Brussels Edition: Green Shoots of Recovery?

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

The euro-zone economy appears to have started the year with a tentative new lease of life, and data published today could provide more evidence of recovery. Economic confidence, based on the European Commission’s monthly surveys of consumers and businesses, probably rose to a five-month high in January. Such an outcome would support the cautious optimism expressed by European Central Bank President Christine Lagarde last week, when she said incoming data suggest ongoing but moderate growth. Numbers on inflation and unemployment from Germany and on joblessness from Italy could offer further clues.

What’s Happening

Pay-for-Delay | A day before Brexit day, the EU’s highest court gives a binding ruling that could help resolve a British dispute between GlaxoSmithKline, generic drug makers and the U.K.’s antitrust watchdog. The decision could also weigh on  pending EU court challenges over so-called pay-for-delay deals, that hold back sales of cheaper, generic versions of a certain drug.

Social Visit | Mark Zuckerberg is slated to visit Brussels in mid-February as Facebook fends off antitrust and privacy scrutiny over how it handles data. His trip comes before the EU is due several days later to unveil its plans to deal with AI, and as the bloc seeks to be at the forefront of regulating large U.S. tech companies with strict competition enforcement and its flagship privacy rules.

Late Honor | Mario Draghi will get Germany’s Order of Merit this week though only after he left office, unlike former ECB presidents. If the delay in honoring him was intended to avoid controversy in a country where his ultra-loose stimulus embittered many citizens, it hasn’t worked: an editorial in Bild called the accolade “the most expensive Order of Merit our country has ever awarded.”

Hard Part | The EU Parliament approved Boris Johnson’s Brexit deal, clearing the way for the U.K. to leave the bloc on Jan. 31 with an agreement designed to avoid a chaotic rupture. But the fight over the divorce deal was the easy part. With 11 months of tricky negotiations on the future relationship coming up, potential clashes are everywhere you look. Here are five key ones.

In Case You Missed It

5G Dodge | The EU stopped short of an outright ban of Chinese suppliers such as Huawei from lucrative 5G contracts, as warnings by the U.S. failed to convince its closest allies. The decision represents an effort to navigate between Beijing’s warnings of repercussions and U.S. threats of sanctions, such as a reduction in intelligence sharing.

Spanish Uncertainty | Catalonia’s separatist President Joaquim Torra said he’d set a date for elections after the regional parliament passes a budget, adding another element of instability by bringing his two-year-old administration to an end. The decision to call elections means is another headache for Spanish Prime Minister Pedro Sanchez, who is reliant on the support of the separatists of Esquerra Republicana.

Better Numbers | Germany raised its 2020 growth projection and pledged investment to keep the economy competitive as it turns more digital and climate-aware. Angela Merkel’s cabinet also approved legislation that sets out the timetable to close more than 100 coal power plants across Germany, entrenching the most important part of a program to make Europe’s biggest economy greener.

Romanian Health | The gruesome death of a cancer patient in Bucharest highlights Romania’s chronic underfunding of health care and the corruption that’s eating away at what remains of the system. The decay resonates beyond the country’s borders, driving thousands to emigrate to Europe’s west each year and stoking populism and creating uncertain economic prospects back home.

Chart of the Day

Italy’s crippling public debt is set to keep expanding amid chronically low economic growth, according to the International Monetary Fund. While the country has benefited from the ECB’s expansionary monetary policy and a period of relative political stability to bring down yields, its interest costs are still higher than its economic growth, forcing it to issue new bonds, and reduce spending and investment.

Today’s Agenda

All times CET.

• 9 a.m. Keynote speech by SSM’s Enria at 5th SSM & EBF Boardroom Dialogue in Frankfurt
• 9:30 a.m. ECJ gives binding decision in dispute involving GlaxoSmithKline fine over deals to do with anti-depressant drug
• 10:30 a.m. European Investment Bank President Hoyer gives annual news conference
• 11 a.m. Eurostat to publish economic sentiment and business climate indicators for January and unemployment data for December; data also due on contingent liabilities and non-performing loans in the EU, German inflation and unemployment and Italian unemployment
• Presidents of EU Commission, European Council and EU Parliament begin retreat on the future of Europe
• MEPs vote on a resolution calling for measures to make common chargers a reality for consumers and reduce e-waste and a resolution on measures to close the gender pay gap, including legally binding pay transparency measures
• EU Commission President von der Leyen presents the Commission’s work program for this year to the European Parliament and debates it with MEPs

--With assistance from Stephanie Bodoni and Andrew Langley.

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

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