Brussels Edition: Stuck in Limbo

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

It seems hard to join or leave the European Union these days. Albania and North Macedonia were supposed to start membership talks, but EU governments decided they have to wait four months, highlighting resistance over enlarging the club. The U.K. was meant to have left by now, yet it still had a say in talks yesterday over future membership. And even with the EU threatening punitive measures against Turkey over drilling in the eastern Mediterranean, Ankara’s long, ill-fated membership bid is technically still on the table.

What’s Happening

Cheap Money | Borrowing money can get a whole lot cheaper after Mario Draghi all but pledged additional stimulus if growth and inflation don’t start cooperating. Bond yields fell to records in Greece and touched zero for the first time ever in France and Sweden.

Top Jobs | The race between governments and political factions for the EU’s top jobs is in full swing a day before the EU summit kicks off, and there’s at least one unlikely candidate who’s garnered something resembling momentum behind her bid for the highest-profile gig.

Boris Leads | And then there were five. After the second round of Conservative party ballots, Boris Johnson surged ahead in the race to become Britain’s next prime minister, while former Brexit Secretary Dominic Raab was eliminated. EU leaders will take stock of the latest on Friday, with a no-deal exit seeming more likely by the day.

Scotland Adrift | Whoever becomes Britain’s next premier has probably already lost Scotland. While the Tories squabble over Brexit in London, the Scots are reminded of how alien all that English politicking is. 

In Case You Missed It

Swiss Consequences | The delicate state of Brexit negotiations has hardened the EU’s stance toward Switzerland, another country that’s struggling to redefine its relationship with the world’s largest trading bloc. European Commissioner Johannes Hahn said that the EU must make an example of the Swiss defiance like this. 

Russian Rebuttal | Gazprom moved to dispel warnings from Kiev about an impending gas crisis in Europe this winter. The Russian company is confident enough natural gas will flow to Europe, despite facing tough transit talks with Ukraine and negotiations with Denmark over the controversial Nord Stream 2 pipeline.

Rent Controls | Berlin plans to freeze rents in response to public outrage over a growing shortage of affordable housing, setting a legal precedent in Germany on an issue that’s increasingly creating political waves across Europe. Surging housing costs have sparked protests in Frankfurt, Cologne and Stuttgart, while Amsterdam and Barcelona are also responding to the backlash. 

French Homeopathy | Alternative remedies are under siege in France as a debate rages over whether the government — which for decades has paid about a third of the costs for these health treatments — should continue to subsidize pills that mostly consist of, well, sugar. Talk about First World problems.

Chart of the Day

Euro-area exports fell in April, according to seasonally adjusted figures from Eurostat, a hint of how the global slowdown is hitting the region. Still, it’s just one month in a volatile series, and demand is still up more than 4% this year. 

Today’s Agenda

All times CET.

• 10:30 a.m. Commission President Jean-Claude Juncker delivers a keynote speech at ECB-organized Forum on Central Banking in Sintra, Portugal
• 11 a.m. Eurostat to release 2018 data on GDP consumption per capita
• Commissioners Dimitris Avramopoulos, Vera Jourova and Julian King attend EU-U.S. ministerial meeting on justice and home affairs
• EU lower court rules in challenge by Adidas against decision by the EU’s Intellectual Property office to annul a bloc-wide trademark for its three stripes 

--With assistance from Stephanie Bodoni.

To contact the editor responsible for this story: Daliah Merzaban at dmerzaban@bloomberg.net, Chris Reiter

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