Brussels Edition: Trade Meeting, Cookies, Italy’s Budget

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

Transatlantic tensions will be the main course at a lunch of European Union trade ministers today in Brussels and the latest developments may be hard to digest. As the bloc gears up for a WTO decision allowing the U.S. to impose tariffs on nearly $8 billion of EU goods as retaliation over illegal subsidies to Airbus, EU trade chief-designate Phil Hogan urged the U.S. administration to engage and prevent a commercial breakdown that could hit tens of billions of dollars worth of international trade. Or, in Hogan’s words, face “the law of the jungle.”

Viktoria Dendrinou and Jonathan Stearns

What’s Happening

Brexit Draft | It’s Oct. 1 and supposedly 30 days until Britain leaves the EU. Nowhere is  that deadline more apparent than at the annual Conservative party conference in Manchester, with the “Get Brexit Done” slogan plastered behind every speaker. And there may finally be some progress, too: the U.K. government has completed the draft legal text of a Brexit deal and is expected to send it to EU officials this week.

Tricky Hearings | Confirmation hearings for the new European Commission continue today after starting off with a bang: the EU Parliament forced Romania and Hungary to nominate new candidates, as their first picks were rejected over irregularities in their financial statements. Meanwhile, Hungary rejected a claim by the EU’s rotating presidency that all members have agreed to tie the bloc’s funding to rule-of-law conditions.

Cookie Guidance | It often seems impossible to access websites without having to click a box saying it will install cookies — tiny pieces of code that allow advertisers to track you — on your PC. But what happens when this box is already pre-ticked? The EU’s top court gives guidance today on whether that goes beyond what’s in line with EU law and respects the requirement to ask for users’ consent.

Tax Breaks | The court is also weighing a challenge to the European Commission’s crackdown on multimillion-euro tax breaks for Spanish companies that acquired stakes in foreign firms. A non-binding opinion by one of its advisers today could give the Commission another boost, after a 2016 ruling already backed it. At issue is a 2012 amendment to the Spanish measure expanding the scope of the disputed tax break to acquisitions in foreign holding companies.

Greta Effect | Call it the Greta Thunberg effect, democracy against the establishment, or simply an issue whose time has come. Whatever it is, pressure is rising for the EU to finally get its act together on climate. The challenge is to turn the political impetus into effective policy without running into vested interests. And without being deterred by the eye-watering price tag.

In Case You Missed It

Italian Test | Prime Minister Giuseppe Conte is set to test the limits of the EU’s flexibility with a budget framework for 2020 that falls short on debt reduction targets and fails to reduce Italy’s deficit. The finance plan, approved by the cabinet on Monday evening, sets a target for a 2020 deficit of 2.2% of gross domestic product and aims to boost growth to 0.6%.

Mixed Bag | Europe’s labor market is giving some hope to the region’s economic story, which has been dominated by a deepening manufacturing slump that’s tipped Germany close to recession. Not all is rosy, however. German inflation unexpectedly slowed to the weakest level in almost three years, adding to evidence of muted price pressures just weeks after the ECB decided to deploy fresh stimulus.

German Combustion | Crucially, the continent’s largest economy is facing a manufacturing crisis. Germany’s economic power was built on the back of its excellent gasoline and diesel cars. Their inevitable demise puts the country’s position as the “engine of Europe” under threat, Bloomberg Opinion’s  Chris Bryant explains.

Chart of the Day

Brussels Edition: Trade Meeting, Cookies, Italy’s Budget

Euro-area inflation appears well and truly stuck at a low level, a frustration for ECB policy makers, who’ve just unveiled another round of stimulus. Apart from an Easter-related bump in April, the core rate remains around the 1% level. That’s forecast to be the case again today, when Eurostat publishes September’s figures.

Today’s Agenda

All times CET.

  • 11 a.m. Eurostat publishes euro-area inflation flash estimate for September

  • 1 p.m. Informal meeting of EU trade ministers in Brussels, to discuss Airbus sanctions, U.S. relations, Mercosur deal

  • EU Commission President Juncker in Strasbourg, delivers speech on Council of Europe 70th anniversary

  • ECJ gives non-binding opinion in Spanish tax breaks dispute

  • ECJ publishes guidance on a German dispute over computer cookies

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