ADVERTISEMENT

Brussels Edition: Soft Patch or Slump?

Brussels Edition: Soft Patch or Slump?

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

A barrage of recent downbeat euro-area economic data has left policymakers wondering whether and how they should respond. ECB President Mario Draghi repeated yesterday that risks have intensified in recent months, even though the soft patch in the economy doesn’t necessarily foreshadow a serious slump. Data on business and consumer sentiment for the 19-nation bloc due today may help shed some light on the depth of the downturn.

What’s Happening

Still Foggy | If EU officials had expected last night’s House of Commons votes on the alternatives to Theresa May’s Brexit deal to clear some of the fog, they were badly mistaken: None of the options won majorities. EU ambassadors in Brussels meet today to discuss the state of Brexit talks, holding out the hope May’s deal will be approved before the end of the week. That may be tough, given the Democratic Unionist Party’s decision not to back the deal.

Finnish Hacking | The country that shares a bigger border with Russia than the rest of the EU combined is ramping up defenses against the threat of foreign meddling in its upcoming election. Finland’s government has offered training on how to spot and counter disinformation and hacking, while social media companies are teaching journalists how to protect their profiles and respond to online harassment.

German Power | A ruling by the EU’s top court today may put an end to a saga that started in 2014 with an order by the European Commission that Germany claw back excess reductions from major power users. Germany hasn’t been able to challenge the decision, which it said “misunderstood the underlying facts.” Its appeal at the top court has been pending since 2016.

Plot Thickens | Swedbank AB Chief Executive Officer Birgitte Bonnesen will face shareholders today amid reports the bank’s being investigated by U.S. authorities for providing misleading information regarding potential money laundering. The bank, which faces allegations it handled more than $10 billion in suspicious transactions tied to the Danske Bank Estonian laundering case, said it believes it has been truthful and accurate.

In Case You Missed It

Tiering Time? | The ECB’s chief economist says there needs to be a solid monetary-policy case before officials act to mitigate the side effects of negative interest rates on banks. ECB staff are examining the issue of tiering — where some excess reserves are exempt from the lowest rate — but action isn’t a done deal, Peter Praet said in a Bloomberg interview.

Shake it Up | Emmanuel Macron upended French politics when he swept aside mainstream parties that had dominated elections since the 1970s. But disrupting politics on a European level will be trickier for Macron’s La Republique en Marche!, as it seeks to form ad hoc coalitions after the European elections rather than join existing groups in the assembly, pitting it against entrenched interests.

Gender Gap | The last several decades have delivered major progress for women worldwide, with literacy, life expectancy and pay at or near historic highs. But huge disparities remain, especially in developing countries. Here are 10 important measures showing how over the past two decades some individual gender gaps have narrowed considerably, though most still persist.

Eastern Risks | As an eastern European credit collapse threatened to topple western parent banks in 2009, policy makers pulled together for the first time to save the system. A decade later, with eastern lenders outperforming the richer west, new risks are forming that threaten to be just as damaging, including rising political populism and a growing money-laundering  scandal.

Chart of the Day

Brussels Edition: Soft Patch or Slump?

Germany’s bond market just flashed another warning sign that Europe’s biggest economy is going the way of Japan. Ten-year bond yields dropped below those of the Asian nation’s for the first time since 2016 after ECB President Draghi said risks for the euro area remain tilted to the downside. The slide in bund yields has led to fears of a so-called Japanification of the euro area, where inflation, growth and yields remain permanently low.

Today’s Agenda

All times CET.

  • 9 a.m. Belgium’s caretaker government holds special cabinet meeting on measures related to Brexit 
  • 10 a.m. EU ambassadors in Brussels meet to discuss Brexit
  • EU court adviser gives non-binding opinion in a case by the European Commission seeking a daily penalty of 105,991 euros for Spain for failing to adopt EU rules on credit agreements for consumers of residential immovable property
  • EU Parliament votes on plans to improve consumers’ trust in drinking tap water by tightening the maximum limits for specific pollutants
  • EU top court rules on Germany’s appeal seeking to overturn a 2014 European Commission decision forcing it to claw back excess reductions from major power users that were granted in 2013 and 2014
  • EU foreign policy chief Mogherini in Quito, Ecuador, co-chairs the second meeting of the International Contact Group on Venezuela
  • German March CPI; Euro-zone consumer and business confidence

--With assistance from Nick Rigillo and Stephanie Bodoni.

To contact the editor responsible for this story: Vidya N Root at vroot@bloomberg.net, Iain Rogers

©2019 Bloomberg L.P.