Brussels Edition: The New Team

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

Who’ll be the EU’s next antitrust chief? Who’ll spearhead the bloc’s efforts to tackle climate change? And who’ll be in charge of trade negotiations with the U.K.? Incoming European Commission President Ursula von der Leyen will answer these questions and more when she unveils her new team today. Made up of nationals from each EU country except Britain, the new college of commissioners will feature people of all political stripes as well as a record 13 women. The real power in Brussels, however, will lie with the handful of individuals appointed to key portfolios that’ll shape EU policies and determine its place in an increasingly uncertain global order. Stay tuned for the action. 

What’s Happening

Looking Ahead | With the British Parliament suspended last night for five weeks, Prime Minister Boris Johnson can get on with trying to strike a Brexit deal (or not) without the interference of lawmakers. Those talks haven't made much progress and chief EU negotiator Michel Barnier will brief leaders of the European Parliament's political groups today.

German Revolution | The Bundestag today begins debating the 2020 budget amid increasing calls for the government to boost investment and increase debt as a potential downturn looms. The discussion comes as the German finance ministry seems prepared to review its plan for balanced budgets through 2023 in case of a deep recession.

Spanish Mortgages | Spanish banks await a non-binding legal opinion on whether they might have to pay billions of euros in compensation for mis-selling mortgages linked to an index published by the Bank of Spain. In the worst case scenario, the EU's top court could ultimately rule that lenders have to pay clients as much as $44 billion in a decision expected in four-to-six months. 

Capital Markets | The IMF is scheduled to make a presentation today at the Belgian central bank on the state of Europe’s capital markets. It’s another sign that even after years of reform, the integration of the EU’s fragmented financial system will be a key issue for von der Leyen's incoming team. The note could also feed into EU finance ministers’ talks on the issue when they meet in Helsinki Friday. 

In Case You Missed It

British Rebound | The U.K. economy grew at its fastest pace in six months in July, an unexpectedly strong performance that will allay fears Britain is facing a possible pre-Brexit recession. However, there is evidence that the economy lost some momentum more recently as the political crisis over Brexit hit confidence and the trade war between the U.S. and China escalated.

Conte Confidence | Italian Prime Minister Giuseppe Conte won the first confidence vote for his new government after presenting his program in Italy’s lower house. He vowed to repair ties with the EU while cutting taxes. He will face — and is set to win — a similar vote in the Senate today, following which the process to draft the controversial 2020 budget will start in earnest. 

ECB Test | Mario Draghi will test the composure of global policy makers this week as he unleashes a barrage of stimulus to shore up economic growth. The easing will probably feature an interest-rate cut that widens the difference between borrowing costs in the euro area and elsewhere. That will potentially affect foreign exchange markets — and risk the ire of critics such as Donald Trump.

New Hope | France’s foreign minister praised a “new atmosphere” during a trip to Moscow that could help to resolve the long-stalled Ukraine conflict as President Emmanuel Macron steps up efforts to repair strained EU-Russia relations. The optimism comes as a summit of the leaders of Germany, Ukraine and Russia is due in the next few weeks in a bid to revive a 2015 Ukraine peace deal.

Chart of the Day

Economists predict Germany will avoid a recession but the picture they paint of future growth is dire given global trade conflicts and political uncertainty. According to a Bloomberg survey, output in Europe’s largest economy stagnated in the third quarter and will rise more slowly from there than previously forecast. 

Today’s Agenda

All times CET.

• 9:30 a.m. EU court opinion (final ruling in coming months) on legality of controversial index-linked Spanish mortgages

• 12:00 p.m. EU Commission president-elect Ursula von der Leyen presents portfolios and team of commissioners 

• 12:30 p.m. IMF and Belgian central bank present note on further capital market integration in Europe

• EU parliament president and political group leaders discuss Brexit with EU chief negotiator Michel Barnier

• EU trade chief Cecilia Malmström speaks at Madrid event on EU-Japan Economic Partnership Agreement

• Germany's Scholz presents 2020 budget to parliament
• Italian government confidence vote in upper house
• Slovenian parliament holds second reading of a bailout law opposed by the ECB and the nation's central bank
• Council of Europe's anti-money laundering and counter terrorist financing body MONEYVAL will publish report on Malta

--With assistance from Zoe Schneeweiss, Charlie Devereux, Alessandro Speciale, Ian Wishart and Alexander Weber.

To contact the editor responsible for this story: Vidya N Root at vroot@bloomberg.net

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