Brussels Edition: When Jean-Claude Met Boris

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

One of them is optimistic about the prospect of a Brexit deal, but is relentlessly pursuing a course without one. The other hasn’t seen any proposals that could lead to a deal and warns of “utter chaos” should negotiations fail. Today marks the first time Boris Johnson meets European Commission President Jean-Claude Juncker (at least since Johnson became U.K. Prime Minister) and one thing they both agree on is that it could be a make-or-break discussion.

What’s Happening

More Levies | Some of Europe’s top luxury brands are targeted in President Donald Trump’s latest tariff salvo, which could affect billions of dollars in exports of American-bound whiskeys, wine, Champagne, handbags and men’s suits. The World Trade Organization is expected to authorize the U.S. to legally impose tariffs on an array of European exports in retaliation for Europe’s illegal government aid to Airbus.

Spanish Countdown | With the clock ticking towards a new election in Spain — potentially the fourth in as many years —King Felipe VI will hold meetings with political leaders today and tomorrow. If he comes to the conclusion that acting Prime Minister Pedro Sanchez won't be able to form a government, Spaniards will head back to the polls in November.

Apple Taxes | Apple fights the world’s biggest tax case in a quiet courtroom this week, trying to rein in the EU’s powerful antitrust chief ahead of a potential new crackdown on internet giants. The EU General Court in Luxembourg must weigh whether regulators were right to levy a record 13 billion-euro tax bill on the iPhone maker for its deal with Ireland, which allegedly allowed the company to pay far less than other businesses.

Agenda Setting | EU European Affairs ministers meet in Brussels to discuss the agenda for next month’s leaders’ summit. France and other countries want climate policy on the table again, after the last failure to agree on zero-net emissions by 2050, while Greece and Cyprus are pushing for a discussion on additional punitive measures against Turkey over its drilling in the Mediterranean.

Budget Frustration | Ministers will also try to make some progress on the stalled negotiations about the bloc’s next trillion-euro budget, as time to reach an agreement is running short. Not unrelated is another round of talks about sliding democratic standards in Hungary and Poland, and on the new mechanism proposed by the European Commission to shield rule of law in the bloc.

In Case You Missed It

Italian Assets | Italy’s new finance minister walked back on plans by the previous government to sell state assets, calling the targets set by his predecessor “very unrealistic.” Roberto Gualtieri said the focus will shift to making assets owned by the state more efficient, as the government plans a budget deficit 2% of gross domestic product in 2020, according to Corriere della Sera.

Japanification | The monetary stimulus that European Central Bank President Mario Draghi unleashed last week won’t be enough on its own to prevent an extended period of low economic growth and feeble inflation. That’s the view of analysts in Japan, a nation with long experience of entrenched weakness where the central bank has also deployed a combination of negative interest rates and quantitative easing.

Facebook Money | The ECB warned Facebook that the bar for regulatory approval of its planned Libra project has been set very high, as EU finance ministers meeting in Helsinki on Friday expressed their concerns about digital currencies. Policy makers said Libra raises serious questions about money laundering and data protection, while EU antitrust authorities are conducting an early-stage probe into how the new payment system will work.

Stomach Troubles | U.S. and European health regulators said they’re looking into the possibility of whether Sanofi heartburn medication Zantac and its generic versions contain a probable carcinogen. The discovery underscores the challenge regulators face in overseeing a vast global supply chain of drugs and raises questions about the quality of generic manufacturing.

Chart of the Day

European policy makers are taking a tough stance against single-use plastics. New regulations, scheduled to take effect in 2021, are targeting a market of more than $10 billion a year by banning a raft of plastics products, including cutlery and straws, according to BloombergNEF. The heaviest blows will be suffered by the polypropylene and polystyrene industries, for which Europe is the second-largest market.

Today’s Agenda

All times CET.

• 9 a.m. EU European Affairs ministers meet in Brussels
• European Parliament plenary begins in Strasbourg
• EU Commission President Juncker meets U.K.’s Johnson in Luxembourg for working lunch
• Johnson also meets Luxembourg counterpart Bettel, with a news conference expected at around 3:15 p.m.
• 5 p.m. EU antitrust chief Vestager in Berlin, participates in “Frauenpower für Europa” event
• 6 p.m. German Chancellor Merkel speaks at prize ceremony in Bonn
• 7:30 p.m. EU foreign policy policy chief  Mogherini briefs EU lawmakers in Strasbourg on Hong Kong

--With assistance from Viktoria Dendrinou, Tony Aarons and Charles Penty.

To contact the editor responsible for this story: Heather Harris at hharris5@bloomberg.net, Iain Rogers

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