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Brussels Edition: Top-Job Tensions

Brussels Edition: Top-Job Tensions

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

Tensions are rising in the battle for EU leadership. Europe’s center-right alliance suspects that Emmanuel Macron’s determination to kill Manfred Weber’s bid for the job of European Commission president is part of a broader plan to undermine the bloc’s traditional parties — like he did in France. They’re now putting considerable pressure on Angela Merkel to stand up to Macron, setting the stage for a potential stalemate in Sunday’s summit for top jobs.

What’s Happening

Euro Enthusiasm | The bloc’s newest member can’t wait to embrace all things euro. As soon as early next year, Croatia aims to transition to what’s called ERM-2 — effectively the waiting room for membership in the common currency. The nation’s enthusiasm for the euro is understandable given its reliance on tourism, but it does contrast with the attitude of some members that ranges from lukewarm to downright hostile.

Treading Water | EU trade chief Cecilia Malmstrom will today update fellow commissioners on the state of negotiations over a landmark trade deal with Mercosur countries, as both sides push to get an accord after two decades of talks. Top commission officials will also hear the latest on Italy’s talks with Brussels over its debt, though no decision on a disciplinary process is expected yet.

Energy Talks | Imports of U.S. LNG will be the focus of EU energy ministers today. Europe has already become a battle ground in a gas trade war between Washington and Moscow, with President Donald Trump criticizing the planned Nord Stream 2 pipeline that would bring more Russian fuel into the EU. Energy security could become an even hotter issue later this year, with Ukraine warning of trouble in transit talks with Russia.

Swiss Fallout | With no signs of a resolution to a political spat between the EU and Switzerland that’s hijacked stock-market regulations, the finance industry is preparing for the potential fallout. Days before a critical deadline, UBS warned clients they won’t be able to trade Swiss shares at its trading venue in London if the dispute escalates this week.

U.S. Questioning | WTO members are asking the Trump administration to justify the legality of its $16 billion assistance program to help farmers impacted by retaliatory tariffs from China and other countries targeted by the U.S. trade wars. The inquiry could lead to more disputes if WTO members determine the program violates international trade rules.

In Case You Missed It

Tech Fine | Qualcomm faces another EU antitrust fine a year after being ordered to pay a 997 million-euro penalty for thwarting rival suppliers to Apple. The chip giant may be fined as soon as next month, potentially making it the last U.S. tech firm to be punished before competition chief Margrethe Vestager steps down. 

German Slide | A slump in German business confidence deepened in June as trade tensions weighed on manufacturers. U.S.-led protectionism has clouded Germany’s growth outlook, boosting fears that domestic demand will be undermined. The data will be closely watched after ECB President Mario Draghi last week said he will inject fresh monetary stimulus for the euro area if the economy doesn’t pick up.

Spanish Trouble | The resignation of a high-profile member of Ciudadanos, Spain’s third-largest party, could show that Prime Minister Pedro Sanchez is running out of options to form a government unless he wants to turn to anti-establishment parties or pro-independence groups. 

Brexit Saga | It’s been three years since Britain voted to break away from the EU, but the country still hasn’t managed to leave, while the risk of a messy no-deal split remains real. The race to replace Theresa May is down to two contenders, and you shouldn’t rule out another general election before the divorce is resolved. Here’s what to expect from the next season of the Brexit saga. 

Chart of the Day

Brussels Edition: Top-Job Tensions

Bavaria, Germany’s industrial powerhouse, wants the nation to stop burning coal by 2030, eight years before Chancellor Angela Merkel’s deadline. It may have little to lose by rocking the boat. The region has just five operational coal stations among nation’s roster of about 125 plants, and no lignite mines nor lignite-fired facilities

Today’s Agenda

All times CET.

  • 10 a.m. EU energy ministers meet in Luxembourg to discuss external energy relations 
  • 10:30 a.m. NATO secretary general’s pre-ministerial press conference 
  • EU foreign policy chief Federica Mogherini delivers speech at the 15th anniversary of the European Defence Agency
  • Commission President Jean-Claude Juncker and European Council President Donald Tusk have a working lunch in Osaka with Japanese Prime Minster Shinzo Abe
  • WTO members will press the U.S. to explain how its farm bailout complies with the group’s rules 

--With assistance from Bryce Baschuk, Ewa Krukowska, Andrea Dudik, Jasmina Kuzmanovic and Alexander Weber.

To contact the editor responsible for this story: Vidya N Root at vroot@bloomberg.net, Chris Reiter

©2019 Bloomberg L.P.