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Brussels Edition: China’s Hidden Network

Brussels Edition: China’s Hidden Network

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

Chinese President Xi Jinping may have failed to win over Jean-Claude Juncker, but plenty of European politicians are open to Beijing’s advances. Ahead of next week’s EU-China summit, we spoke with more than two dozen officials in Beijing, Brussels and Strasbourg to discover the extent of China’s network of political advocates across Europe. What emerges is largely below-the-radar activity to gain influence that knows no political or geographical boundaries, and which has been stepped up as the EU heads toward its May parliamentary elections.

What’s Happening

Brexit Preparations | After Commission officials horrified Brussels-based Brits yesterday by saying they’d be banned from bringing sausage, bacon and pork pies from the U.K. in case of a no-deal Brexit, today it’s all about the EU’s contingency plans on transport and food safety. But there's still a distinct lack of detail on the critical question of keeping the Irish border clear of customs controls.

Turning 70 | NATO foreign ministers will hold working sessions in Washington today on defense budgets, Russia, the fate of the INF nuclear treaty and terrorism. Unusually, China may also come up as part of the talks on new security challenges as the ministers wrap up their gathering on the alliance’s 70th anniversary.

Policy Clues | The ECB will publish an account of its March meeting today, potentially shedding light on a discussion that preceded Mario Draghi’s announcement that officials should reflect on ways to offset the impact of negative rates. His remarks were seen as an assurance that the ECB is ready to look into easing a squeeze on banks’ profit margins.

Gas Grids | A revamp of EU natural-gas rules to explicitly cover pipelines to and from the bloc is due to clear the final political hurdle today when the European Parliament votes on the legislation. The new law is advancing only after Germany won a concession over its plan to import more gas from Russia through the Nord Stream 2 project.

Whose Fault | Does a screw on the runway qualify as an “extraordinary circumstance”? The European Court of Justice’s answer today will be important for Germanwings, which faces a compensation claim from a passenger whose flight was delayed due to a tire change. The dispute is part of a long list of EU court cases clarifying airline liability in case of delays or cancellations.

In Case You Missed It

Defending Democracy | Brussels warned governments yesterday about the need to uphold democratic standards and threatened a new lawsuit against Poland. Concerns about the erosion of the rule of law on the EU’s eastern flank have risen to the top of the bloc’s agenda, as pushes in Hungary, Poland and Romania for greater control over state institutions have sparked fears of a shift toward authoritarian rule.

Greek Relief | Greece cleared a key hurdle toward receiving a 1 billion-euro cash tranche for debt relief after the Commission said the country had completed outstanding reforms. While Brussels warned that risks to financial stability remain, its assessment paves the way for the euro area to disburse the funds later this week, allowing Athens to proceed with plans for another possible bond sale.

Trade Delays | EU ambassadors held off on giving the green light for trade talks with the U.S. as France continued to withhold its consent, despite the bloc’s eagerness to begin deliberations on slashing industrial tariffs. An escalation of tensions with the U.S. would come at a very bad time for Europe’s economy, which is struggling amid a global slowdown.

Retaining Unicorns | The best way for Europe to stop its potential unicorns from galloping to the U.S. is to ease restrictions on taking in skilled foreign workers, according to the co-founder of a $112 million fund for Nordic and Baltic tech startups. His comments come as the debate on migration is heating up in the run-up to the May EU parliamentary vote.

Chart of the Day

Brussels Edition: China’s Hidden Network

The euro-area economy got a modest lift yesterday as activity in services came in stronger than anticipated at the end of the first quarter. Purchasing managers’ indexes for the region’s four largest economies provided some much-needed good news that helped to push the euro higher. Italy and Spain beat economists’ forecasts, and March readings for Germany and France were revised up compared with flash estimates.

Today’s Agenda

All times CET.

  • 12:15 p.m. Press conference by European Commission Vice President Jyrki Katainen on Brexit preparedness measures concerning health and food safety
  • 12:30 p.m. EU competition chief Vestager speaks at meeting of national antitrust regulators in Bucharest
  • Declaration by Commissioner Violeta Bulc on Brexit preparedness on road safety and transport
  • Meeting of NATO ministers of foreign affairs in Washington, DC 
  • Commissioner Valdis Dombrovskis delivers keynote at Eurofi financial regulation conference in Bucharest
  • EU top court rules on a case involving Germanwings and whether the damage caused to an airplane tire by a screw lying on the runway is an “extraordinary circumstance”
  • EU top court rules on a complaint over sexual harassment at the European Investment Bank seeking the annulment of a decision by EIB President Werner Hoyer in which he rejected the claimant’s complaint
  • Minutes of the ECB’s March meeting to be released

--With assistance from Jonathan Stearns, Nick Rigillo, Stephanie Bodoni and Nikos Chrysoloras.

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

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