidence among manufacturing executives has dropped to its lowest level in six years. At the same time, German industrial production saw a slight pick-up in May, but investors still think a German recession is inevitable.
Trade Spat | Trade Commissioner Cecilia Malmstrom signaled that she expects the U.S. and EU to hit each other with tariffs as retaliation over illegal government aid to Airbus and Boeing. The simmering dispute threatens to worsen transatlantic commercial ties as the bloc presses Donald Trump’s administration to refrain from imposing tariffs on European automotive goods.
Greek Warning | Euro-area finance ministers said they looked forward to working with the new Greek government but warned the incoming administration that it needs to stick to its post-bailout commitments. They will be welcoming a new member to their ranks: Prime Minister Kyriakos Mitsotakis selected Christos Staikouras as finance chief following Sunday’s election victory.
Euro Dreams | Croatia’s planned reforms for the banking sector were endorsed by euro-area finance chiefs as well as the ECB. The Frankfurt-based central bank will now conduct a health check of Croatia’s banking system, which may last about a year. Countries must join the ECB’s system of banking supervision and the bloc’s bank-failure mechanism before they can adopt the euro.
Chart of the Day
Spain’s economy is on track to outpace every Group of Seven economy apart from the U.S. this year, building on an expansion that has endured for half a decade. The Bank of Spain predicts 2.4% growth, about twice what’s expected for the euro area. But the European Commission can’t help worrying that the momentum is unsustainable, a view that has implications for budgetary policy, with Brussels seeing far less fiscal leeway.
Today’s Agenda
All times CET.
- 9 a.m. EU finance ministers meet in Brussels
- 9 a.m. EU top court hears arguments in case over transatlantic data transfer tools
- Council President Donald Tusk meets Azerbaijan President Ilham Aliyev in Baku
- 7 p.m. EU privacy chief Andrea Jelinek and Commission Secretary General Martin Selmayr speak at Brussels event on data protection and competitiveness in the digital age
- EU climate chief Miguel Arias Canete participates in the event with Politico in Brussels
- Contenders for leadership of U.K. Conservative party take part in their first set-piece TV debate
- SSM’s Andrea Enria in Athens to meet Bank of Greece’s governor and bankers
- Verdict due in fraud trial of businessman Bernard Tapie and Orange CEO Stephane Richard
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