EU Strategy Shattered, Biden Fed Picks, China Slowing: Eco Day

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Happy Friday, Europe. Here’s the latest news and analysis from Bloomberg Economics to help take you through to the weekend.

  • The European Union’s three-decade-old strategy for keeping its debt in check has been shattered for good by the pandemic, and that threatens to open up battle lines over what should replace it
  • The U.K. and the EU remain locked in a standoff over how to implement the Brexit deal in Northern Ireland, despite more than three hours of talks between top officials on Thursday
  • Southern Europe’s tourist hotspots face another bleak summer as it may take months for enough vaccine shots to be delivered so that people can start crowding onto planes, taking cruises, or hanging out in packed bars along the beach
    • The European economy will recover more slowly this year as the coronavirus keeps a tight grip on the region, with the outlook resting largely on a vaccination campaign that has so far stumbled
  • The EU will step up appeals to the U.S. to align its foreign policy priorities with the bloc, arguing that a common western front would stand a better chance of forcing China to pursue fairer trade policies
  • President Joe Biden’s administration is refraining from a new tariff rotation in its dispute with the EU over illegal aid to Boeing Co. and Airbus SE, a move that could help lay the groundwork for resolving a 17-year dispute
  • The Biden administration is working to address the global semiconductor shortage that has caused production halts in U.S. industries including autos, White House Press Secretary Jen Psaki said
  • The U.S. budget deficit will be wider than previously forecast this year because of a coronavirus relief package approved in December, but smaller over the next decade amid stronger economic growth, according to the Congressional Budget Office
  • Economists Lisa Cook and William Spriggs are backed by several key White House officials to fill a vacancy on the Fed Board of Governors
  • China slowed sharply ahead of the Lunar New Year holiday, according to alternative data compiled by Bloomberg Economics
  • Japan’s economy is estimated to have finished the pandemic year of 2020 with growth reaching double digits

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