Brussels Edition: Painful Ceasefire

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

A week after agreeing on a 540 billion-euro rescue package, EU finance ministers are holding another video conference this afternoon to flesh out their response to the coronavirus. The main focus will be on a plan for an employment insurance fund worth 100 billion euros, which needs ministers' approval. While the contentious question of joint debt issuance could come up again, a ceasefire on the subject is expected to hold until leaders meet virtually on April 23. The ministers should also sign off on a statement in support of exploiting flexibility in bank regulations to keep credit flowing amid the greatest economic downturn in almost a century.

What’s Happening

Virus Update | Germany announced tentative steps to slowly start returning the country to normal, while Spain recorded the biggest rise in new cases in six days, Italy reported the fewest infections in more than a month and France’s death toll rose by the most yet. Romania is mired in a dispute over  the government’s intention to allow church volunteers and police to go building to building to give people communion for Orthodox Easter. Here’s the latest.

Trade Strained | Over a call today, EU trade ministers will discuss the impact of the pandemic on global commerce and how to make the bloc less vulnerable to integrated supply-chain disruptions.  Bidding wars have erupted between capitals and trade barriers have been erected by officials already under pressure to bring production of medical and food supplies back home.

Reopening Rules | The day’s third video conference is between EU home-affairs ministers and will focus on the next steps for gradually lifting restrictions on movement, after the presentation of a roadmap in Brussels yesterday.  For those who missed it, this is what the new normal will look like.

Brexit Resumes | You’ll be excused for having forgotten all about Brexit, but it’s still here. Formal negotiations will resume next week by video conference, and the two sides will seek “tangible progress” by June after delays caused by the pandemic added another setback to an already super-ambitious target of reaching a deal by the end of the year.

In Case You Missed It

Silver Lining | Whipsawed by Brexit, the U.K. looks particularly vulnerable to the external shock from the pandemic, thanks to three years of under-investment and uncertainty about its future. The silver lining is that some of the contingency plans that U.K. companies made to handle a no-deal departure are now proving very handy. Here are a few examples.

Boris Barrage | Meanwhile, Boris Johnson’s administration faces a barrage of criticism over its virus response. The government is being asked why it allowed sporting events to proceed as the virus first took hold, why the lockdown was delayed, why testing isn’t widespread, and why there isn’t enough protective gear for health-care professionals.

German Criminals | In Germany, even the criminals are efficient. It took them just a few days to build dozens of scam websites, phishing the data of aid applicants and seeking to channel the money into their own pockets. Here’s how they did it.

Italian Beaches | When Italians look for light at the end of the tunnel in the sixth week of their nationwide lockdown, a lot of them see the same thing: sunshine, endless beaches and the warm Mediterranean sea. But it’s unclear whether the summer can be saved, which is bad news for both the sanity and the economy of the nation.

Chart of the Day

Brussels Edition: Painful Ceasefire

In response to the pandemic, the Group of 20 economies have provided fiscal support equal to 3.5% of GDP, according to calculations by the International Monetary Fund. This amount is higher than the stimulus during the global financial crisis that began in 2008, the fund said, while also highlighting “massive packages of public-sector liquidity support” for companies, which in France, Germany, Italy, Japan, and the U.K. were above 10% of GDP.

Today’s Agenda

All times CET.

  • 9 a.m. European Commission President Von der Leyen and European Council President Michel address EU Parliament

  • 10 a.m. Video conference of EU trade ministers

  • 11 a.m. Eurostat to publish February industrial production reading

  • 2 p.m. Video conference of EU home affairs ministers

  • 3:30 p.m. Video conference of EU finance ministers

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