Brussels Edition: Seeking to Reassure

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

European finance ministers have two goals for today: the first is to agree on joint backstops for financing national governments and extending liquidity to companies. It’s an effort to reassure markets and keep a lid on borrowing costs as countries go on a spending spree to cushion the blow from the coronavirus pandemic. The second is to prevent a recession from triggering a political crisis that will fuel anti-EU forces in Italy and elsewhere. So expect a lot of talk about solidarity, money to boost healthcare systems and perhaps a very vague reference to the prospect of joint debt issuance to share the burden of rebuilding economies. We have the full laundry list of measures due to be adopted. If there’s a deal of course.

What’s Happening

U.K. Turmoil | The U.K. is facing a leadership crisis as it heads into the peak of the pandemic, with Boris Johnson in intensive care and his government under pressure to get a grip on the outbreak. The 55-year-old prime minister’s condition worsened during Monday afternoon and the pound fell after the government announced he had been moved to the facility for the most seriously ill patients.

Virus Update | European governments are seeing growing evidence that shutting down much of the economy is containing the disease. While most leaders are pleading for patience, Austria may become the first country to ease restrictions, and Denmark looks set to follow. Here’s the latest.

Real Crisis | The EU is facing its biggest challenge since it was created, according to German Chancellor Angela Merkel. The crucial difference between this crisis and the financial meltdown that started in Greece in late 2009 is that the effects of the pandemic, with people still dying in the thousands, are indiscriminate and not quantifiable, Ian Wishart explains.

More Tariffs | The EU plans to impose tariffs on lighters and plastic fittings from the U.S. in retaliation for controversial American duties on imported steel and aluminum. The measures highlight how there’s little sign of global trade disputes abating in the face of the pandemic threatening the global economy.

In Case You Missed It

AI Regulation | When DeepMind, the artificial-intelligence company owned by Google, released predictions for some of the building blocks of the virus that causes Covid-19, it was yet another example of the powerful role algorithms are playing to combat the pandemic. But new EU AI laws could complicate the types of innovations DeepMind and others make in the future.

Hungarian Predicament | If the coronavirus has shown up the EU’s frailties in finding a united responseto the crisis, Viktor Orban’s ability to thumb his nose at western Europe exposes a weakness that risks long-lasting damage to the post-Cold War integration project. While Brussels is alarmed by Hungary’s authoritarian turn, here’s why there’s little it can do to stop it.

Jailbirds Freed | European governments have begun releasing thousands of inmates nearing the end of their sentences or those that are unwell to try to slow the spread of the virus. EU justice ministers discussed yesterday how to manage the risk of Covid-19 outbreaks in prisons and detention centers.

Climate Diplomacy  | The two most important locations for international climate diplomacy — this year and last — have both been turned into field hospitals. But a delay to the pivotal COP26 meeting doesn’t mean the pandemic has wrecked global climate action.

Chart of the Day

Brussels Edition: Seeking to Reassure

A Spanish recession is unavoidable — Bloomberg Economics predicts the economy contracted by 5% in the first quarter and will shrink another 7% in the second. The risk is that the government’s reluctance to spend more on saving jobs and keeping companies afloat delays the recovery and magnifies the fiscal costs.

Today’s Agenda

All times CET.

  • 3 p.m. Video conference of EU finance ministers. Press briefing expected around 8 p.m.
  • 4 p.m. Video conference of EU research ministers
  • EU tech & antitrust chief Vestager takes part in ‘Facebook Live’ event with Radikale Venstre

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