Brussels Edition: Search for a Cure

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

In battling the deadly coronavirus, European policy makers face the same predicament as the continent's overwhelmed medical community: the usual remedies don’t work. Central bank interventions, defiant reassurances by leaders and stimulus pledges failed to prevent a historic market meltdown yesterday. But like doctors, they won’t just give up. And the Commission will today unveil a set of treatment options to help countries cushion the outbreak’s economic impact. One question that lingers is whether euro-area governments are ready to agree on ambitious, coordinated fiscal stimulus — amid doubts about whether even that medicine would be effective.

What’s Happening

EU Shutdown | It’s getting eerily quiet in Brussels, as ministerial meetings are being canceled and staff are being asked to work from home. That feeling is only bound to get more pronounced starting midnight today, after the Belgian government ordered the closure of all bars and restaurants and non-essential shops on weekends. It’s a foretaste of what has already hit Italy. 

Border Risks | EU home affairs ministers will today review the measures backing Athens in its dispute with Turkey over still uncontrolled migration flows at the Greek border. But the lingering question among many of them will be about closing Europe’s borders, both internal and external, as a result of the coronavirus.

Air Relief | The Commission plans to propose a waiver of a requirement that air carriers use at least 80% of their takeoff and landing slots or risk losing them the following year. The move seeks to help airlines cope with the impact of the pandemic that has caused air travel demand to plunge by suspending an obligation on their use of airport slots for at least several months.

German U-Turn | Angela Merkel’s administration is prepared to abandon its long-standing balanced-budget policy to help finance measures to contain the fallout of the coronavirus. No decisions have been made on specific measures or an amount, but it would be a remarkable u-turn. Merkel said she would announce additional stimulus measures on Friday.

In Case You Missed It

 ECB Action | Warning of a “major shock” to prospects for global growth, Christine Lagarde unveiled a package of monetary measures aimed at “surgically” supporting key parts of the euro-area economy hurt by the outbreak, with a focus on helping companies and keeping banks lending. The ECB’s move failed to stem a global stock rout. 

More Putin | Vladimir Putin changed his mind and backed a plan to allow him to run for two more presidential terms because of the current turbulent period in the world. Of course the Russian president has had a hand in some of the latest turmoil, setting off a price war in the oil market and fueling a crisis with Turkey over the civil war in Syria.

Jet Set | While commercial airlines are suffering globally from tumbling demand, there’s at least one small sub sector that seems to be thriving. The private jet industry has received a surge in inquiries from Americans currently in Europe after Donald Trump announced a travel ban from the continent, even as operators themselves scramble to clarify how that will impact their operations.

Next Phase | U.K. authorities have abandoned efforts to contain the spread of coronavirus and instead will focus on delaying the worst of the outbreak. The move came as the Institute for Fiscal Studies warned that the British economy is ill-prepared to cope with shocks such as the coronavirus, with forecasts pointing to “feeble” growth over the next five years.

Chart of the Day

ECB President Lagarde said recent economic indicators show a “considerable worsening of the near-term outlook” because of the spread of the coronavirus. The latest forecast — already somewhat out of date, according to Lagarde — see euro-area GDP rising 0.8% in 2020. That’s down from 1.1% in December and in line with the OECD prediction at the start of this month.

Today’s Agenda

• EU home affairs ministers meet in Brussels to discuss the situation at the Greek border with Turkey 
• Commission to present urgent support measures to help countries dealing with the coronavirus fallout 

--With assistance from Zoe Schneeweiss.

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net, Chris Reiter

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