Brussels Edition: Whatever It Takes and Then Some

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

While many in Brussels and in national capitals claim credit for weathering the existential crisis that rocked the euro area seven years ago, most people who understand financial markets agree that the main reason the common currency is still around is one man and three words. Today, that man — European Central Bank President Mario Draghi — holds his final policy meeting and press conference, where he’ll defend his controversial legacy of trying to sustain growth with dirt-cheap cash. But he’ll also say that while the ECB will keep doing “whatever it takes” to meet its inflation mandate, this time around it’ll need help from governments. 

What’s Happening

Brexit Ad Nauseam | Brexit will be delayed (again), after all 27 EU government envoys in Brussels agreed in principle at a meeting yesterday that another extension will be necessary. The question still to be answered is on what grounds and for how long, with France insisting on a few days and Bulgaria willing to postpone for a century.

Turkey Test | NATO, struggling to patch up rifts caused by Donald Trump’s “America First” agenda, confronts another big split today when the alliance’s defense ministers discuss Syria. Turkey — NATO’s second-biggest army — angered its western allies with a military operation in northern Syria before reaching a pact with Russia to secure a buffer zone.

Rubik’s Cube | The multicolored cube that’s kept small and big hands busy since the 1970s will face another day in court as its owners try to win back the EU trademark rights for the toy’s shape. A binding ruling by the bloc’s top court in 2016 has made this trickier. 

Diesel Pollution | The EU’s top court will today decide on the first of a series of suits the Commission has brought against countries, including Germany and the U.K., for exceeding air-pollution levels caused by diesel engines. First up, the case against France, which will be a binding decision.

Exhuming Franco | The late dictator Francisco Franco’s body will be exhumed today from the monument where he has lain for the past 44 years and taken to his family pantheon outside the Spanish capital. The monument was considered an offense by many Spaniards, and the exhumation marks a political victory for Pedro Sanchez ahead of general elections next month. 

In Case You Missed It

Tactic Shift | Germany nominated Isabel Schnabel for the ECB Executive Board, a change of strategy for Angela Merkel after her three previous picks failed to complete their terms. Schnabel, whose career has remained firmly in academia, will face a tricky task: she’d join the ECB just as pressure mounts on governments, including Germany, to add fiscal stimulus to accompany monetary support. 

Probe Costs | Swedbank said investigations of its role in a giant money-laundering scandal now involve several U.S. agencies as well as the ECB. Sweden’s oldest bank expects the cost of dealing with probes to reach 1 billion kronor ($103 million) this year alone, and the U.S. investigations could be lengthy. 

Bad Loans | It’s too difficult for European banks to sell their non-performing loans, according to the bloc’s top banking regulator. Under current rules, potential buyers of bundled loans face “very high capital requirements,” and new regulations governing asset-backed securities are causing “compliance challenges” for bad-debt sellers, the EBA said yesterday.

Saving Earth | $300 billion. That’s the money needed to stop the rise in greenhouse gases and buy up to 20 years of time to fix global warming, according to UN climate scientists. Here’s how.

European Wines | Climate change is altering the continent’s wine map. Rising temperatures mean that Germany’s once ­anemic pinot noirs are becoming increasingly fleshy, seductive and delicious, while southern England now produces lemony, edgy, sparkling whites. By 2050, Norway, and Sweden may be the source of some of the world’s great wines, Elin McCoy reports. 

Chart of the Day

Incoming ECB President Christine Lagarde has hinted she may want to harness the institution’s asset-purchase program to fight climate change. Using the ECB’s balance sheet for anything other than the pursuit of monetary stability would be a big departure from traditional policy making, but if the political will is there, Bloomberg Economics thinks it will happen.

Today’s Agenda

All times CET.

• 9:30 a.m. EU lower court rules in trademark-related dispute concerning the shape of the Rubik’s cube
• 9:30 a.m. EU’s top court will rule on case brought by the Commission against France over diesel pollution
• 2:30 p.m. ECB announces monetary policy decision after final meeting of Draghi’s term
• 5 p.m. Commission President Jean-Claude Juncker delivers a speech at the European Policy Centre
• NATO defense ministers meet in Brussels
• U.S. Defense Secretary Mark Esper speaks at German Marshall Fund event in Brussels
• EU antitrust chief Margrethe Vestager delivers speech at conference at the European Committee of the Regions in Brussels

--With assistance from Stephanie Bodoni, Paul Gordon, Viktoria Dendrinou, Ian Wishart and Zoe Schneeweiss.

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

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