Brussels Edition: Delayed Again

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

For the first time ever, a Brexit accord struck in Brussels appears to have sufficient support from the House of Commons. But the unruly U.K. Parliament shot down Boris Johnson’s plan to fast forward the deal’s approval, so that Britain can leave the bloc at the end of the month as planned. Another extension from the EU and another election in the U.K. are now in the cards. The result of a new national ballot — and therefore what happens to the Brexit deal — is anyone’s guess, as polls in the country have often proved unreliable.

What’s Happening

Fresh Hammering | France faces more criticism from within the EU for thwarting the membership aspirations of North Macedonia and Albania — and this time on its own turf. The EU Parliament in Strasbourg will debate the accession prospects for both Balkan countries today, less than a week after the outlook dimmed with a French refusal to set dates to start negotiations.

Got Mail | ‘Tis the season for budget plucking. Italy will respond today to a letter by the European Commission asking it for clarifications of its 2020 spending plans. While Rome wasn’t alone in receiving a warning from Brussels that its budget risks breaking EU rules, it may be most in trouble: according to Eurostat data, it has the biggest debt load of any country in the euro area.

Conte Grilling | Meanwhile, Giuseppe Conte is in for a grilling from the Italian parliament’s intelligence committee. Under scrutiny will be whether the prime minister went too far in pledging Italy’s help for Donald Trump’s efforts to discredit the Muller investigation in the frantic weeks when he was trying to stave off an early election and build the new majority that kept him power in Rome.

Incoming German | Germany plans to nominate Isabel Schnabel for the vacancy on the European Central Bank’s Executive Board that opened up after the resignation of compatriot Sabine Lautenschlaeger, according to a newspaper report. Schnabel’s appointment would come at a time of unusually heightened dissent among policy makers, and whoever takes over will likely also have to help reconcile Germans with the ECB and its policies.

In Case You Missed It

No Boost | Mario Draghi’s call for governments to spend more to support the economy appears to be falling on deaf ears. The fiscal boost from extra spending will be about 0.4% of euro-area output next year, according to HSBC’s analysis of proposed budgets. While there may be more fiscal slippage, it’s unlikely to be enough as countries like Germany remain reluctant to embark on an expansion.

German Plan | A proposal by German Defense Minister Annegret Kramp-Karrenbauer to create an international security zone in Syria has come under fire from within the ruling coalition, even as she’s due to present it to NATO later this week. Kramp-Karrenbauer — Angela Merkel’s designated successor — said that she has the chancellor’s backing, but her plan drew a mixed response from Merkel’s office and the Social Democrats.

Defiant Ruling | Slovenian lawmakers approved a law designed to protect more than 100,000 investors who lost money during a 2013 financial bailout, defying criticism from the ECB that it breaks euro-area rules. Slovenia’s central bank also vowed to challenge the law in the Constitutional Court.

Green Light | Six years after Croatia joined the EU, the Balkan nation got a green light from the commission to join the continent’s passport-free Schengen area. But don’t hold your breath for any quick changes. Fellow EU nations Romania and Bulgaria, which joined in 2007, are still waiting to join the world’s largest multinational free-travel zone.

Graft Progress | Staying with Bulgaria, the commission will consider ending a 12-year corruption and judiciary monitoring mechanism for the Balkan nation, though it slammed neighboring Romania for a lack of progress in fighting graft. The two countries have been under scrutiny amid concerns over the rule of law.

Chart of the Day

Spain’s economy is cooling rapidly: Job creation has slowed, tourist numbers are stalling and the global economy is faltering. A deterioration in consumer sentiment, in a context of heightened political uncertainty and given the very low household saving rate, could quickly lead consumers to scale back spending, according to Bloomberg Economics.

Today’s Agenda

All times CET.

• 11 a.m. NATO Secretary General Stoltenberg briefs press in Brussels ahead of alliance's ministerial meeting
• 2:40 p.m. NATO hosts High-Level Public Diplomacy Conference on Arms Control and Disarmament in Brussels
• 3 p.m. Italy’s Conte faces questions from parliamentary committee on intelligence services
• EU Parliament debate on accession talks with North Macedonia and Albania
• EU foreign policy chief Mogherini in Tokyo, attends dinner hosted by Japanese Prime Minister Abe

--With assistance from Zoe Schneeweiss, Jonathan Stearns and Alessandro Speciale.

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

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