Brussels Edition: Uncharted Territory

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

The European Commission may issue a negative opinion on Italy’s budget today, taking the unprecedented step of essentially rejecting a country’s spending plans. The move may not come as a surprise since Italy hasn’t addressed any of the commission’s concerns. Still, it will further escalate the brewing standoff between Rome and Brussels — one that could have unforeseen consequences for Italy and the euro area.

What’s Happening

Trade Tango | EU and U.S. officials will discuss efforts to expand trans-Atlantic trade in industrial goods by cutting regulatory barriers and tariffs when they meet in Washington today. The talks could last until Friday, giving each side a chance to flesh out the July 25 deal between Donald Trump and Jean-Claude Juncker. The big unanswered question: What’s Trump’s thinking on U.S. imports of EU cars and car parts?

Here’s the Beef | Industrial goods aren’t the the only item on the trade agenda. The EU and U.S. will hold a video conference on a separate issue — dating from before Trump’s election — of American concerns about the bloc’s quota for imports of hormone-free beef. EU governments have given Commissioner Phil Hogan a mandate to negotiate the matter.

Secret Hearing | The three candidates to succeed Daniele Nouy as the head of the ECB’s banking supervision arm are being grilled behind closed doors at the European Parliament today. The ECB never published the shortlist with the three names, and lawmakers fear they may be violating data-protection rules if they talk about the applications in public, people close to the process say. Ireland’s Sharon Donnery is seen as the front runner.

Cambridge Analytica | The EU’s Justice Commissioner Vera Jourova will be in Strasbourg today, discussing with EU lawmakers the scandal in which the data of millions of Facebook users was shared with consulting firm Cambridge Analytica. The debate comes ahead of a vote Thursday at the European Parliament on a resolution backing measures such as a full audit of Facebook or changes to its platform to avoid such privacy violations.

In Case You Missed It

Judges’ Day | Poland’s Supreme Court has asked 23 recently retired judges to return to work after the EU’s top tribunal ordered the country to “immediately suspend” rules that forced them out by lowering the retirement age. The case, which pitted Poland’s Supreme Court against its executive branch, is a litmus test for the EU as it struggles to contain populist forces from Rome to Budapest.

Deserted | As one of our colleagues put it, what was once dubbed “Davos in the Desert” is now just “the desert.” The three-day conference hosted by the Saudi kingdom’s sovereign wealth fund that kicks off in Riyadh today was meant to showcase opportunities created by efforts to wean the economy of oil. That is, until the killing of government critic Jamal Khashoggi prompted dozens of business leaders to pull out.

Extending Daylight | EU countries may scrap seasonal clock changes as of 2021, according to draft legislation seen by Bloomberg. Putting an end to the decades-old practice of capitalizing on natural daylight in 2021 instead of next year — as the Commission proposed with much fanfare — is a compromise tabled by Austria, which holds the rotating EU presidency.

Fighting On | Once again, Theresa May lives to fight another day. After yet another weekend in which members of her U.K. Conservative Party said that they were on the point of throwing the prime minister overboard, by last night talk of a challenge to her had yet again receded.

Chart of the Day

Brussels Edition: Uncharted Territory

In case you’re wondering, Sweden still doesn’t have a government. Acting Prime Minister Stefan Lofven reported scant progress after a week of trying to form a new coalition amid the deepest political gridlock the country has ever seen. Lofven will continue with another week of talks and hold confidential discussions with the other party leaders.

Today’s Agenda

All times CET.

  • 9 a.m. European Parliament plenary debate on the Facebook/Cambridge Analytica data scandal with EU Justice Comissioner Vera Jourova
  • 10 a.m. EPC cybersecurity event: The European Policy Centre holds an event on transatlantic cybersecurity cooperation
  • 10:30 a.m. Romanian President Klaus Iohannis will debate the future of Europe with MEPs in Strasbourg and EU Commission President Jean-Claude Juncker 
  • 10:45 a.m. Event for Brussels press corps at ESM's Luxembourg headquarters, with Managing Director Klaus Regling 
  • 11 a.m. Eurostat to release 2Q data on government debt and deficit 
  • 3:30 p.m. Readout from the College of EU Commission meeting where Italian budget will be discussed, among other things
  • 7 p.m. German Chancellor Angela Merkel holds campaign rally in Dieburg ahead of Hesse state election on Oct. 28
  • The three candidates for Single Supervisory Mechanism chair appear for informal, closed-door hearings at the European Parliament in Strasbourg
  • EU Parliament to vote on plans to improve consumers’ trust in drinking tap water by tightening the maximum limits for certain pollutants, and on providing tap water for free, or for a low service fee, in restaurants, canteens and catering service

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