Brussels Edition: Europe Starts to Reopen
Brussels Edition: Europe Starts to Reopen
(Bloomberg) -- Welcome to the Brussels Edition, Bloomberg’s daily briefing on what matters most in the heart of the European Union.
As the rate of coronavirus deaths across Europe shows signs of a sustained decline, governments are stepping up planning for the next phase — at different speeds. Italy, Spain and Belgium signaled tentative moves to open up parts of their economies, while France will announce easing measures this week. The U.K. has so far remained reticent about how and when it will scale back lockdowns, while German officials cautioned against a rush to reduce controls. It’s the same quandary faced by authorities all around the world: how to lift economy-crippling restrictions and return to a semblance of normality without risking a devastating second wave?
What’s Happening
Virus Update | With over 2.9 million confirmed cases and more than 200,000 deaths, the coronavirus outbreak continues to spread across the globe, and the World Health Organization has some grim news for those who beat it: catching Covid-19 may not protect you from getting it again. Here’s the latest.
Monetary Momentum | Global central banks are under pressure to do more even after driving interest rates to record lows and pledging to spend trillions on asset purchases. The ECB sets policy on Thursday with a heavy weight on its shoulders as governments squabble over joint fiscal action despite warnings the economy could shrink as much as 15%.
Tourism Talks | As Europe reels from an unprecedented recession, few sectors will take as heavy a hit as tourism, which has seen a steep drop in demand and countless lost jobs. EU tourism ministers will hold a call today to discuss possible action to bolster a recovery, even as some experts warn people of the risks of traveling this summer.
Election Obstacles | The Polish government’s plan to hold a presidential election during the lockdown is facing growing political and logistical headwinds, sowing confusion just two weeks before the vote. Hundreds of local administrations are refusing to cooperate with plans to hold the ballot, which the opposition has called a sham.
In Case You Missed It
Death Traps | As countries begin to chart a course out of lockdown, the grim extent of mortality in Europe’s retirement homes is just beginning to emerge. Nowhere is this more evident than Belgium, which has the highest per-capita death rate in the world — mainly due to rigorous data gathering, unlike many of its neighbors.
Different Journeys | Lufthansa has warned it won’t be able to survive without state aid from Germany, Switzerland, Austria and Belgium. But negotiations over an aid package — potentially as much as 10 billion euros — are snared on how much it will receive from each country and how much sway politicians will end up having. Air France-KLM is getting as much as 11 billion euros in loans and state guarantees from the French and Dutch governments.
Airbus Bleeds | Airbus is also fighting for survival. The planemaker is “bleeding cash at an unprecedented speed,” Chief Executive Officer Guillaume Faury said in a letter to staff seen by Bloomberg News. A plan to slash production by one-third may not reflect the worst-case scenario, he said.
Oil Shutdown | The economic impact of the coronavirus has ripped through the oil industry in dramatic phases. Negative prices, ships dawdling at sea with unwanted cargoes and traders getting creative about where to stash oil. The next chapter in the oil crisis is now inevitable: great swathes of the petroleum industry are about to start shutting down.
Back to Work | Volkswagen is restarting output at its home plant in Wolfsburg after a coronavirus-related stoppage. As the world’s biggest car factory ramps up, the German automaker’s top labor leader warned that political fallout of EU divisions could be more harmful than production disruptions.
Chart of the Day
Bloomberg Economics’ best-case scenario for the euro area this year is an 8% contraction in gross domestic product. A worse outcome would be a second wave of infections leading to tighter restrictions and a hit of about 10%. There’s also the increasingly worrying situation where governments fail to act strongly enough in a timely manner, leaving the economy badly scarred for longer and turning the public-health crisis into a sovereign-debt crisis.
Today’s Agenda
All times CET.
- 5 p.m. Commissioners Valdis Dombrovskis and Paolo Gentiloni speak in EU Parliament about the economic response to coronavirus
- Video conference of EU tourism ministers to discuss action for a quick recovery of the sector
- Commissioners Thierry Breton and Stella Kyriakides hold a videoconference with EU health ministers
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