Brussels Edition: Eyes on the ECB

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

Social gatherings are being banned, flights canceled, borders re-erected, and yet the death toll keeps rising. As Europe goes into gradual shutdown, its leaders have vowed to bend EU budget rules and legal restrictions on direct aid to companies, while stopping short of explicitly declaring a massive stimulus to cushion the impact of a deadly viral outbreak. Will the action plan agreed over a conference call last night be enough to reassure quarantined citizens and confused investors? Probably not. Optimists are hoping that the European Central Bank will ride to the rescue.

What’s Happening

Crisis Funds | Desperate times call for big numbers. Italy wants to step up its stimulus package to 16 billion euros to help support its locked-down economy, while Hungary’s Viktor Orban said his government would work on a multi-billion euro crisis fund to help struggling industries. Denmark announced $20 billion of tax breaks and investors expect the U.K. to ramp up spending at today’s budget.

Europe Lockdown | The measures come as countries across the EU struggle to contain the spread. Alongside Italy’s lockdown, schoolchildren in Greece and university students in Portugal were asked to stay home. Air France canceled thousands of flights, Ireland scrapped St. Patrick’s Day celebrations and Madonna pulled out of concerts in Paris.

Home Office | For the ECB, tomorrow’s key meeting on whether to cut interest rates is being made trickier as the epidemic keeps governors at home. At least five will dial in by teleconference — including Italy’s bank chief — instead of traveling to Frankfurt. The institution reported its first case of the virus this week.

Refugee Reboot | Turkish Prime Minister Recep Tayyip Erdogan expects to host Angela Merkel and Emmanuel Macron in Istanbul next week in an effort to revive the deal that helped stem the flow of refugees to European shores. Talks in Brussels collapsed Monday after a near two-hour meeting, with Turkey’s foreign minister accusing EU nations of not sticking to their promises.

In Case You Missed It

Self-Isolation | A Europe-wide push for people to self isolate to prevent the spread of the coronavirus could prove challenging for the majority of the continent’s population who typically don’t work from home. Six in 10 individuals in member states hadn’t done so in 2018, according to figures compiled by the OECD. And in Italy — the hardest hit so far — that number was as high as 67%.

Bank Pain | European banks will see about 30 billion euros erased from their net income over the next three years because of the coronavirus fallout. That’s according to analysts at Goldman Sachs, who said lenders with low levels of profitability in Germany, Italy and Greece will be disproportionately affected. Germany’s banking watchdogs meanwhile are debating relief for lenders.

Plane Relief | Airlines were among the first beneficiaries from EU measures to combat the economic fallout from the coronavirus. The bloc proposes to ease a requirement requiring carriers to use at least 80% of their slots or risk losing them the following year — for the first time in more than a decade.

Intel Hearing | U.S. chipmaker Intel urged EU court judges to assess from scratch whether a 1.06 billion-euro antitrust fine against it should be scrapped. They’re one of the few companies that have battled the bloc all the way, with most tending to capitulate in the face of likely defeat. This case has been going on for over a decade.

Chart of the Day

The Irish government’s 3.1 billion-euro package to fight the spread of the coronavirus amounts to almost 630 euros per person —  making it four times bigger than Germany’s measures announced through March 9 and 30 times bigger than those of the U.S, according to Goodbody Stockbrokers. “These amounts are likely to change as the crisis develops, but it clearly shows how serious the Irish government is now taking the issue,” Chief Economist Dermot O’Leary said.

Today’s Agenda

All times CET.

• 9:30 a.m. EU lower court hears for the second time arguments in Intel's pending appeal of a 1.06 billion antitrust fine levied by the European Commission in 2009 over rebates to rivals
• 11:30 a.m. Press conference by Commissioner Sinkevicius on the circular economy action plan
• EU economy chief Gentiloni in the Netherlands, meets Prime Minister Rutte, Finance Minister Hoekstra

--With assistance from Zoe Schneeweiss.

To contact the editor responsible for this story: Caroline Alexander at calexander1@bloomberg.net, Iain Rogers

©2020 Bloomberg L.P.