Brussels Edition: Back to the Drawing Board

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

Even as Europe wades through a widening Russian money-laundering scandal, a blacklist designed to prevent such activities will be rejected by the bloc’s interior ministers today in Brussels. While the EU’s justice chief blamed lobbying for the failure to agree on the measure — which lists Saudi Arabia alongside U.S. territories as high-risk jurisdictions — diplomats from member states argue that the document wasn’t legally watertight and the process was flawed. For the European Commission, which drafted the list, it’s back to the drawing board. 

What’s Happening

ECB’s Take | European Central Bank officials are poised to cut their economic forecasts today by enough to justify another round of loans for banks. The ECB’s latest projections are expected to show extensive downgrades for inflation and economic expansion in 2019, as views on the governing council vary on whether the current weakness is just a soft patch or a more consistent downturn.

Job Jostle | The European Parliament plans to map out the strategy for negotiations with EU governments on picking the bloc’s first chief prosecutor today. The assembly supports a Romanian anti-corruption crusader, while national capitals back a French candidate. The make-up of the negotiating team and the timetable for the full parliament to weigh-in will be discussed. 

Energy Probe | EON is set to be subjected to an extended EU probe into its takeover of RWE AG’s Innogy, a deal that would make EON the dominant grid operator in Germany and transform the country’s energy industry as utilities grapple with the shift to renewables.

Difficult Meeting | Talks between British and EU negotiators continue this week after a “difficult” meeting in Brussels to improve the divorce agreement. Pro-European lawmakers in the U.K. ratcheted up efforts to secure a second referendum, while European officials are pessimistic that Theresa May will have enough votes to get her Brexit deal over the line next week.

In Case You Missed It

Worsening Outlook | The global economy is suffering more than expected from trade tensions and political uncertainty, which are clouding prospects particularly in Europe, the OECD said yesterday in a gloomy report. The Paris-based organization downgraded almost every Group of 20 economy, including slashing its forecast for Italy to a 0.2 percent contraction this year.

Orban ShowdownThe ultimatum that Hungarian Prime Minister Viktor Orban received to avoid expulsion from the EU’s biggest political group is all but certain to go unmet, potentially sharpening battle lines between mainstream forces and nationalists ahead of crucial EU-wide legislative elections in May.

Scrapping Vetoes | The EU’s inability to agree on taxing global tech giants shows the need for majority voting, French Finance Minister Bruno Le Maire said as he presented a national levy on about 30 Internet companies. EU finance ministers poured cold water last month over plans to scrap national vetoes on tax policy, an initiative many nations see as encroaching on their sovereignty.

Kurz Abroad | Austrian Chancellor Sebastian Kurz was surprised to get double the scheduled one-on-one time with Donald Trump during a visit to Washington last month, where the two men covered the whole gamut of European politics. Yet the cordiality in the White House may say more about fractious trans-Atlantic relations than Kurz’s meteoric political rise.

Chart of the Day

Brussels Edition: Back to the Drawing Board

Greece’s benchmark index extended an advance since the end of December to 15 percent, the biggest gain since 1999. That’s helped unwind a brutal selloff from a two-year low and bid up bank valuations, which collapsed to less than half of their book value in January. The rally came on the heels of Greece marking a milestone in its recovery from a bruising financial crisis after agreeing to sell 10-year bonds for the first time in nine years.

Today’s Agenda

All times CET.

  • 10 a.m. EU’s justice and home affairs ministers meet in Brussels
  • ECB policy decision and Mario Draghi news conference
  • EON/Innogy deal faces an extended EU probe 
  • EU Parliament leaders discuss planned negotiations with EU governments on the choice of the bloc’s first chief prosecutor 
  • EU trade chief Cecilia Malmstrom delivers a keynote speech at the “40th Annual International Trade Update,” at the Georgetown University Law Center in Washington, D.C.
  • MEPs and national MPs will gather for an inter-parliamentary meeting in Brussels on “Women’s Power in Politics” 

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