Brussels Edition: Check-Up Day

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

The euro area will get another health check today when the European Commission releases its latest economic forecasts. And while key risks stemming from U.S.-China trade tensions and Brexit have subsided in recent months, the bloc is gearing up for fresh threats. Chief among them: the coronavirus outbreak and the damage it could inflict on the global economy, even though it’s still too soon for the EU to precisely gauge the impact. Global epidemic notwithstanding, recent economic data have offered little cause for optimism, as industrial output in the euro area recorded its steepest drop in almost four years and the bloc’s largest economy continues to teeter on the verge of recession. 

What’s Happening

Health Measures | Health ministers meeting in Brussels today will allude to the risks of inhibiting free travel in the bloc’s border-free zone should the coronavirus spread in Europe, according to a draft of their joint statement seen by Bloomberg. Ministers will task the bloc’s executive arm to find ways to protect the supply of medicines if the crisis worsens, highlighting worries within the EU that deliveries of key drugs could be disrupted.

Merkel Praised | As Merkel’s reign draws to an end, even critics from countries she was once seen as tormenting are singing her praises, such as Portugal’s prime minister. In an interview with us, Antonio Costa also said he opposes radical solutions — such as Berlin-style rent freezes — to clamp down on soaring real-estate prices, that have been fueled by his country’s “golden visas” program.

Google Hearing | Google claims the EU unfairly ramped up a then-record 2.4 billion-euro antitrust fine by hundreds of millions of euros using flawed number-crunching meant to punish the “gravity” of its alleged ill-treatment of shopping rivals. The tech giant continues its fight at a hearing at the bloc’s General Court today, where it’s slugging it out with the regulator over the 2017 levy.

Poland’s Democracy | Poland will defend its contested disciplinary regime for judges in a response to the EU’s top tribunal amid a four-year standoff over democratic values. Still, words may not stop the court from imposing penalties against the eastern nation, which keeps tightening its grip on judges and claiming Brussels interferes with its right to shape its judicial system.

In Case You Missed It

New Chancellor | The search to replace Angela Merkel as chancellor has kicked off as the first two contenders — Friedrich Merz and Jens Spahn — register their interest amid growing pressure to accelerate the process. The political vortex may be the final test for the German leader’s crisis-management skills.

Greek Party | Seems like only yesterday when a Greek finance minister was openly threatening default and a populist referendum pushed the euro area’s problem child to the brink of exiting the currency bloc. The EU’s most indebted member is still junk rated, but markets couldn’t care less, with borrowing costs reaching jaw-dropping lows. Here’s what changed. 

Cambodian Sanctions | The EU decided to impose trade sanctions against Cambodia as a result of alleged human-rights violations, making good on a year-long threat with tariffs on around 1 billion euros of imports. The move is an attempt to prod changes in the behavior of Cambodian Prime Minister Hun Sen, while being wary of damaging the country’s economy.

Vietnam Paradigm | The European Parliament approved a free-trade agreement with Vietnam after winning concessions from Hanoi that may show the way for a bigger commercial deal between Europe and South America. The accord with the Asian country will gradually eliminate 99% of tariffs and other barriers on about 50 billion euros worth of goods. 

British Troubles | Less than two weeks after leaving the EU, the U.K. is already back in trouble with the bloc. A dispute over an obscure transport tax that the EU doesn’t like is a stark reminder that Britain has yet to escape the shackles of Brussels-made laws and bureaucracy. 

Chart of the Day

Italy isn’t just in an economic slump, its population is also sagging, pushing the country into its biggest demographic crisis in more than a century. The number of people in the country fell for a fifth year in 2019, and deaths exceeded births by almost 212,000, the biggest gap since 1918.

Today’s Agenda

All times CET.

• 9 a.m. EU health ministers hold extraordinary meeting in Brussels to discuss coronavirus
• 11 a.m. Commission releases its quarterly economic forecasts
• 1:30 p.m. Commission president Ursula von der Leyen testifies in Berlin in so-called “consultant affair”
• 3:15 p.m. U.S. Secretary of Defense Mark Esper briefs the press on meeting of NATO defense ministers
• Google, the Commission and a long list of stakeholders on both sides face EU court judges for a second day of hearings in the first of three pending appeals by the U.S. tech giant against record antitrust fines
• NATO defense ministers meet in Brussels
• Deadline for Polish government to reply to EU Court of Justice in case regarding contested disciplinary regime for judges

--With assistance from Marek Strzelecki and Zoe Schneeweiss.

To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net, Chris Reiter

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