Brussels Edition: Funding Our Way of Life

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

While the Brussels bubble is embroiled in a spat over protecting ‘‘our European way of life,’’ EU finance ministers gathering in Helsinki today will discuss how to protect life on Earth as we know it. The finance chiefs will brainstorm how to foster trillions of euros in investments needed to turn the continent's economy climate-neutral. The heated debate is poised to dominate Ursula von der Leyen's term at the helm of the European Commission and the bloc's political agenda over the next five years.

What’s Happening

Greek Debt | Also at the Helsinki meeting today, Greece is set to ask for an early repayment of its more expensive emergency loans to the International Monetary Fund. While any savings are unlikely to move the needle in Greece’s ambitious debt-sustainability projections, the request adds to signs of growing confidence. Meanwhile, trouble is brewing in the Aegean.

Dragging On | Aside from the sort-of EU-U.K. negotiations over changes to the deal itself, discussion is beginning to turn to whether to allow a further Brexit postponement next month, should Britain request one. Some in Brussels think Hungary might veto it to help Boris Johnson. Yet, as Luxembourg's Xavier Bettel said yesterday, there's no guarantee the EU will let it happen anyway.

Draghi’s Next Move | If being Italian made Mario Draghi’s job atop the ECB more complicated, it certainly didn’t make his position back home any simpler. So what will happen when he steps down from his role as the world’s most powerful Italian and returns to his native land? An upcoming book by our very own Jana Randow and Alessandro Speciale looks at Draghi’s tenure at the ECB — and what the future may hold for him. Here’s an excerpt.

In Case You Missed It

Monetary Bazooka | The ECB cut interest rates further below zero and will start open-ended bond purchases after Draghi overcame critics of his stimulus policies to make a final run at reflating the euro-area economy. The measures are a remarkable turn of events, just nine months after the ECB signaled it was done with ever-looser policy and mark a win for the outgoing chief in his penultimate meeting.

Bank Buffer | The ECB offered lenders partial relief from its negative interest rate, which banks complain squeezes profitability. To help them, the ECB is introducing a two-tier system for reserves, with part of their holdings of excess liquidity exempt from deposit charges. Draghi then took a swipe at banks’ complaints, saying they should focus on cost cuts and improved technology if they want to boost profits.

Climate Cost | Behind the scenes at some of the world’s biggest banks, few employees are busy trying to calculate what might be one of the most important numbers any financial institution will ever disclose: How much the assets on their balance sheet are contributing to global warming. And beyond the challenge of tallying emissions, there’s the much more daunting task of ­cutting them.

Roadside Assistance | Angela Merkel wants to help offset the higher costs of cleaner vehicles by putting a price on carbon-dioxide emissions, potentially offering a lift to Germany’s vital auto industry as it grapples with the transition away from the combustion engine. Battered by a slowdown in China, the trade war and environmental concerns, Germany’s car production has slumped to the lowest level since at least 2010.

Google Pays France | Google agreed to pay 965 million euros to end two French fiscal cases after years of facing outrage in Europe over the small amount of tax it pays. The resolution comes amid a long-running dispute between the U.S. and Europe about who should be taxing big Silicon Valley companies, partly spurred by a French levy of 3% on large tech firms generating revenue in the country.

Chart of the Day

Denmark cut its key interest rate back to its historical low, mirroring an earlier move by the ECB as it seeks to defend the currency peg. The cut brings the nation’s deposit rate to minus 0.75%. It ends the longest period of unchanged rates in Denmark — 3 1/2 years — since the krone was anchored to the euro in 1999. 

Today’s Agenda

All times CET.

• 8:30 a.m. Euro-area and EU finance ministers and central bankers meet in Helsinki
• 11 a.m. Eurostat to release 2Q labor cost index and international trade for July readings
• EU diplomats in Brussels will take stock of the latest in Brexit negotiations

--With assistance from Ian Wishart and Zoe Schneeweiss.

To contact the editor responsible for this story: Heather Harris at hharris5@bloomberg.net, Andrew Blackman

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