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Brussels Edition: Italian Interference, Brexit for Christmas

Brussels Edition: Italian Interference, Brexit for Christmas

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

Just when contentious plans to strengthen the euro looked like they finally had everyone’s backing, Italy raised fresh questions,  casting doubt over whether it would support a reform of the bailout fund. For now, it seems to be mostly domestic noise and the government has been reassuring its European partners that they won’t derail the long-negotiated package. EU officials hope a meeting of finance ministry deputies in Brussels today will shine some light on Rome’s true intentions — and also make progress on stalled talks over common deposit insurance.

What’s Happening

Confirmation Vote | Ursula von der Leyen’s new team is on track to get the final go ahead when the European Parliament holds its confirmation vote on Wednesday. If all goes well, the EU executive’s first female boss will take over next week — though with the U.K. still not sending its own representative, there’s one legal headache to overcome.

German Recovery | Data due today will probably show German business confidence edged higher in November, the latest sign that the country’s factory slump is bottoming out. Such an improvement would back the German government’s argument that the country is not in an economic crisis, strengthening its case against calls for further stimulus.

New Valley | The EU is planning a 3.5 billion-euro fund to invest in early-stage technology in an effort to boost the innovation pipeline. Venture capital in EU tech has jumped, with companies getting bigger and the trade war between the U.S. and China pushing investors to consider alternatives to the two tech hubs.

DC Visitor | Donald Trump will meet Bulgaria’s Prime Minister Boyko Borissov in the White House today to discuss security in Eastern Europe. Their get-together comes after a series of meetings between the U.S. president and central European leaders to discuss security in a region where Russia seeks to retain its traditional influence.

In Case You Missed It

Johnson’s Manifesto | U.K. Prime Minister Boris Johnson pledged his Conservatives won’t raise several taxes and that the NHS will not be “on the table” in trade talks. His plans, including a promise to put his Brexit deal back to parliament before the Christmas recess, were announced as polls showed the Tories holding a double-digit lead ahead of the Dec. 12 election, with one analysis suggesting his party will win a 48-seat majority.

Second Term | Romanian President Klaus Iohannis won a second term by defeating ex-Prime Minister Viorica Dancila in a runoff on Sunday. The incumbent helped torpedo efforts by the previous government to decriminalize low-level corruption. He’ll still have his work cut out, with many Romanians desperate for improvements to poor infrastructure, health care and schools.

Lane’s View | The European Central Bank’s chief economist, Philip Lane, said policies are “in good shape” for the baseline scenario of improving conditions over the next one or two years, but further rate cuts can’t be ruled out. His comments follow Christine Lagarde’s call for for a new policy mix.

Peach Blues | Already grappling with the effects of climate change and unseasonably warm weather, Greek peach growers are also collateral damage in Donald Trump’s trade wars. While it’s a painful double whammy, to some farmers freak weather conditions are even more worrying than the effect of U.S. levies.

Nordic Warning | After half a decade, negative interest rates are now the norm across most of the Nordic region. But reality hit after the summer, when it became virtually impossible to get government bonds at positive yields across most of the euro zone. One of the region’s biggest pension funds wonders whether this is just the beginning. Here’s what it’s doing to deal with the new normal.

Chart of the Day

Brussels Edition: Italian Interference, Brexit for Christmas

It’s harder up north. Swedish 15-year-olds face the longest time in the workforce in the EU, an average of 41.9 years, according to Eurostat, followed closely by the Dutch. Italians get by with a working life that’s about 10 years shorter. Both extremes are surpassed by nearby countries that don’t belong to the bloc: Iceland’s teenagers can look forward to working more than 46 years, while in Turkey the figure is about 29 years.

Today’s Agenda

All times CET.

  • 8:30 p.m. Portuguese Prime Minister Costa has working dinner with EU’s von der Leyen in Strasbourg

  • Euro-area finance ministry officials discuss deposit insurance and ESM reforms

  • Belgian Socialist Party politician Magnette meets with King Philippe again on coalition options

  • Bulgarian Prime Minister Borissov visits White House

  • Serb lawmakers expected to vote on 2020 budget

  • ECB’s Holzmann and Vasle speak at Austrian central bank conference in Vienna

  • ECB Chief Economist Lane speaks in London

--With assistance from Slav Okov, Sheldon Reback and Jana Randow.

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

©2019 Bloomberg L.P.