Brussels Edition: New Relationship, Same Old Squabbles

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

A shrunken EU will today formally start work on a partnership agreement with a foreign country, and relations are already turning sour. U.K. Prime Minister Boris Johnson will use a speech to harden his stance against aligning with EU rules, while chief negotiator Michel Barnier will demand just that when he unveils his strategy in Brussels. Johnson's government wasted no time ramping up pressure on the EU, insisting that if Britain doesn’t obtain a comprehensive deal before the end of the year it will walk away. That gives the EU a fresh challenge that will make the next 11 months every bit as tense as the past three years. 

What’s Happening

Budget Fight | Brexit is deepening the rift between richer and poorer EU states as they clash over the bloc’s budget for the next seven years. A group of 17 eastern and southern nations, which met in Portugal on Saturday, appear ready for a fight with the more frugal northern EU members over an emergency summit in Brussels on Feb. 20.

Macron in Poland | In the first visit by a French head of state to Warsaw in six years, Emmanuel Macron will need all his charm to rekindle France’s relationship with Poland. The attempt to patch over strains with the EU’s biggest ex-communist member is central to his plans to strengthen the bloc after the U.K.’s departure.

Iran Visit | EU’s foreign policy chief has repeatedly invited his Iranian counterpart to Brussels, to no avail. So Josep Borrell is now traveling to Tehran himself. The aim is to keep Iran talking — via a dispute resolution mechanism for the nuclear accord — and thus away from nuclear enrichment.

Facing Reality | Facial recognition has emerged as a hot-button issue as the EU prepares to outline its plans to regulate artificial intelligence next month. The bloc has accepted there’s no escape from the technology, but the following terms and conditions apply. 

Virus Update | The EU has mobilized support to help China deal with the coronavirus, as its spread throughout the world accelerates and the death toll rises. In addition to the human casualties, the illness casts a dark cloud over the global economy. Here’s our map tracking contagions and their fallout. 

In Case You Missed It

Blocked Lines | Chancellor Angela Merkel’s efforts to rule out a ban on Huawei have hit a wall. While the U.K. and the EU introduced policies that allow the Chinese company’s partial participation in next-generation wireless networks, Merkel has failed to forge a compromise within her Christian Democratic-led bloc. 

Irish Elections | Leo Varadkar won international applause for his handling of Brexit, all while cementing the Irish economy’s position as one of Europe’s strongest and getting unemployment down toward the lowest in a decade. Trouble is that kudos abroad isn’t translating into support at home and he risks losing power, Dara Doyle reports from Dublin.

Trade’s Miracle | The word “trade” might bring to mind tweets by Donald Trump and EU anti-dumping duties. But it’s so much more. Join Bloomberg reporters on a journey from French vineyards to West Bank crossings and the Nigeria-Benin border to capture an ordinary day during this extraordinary period in the global economy.

Zero Waste | Germans are world leaders in recycling, but one city has decided more needs to be done. Kiel, a Baltic port known for its annual sailing regatta, has committed to totally eliminate waste, conserve and recover resources and not burn or bury them. Here’s why.

Noble Adoptions | Have you made money but people still turn their nose up at you because of your humble beginnings? This businessman has a solution — though it costs up to a million euros and involves being adopted by obscure, penniless Counts. 

Chart of the Day

German banks are running out of space. To avoid paying the ECB to hold their cash, they have stuffed vaults with so much cash that some are having to look at external storage, and face being turned away.

Today’s Agenda

All times CET.

• 12 p.m. Commission President Ursula von der Leyen meets Hungary’s Prime Minister Viktor Orban in Brussels, after earlier meeting Council President Charles Michel
• 12:30 p.m. European Commission due to unveil negotiating mandate proposal for post-Brexit talks
• 3 p.m. EU Parliament Committee on Environment holds hearing with Internal Market Commissioner Thierry Breton
• 3 p.m. Tech and antitrust chief Margrethe Vestager delivers a keynote speech in The Hague at a symposium on digitalization organized by the Second Chamber of the Dutch House of Representatives
• German Chancellor Merkel hosts Austria’s Sebastian Kurz in Berlin
• France’s President Macron begins two-day trip to Poland
• EU foreign policy chief Josep Borrell visits Iran and will meet with President Hassan Rouhani, Foreign Minister Javad Zarif and Ali Larijani, speaker of the parliament

--With assistance from Zoe Schneeweiss.

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

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