Brussels Edition: Trump vs Europe

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

As Donald Trump heads to a showdown over global trade with China’s Xi Jinping at the G-20 in Japan, European partners are perplexed at his eagerness to open a second front against his erstwhile allies. Trump has made no secret of his desire to challenge Europe on everything from trade — where he’s threatened to slap tariffs on the auto industry — to Iran, where the U.S.’s unilateral withdrawal from the landmark nuclear accord has left the EU impotent. The problem is, Europe’s leverage over Trump is limited. The EU’s only tools to hit back are counter measures on trade. 

What’s Happening

Swiss Countdown | With just days before the EU's recognition of the Swiss stock exchange expires, Switzerland and the bloc aren’t any closer to an accord over a deal governing their relationship. Barring a miracle, EU-based investors will lose the ability to trade Swiss shares in London and other financial centers in the bloc after the end of the week.

Safe Tech | Makers of connected cars, smart fridges and other internet devices will soon be able to seek cyber certification designating their products safe to use under new EU rules that enter into force today. The EU's cybersecurity agency will help oversee the scheme to prevent users from being vulnerable to hacking and cyber breaches.

Finnish Plans | Finland, which takes over the EU presidency on July 1, will seek an agreement to make the EU commit to becoming carbon neutral by 2050. While its stint heading the bloc over the next six months will likely be dominated by Brexit, Finland said it aims to defend the bloc’s interests and not let the U.K’s departure overshadow other major issues. 

Deal Approval | IBM is expected to win unconditional EU approval for its largest ever takeover, a $33 billion bid for open-source provider Red Hat. The company didn't file concessions by a deadline last week, often a sign that a quick approval is expected. The European Commission is expected to rule on the deal today.

In Case You Missed It

Balkan Letdown | The EU’s foot-dragging over an expected promise of membership for countries like North Macedonia risks dire consequences across the volatile western Balkans region, whose nations are desperate to join the bloc. As EU countries hesitate, Balkan politicians are struggling to explain the letdown to their citizens.

Popular Mario | As the EU seeks a successor to Mario Draghi, the ECB’s president also got something of a job offer to cross the Atlantic. Donald Trump said that he’d want “Mario D.,” as he has called him, to run the Federal Reserve, instead of the “person” in charge now. But Trump is no fan of EU competition chief Margrethe Vestager, saying “she’s suing all our companies.” One person who does like Vestager is the woman set to be the next Danish prime minister. Mette Frederiksen said last night that she’d like Vestager to stay on as EU commissioner for another term.

Missile Moves | NATO defense ministers took aim at Russia yesterday, endorsing measures to replace a dying arms-control pact and warning member Turkey against the purchase of Russian missiles. The U.S. is the driving force behind the moves.

Danish Ambition | Denmark’s Social Democrats and their center-left allies have agreed to form a government set on greater welfare spending, higher taxes and one of the most ambitious climate policies in the world. Their accord includes cutting greenhouse gas emissions by 70% by 2030, a target higher than the EU’s and one critics have described as overambitious.

Quiz | Which former European Commission lawyer wrote a best-selling thriller that was turned into a Netflix series? Find the answer in tomorrow’s newsletter. 

Chart of the Day

With Europe set for a record heatwave, the frequency of freak weather events is beginning to resonate. Voters are growing increasingly worried about climate change, with 43% of respondents in a Eurobarometer survey citing it as a concern, up from 35% a year ago. That makes climate change the EU’s No. 4 issue, behind the economy, youth unemployment and immigration.

Today’s Agenda

All times CET.

• 9:30 a.m. EU top court ruling on Hungary's challenge to European Commission decision that Hungarian law on the taxation of advertisement sales violates EU state aid rules
• 9:30 a.m. EU top court gives non-binding opinion in case concerning Poland's wide-ranging judicial overhaul 
• 6 p.m. ECB Governing Council member Ewald Nowotny speaks in Vienna
• NATO defense ministers meeting in Brussels 
• EU is expected to approve IBM's takeover of Red Hat without conditions
• U.S. congressmen, EU commissioners, EU ministers speak at German Marshall Fund conference in Brussels 

--With assistance from Marine Strauss, Nick Rigillo, Nikos Chrysoloras and Kati Pohjanpalo.

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

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