Brussels Edition: French Disconnection

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

With the threat of punitive U.S. tariffs on European cars and auto parts looming, EU ambassadors in Brussels will be looking to France to break a deadlock that’s prevented the bloc’s executive arm from starting trans-Atlantic trade talks. There’s a lot at stake because a delay by EU governments in approving a negotiating mandate risks provoking Donald Trump’s ire and prompting him to impose the automotive levies, which could throw Europe’s economy into a recession. Many countries in the bloc want to try to keep the duties at bay by showing Trump progress toward a goal of cutting industrial tariffs, but France has been stalling over environmental and policy concerns.

What’s Happening

Brexit Logjam | Also on the agenda for EU ambassadors today will be Theresa May’s request for another short extension, amid resistance by some member states to allowing Brexit to hang on a cliff edge on the eve of the European parliamentary elections. Much will therefore depend on whether May’s reaching out to to her greatest political enemy to break the impasse makes any headway before EU leaders meet on April 10.

NATO Niceties | Trump may have spent a lot of time over the past couple of years criticizing his NATO allies, but defense officials in Brussels expect NATO Secretary General Jens Stoltenberg’s speech to the U.S. Congress today to highlight the American political establishment’s continued commitment to trans-Atlantic security.

Huawei's Limits | France won’t succumb to U.S. pressure for an outright ban on Chinese equipment from 5G procurement, but the likes of Huawei will be asked to pay a price they may find unpalatable. Under a bill parliament starts debating today, companies will have to agree to submit their equipment to broadened technical tests, which may be akin to  handing over industrial secrets, in order to be eligible for the lucrative network contracts.

Poof-It’s Gone! | He looks a bit like Doc from the “Back to the Future” movies and he claims it could take minutes, rather than thousands of years, to zap nuclear waste. Meet the physics professor in France — also a Nobel laureate — who has captured the imagination of the country’s nuclear industry with his radical findings.

In Case You Missed It

Italy Warning | European Commission President Jean-Claude Juncker urged Italy’s populist government to do more to boost the country’s contracting economy, an admonition that came a day after the OECD spotlighted economic and fiscal concerns of its own.

Steel Solutions | Thyssenkrupp and Tata Steel have offered to sell assets in Belgium, Spain and the U.K. to win antitrust approval for a European steel joint venture. The two companies are working to ease concerns flagged by European regulators that the combination of their steel operations would have too much control over market supply and prices.

No Exemption | The EU ordered the U.K. to claw back illegal tax breaks designed to lure multinationals, a timely reminder that it still calls the shots on competition rules until Britain leaves the bloc. The European Commission said Britain gave certain multinationals a selective advantage by granting them an unjustified exemption from anti–tax avoidance rules.

Merger Backing | German Finance Minster Olaf Scholz gave the possible merger between Deutsche Bank and Commerzbank a fresh push by reviving his call for a national banking champion that can support German businesses at home and abroad. The negotiations are entering a critical phase.

German Reparations | Poland’s ruling party is returning to the controversial topic of World War II reparations from Germany, calling on its western neighbor to take “responsibility” for the economic costs of its invasion eight decades ago. Calls for reparations from the war, during which about six million Poles — half of them Jews — were killed, have soured ties between Warsaw and Berlin.

Chart of the Day

Brussels Edition: French Disconnection

The World Trade Organization slashed its global trade growth projection for 2019 to a three-year low, citing the impact of rising commercial tensions and tariffs. The revised figures provide an important gauge of the stakes involved in Trump’s economic fight with China nearly a year after the initial salvos of the trade war were fired.

Today’s Agenda

All times CET.

  • 11 a.m. Eurostat publishes February retail trade reading for the euro area
  • ~12 p.m. European Commission Vice President Timmermans presents proposals on further strengthening the rule of law in the EU
  • 12:30 p.m. EU antitrust chief Vestager speaks at meeting of national antitrust regulators in Bucharest
  • 1 p.m. Commissioner Moscovici presents contingency measures on hard-Brexit preparedness in the area of customs
  • 2:30 p.m. European Parliament holds Brexit debate in Brussels
  • 3:15 p.m. Swedish Prime Minister Lofven speaks to the European Parliament on the future of Europe
  • NATO Secretary General Stoltenberg addresses a joint meeting of the two U.S. Houses of Congress; Stoltenberg will also give a speech at the conference “NATO Engages: The Alliance at 70,” co-organized by the Atlantic Council, the German Marshall Fund and the Munich Security Conference. He will hold a bilateral meeting with Secretary of State Pompeo
  • Informal meeting of EU competitiveness ministers in Bucharest
  • EU top court gives non-binding opinion in appeal by BMW against 2014 European Commission decision to only approve 17 million euros in German aid, out of planned package of 45 million euros, to build electric cars
  • French lawmakers debate 5G security bill

©2019 Bloomberg L.P.