Brussels Edition: Stupid Games, Tech Nightmares

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

Brexit talks are on the brink of collapse. At least that’s what the British government briefed yesterday, putting the responsibility squarely on the shoulders of the European Union, and particularly German Chancellor Angela Merkel. For EU Council President Donald Tusk, the whole ‘‘stupid blame game’’ doesn’t do anyone any good. Neither side has yet been brave enough to finally pull the plug, but nothing has yet been arranged for today. The U.K. says they’ll meet ‘‘soon,’’ and the Commission is ‘‘available.’’ An address by Jean-Claude Juncker and EU chief negotiator Michel Barnier at the European Parliament this afternoon might offer some clarity. 

What’s Happening

Eurogroup Meets | Euro-area finance ministers meeting in Luxembourg today will debate the final key elements of a small budget for the currency bloc, seeking to cap two years of difficult negotiations over a tool that falls far short of Emmanuel Macron's original sweeping vision. Here’s a look at the outstanding points and why a deal may still be elusive.

New Banker | Finance ministers are also due to endorse the appointment of Fabio Panetta, the Bank of Italy’s No. 2 official, to the Executive Board of the ECB. He would become the fourth Italian in the central bank’s leadership echelon since its creation, following in the footsteps of President Mario Draghi.

5G Security | The EU will warn against a nightmare scenario whereby hackers or hostile states assume control of everything from electricity grids to police communications and home appliances. While it doesn’t name China or Huawei, a new report opens the door to measures to prevent over-dependence on a single supplier, especially if it’s from a country with poor democratic standards.

Balkan Expansion | EU government envoys will debate starting accession negotiations with Albania and North Macedonia today. While the draft communique under discussion does give a green light, countries such as France, the Netherlands, Denmark, Greece and Bulgaria still have reservations (for different reasons), meaning that any positive nod would probably be vague, and have strings attached. 

Polish Elections | Opinion polls suggest Law & Justice will cement its grip on power in this Sunday’s Polish election. The result of the vote may determine whether Poland’s transformation —whereby state companies became political machines, civil liberties were curtailed and public television was turned into a mouthpiece — becomes irreversible. It all started with a plane crash.

In Case You Missed It

Carbon Tax | The EU is poised to bring trade policy into the fight against climate change, a move that risks stoking global tensions. Frans Timmermans, the designated EU climate czar, said that the EU should analyze introducing a carbon border tax, preventing European energy-intensive manufacturers such as steelmakers from relocating outside the EU to avoid emission curbs.

Vestager’s Promise | Margrethe Vestager promised a clampdown on big tech during her European Parliament audition for a job that will equip her with greater weaponry to take on the Silicon Valley giants. Her five-year term will focus on digital-services rules to set new liability and safety limits for internet platforms. Here are her biggest hits so far. 

Crypto Assets | Crypto assets such as Libra could have a systemic effect on financial stability and should be regulated by the EU, according to the bloc’s incoming financial services chief. Valdis Dombrovskis said the EU is currently working on a regulatory framework for cryptos, echoing concerns by authorities around the world about Facebook’s plan for a digital currency. 

Car Pollution | Whatever happens with Brexit, Europe and the U.K. will be united by filthy air and a slowly unfolding public-health crisis caused by its embrace of diesel. Worldwide, 90% of people breathe dirty air, costing 7 million lives a year.

Chart of the Day

German industry did marginally better in August than July, but whether the economy as a whole shrank in the third quarter depends on how services have performed. Leading indicators point to further weakness ahead and the damage appears to be spreading to that sector, research by Bloomberg Economics suggests.

Today’s Agenda

All times CET.

• 10 a.m. Belgian Deputy Prime Minister, Minister of Finance and ESM Governor Alexander de Croo, in a panel discussion on his book “The Age of Women – Why Feminism also Liberates Men” at the ESM in Luxembourg

• 1 p.m. Euro-area finance ministers gather in Luxembourg to discuss the economic situation in the currency bloc, exchange rate developments, invite bids for Sabine Lautenschlaeger’s replacement at the ECB’s Executive Board, and confirm Fabio Panetta at ECB board
• 2:30 p.m. Press conference by EU Commissioners King and Gabriel and the Finnish Presidency of the Council on the EU-wide risk assessment of 5G networks
• 3:30 p.m. EU Commission President Jean-Claude Juncker and EU’s chief Brexit negotiator Michel Barnier address the Plenary of the European Parliament
• 4:35 p.m. NATO Secretary General Jens Stoltenberg gives joint press conference with Italian Prime Minister Giuseppe Conte
• 5:10 p.m. EU Council President Donald Tusk gives keynote speech at the Athens Democracy Forum. Earlier in the day, Tusk will meet Prime Minister of Greece Kyriakos Mitsotakis
• The EU is set to release its assessment of security risks posed by 5G, a report that will serve as the basis for stricter measures governing future mobile networks to be agreed later this year
• Bank of England’s financial stability committee will release a quarterly statement

--With assistance from Viktoria Dendrinou, Zoe Schneeweiss and Craig Stirling.

To contact the editor responsible for this story: Emma Ross-Thomas at erossthomas@bloomberg.net, Andrew Blackman

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