Brussels Edition: Ethical Robots

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

It may not have the kind of money that the U.S., China and their companies are throwing at artificial intelligence. But the European Union is betting that crafting ethical guidelines around transparency and accountability in the use of AI in the bloc will help it better compete and regulate the field. Its handpicked committee publishes its draft recommendations today, opening it up for comments before offering a final version that will guide future EU policy making. 

What’s Happening

Crashing Out | Over in London, some in Theresa May’s government would quite like a “no-deal” Brexit, believing that the EU will magically transform it into something resembling a deal. Not so fast. When the European Commission comes out with its contingency proposals tomorrow, a series of side agreements to cushion the impact of a chaotic withdrawal won't feature as an option. Instead, the EU will announce a bare minimum of unilateral action aimed at protecting its interests.

African Connection | In the final days of its EU Presidency, Austria is trying something new. A “high-level forum” for EU and African leaders in Vienna today is supposed to “move beyond” migration. Sebastian Kurz, who became Austrian chancellor by talking about little else, is being snubbed by most EU leaders: German Chancellor Angela Merkel, French President Emmanuel Macron and May won’t be there, leaving him to discuss how fintech startups can help Africa with the prime ministers of Hungary, Poland and Slovenia.

Benchmark Present | A bill on sustainable finance that EU ambassadors will discuss tomorrow now features a two-year extension of important euro lending rates like Eonia and Euribor. That means the longer transition period to new or improved rates, for which banks have lobbied, is all but certain, as the European Parliament has already adopted the same amendment. With trillions in financial contracts tied to these rates, a smooth transition is crucial.

In Case You Missed It

Swiss Access | The EU proposed granting Switzerland’s stock exchanges access to the single market until the end of June. But this is the last such extension, Brussels warned Bern, as it tied any additional time to the Swiss government’s endorsement of a new agreement on economic ties with the bloc. 

Orban’s Regime | Hungarians protested after Prime Minister Viktor Orban passed a law last week which essentially created a new top court and placed it under government oversight. He has converted state media into a government mouthpiece that rarely gives similar airtime to opposition viewpoints, and he won a re-election in what international observers called an “adverse climate.” The response of European mainstream parties so far has been to fiddle while Budapest burns. 

Polish Conspiracy | In other eastern news, the head of the National Bank of Poland said that euro enthusiasts bent on pushing the country to ditch the zloty and join Europe’s single-currency area are probably behind reports linking the central bank with a corruption scandal. In what might further fuel conspiracy theories, the EU’s highest court ordered the government to suspend a sweeping judicial overhaul that involves lowering the retirement age of Supreme Court judges. 

Clean Cars | Europe is showing greater resolve to clean up road transport amid heightened warnings about the catastrophic environmental impact of climate change and the economic risks of losing out to the likes of China in the technological transition to low-emission vehicles. Yesterday, EU negotiators reached agreement on tighter caps on carbon dioxide from cars in a bid to spur the development of clean autos.

Romanian Corruption | As Romania prepares to assume the rotating presidency of the EU, the head of the country’s ruling party rekindled talk of amnesty and pardons for officials in trouble over corruption, steps previously thwarted by the largest protests since the fall of communism. It definitely doesn’t help the government improve its image.  

Chart of the Day

Traders in eastern Europe face a toxic landscape in 2019. In the twilight of the euro area’s monetary-stimulus program, populism is spreading and growth is slowing. On top of that, for all their fiery rhetoric slamming EU meddling, eastern member states are reliant on the bloc’s contributions to infrastructure projects. Receipts are already poised to fall because of Brexit, and any further reductions are seen weakening the region’s economic outlook and dimming the appeal of their markets.

Today’s Agenda

All times CET.

• 8:30 a.m. Security software company McAfee hosts breakfast with company and EU experts examining the mechanics of cyber incidents and how to effectively address them
• EU Commission President Jean-Claude Juncker speaks at Africa-Europe forum in Vienna
• EU foreign policy chief Federica Mogherini speaks at EU Non-Proliferation And Disarmament Conference in Brussels 
• EU-Serbia Stabilization and Association Council reviews state of EU-Serbia bilateral relations
• Deadline for Belgian Prime Minister Charles Michel to present government program. Parliament votes on 2019 budget 

--With assistance from Boris Grozev, Alexander Weber, Ian Wishart and Viktoria Dendrinou.

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Vidya N Root

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