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Brussels Edition: Socialist Day of Reckoning

Brussels Edition: Socialist Day of Reckoning

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

Angela Merkel is still chancellor of Germany, but for how long? Starting today, the Social Democrats — her discontented junior coalition partner — will wrangle with themselves at a three-day convention in Berlin. The base may be placated after electing government critics as leaders, but the little-known pair will be under pressure to win concessions from Merkel on issues that risk crossing conservative red lines. Things are likely to remain volatile — and squabbling in Berlin could hamper EU progress in areas from banking union to tackling climate change and a long-term budget. 

What’s Happening

U.K. Debate | With days to go before the British election, the two biggest parties are promising everything to everyone in a bid to lure voters. With premier Boris Johnson maintaining a comfortable lead in polls, tonight’s TV debate may be Jeremy Corbyn’s last chance to turn the tables. 

Green Revolution | The big question for next week’s summit is to what extent the super-ambitious first draft of the communique committing the EU to zero-out its emissions will be watered down. EU leaders meet the day after the European Commission has presented its Green Deal proposals; they will also pledge to keep close tabs on post-Brexit trade talks, after sparring over the bloc’s trillion-euro budget and snail-paced euro-zone reforms

Orban’s Nemesis | Also on next week’s EU agenda, a ministerial meeting on Tuesday will debate the rule of law in Hungary and Poland (again). Ministers should read this story about Akos Hadhazy, who used to be a member of Hungary’s governing party. Now he’s a crusader against graft in what’s become one of the EU’s most corrupt countries. 

Dutch Warnings | The EU will act as one if the U.S hits France with tariffs and must stop being naive with powers like China, the Dutch finance chief warned. Speaking in an interview, Wopke Hoekstra also called on the bloc to step up efforts to combat money-laundering as more cases pop up, just hours before ministers endorsed the potential creation of an agency to prevent such crimes.

Trade Woes | WTO members agreed to a preliminary 2020 budget, bowing to U.S. demands to choke off funding for the alliance’s appellate body. The deal averts a January 1 shutdown of the the panel that has the final say in trade disputes that affect billions of dollars in international commerce.

In Case You Missed It

Finnish Shock | Finland is seeking a prime minister after the surprise resignation this week of the current leader. Lawmakers agreed late yesterday on a timetable for appointing a new government, and the make-up of the coalition should be known Sunday. Meanwhile, support for the anti-immigration Finns Party jumped to a record, according to a poll published by broadcaster YLE.

Green List | EU policy makers sealed a deal to create a classification system for green financial products, aiming to strengthen the rapidly growing market’s legitimacy. The rules will help craft common definitions for environmentally friendly investments and thwart “greenwashing” — where products are marketed as sustainable, even if they don’t really help fight climate change.

Market Transparency | Europe’s sweeping market reforms have failed to lower the cost of data or improve transparency, and now regulators want to take another whack at solving the problem. The European Securities and Markets Authority has called for real-time information on transactions to help overcome the EU’s fragmented trading systems and improve liquidity.

 Macron’s Challenge | French President Emmanuel Macron’s ability to deliver his pension reform is being tested as labor unions extend their strike to Monday. With thousands marching in the streets and walking out of work, Macron’s Prime Minister Edouard Philippe is expected to unveil details of the pension reform as soon as next week.

Ethical Phones | As far as human rights and the environment are concerned, smartphones are a nightmare. A company in Amsterdam has been trying to break that cycle. Meet the Fairphone, which is made partly from ethically sourced metals and recycled plastics and seeks to capitalize on growing concerns over the impact of our consumption on the planet. 

Chart of the Day

Brussels Edition: Socialist Day of Reckoning

Germany got a sharp reminder that its key industries have a long way to go to overcome a slump that’s already lasted more than a year and tipped the economy close to recession. An unexpected fall in factory orders at the start of the fourth quarter suggests momentum in Europe’s largest economy will remain sluggish for some time. 

Today’s Agenda

All times CET.

  • 9:30 p.m. Boris Johnson, Jeremy Corbyn clash in TV debate ahead of U.K election
  • Three-day German SPD congress begins in Berlin
  • Eurostat to release data on air passenger transport and age of airplanes in the EU

--With assistance from Viktoria Dendrinou.

To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net, Chad Thomas

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