Brussels Edition: May’s Last Days

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

After three years of failing to bridge the divide in her Conservative party and across Britain over how to leave the European Union, Theresa May is set to announce a date for her resignation today. It’s possible the British prime minister will be replaced by someone more willing to pull the U.K. out of the bloc without a deal for an orderly transition. In any case, the new U.K. leader will only have a couple of months to decide on their stance before the Oct. 31 deadline. 

What’s Happening

Cyber Talks | EU and U.S. officials gather in Washington today to discuss cybersecurity strategies a week after Donald Trump’s administration ratcheted up its campaign against Huawei by blacklisting the Chinese firm. Washington has been urging European allies to take a tough line on the company, saying the telecoms equipment giant poses a cyber threat.

Irish Vote | Local and European elections in Ireland today will test the support for ruling party Fine Gael. In addition to Brexit complications, an impressive performance by young Green candidate Saoirse McHugh in TV debates could lead to surprises. There’s also a vote to ease divorce rules, halving a four-year waiting period. 

Belgian Polls | Apart from the EU elections, Belgium will hold federal and regional votes on Sunday. While Flemish nationalists and French-speaking Socialists look set come first in their respective regions, cobbling together a national coalition may be much more complicated. Long and strained coalition talks are not new to the country, which until recently held the world record for going the longest without a government: 541 days.

Week Ahead | As if the excitement of Sunday’s European elections isn’t enough, EU leaders will gather in Brussels on Tuesday to begin complex talks on who will lead the European Council, the European Commission and the ECB. But gender, politics and passport also matter, further complicating the task. To see for yourself, check out our game. 

In Case You Missed It

German Blow | German business confidence fell to the weakest in more than four years, as the escalation of global trade tensions weighed heavily on the outlook. Along with a survey showing manufacturing still contracting and new orders falling, it’s a reminder of the shaky situation Europe’s largest economy is in.

ECB Woes | Some ECB officials expressed concern at their April policy meeting that euro-area inflation remains too low and expectations of price growth are falling, after years of failing to reach their goal. Still, they said the the situation didn’t yet warrant policy action. It’s an echo of a debate playing out at central banks across advanced economies right now. 

Swiss Disagreement | The EU’s yet-to-be-signed framework agreement with Switzerland doesn't have enough backing among the Swiss public, according to Finance Minister Ueli Maurer. He wants to “get in touch” with Brussels again, but time may be running out. Recognition of its stock exchange under Mifid II regulation expires at the end of June, and Brussels has made an extension contingent on Bern’s backing of the deal.

Polish Prospects | Poland’s Catholic Church admitted to failures amid a growing scandal about pedophilia among priests. The admission followed the release of a documentary film on the matter that has become a political lightening rod in the run-up to Sunday’s European Parliament elections.

Quiz Answer | And here’s the answer to yesterday’s quiz: The senior euro-area official with a romantic movie cameo is Harald Waiglein, director general at the Austrian finance ministry and the country’s representative in the European Stability Mechanism and the Euro working group. He can be seen strumming his guitar and singing on stage when the couple enters a music club. And it wasn’t an act: Before embarking on his career in the finance ministry, Waiglein was the singer of the alternative-rock band Bomb Circle.

Chart of the Day

What a difference an election cycle makes. It’s been five years since the last European Parliament ballot, and Sunday’s results are likely to reflect how immigration has replaced the economy at the forefront of voters’ minds. Maybe they should be more circumspect, given the global trade slowdown that’s hit the economy and put German manufacturing into its deepest slump in years.

Today’s Agenda

All times CET.

• 1 p.m. EU Council President Donald Tusk meets with Italian Prime Minister Giuseppe Conte in Rome
• EU financial services chief Valdis Dombrovskis delivers a keynote speech at the Financial Markets Forum in Riga
• EU trade chief Cecilia Malmstrom participates in a Civil Society Dialogue in Brussels
• EU elections in Ireland

--With assistance from Alexander Weber, Aoife White, Zoe Schneeweiss, Fergal O'Brien, Nikos Chrysoloras and Catherine Bosley.

To contact the editor responsible for this story: Chris Reiter at creiter2@bloomberg.net

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