Brussels Edition: More German Blues?
Brussels Edition: More German Blues?
(Bloomberg) -- Welcome to the Brussels Edition, Bloomberg’s daily briefing on what matters most in the heart of the European Union.
In the past week, dire industry numbers for December have led to questions about the health of European manufacturing, and even revived chatter about a German recession. The region’s largest economy publishes fourth-quarter GDP data today, and while the forecast is for slight growth of 0.1%, a sizable minority of economists in Bloomberg’s survey expect a German contraction. That would be the second in the space of a year and would leave the economy in a weakened state even before factoring in the likely impact of the coronavirus outbreak.
What’s Happening
Merz Menace | He is Angela Merkel’s arch-nemesis, and he’s not done trying to get her job. With Annegret Kramp-Karrenbauer out of the way, Friedrich Merz is making another play, and conservatives who are angry that the CDU is too centrist will back him. Here’s why he’s the biggest threat to Merkel and her ability to stay on as chancellor till the end of next year.
Brexit Preparations | EU government envoys in Brussels will today seek consensus on a toughened mandate for the European Commission to negotiate a post-Brexit deal with the U.K, with the wording on the so-called “level-playing field” being the main bone of contention. Meanwhile, Boris Johnson’s first cabinet reshuffle went disastrously wrong.
Budget Tussle | Diplomats today will be mostly worried about reconciling differences over the bloc’s next trillion-euro budget ahead of a leaders’ summit next week, based on the latest compromise proposal by Council President Charles Michel. One official pointed out that the gap between the most and least frugal proposal is around 40 billion euros spread over seven years.
Week Ahead | The summit is the highlight of a very busy week. Among other things, EU foreign ministers will seek to overcome divisions over how to enforce a Libyan arms embargo on Monday, the same day when Facebook CEO Mark Zuckerberg will be in town. On Wednesday, the Commission will unveil its latest proposals on regulating big data and artificial intelligence.
In Case You Missed It
Serbia’s Aspirations | A plan forged by Serbia’s opposition parties to boycott this year’s elections is falling apart, providing a boost to the person it was designed to hurt — President Aleksandar Vucic. The dispute shines a spotlight on a candidate for EU membership that’s already under close scrutiny in terms of how it observes the rule of law.
Green Bank | The European Central Bank is looking for ways to use its monetary policy to intensify its fight against climate change. While “green QE” — buying environmentally friendly bonds for political reasons — is a non-starter, officials are focusing instead on less controversial options.
Viral Outbreak | As coronavirus cases and their death toll keep rising, you may be surprised to know that the road to a vaccine runs through Oslo. The key player in the race to develop a cure is three years old, has just 68 permanent employees and doesn’t even conduct biomedical research.
Delayed Defense | The Pentagon’s new ground-based missile defense system being built in Poland is now running as many as four years behind schedule. The site, which was supposed to be operational by December 2018, is intended to be capable of detecting and intercepting intermediate-range Iranian missiles, although it might initially lack the necessary crew housing and facilities.
Chart of the Day
Europe’s slow recovery from its 2019 slump is under threat from the coronavirus outbreak, according to the Commission, which sees no improvement in growth this year. Its forecast for 2020 economic growth remained at a “subdued” 1.2%, the same pace as 2019, while singling out the virus as a “key downside risk.”
Today’s Agenda
All times CET.
- 8 a.m. Germany to release fourth-quarter GDP data
- 11 a.m. Eurostat to release flash estimate GDP and employment for the EU and euro area for the fourth quarter, as well as international trade in goods reading for 2019
- Eurostat will also release data on marriages in the EU
- EU officials attend Munich Security Conference
- Google, the Commission and a long list of interveners on both sides face EU court judges for a third day of hearings in the first of three pending appeals by the U.S. tech giant against record EU antitrust fines
To contact the editor responsible for this story: Vidya N Root at vroot@bloomberg.net, Chris Reiter
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