Brussels Edition: Brexit’s Decisive Days, German Lizards

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

Brexit talks grind on, with the next 48 hours looking decisive. EU chief negotiator Michel Barnier told ambassadors that while there’s still appetite to continue discussions, the U.K.’s current proposals aren’t acceptable. It’s hard to find many in Brussels who are confident of a deal by Thursday’s EU summit and even London acknowledged that “ significant work” is needed.  The surreal nature of the situation will be highlighted by the Queen’s Speech today, where the monarch lays out the priorities for Boris Johnson’s minority government — the same administration that has tried and failed to trigger an election to push thought its Brexit agenda.

What’s Happening

Turkey Sanctions | EU foreign ministers meeting in Luxembourg today will deplore the Turkish offensive in Syria, vow to coordinate on imposing an arms embargo and probably escalate the process of triggering sanctions on companies and individuals involved in drilling activities off the coast of Cyprus. The decisions will mark a new low in relations between Ankara and its NATO allies in Europe. 

Balkan Bickering | EU diplomats will today seek to broker a seemingly impossible compromise between the majority of EU member states that support the start of accession negotiations with Albania and North Macedonia, a group of skeptics that agrees with conditions attached, and France, which demands a complete overhaul of the entire enlargement process before discussing the admission of new members. 

Tariff Trigger | The U.S. is set to get the final green light from the World Trade Organization today to hit $7.5 billion of EU goods with tariffs as retaliation for illegal aid to Airbus. EU trade chief Cecilia Malmstrom made a last-ditch plea to avert the duties, which will probably fall on deaf ears. She will hold a press conference today on enforcing the bloc’s slew of market-opening agreements around the world. 

Italian Friction | Italy’s coalition is poised to enter a crucial week for next year’s budget-approval process as divided as ever. The Five Star-Democrats government is due to present a draft of its plans to the Commission by tomorrow, but the two parties continue to clash over a number of items, such as income support for families with kids, changes to pensions and the introduction of a minimum salary.

In Case You Missed It

Polish Continuity | Poland’s ruling nationalists won parliamentary elections, giving the Law & Justice party four more years to continue policies that have collided with the EU’s democratic standards, an exit poll showed. Riding a wave of support built on family handouts, the vilification of gays and the rejection of multiculturalism, Law & Justice won 43.6% compared with 27.4% for its nearest rival, the pro-European Civic Coalition.

Budapest Shocker | The opposition unexpectedly won the election for mayor of Budapest and some of Hungary’s biggest cities against Prime Minister Viktor Orban’s party on Sunday — his first major defeat in almost a decade in power. Anti-Orban groups fielding joint candidates got a lift from a video featuring one of the illiberal leader’s allies rollicking in an orgy. The loss might be no big deal: just a year ago Polish opposition parties won leadership of every city with more than 100,000 people.

Wobbly Economy | The global economy is wobbling. Whether it topples over is the big question in financial markets, executive suites and the corridors of power. Here’s a list of reasons why a recession may be coming (or maybe not), as the guardians of the world economy head to Washington this week for annual meetings of the International Monetary Fund and World Bank.

German Lizards | While critics charge Germany with being overzealous in its commitment to balanced budgets, the truth is that the country has plenty of funds earmarked for investment. The problem is painfully slow planning and execution processes. Look no further than this parable with bats, lizards and red tape. 

Heavy Metal | Notre-Dame Cathedral is still at risk from the 551 tons of scaffolding that fused above it during the searing blaze that destroyed the Paris monument’s roof and towering spire six months ago. The tangled metal poses the biggest challenge to efforts to ensure that the vaulted ceiling doesn’t collapse. 

Chart of the Day

The removal of Prime Minister Viorica Dancila leaves Romania set to appoint its 17th head of government in the past three decades — more than any other EU member state. Eastern Europe as a whole has been far from stable since communism collapsed. From the more developed west, only Italy comes close to challenging it for political volatility.

Today’s Agenda

All times CET.

• 8:30 a.m. EU foreign ministers meet in Luxembourg 
• 11 a.m. French President Emmanuel Macron meets Ursula von der Leyen, the Commission’s president-elect in Paris
• 12 p.m. Trade chief Cecilia Malmstrom gives a keynote speech at the European Strategy and Policy Analysis System Annual Conference and debriefs reporters in Brussels
• 12 p.m. NATO Secretary General Jens Stoltenberg participates in the 65th Annual session of the NATO Parliamentary Assembly in London and meets with British officials 
• 1 p.m. Council President Donald Tusk meets Macron in Paris
• The WTO will formally adopt the Airbus arbitration award
• EU’s agriculture ministers meet in Luxembourg to discuss impact of U.S. tariffs on European farmers
• Nobel economics prize is announced
• Spanish court ruling expected on trial of Catalan independence leaders
• Spanish government is expected to exhume late dictator Francisco Franco

--With assistance from Jonathan Stearns, Zoe Schneeweiss and Zoltan Simon.

To contact the editor responsible for this story: Heather Harris at hharris5@bloomberg.net, Chris Reiter

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