Brussels Edition: NATO Ambitions, Google Court Battle

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

Donald Trump has NATO scrambling again. The Brussels-based alliance, whose defense ministers meet today in the Belgian capital, plans to expand its training mission in Iraq after the U.S. President called for it to play a bigger role in the Middle East. The move buys time for deliberations about boosting other activities in the region — a brainstorming exercise that will raise tricky tests. Aside from the awkwardness of a U.S.-dominated organization expanding its footprint in a part of the world with no shortage of anti-American feeling, there is the question of encroaching on other actors, including the United Nations. Meanwhile, a bigger NATO operation in Iraq will require the approval of the country’s new prime minister, constrained by an Iraqi parliament appeal for the expulsion of foreign troops following the U.S. airstrike that killed a top Iranian general in Baghdad.

What’s Happening

Google Fight | After an acrimonious, decade-long antitrust battle and nearly $9 billion in fines, Google, the European Commission and an army of lawyers are heading to Luxembourg for a three-day hearing in the first of a trilogy of cases the Internet giant is challenging at the bloc’s top courts. At issue this week is the EU’s 2017 decision to fine Google $2.6 billion for thwarting smaller shopping-search services and any findings of fault by the commission could dampen its fervor to take on the high-tech sector or move forward on similar complaints.

Vietnamese Trade | The EU’s global free-trade campaign should get a boost today when the European Parliament votes on a market-opening accord with Vietnam. The assembly’s expected endorsement would allow the deal, reached in 2015 and delayed by a European court case, to enter into force around mid-year.

Spare Change | EU lawmakers and Commission President Ursula von der Leyen will discuss this morning how the 27 leaders of an “ambitious” and “geopolitical” Europe will spend endless hours — possibly days — next week, fighting over fractions of 0.1% of the bloc’s GDP. This relatively small change is what separates the “frugal” from the “profligate” camps of EU countries — at loggerheads over the EU budget — and, believe it or not, could be a deal-breaker.

Succession Plan | A day after Angela Merkel’s chosen successor, Annegret Kramp-Karrenbauer, announced she would no longer pursue the top job, her conservative allies are pressing the German Chancellor to speed the process of finding a replacement. Whoever steps up has a tough task in working out how to maintain the cordon sanitaire around the far-right Alternative for Germany party, while EU officials are worried about paralysis in Berlin that could stymie strategic decisions in Brussels.

In Case You Missed It

Inflation Goal | Christine Lagarde’s presidency of the ECB is hurtling along, with the institution’s strategic review possibly seeing a decision on whether or not to change its inflation goal by the middle of the year, according to euro-area officials. They described a rushed agenda under Lagarde, who reached her 100th day in the job over the weekend.

Trade Squabble | The EU has swiftly rejected British calls for London’s financial-services firms to enjoy continued access to the single market even if it breaks away from the bloc’s rules after Brexit. Von der Leyen also said that the U.K. needs to go further than Canada to get a deal free of tariffs and quotas, further raising the temperature with Britain before negotiations on the future relationship even start.

Huawei Reprieve| Merkel’s lawmakers moved to sideline hard-liners seeking to exclude Huawei from 5G networks with a motion that stops short of a full ban of the Chinese equipment maker. It’s a tough balancing act — the U.K.’s relations with President Trump took a damaging blow when Prime Minister Boris Johnson announced that he’d allow Huawei to supply part of its 5G infrastructure.

Renzi Torment | Just when Italian Prime Minister Giuseppe Conte thought he could finally focus on domestic issues, his government is again under threat from friendly fire. Matteo Renzi, a former premier and head of the small Italy Alive party that forms part of the ruling coalition, is threatening a no-confidence vote on a minister from a rival party if he doesn’t get his way on judicial reform, throwing Conte’s government plan into disarray.

Chart of the Day

A record number of tourists flocked to Denmark last year, further evidence of the magnetic powers of hygge, iconic design and a world-class food scene. According to Statistics Denmark, there were almost 56 million overnight stays in 2019, up from 53.8 million in 2018. The majority of visits were to the capital Copenhagen, which according to an EU report is suffering from overtourism.

Today’s Agenda

All times CET.

• 9 a.m. Commission President von der Leyen addresses the Plenary of the European Parliament on the special European Summit of Feb. 20 on the Multiannual Financial Framework
• 12 p.m. MEPs in Strasbourg to give their final vote on the free-trade and investment deals between the EU and Vietnam
• 12 p.m. European Parliament votes on a resolution about the planned EU mandate for negotiations with the U.K. on the future relationship
• Google, the European Commission and a long list of actors on both sides face EU court judges for a three-day hearing in the first of three pending appeals by the U.S. tech giant against record EU antitrust fines
• NATO defense ministers meet in Brussels
• Italian Senate due to vote on whether League party leader Salvini should face prosecution for refusing access to a migrant ship when he was interior minister

--With assistance from Stephanie Bodoni, Aoife White and Nikos Chrysoloras.

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

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