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Brussels Edition: Defending Democracy, Protecting Champagne

Brussels Edition: Defending Democracy, Protecting Champagne

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

Poland has faced a string of lawsuits from the European Commission since it started a sweeping judicial overhaul four years ago, which the EU watchdog and most observers say risks undermining the nation’s democratic standards. Today, the EU’s top court will give a binding decision on the legality of measures that cut judges’ retirement ages and discriminate between male and female jurists. A loss for Poland wouldn’t be the first, highlighting the widening East-West rift in the EU and further undermining Warsaw’s narrative that it’s sticking with the bloc’s rules by simply exercising the sovereign right to shape the judiciary. 

What’s Happening

Military Projects | The EU is closing in on an accord that would allow the U.S. government and American companies to participate in joint defense projects, potentially removing a source of friction in transatlantic ties. We have the draft deal here, due to be debated by EU government envoys in Brussels tomorrow, which will also pave the way for cooperation with the U.K on defense projects post-Brexit.

EU-China Deal | China and the EU will sign an accord to protect products that have a specific geographical origin — such as Champagne or Manchego cheese — in a bid to fight counterfeits, according to French President Emmanuel Macron. There will be a celebration of the occasion in Beijing on Wednesday, though a diplomat in Brussels told us member states hadn’t seen an actual text of the deal when Macron announced it. 

Nuclear Fallout | The landmark accord which has kept Iran’s nuclear program in check is being torn apart, and the EU appears unable to do anything about it. Yesterday, Tehran said that it had increased the number of advanced centrifuges used to enrich uranium, while an announcement of another step away from the nuclear deal is expected this week. 

Lagarde’s Call | Anyone who wanted Christine Lagarde to deliver a monetary speech on her first working day as ECB chief was left hanging. Instead, she promoted “strength, resolve and courage” for Europe during an appearance in Berlin. For those seeking signals on stimulus measures, she had an unmistakable message: “Please leave the room.”

In Case You Missed It

Dodgy Passports | A Malaysian fugitive financier — accused of masterminding one of the biggest financial scandals in the world — has joined the relatives of Cambodian strongman Hun Sen in the ranks of esteemed citizens of Cyprus. The EU Commission has vowed a crackdown on the practice of handing EU passports to whomever is willing to pay, but its action on that front leaves as much to be desired as Nicosia’s due diligence checks.

Orban’s Challenge | Romania approved the country’s sixth government in five years, ending weeks of political uncertainty following the ouster of the previous administration. Liberal premier Ludovic Orban pledges to repair what he calls damage to the economy, the judiciary and EU relations by three years of Social Democrat rule, but the closeness of Monday’s vote indicates the new government could struggle to pass legislation.

German Cars | German Chancellor Angela Merkel hailed a “paradigm shift in mobility” as she visited a revamped Volkswagen electric-car plant in Zwickau yesterday. The visit, however, was a stark reminder of the challenges ahead both for Merkel’s embattled government and Germany’s car industry struggling to adapt to the death of the combustion engine.

Swedish Breakthrough | Researchers in Sweden have created a molecule that offers a way to trap heat from the sun. Read how this energy breakthrough could store solar power for decades for use across a range of consumer applications to heat everything from homes to vehicles.

Gene Therapy | On the Italian island of Sicily, a $1.8 million treatment now offers hope to hundreds of people suffering from a severe blood disorder. Italy has more patients afflicted with the inherited disease, beta thalassemia, than anywhere in Europe and the U.S. But these patients, dependent on frequent blood transfusions, will need to wait to get Bluebird Bio’s newly approved gene therapy. Drugmakers diving into the potentially lucrative field must persuade governments and insurers to pay for the costly therapies, not just in Italy but around the world.

Chart of the Day

Brussels Edition: Defending Democracy, Protecting Champagne

Euro-zone manufacturing remained near the weakest in seven years last month, a poor start to the final quarter that raises pressure on the region’s governments to add fiscal stimulus to insulate the region from a worsening global slowdown. Germany with its export-reliant industry continued to be the principal source of frailty.

Today’s Agenda

All times CET.

  • 9:30 a.m. The EU’s top court rules in cases against the European Central Bank and Latvia’s Trasta Komercbanka, the lender shut down after money-laundering allegations
  • 9:30 a.m. The EU’s top court decides a dispute between the European Commission and Poland over measures to lower the retirement age of judges and also distinguish between the retirement ages for men and women 
  • EU trade chief Cecilia Malmström and her designated successor Phil Hogan are in Shanghai to participate in the World Trade Organization’s mini-ministerial meeting
  • EU Commission Vice President Maroš Šefčovič meets Dmytro Kuleba, Ukraine’s deputy prime minister, in Brussels
  • EU Brexit negotiator Michel Barnier, Blackstone CEO Stephen Schwarzman and Verizon CEO Hans Vestberg speak at Lisbon Web Summit
  • OPEC world outlook published in Vienna

--With assistance from Nikos Chrysoloras and Wojciech Moskwa.

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net, Chad Thomas

©2019 Bloomberg L.P.