Brussels Edition: Presidential Cliffhanger

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

Ursula von der Leyen improved her chances of becoming European Commission president by promising Socialist lawmakers more ambitious action on everything from climate change to social rights. The written pledges may help secure the absolute majority she needs when the European Parliament votes on her nomination today at 6 p.m. in Strasbourg. But von der Leyen's victory isn’t in the bag, with some Parliament members and officials saying she still needs to perform well in a speech and debate this morning. It may not be as riveting as the men’s Wimbledon final on Sunday, but this ballot is the closest thing the EU has to such drama. 

What’s Happening

Bad Tempered | The EU is bracing for Brexit talks to become more hostile under the next British government after a meeting of chief negotiators last week was described as one of the most difficult encounters of the last three years. The bloc is weighing up possible concessions it could offer to avoid a chaotic no-deal Brexit, but two officials with knowledge of the discussions said the U.K. now appeared to be trying to bully its way to get what it wants.

Spanish Deadlock | Pedro Sanchez’s bid to take office for a second term in Madrid is running into headwinds, with the anti-austerity Podemos refusing to give him the votes he needs. If Sanchez loses next week’s confidence vote in Parliament, he’ll have two more months to stitch together a majority before the legislature is dissolved and voters are asked to try all over again. 

Greek Plans | Only nine days after winning national elections, the new Greek government is pouncing on low debt yields to sell a new seven-year bond, expected today. The country wants to finalize its annual financing program and signal that better days are coming for the Greek economy, as the new administration seeks to convince skeptical creditors of the need to loosen its fiscal targets

Airbus Retaliation | As soon as this summer, Europe expects the WTO to give the U.S. the green light to hit the EU with tariffs on products valued at between $5 billion and $7 billion over illegal aid for Airbus, according to two European government officials. In addition to helicopters and aircraft parts, the U.S. tariffs may target cheese, olives and pasta.

In Case You Missed It

Turkish Steps | EU foreign ministers agreed to freeze most high-level contacts with Turkey and cut the flow of funds to the country, while holding back on sanctions targeting Turkish companies involved in offshore drilling in the eastern Mediterranean. The spat adds to the uncertainty weighing on Turkish assets, following the dismissal of the country’s top central banker and the prospect of U.S. sanctions over Recep Tayyip Erdogan’s decision to purchase Russian missiles. 

Tax Order | GlaxoSmithKline and Vodafone are among more than a dozen companies that have challenged an EU order forcing the U.K. to claw back millions in tax breaks, adding to the list of potential EU flash points ahead of Brexit. The court cases marks the start of at least two years of legal quarreling in the tribunals in Luxembourg that the U.K. was keen to sever ties with by leaving the bloc.

Rail Shift | Italy is preparing to commit itself to completing the TAV high-speed rail project through the Alps to France, in a sudden about-face by the Five Star Movement. Tensions over the project have threatened the coalition’s survival, and a green light later this month could further undermine Luigi Di Maio’s party. 

Eastern Woes | Europe’s eastern wing is suffering from aging and shrinking populations, and those countries are less prepared to deal with the issue, a top International Monetary Fund official said. This should be tackled by raising the retirement age, extending job incentives and importing workers, something that may be difficult in a region gripped by anti-immigration populism. 

Chart of the Day

Brussels Edition: Presidential Cliffhanger

French President Emmanuel Macron stuck to his demand for deep reforms in the EU before it accepts new members, telling biggest candidate Serbia that premature entry would benefit no one. Balkan leaders have expressed frustration at what they say is stalling by the EU.

Today’s Agenda

All times CET.

  • 9 a.m. Von der Leyen to address EU Parliament in Strasbourg
  • 6 p.m. The European Parliament to vote on von der Leyen’s nomination for European Commission presidency
  • EU trade chief Cecilia Malmstrom and Bank of England Governor Mark Carney participate in conference about Bretton Woods in Paris
  • ESM Managing Director Klaus Regling speaks at Economist 23rd Government Roundtable in Athens

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