Brussels Edition: Trade-War Tragedy

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

The EU Commission told us yesterday how trade wars are starting to take a toll on growth. Today we’ll find out how likely they are to escalate, as Cecilia Malmstrom informs trade ministers about the results of preliminary talks with U.S. negotiators that are intended to lay the groundwork for a trans-Atlantic deal. Ministers will also discuss slow-moving talks for an accord with Mercosur countries, legislation on screening foreign investment and one of the untold tragedies of trade wars: anti-dumping duties on European fries.

What’s Happening

Italian Sojourn | Eurogroup President Mario Centeno will meet Italy’s prime minister and finance minister in Rome, a few days before the country has to submit revised budget plans to Brussels. The trip comes after the Commission said economic growth next year will be weaker than the government targets, while the budget deficit will move dangerously close to the EU limit of 3 percent. Italian bonds fell, signaling that markets take the EU’s projections seriously. And industry officials in the prosperous north are not happy.

Brexit Coreper | We are approaching the endgame of Brexit — we just don’t know if it’s going to be a happy ending. EU27 envoys will discuss the latest on the negotiations and prepare for a meeting of the bloc’s European Affairs ministers on Monday. Whether the gatherings will be procedural or substantial largely depends on the U.K. cabinet, which needs to approve an outline of a withdrawal deal pushed by Prime Minister Theresa May.

Week-Ahead | Brexit and the deadline for the revised Italian budget are the main highlights for next week. On Monday, IAEA nuclear inspectors are expected to publish their quarterly Iran report, which is likely to show the Persian Gulf country continues to abide by its commitments. On Tuesday, German Chancellor Angela Merkel will deliver a speech on the future of Europe at the EU Parliament in Strasbourg.

In Case You Missed It

Conservative Pick | Europe’s Christian Democrats selected Manfred Weber of Germany to run for European Commission president. The EU’s biggest political family chose a Brussels insider to succeed Jean-Claude Juncker, just like Frans Timmermans, who will be the candidate of the center-left. Will either candidate be able to reconnect the heart of EU bureaucracy with grassroots national politics?

Laundering Warning | The European Commission has ordered Denmark and Estonia to completely transpose the bloc’s latest anti-money laundering legislation or face court. Danske Bank, Denmark’s biggest, is under criminal investigation for breaching money laundering laws. The Commission also warned Malta to step up its anti-money laundering efforts.

Macron Meh | He’s touring World War I battlefields to highlight the dangers posed by the resurgence of nationalism in Europe. He warns of the global threat of climate change. And he lays out ambitious plans for transforming the EU. The problem for Emmanuel Macron is that voters have other priorities.

Greener Gas | Russia is looking at how to develop a market for hydrogen in Europe, a move that would help maintain demand for one of its primary exports as governments everywhere work to cut pollution. Gazprom, the dominant exporter of natural gas into Europe, is exploring ways to produce emissions-free hydrogen from its fuel and create a 153 billion-euro a year market by 2050.

Brexit Booze | Some good news for our readers in Britain. Dutch brewer Heineken is stockpiling reserves of Desperados tequila-flavored beer, Strongbow apple cider and other essential supplies to help you get through the day after the U.K. leaves the EU.

Chart of the Day

Brussels Edition: Trade-War Tragedy

Global trade tensions, Italy’s fiscal battles and U.S. overheating pose risks to the euro-area economy, the European Commission warned as it lowered its growth forecast for the coming year. The Commission, like other forecasters, also sees the slowdown spreading to the rest of the world, including China and the U.S.

Today’s Agenda

All times CET.

  • 9 a.m. EU’s trade ministers meet in Brussels to discuss WTO modernization, EU/U.S. trade relations, foreign direct investment screening, talks for a trade deal with Mercosur
  • 12:30 p.m. Eurogroup President Centeno meets Italian Finance Minister Giovanni Tria and Italian Prime Minister Giuseppe Conte in Rome
  • 2:45 p.m. ESM Managing Director Klaus Regling, Deputy Bank of France Governor Sylvie Goulard, EIB President Werner Hoyer, French Finance Minister Bruno Le Maire deliver speeches on the international role of the euro and trade wars at French-German Business Forum in Paris
  • ALDE Party Congress in Madrid
  • EU Commission President Juncker meets NATO Secretary General Jens Stoltenberg

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