Brussels Edition: Taking on the Dollar

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

Europe is eager to flex its muscles as a world power, and today it will explain how. The European Commission will release a blueprint that describes its plan to challenge the dollar’s dominance in global finance, in part by bolstering the use of the euro in strategic sectors like energy where the greenback is now king. In the face of Donald Trump’s aggressive trade policies, the EU is determined to mitigate what’s known as the dollar’s “exorbitant privilege,” which gives Washington clout to prod other countries to comply with its foreign policy goals.

What’s Happening

Fake News | In its efforts to curtail the spread of fake news, the European Commission is checking in today on how technology firms like Google, Facebook and Twitter are doing at reining in misinformation. In September the firms pledged to abide by a self-regulated code of conduct to, for instance, be more transparent about political ads. The EU could impose legislation at some point if it isn’t happy with the results.

Next Move | Italian Prime Minister Giuseppe Conte could be on the cusp of presenting a revised budget to end a deadlock with the commission and prevent a procedure that could eventually lead to fines. But his room for maneuver is limited: not only is time running out, any tweaks will need to be substantial enough to win over Brussels, officials warn.

Swiss Row | EU ambassadors will be briefed on the latest developments in the bloc’s fraught treaty talks with Switzerland that could lead to Brussels blocking EU investors from trading on Swiss exchanges in the New Year. On Friday, the divided Swiss government plans to announce its stance on the draft EU framework governing bilateral relations.

Competitive Advantage | How to ensure fair and open competition will be the talk of the town in Brussels today as hundreds descend on the luxury Steigenberger Wiltcher’s Hotel for an anti-trust conference. It’s one of the most popular events of the year on the subject because there’s no entry fee and speakers include Tommaso Valletti, the commission’s chief competition economist. Even the U.S. Department of Justice and the U.K. Competition and Markets Authority are represented.

In Case You Missed It

Brexit Battle | Revealing Prime Minister Theresa May’s weakness heading into a crucial Brexit vote, her government was found to be in contempt of Parliament — a moment without precedent in recent history — over its refusal to release the Attorney General’s legal advice on Brexit. Meanwhile, the EU’s top court said in an advisory opinion that the U.K. can unilaterally reverse the Brexit process, potentially giving a boost to May’s bid to drum up support for her withdrawal deal among hardliners who want out.

Macron Retreats | French President Emmanuel Macron’s government reversed course and suspended a fuel-tax hike that had sent as many as 300,000 protesters into the streets for three weeks in sometimes violent clashes. It’s a rare retreat by Macron, who has prided himself on sticking to his policies and ignoring his tumbling popularity ratings. 

Merkel’s Last Act | After shaking up German politics by announcing in October she was stepping down as Christian Democratic Union leader, Angela Merkel said she’s prepared to serve out her fourth term as chancellor through 2021. Here are four scenarios for the final act of the chancellor’s political life, with the probability for each one.

Tech Tax Tweak | Big Tech may still be taxed in Europe after France and Germany proposed an 11th-hour compromise to keep the proposal from dying. This is what the watered-down wording could mean for the likes of Google and Facebook if it eventually becomes law — but that requires unanimous approval.

Arms Control | NATO signaled Russia must comply soon with a landmark arms-control agreement or face the deal’s demise, while papering over internal differences about a U.S. threat to withdraw from the pact.

Chart of the Day

Germans are spending more time than ever at work — 15.64 billion hours in the third quarter — but their renowned efficiency is slipping, creating concerns that the hiring frenzy in Europe’s biggest economy may be overdone. 

Today’s Agenda

All times CET.

• 11 a.m. Eurostat to release Oct. retail trade reading for the euro area 
• 1:30 p.m. The director of the IMF Europe Office will present the latest Regional Economic Outlook for Europe
• The European Commission is due to publish a communication addressing efforts by tech platforms to fight the spread of fake news
• The European Commission is set to publish a communication on the euro’s international role
• EU Commission President Jean-Claude Juncker receives Romanian Prime Minister Viorica Dancila
• EU Commissioners Maros Sefcovic, Guenther Oettinger, Violeta Bulc and Elzbieta Bienkowska, as well as the CEOs of Airbus and Rolls-Royce, participate in the 4th EU Aeronautics Conference
• EU foreign policy chief Federica Mogherini attends the NATO Foreign Ministers Meeting in Brussels 

--With assistance from Zoe Schneeweiss, Natalia Drozdiak, Aoife White and Jonathan Stearns.

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

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