Brussels Edition: Leaders Kicking Cans

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

European leaders are no closer today to an agreed strategy to handle the crisis that is sinking their economies than they were before their heated video conference last night. The call echoed the same old divisions over burden and risk sharing that almost tore the EU apart during the sovereign debt crisis almost a decade ago. The European Central Bank’s massive intervention has calmed markets for now and will probably give governments the time to hammer out a compromise over the next two weeks. But the showdown at the e-Summit yesterday doesn’t exactly inspire confidence that the bloc can rise to the challenge of a looming recession, and its consequences for financial and political stability. 

What’s Happening

Virus Update| In more grim news, the spread of new cases in Italy spiked again, and  Spanish death toll surpassed the Chinese total. And from Spain to Germany, farmers warn of fresh food shortages, partly because of the virus.

Lockdown Limbo | Despite Germany's relative success at dealing with the coronavirus outbreak, Chancellor Angela Merkel -- who is self-isolating because of exposure she had to the virus -- said it was too soon to start thinking about easing lockdown measures, due to the 14-day incubation period for the virus.

Populist Test | As the last global crisis paved  populists’ path to power, a looming question now is whether this one will loosen or tighten their grip. It may be too soon to tell, but what’s clear is that the enemy this time is a microbe that doesn’t easily fit into the simple anti-elite, anti-migrant or ant-science narratives that have proven so politically fruitful before.

New Mission | EU nations reached a deal — due to be formalized today — to launch a naval mission in the Mediterranean to enforce an arms embargo on Libya. The deployment of warships, which will allow the EU to finally display some military muscle by intervening in a conflict in its own backyard, was reached after Greece saved the day by offering its ports for migrants saved at sea. 

Dividend Talks | The ECB is in talks with lenders on dividends as banks across the region grapple with shareholder payouts amid one of the worst in recent memory. They come as Europe’s main banking lobby group tries to find common ground among its members on whether to scrap dividends, with only a handful of banks having already agreed to delay or suspend them. 

In Case You Missed It

Green Focus| Two of the architects of the EU’s pollution cap-and-trade system said policymakers shouldn’t rush to intervene in the market after prices for pollution dropped by almost a third.  Meanwhile, the EU is likely to make greening the economy an essential part of efforts to recover from the shock of the coronavirus pandemic — or so it says. 

Cough Cops | Coughing to threaten or intimidate police officers and shop workers amid the coronavirus pandemic could land you in jail for two years, U.K. authorities have warned. This isn't Britain being weird. Police and prosecutors around Europe are cracking down on people exploiting the virus

Another Victim | Kosovo lawmakers ousted Prime Minister Albin Kurti, becoming the first nation in Europe to vote out a government over the way it handled the coronavirus outbreak. The cabinet’s collapse is a setback for the Balkan state, which seeks to gain full international recognition after it declared unilateral independence from Serbia in 2008. 

Tele Medicine | The coronavirus pandemic is changing many ways in which business is conducted, and it stands to give a boost to Telehealth apps that provide anything from text-based services to video chats with doctors. Their use had already been rising before the arrival of Covid-19, and the virus is likely to push adoption higher. 

Chart of the Day

Brussels Edition: Leaders Kicking Cans

Government bonds rallied across the euro area after the ECB said issue limits, which constrained sovereign bond-buying to a third of each of its member state’s debt, “should not apply” to its new emergency purchase program for the coronavirus.  The dramatic move tallies with  Christine Lagarde’s comment that there are “no limits” to the central bank’s commitment.

Today’s Agenda

  • Informal videoconference with EU ministers responsible for cohesion/regional policy

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