EU Confronts the Ghost of Deadlines Past: Brussels Edition

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

In a parallel universe, where transitions are smooth and deadlines met, today is Britain’s last day in the EU. It’s also Jean-Claude Juncker’s last day at the helm of the bloc’s executive arm. But this is Brussels, where cans keep getting kicked down the road, muddling through is the norm and difficult decisions are usually only taken when all other alternatives (and then some) have been exhausted. At least there’s one European institution sticking to its schedule: today marks Mario Draghi’s last day as head of the European Central Bank and tomorrow the restart of its asset purchases to keep Europe’s stop-start growth from stalling formally kicks off. 

What’s Happening

Minimal Growth | Figures today will likely show the euro-area economy expanded just 0.1% in the third quarter, the slowest pace since 2013, adding to the new reality of an economy beset with low growth, wavering investment and rising uncertainty. It’ll be another two weeks though before we get more key data: whether or not the bloc’s biggest economy, Germany, slipped into a technical recession. 

Johnson’s Gamble | Boris Johnson finally succeeded in getting Parliament to give him a general election. Yet while the polls have him far ahead, it’s still a risky move. From Brexit fatigue to electoral math, here are all the ways the vote could go wrong for him.

Rebel Suits | The EU’s top court will give non-binding opinions today in suits against Europe’s rebels in the East — Poland, Hungary and the Czech Republic — over their failure to comply with 2015 decisions to accept migrants entering the bloc mainly through Italy and Greece. An EU win would force these countries to comply or face new cases demanding financial penalties if they fail to do so.

Taking Office | Laura Codruta Kovesi becomes the EU’s first chief prosecutor today, beginning a seven-year, non-renewable term after a politically bruising contest for the job. Kovesi, a former anti-corruption crusader from Romania, was chosen by EU governments and the European Parliament over a French candidate — and over the opposition of her own country.

Week Ahead | EU finance ministers gather in Brussels next week to assess, among other things, the bloc’s latest growth projections — due to be released by the Commission next Thursday. Europe’s top tech conference kicks off in Lisbon on Monday, while the EU’s top court will rule on Tuesday over Polish measures which allegedly undermine the independence of the judiciary.

In Case You Missed It

Driving Ahead | The road to corporate tie-ups in Europe is strewn with failures, and mergers of equals are even harder. Yet that’s what Fiat Chrysler and PSA Group will be attempting after their boards signed off on a proposed transaction late yesterday. A combination would create a regional powerhouse to rival Volkswagen, with a stock-market value of about $49 billion. 

Euro Gloom | Economic confidence in the euro area extended its slide this month, lending credence to warnings by the ECB that the region might not have seen the worst of its downturn. Bad news continued to come out of Germany where unemployment resumed its rise, increasing pressure on Angela Merkel’s government to step in with stimulus. 

Spy Pressure | Speaking of Merkel’s headaches, the chancellor is being pushed by her intelligence services and party to toughen the government’s stance on Huawei to ensure German data is safe as the country builds out its 5G networks. The dilemma illustrates her delicate balancing act as she tries to defend German interests without riling China, a key market for her country’s exporters.

Pipeline Politics | In a boost for Russia’s effort to tighten its grip over natural gas supplies to western Europe, Denmark will allow the controversial Nord Stream 2 pipeline to pass through its territory. The green light is a snub to Donald Trump and gives Gazprom yet another route to one of the world’s most important gas markets.

Pollution-Free Policies | Here are five new policy measures that could preserve much of the EU’s heavy industry while prodding those companies to reduce fossil-fuel emissions. That’s according to research published yesterday, feeding the debate about how the EU can achieve its goal of reducing net greenhouse gas emissions to zero without driving industry and jobs abroad.

Chart of the Day

France’s economy grew more than expected in the third quarter, with economists attributing the positive surprise to tax cuts adopted to appease Yellow Vest protesters. Data released by Eurostat yesterday show that the handouts may have been warranted, as France has the highest tax burden of any country in the EU. Ireland, which has been subject to EU probes over alleged sweetheart deals to companies, is the least taxed in the bloc. 

Today’s Agenda

All times CET.

• 11 a.m. Third-quarter GDP data for the euro area will be released by Eurostat
• 11 a.m. Eurostat releases flash estimate for euro-area October inflation and the September unemployment reading
• 11:30 a.m. ECJ gives non-binding opinion in Commission challenge against Hungary for not complying with its obligation on the relocation of refugees 
• 12:30 p.m. Bruegel event on EU rules for insolvency 
• 2:30 p.m. ESM Managing Director Klaus Regling speaks to staff at the Bank for International Settlements in Basel

--With assistance from Stephanie Bodoni, Zoe Schneeweiss and Jonathan Stearns.

To contact the editor responsible for this story: Heather Harris at hharris5@bloomberg.net, Chris Reiter

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