Brussels Edition: Bracing for Chaos

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

It looks ever more likely the U.K. will crash out of the EU with no deal, and policy makers on both sides of the border are devising contingency plans. The European Commission is set to chime in today with proposals on how to protect its interests in a no-deal scenario by, for instance, ensuring planes can keep flying, trade can at least partially keep flowing and much more. The British government, meanwhile, has warned businesses to prepare for the worst, even putting 3,500 troops on standby in case things get ugly. If the two sides keep working unilaterally, one thing is clear: Chaos is inevitable. 

What’s Happening

Italy Deal | Italy’s populist government is betting the EU Commission will ratify an informal deal today to avoid sanctions over the country’s expansionary budget plans. A spokeswoman for the Treasury in Rome said the government struck a technical agreement with EU officials yesterday.

French Budget | Italy won’t be alone in asking for leniency today for deviating from the EU’s fiscal prudence rules. French Finance Minister Bruno Le Maire will meet EU Commissioners Valdis Dombrovskis and Pierre Moscovici to explain the government’s decision to widen its deficit in an effort to appease so-called Yellow Vest protesters

Dirty Trucks | Austria wants to leave its post in the EU’s rotating presidency with an environmental bang. After reaching a hard-fought deal Monday with the European Parliament to roll out tougher carbon-dioxide limits for cars, it is now taking aim at bigger vehicles. Austria will seek a deal with environment ministers on Thursday to impose CO2 caps on trucks for the first time.

Money Laundering | Following a string of scandals that prompted the EU in September to propose giving the European Banking Authority more power to stop offences from slipping through the cracks, ambassadors meeting today will probably enshrine the regulator’s leading role. There had been some differing views among finance ministers on who should be in charge.

In Case You Missed It

Belgian Crisis | Prime Minister Charles Michel tendered his government’s resignation after his coalition lost its parliamentary majority and lawmakers failed to back a minority administration. The fall of Belgium’s government is the latest in a series of political spats around the world over a non-binding UN-brokered accord on migration.

Illiberal Politics | Hungarian Prime Minister Viktor Orban is looking to carve out a bigger sphere of influence for his brand of illiberal politics across the Balkans by using business deals. There’s a telling map of Hungary’s expanding reach in this story.

Bankers’ Nightmare | They already have among the strictest rules in the EU on how much bankers can be paid, but the Dutch aren’t done. If Finance Minister Wopke Hoekstra gets his way, bankers may have to follow some stringent guidelines concerning their shareholdings and may even be compelled to explain how their pay relates to their role in society.

Hacked Cables | The New York Times reported that hackers infiltrated EU diplomatic communications and downloaded thousands of cables that reveal concerns about the Trump administration, struggles dealing with Russia and China and Iran's nuclear risks.

Wine Tasting | It’s only Wednesday, but that rarely stops the Brussels bubble from having a drink, bubbly or otherwise. So here’s Elin McCoy’s picks of excellent wines you don’t need a fortune to buy. It may come handy for Christmas — or at least be more useful than our guide on the best gift ideas for billionaires.

Chart of the Day

Brussels Edition: Bracing for Chaos

Portugal was the latest EU country to revise down its 2019 growth projections, following Finland, Denmark, Belgium and others. In another sign of worsening economic malaise, German business sentiment deteriorated in December to its lowest level in over two years.

Today’s Agenda

All times CET.

  • 4:45 p.m. French Finance Minister Bruno Le Maire holds a press conference in Brussels
  • EU Commission to announce contingency measures for no-deal Brexit
  • Commission to announce whether it will escalate spat with Italy over fiscal rules, in process that could lead to financial penalties
  • EU Energy Ministers exchange views for the first time on the strategy for long-term EU plans to reduce greenhouse gas emissions in line with the Paris Agreement 
  • A bill on sustainable finance, which EU ambassadors will discuss today, now features a two-year extension of important euro lending rates like Eonia and Euribor. EU envoys in Brussels will also discuss state of play in Brexit negotiations
  • EU Commission President Jean-Claude Juncker receives Serbian Prime Minister Ana Brnabić and Greek President Prokopis Pavlopoulos
  • EU top court rules in a challenge by Italy’s Silvio Berlusconi and Fininvest against Banca d’Italia over the ex-premier’s stake in financial holding company Mediolanum 
  • EU top court advocate general gives non-binding opinion in suits by the European Central Bank and Latvian Central Bank Governor Ilmars Rimsevics against Latvian security measures prohibiting Rimsevics from traveling abroad and carrying out his duties

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