Brussels Edition: Populism Redux
(Bloomberg) -- Welcome to the Brussels Edition, Bloomberg’s daily briefing on what matters most in the heart of the European Union.
If you thought European populism had died a quiet death, think again. Voters in state and regional elections in Germany and Italy shunned governing parties and threw their support behind right-wing populists — and, to a lesser extent, the far left. Besides being embarrassing setbacks for their ruling coalitions, the results could weaken the governments in two of the euro area’s largest economies, both already flirting with recession. The added uncertainty may deepen their slump in what would be bad news for the currency bloc as a whole.
Boris’s Battles | Boris Johnson’s latest attempt to trigger an early general election was defeated in Parliament yesterday. He’ll try again today. Having accepted the EU’s offer of a three-month Brexit delay, he’s leaving the U.K. facing a bigger crunch moment next year. Should he eventually deliver Brexit, he’ll confront a familiar dilemma: How to sever trade ties with the EU without triggering massive disruption to British business and the economy.
Ahoy Hanoi | A European Parliament delegation begins a three-day visit to Vietnam today as the assembly gears up for its verdict on a delayed free-trade agreement with the Asian nation. EU lawmakers want assurances that Vietnam will outlaw forced labor and allow independent trade unions before a February vote on the trade pact reached in 2015.
Yellow to Rosy | French consumer confidence is expected to confirm that households have put the Yellow Vest protests behind them and will use Emmanuel Macron’s tax cuts to boost spending. That would strengthen the government’s claim that with economic growth slowing, they’ve unleashed fiscal stimulus at the right moment and others — Berlin in particular — should follow suit.
Catalonia Court | Belgian prosecutors will ask a court in Brussels to execute a warrant for the arrest of former Catalan President Carles Puigdemont who led a bid to declare independence from Spain in 2017. His lawyers will probably ask for more time and expect the hearing to be delayed until early December, Europa Press reported.
In Case You Missed It
Swan Song | Mario Draghi made one last plea for euro-zone fiscal support as he signed off from the ECB presidency. Speaking before leaders of the bloc’s biggest economies, Draghi said low rates are no longer delivering the same stimulus and that other policies are needed. Whether his call fell on deaf ears remains to be seen.
Orban’s Shift | Hungary will replace the controversial head of its judiciary, the latest sign that Viktor Orban is trying to quell the EU’s rule-of-law concerns. The Hungarian premier, who recently suffered his worst electoral setback in more than a decade, is also angling to retain his party’s membership in the European People’s Party, the center-right bloc that includes Angela Merkel’s party.
Greek Debt | The European Stability Mechanism agreed to allow Greece to repay ahead of schedule around 2.7 billion euros owed to the IMF by waiving its right to be repaid at the same time. Pre-paying the more expensive loans will likely improve Greece’s debt sustainability and help its market access as it seeks to return to normalcy after a decade in crisis.
Slovene Saga | The upper chamber of Slovenia’s parliament rejected a law designed to protect investors who lost money during a 2013 bank bailout, saying it wouldn’t provide adequate protection. The vote adds a twist in a saga that pitted the government against the ECB, which had argued that the law may force the euro-area member’s monetary body to honor obligations owed by the state.
Chart of the Day
As Britain tries to figure out its split with the EU, it’s attempting to maintain current trading relationships to avoid reverting to World Trade Organization terms after exiting the bloc.
All times CET.
- 3:00 p.m. ESM Managing Director Regling presents the ESM book “Safeguarding the Euro in Times of Crisis” at the European Commission in Brussels
- EU Commission President Juncker meets Serbian President Vučić
- EU foreign policy chief Mogherini hosts working dinner in Brussels with leaders of Western Balkan partners
- EU antitrust chief Vestager in Dortmund, delivers a keynote speech at the Digital Summit; meets German Economy Minister Altmaier
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