Brussels Edition: Draghi’s Plea

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

A frustrated-sounding Mario Draghi is pleading louder than ever for help with the euro-area economy, but no one’s listening. After outlining how the region is getting “worse and worse,” he called on governments yesterday to pitch in with some fiscal stimulus to complement negative interest rates and bond purchases. While the European Central Bank will do something to spur growth in September, the comments suggest it’s running up against the limits of its powers.

What’s Happening

IMF Boss | The International Monetary Fund’s European board members meet today to discuss the institution’s future leadership as Christine Lagarde prepares to take charge at the ECB. While Europe has traditionally held the top IMF post, its countries have so far been unable to agree on a candidate, potentially putting at risk the continent’s decades-long monopoly. 

Don’t Like | Companies that embed social plug-ins such as Facebook’s “Like” button on their website, may end up facing just as much scrutiny as the social media platform if the EU’s top court finds that they’re jointly responsible for user data being shared. The ruling next week is being closely watched by privacy lawyers who say many companies aren’t aware of the risks they’re taking. 

Iran Talks | The fate of the landmark accord on Iran’s nuclear program could be determined on Sunday when the deal’s dispute-settlement committee makes a last-ditch effort in Vienna to salvage it. The talks, requested by France, Germany, the U.K. and Iran, will also include China and Russia. The deliberations come just days before the expiration of U.S. waivers allowing foreign countries to work with Iran on nuclear facilities, which would potentially pave the way for Tehran to pull out of the agreement.

Boris Rebuff | Commission President Jean-Claude Juncker rejected Boris Johnson’s demands for a better Brexit deal, saying the Withdrawal Agreement is the best and only one possible. Chief Brexit negotiator Michel Barnier, who said he’s available for talks over the summer, affirmed the stance in a message to EU diplomats, calling Johnson’s speech yesterday “rather combative” and saying the demand to eliminate the Irish border backstop is “unacceptable.”

In Case You Missed It

Spanish Impasse | Acting Prime Minister Pedro Sanchez failed in his attempt to form a new Spanish government yesterday, prolonging a period of uncertainty for the country and increasing the likelihood of another election. The threat of a new vote adds an element of uncertainty for the Spanish economy, which is on track to outpace every G-7 country this year apart from the U.S.

Trade Channel | Canada and the EU agreed to set up an alternate channel for settling trade disputes, sidestepping an international deadlock created by the Trump administration. The EU plan would establish an alternate arbitration process that would continue the essential principles and features of the appellate body and is envisaged as a stopgap measure until the U.S. resolves the impasse. 

No Crisis | German Finance Minister Olaf Scholz brushed off warning signals for Europe’s largest economy, saying the government has no concrete plans to spur economic growth. Speaking in an interview with Bloomberg TV, Scholz said instead that resolving “man-made” crises such as trade tensions and a potentially hard Brexit would help boost growth as early as the end of this year. 

Quiz Answer | The euro-area central banker drawn to his current job at a young age thanks to chewing gum is none other than Austria’s outgoing chief, Ewald Nowotny. Read more here. 

Summer Pause | Like most of Brussels, our newsletter is taking a break. We’ll be back at the end of the summer, ready for the new Commission, for Brexit (maybe?) and any other exciting developments. While we’re away, if you want to stay on top of the latest on trade wars, you can sign up for our Terms of Trade newsletter here. And, crucially, for recipes of the nine best summer drinks, you can browse here.

Chart of the Day

French President Emmanuel Macron is on a winning streak in his push to repair the labor market as statistics showed the number of registered job-seekers fell to its lowest level in five years. 

Today’s Agenda

All times CET.

• 8:45 a.m. France consumer confidence
• 10 a.m. Italian consumer, manufacturing confidence
• 10 a.m. ECB survey of professional forecasters

--With assistance from Jonathan Stearns, Stephanie Bodoni and Zoe Schneeweiss.

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

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