Brussels Edition: Another Week of Wrangling

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

After failing — yet again — to agree on who should lead the EU’s key institutions, the bloc’s leaders are looking ahead to an emergency summit this coming weekend to try and break the deadlock on who gets the top jobs. Expect frantic backroom negotiations over the next few days, including a meeting of the leadership of the EU’s center-right parties, and discussions on the sidelines of the Group of 20 summit in Osaka. Here are your guides on what countries want and who is still in the running. 

What’s Happening

Polish Ruling | Amid Warsaw’s ongoing standoff with Brussels over the rule of law, the EU’s top court will rule today in a case concerning Poland’s sweeping judicial overhaul. This one is a challenge by the Commission against lowering the retirement age of Supreme Court justices, which could force out nearly two-fifths of the top court in what critics have called a political “purge.”

Italian Dispute | Talks between Brussels and Italy will intensify over the coming days as Rome seeks to avoid disciplinary action over its mountain of debt. A letter by Finance Minister Giovanni Tria has failed to convince EU officials that Italy is doing enough to comply with the bloc’s rules. Unless a compromise is found imminently, a disciplining process could be triggered as soon as next week. 

Economy Scorecard | After Mario Draghi pushed the ECB a step closer to more stimulus, key indicators this week will be pored over for clues on how close policy makers are to action. The important flash estimate for June inflation is out on Friday, while Germany’s Ifo index today and euro-area economic confidence may show how trade tensions are affecting sentiment, spending and investment. 

In Case You Missed It

Prague Protests | Czechs took to the streets in the biggest protests since the fall of communism, demanding that Prime Minister Andrej Babis resign over allegations of conflict of interest and a criminal fraud case involving EU funds. The billionaire has denounced the accusations as an attempt by his opponents to derail his political career. 

Turkish Surprise | Turkish President Recep Tayyip Erdogan was dealt a stinging blow as opposition candidate Ekrem Imamoglu won the rerun of the Istanbul mayoral election, widening his margin of victory in a sign voters are concerned about the country’s crumbling democratic foundations and reeling economy. The vote comes days after EU leaders escalated a threat to sanction Turkey over its offshore drilling in the Mediterranean.

Boris’s Bid | Boris Johnson pitched his bid for U.K. prime minister to Conservative Party members and drew cheers when he dodged questions about a spat with his partner that brought the police to his London home. Meanwhile, as the EU plots how to respond to a prime minister Boris, officials are focusing on one key strategy: keep him away from Brussels for as long as possible.

Merkel’s Plea | Angela Merkel urged global leaders to cooperate as the German chancellor laid out her views on trade ahead of this week’s G-20 summit in Japan. In a video blog on Saturday, she stressed the importance of the G-20 in tackling issues including free trade, climate change and health. The highlight of the gathering, however, will most likely be the face-to-face meeting between Donald Trump and China’s Xi Jinping.

Chart of the Day

Leaving the EU without a deal could cost the U.K. all of the money set aside for possible tax cuts and spending increases. Bloomberg Economics estimates a no-deal Brexit could deliver a 30 billion-pound ($38 billion) blow to public finances by 2023-24.

Today’s Agenda

All times CET.

• 2:30 p.m. ECJ rules in a case concerning Poland’s sweeping judicial overhaul — this one concerns the retirement age of Supreme Court justices
• Commission VP Maros Sefcovic gives a keynote speech at the New Energy Outlook 2019 launch in Brussels
• Budget Commissioner Guenther Oettinger in Berlin meets Chancellor Angela Merkel 
• French President Emmanuel Macron hosts Russia’s Prime Minister Dmitry Medvedev in Paris

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

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