Brussels Edition: Losing Sleep Over Nickels and Dimes

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

The EU is no stranger to infighting, but its most tedious and bitter spats are almost always about money. So as its 27 leaders head to Brussels today to thrash out the bloc’s next long-term budget, aides are preparing their spreadsheets, packing clean shirts and stocking offices with snacks to get through a long night of negotiations — or maybe even two. With diplomats from all camps insisting that getting a good deal is more important than getting one quickly, it’s unlikely the summit will end up with white smoke, even as different sides are only fractions of a percentage point apart. That should allow leaders to tell voters back home that they put up a big fight, making the inevitable compromise just a bit more palatable.

What’s Happening

Right Star | Giorgia Meloni went from bar-tending at a Roman nightclub to leading a political force that’s leapfrogged the party of her former boss Silvio Berlusconi in popularity and is even giving ally Matteo Salvini a run for his money. Here’s everything you need to know about the rising star trying to lure Italy further to the right.

ECB Clues | An account of the ECB’s January meeting due to be published today might not offer much fresh insight into monetary policy, as no changes were made and whatever was said about the economy is already outdated due to the coronavirus. But it could offer clues on the central bank’s plans for its strategic review and on when it might decide whether to change its inflation goal.

Irish Vote | Ireland’s parliament will try to pick a prime minister today after the recent election that saw the populist Sinn Fein surge. With no party winning anywhere near the 80 seats needed for a majority, the result will likely be inconclusive, but once the vote is out the way, government talks will begin in earnest, with a coalition led by rivals Fine Gael and Fianna Fail being the bookies' favorite.

U.K. Challenge | Boris Johnson wants to deliver on his promise to share the benefits of Brexit with the nation, especially those areas of the country where he convinced voters to choose his Conservative party for the first time since 1935. But regenerating entire regions takes some manpower, and much of Britain’s comes from the bloc it just exited.

In Case You Missed It

Looking In | Britain unveiled plans to end what it called the U.K.’s dependence on “cheap low-skilled labor” and deliver on a pledge to halt freedom of movement from the EU. While Johnson has said voters opted for Brexit at least partly to control immigration, the plans triggered immediate warnings from businesses over the impact of potential worker shortages.

Dutch Allure | And while the U.K. is working to take in fewer EU workers, the Netherlands saw the biggest wave of Brexit-inspired moves to the country last year. The nation has been vying with the likes of Germany, France and Ireland, luring corporate entities in the financial, technology, life sciences & health and creative sectors.

Tech Battles | U.S. and Chinese firms hoping to deploy AI and other technology in Europe will have to submit to a slew of new rules and tests, under plans unveiled by the EU to boost the bloc’s digital economy. The move is the latest attempt to leverage the power of its vast, developed market to set global standards.

More Mergers | French Finance Minister Bruno Le Maire met EU competition chief Margrethe Vestager often last year as he tried to save the proposed Siemens-Alstom rail merger. Despite her veto, he may be seeing her more now as Alstom seeks to buy Bombardier’s rail unit; this time around, company executives are signaling a willingness to offer concessions to allay antitrust concerns.

Chart of the Day

The solution for Europe’s struggling banks, many of their CEOs agree, is consolidation that creates cross-continent superbanks — an American-style fix that by several measures is slipping further out of reach. Europe’s banking system is getting more fragmented, not less, 10 years after a sovereign debt crisis shook its foundations. While politicians accept some domestic mergers, they have proved resistant to the idea of larger tie-ups.

Today’s Agenda

All times CET.

• 3 p.m. Extraordinary EU leaders Summit in Brussels to agree on bloc’s trillion-euro budget for 2021-2027

• 5:30 p.m. Social media live chat with EU Commission Executive Vice-President Vestager on the digital package

• ECB publishes account of Jan. policy meeting

• Irish parliament meets to attempt to elect prime minister

--With assistance from Dara Doyle, Nikos Chrysoloras and Paul Gordon.

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net, Iain Rogers

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