Brussels Edition: Ignoring The Risks

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

It’s a familiar theme from the sovereign debt crisis: EU governments fail to act with an urgency commensurate to the seriousness of the situation, so the onus to hold the euro area together falls on the ECB and its monetary firepower. It’s happening again, though this time the central bank’s massive intervention hasn’t prevented strains in markets from reappearing. If EU leaders fail to take convincing action again next week, the gap between the bond yields of Germany and the euro-zone nations worst-hit by the virus could widen further, potentially forcing the ECB to pump even more liquidity as soon as at its next policy meeting. There are risks — political and financial — to this complacency that the ECB can solve everything on its own, which governments seem content to ignore for now.

What’s Happening

Virus Update | Spain reported the biggest increase in the number of confirmed coronavirus cases in a week, Croatia expects a cataclysmic 75% drop in tourist revenue, and Greece is showing the world how to put the outbreak under control. Infections also rose in Italy, while the U.K. extended its lockdown for at least another three weeks. 

EU Enlargement | Albania has been knocking at the EU’s door for more than a decade, and this spring, it finally seemed to open. But as the coronavirus devastates even Europe’s richest economies, the Albanian dream looks more elusive than ever. Andrea Dudik and Flavia Krause-Jackson report from the poorest corner of one of Europe’s poorest countries.

Tariff Cut | The EU is seeking to permanently eliminate tariffs on medical goods needed to respond to the Covid-19 health crisis, which could cover a range of products valued at about $597 billion per year. If successful, the initiative would represent the most significant effort to liberalize trade in medical goods at a moment when countries are hoarding critical health supplies.

Key Tests | Antibody tests are at the forefront of a push to assess who has already built up immunity against the new virus, even unknowingly, pinpointing those who can leave confinement and start rebuilding shattered economies. But the woes of a Berlin-based company show how hard it is to do that. We’re taking you inside the race to master the technology.

Privacy Concerns | Contact-tracing mobile apps should be voluntary, approved by national health authorities, preserve users’ privacy and be dismantled as soon as they are no longer needed, the EU said in its new guidelines — part of a broader effort to coordinate exit strategies among member states when they slowly lift existing lock-down measures. Natalia Drozdiak has the details.

In Case You Missed It

No Extension | The U.K. government said it will reject any request from the EU to delay the final stage of Brexit even as coronavirus hampers negotiations over their future economic relationship. While the U.K. has long argued against seeking an extension to the transition period itself, ruling out any request from Brussels marks a hardening of its position and raises the risk of crashing out.

Green Security | Sustainability has now been elevated to a security priority after the viral outbreak exposed EU’s vulnerability to global supply chains. A more “circular” economy, in which European companies recycle more and use materials more efficiently will boost the bloc’s resilience to similar — or worse — disruptions in global commerce.

Supply Problems | Meanwhile, wind turbine makers are finding it increasingly difficult to get the parts they need to build their machines, snarling progress on a global shift toward renewables at precisely the time scientists say it needs to speed up. Virus-induced supply disruptions are a blow to efforts to slash greenhouse gas emissions close to zero by the middle of the century.

French Troubles | Amazon has been a standout performer globally as the coronavirus pandemic forced store closures, kept shoppers lock down home, amplifying e-commerce demand. In France, the story turned sour. Here’s why.

Burnout Symptoms | It’s Friday and you are probably tired. Maybe even more so than usual. With jobs and caregiving now often happening on the same couch at the same time, many workers are stuck in an unending grind. Here are some strategies for identifying and staving off a burnout. 

Chart of the Day

Chancellor Angela Merkel is moving forward with plans to slowly start returning Germany to normal, allowing some smaller shops to reopen next week. Restrictions are leveling off elsewhere, though most of the continent still remains in lockdown. 

Today’s Agenda

• European Parliament vote on measures to combat the pandemic and its consequences

©2020 Bloomberg L.P.