Brussels Edition: Talking Past Each Other

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

Brexit negotiations resume in Brussels today at the British government's request, despite EU officials admitting they’re not sure why they're bothering and describing Wednesday's talks variously as a waste of time, a pretense and a disaster. (The U.K. called them constructive.) They come as Prime Minister Boris Johnson continues to push for an election in a bid to regain control of parliament after a series of stinging defeats for his Brexit strategy, declaring he would “rather be dead in a ditch” than ask the EU for another delay.

What’s Happening

Top Jobs | Incoming European Commission Chief Ursula von der Leyen will announce her team of commissioners representing all EU countries (except the U.K.) on Tuesday, finally revealing who’ll be in charge of the bloc’s key policy areas for the coming years. Competition, trade and economy will be in focus as will a portfolio that has become one of the most wanted this time round: Climate

ECB Split | To QE or not to QE? That is the question auguring a split among European Central Bank policy makers ahead of their meeting next week. Mario Draghi’s bid to reactivate bond purchases is being threatened by the biggest pushback on policy ever seen during his eight-year reign, but economists see him overriding opposition.

Back to Ecofin | EU finance ministers will gather in Helsinki next week for their first meeting after the summer break to talk about things like climate change, fiscal rules and energy taxation. Crucially though, the gathering will be a chance for the newly-appointed Italian finance minister to meet his counterparts and lay out his government’s much-anticipated plans for the country’s economy. 

In Case You Missed It

German Slump | German factory orders fell in July, aggravating an industrial slump that has pushed Europe’s largest economy to the brink of recession. The latest data came as economic prospects for export-reliant Germany remain uncertain amid increased risks of a no-deal Brexit and the intensifying trade war, raising once again the question of whether Berlin would consider providing stimulus.

Fraud Trial | A day after the trial over a controversial tax scandal opened in Germany, Europe’s banking regulator said it’s investigating the transactions following requests from EU lawmakers. The EBA will review whether these schemes are linked to money laundering and whether there are governance issues within banks in a scandal estimated to have cost more than 10 billion euros in lost revenue.

Danske Probe | The EU is continuing to investigate Danske Bank’s regulators in Denmark and Estonia, even after the bloc’s banking watchdog concluded they hadn’t broken EU law during one of the region’s biggest-ever money-laundering scandals. That means the countries could still face the prospect of court proceedings and even financial penalties if Brussels suspects they didn’t follow EU law.

Not Welcome | Thinking about moving abroad? Well, the U.K. now ranks as less politically stable than Greece or Egypt, and the U.S. isn’t far behind, according to an extensive global survey of expatriates. Political turmoil over Brexit means the U.K. is now among the world’s least desirable destinations for expats, while the U.S. has also seen its reputation plummet as a destination for foreigners.

Chart of the Day

Brussels Edition: Talking Past Each Other

The fiscal plans as set out in Labour’s 2017 manifesto are likely to be more growth-friendly than the Conservatives’ plans, according to Bloomberg Economics. BE thinks the fiscal multiplier on investment spending is about three times bigger than on tax cuts for the rich. The risk for U.K. bonds is that the Labour leadership feels emboldened to go further and scale up the magnitude of the loosening in fiscal policy to differentiate itself from the Conservative party.

Today’s Agenda

  • European Central Bank Vice President Luis de Guindos among speakers at the European House-Ambrosetti’s “Intelligence on the World, Europe, and Italy” forum in Cernobbio, Italy
  • Brexit negotiations between U.K., EU due to resume in Brussels
  • Eurostat to release data on alcohol prices in the EU
  • German Chancellor Angela Merkel continues visit to Beijing 

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