Brussels Edition: Italy Seethes

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

Something has snapped in Italy. Resentment at the EU’s response to the pandemic now runs deep in the very heart of Italy’s government, John Follain and Alessandra Migliaccio report from Rome. Cabinet members and senior figures in the premier’s office, ministries and the central bank see — and often feel — a surging wave of bad blood and frustration. Investors have noticed the spike in euroskepticism, which, together with a lack of credibility in the EU response to the looming recession, are pushing Italian borrowing costs up and exacerbating the misery. Meanwhile, Thursday’s e-summit of leaders to come up up with a plan to cushion the blow from the crisis may disappoint again. But with Italy simmering, kicking the can may not be an option for much longer.

What’s Happening

Virus Update | France became the fourth country to report more than 20,000 fatalities from the coronavirus, while Spain’s new cases and deaths leveled off and the U.K. reported the lowest death toll since April 6. Denmark is now expanding its testing to people with mild symptoms. Here’s the latest from Italy and around the world.

Merkel Rebuke | Chancellor Angela Merkel urged caution amid calls for a further easing of Germany’s containment measures, warning that moving too quickly could risk a relapse to an unsustainable rate of infections. Boris Johnson is also resisting calls to lift U.K. measures too soon. Here’s an overview of lockdowns currently in force.

Bad Bank | A push by some euro area officials to free lenders of their bad debts faces resistance from countries worried that they will bear the costs. Many of the issues that stopped the plan for a European bad bank from getting off the ground three years ago persist. Read more here.

Food Wars | The virus has restarted a discussion about self-sufficiency tinged with nationalism. At least 10 countries, including EU member Romania, have introduced restrictions on exports of grains or rice since mid-March, and while many of those actions might not stick, such threats serve as a wake-up call to governments.

In Case You Missed It

Macron’s Chances | The French welfare state rarely lacks for anything, yet the country has suffered the same supply shortages seen around the world. The public’s faith in President Emmanuel Macron hangs by a mask thread, our columnist Lionel Laurent writes.

State Support | Austria urged the EU to temporarily abandon its strict state-aid rule book to avoid bureaucratic delays in government support for companies facing the worst slump since World War II. EU regulators relaxed those rules in March, but ditching the rule book altogether is probably too much to ask.

Cure Hopes| In the absence of a vaccine, sophisticated antibody treatments are our best chance to fight the virus. This drug cocktail could be tested on humans by the summer, and be saving lives by fall.

German Resilience | Data showing that German energy demand remains surprisingly resilient could mean that the country’s economy may weather the downturn better than other corners of Europe. For more clues,  check out what’s happening in a single German chemical plant that devours about as much electricity each year as London.

Chart of the Day

Brussels Edition: Italy Seethes

Spain’s economy could contract by more than 12% in a worst-case-scenario forecast by the country’s central bank, the first official figures that spell out the potential toll of the coronavirus on the EU’s fourth-largest economy. Over-reliance on precarious, temporary contracts and an economy that depends heavily on tourism means Spain’s labor market is particularly vulnerable.

Today’s Agenda

All times CET.

  • 10:30 a.m. EU-U.K negotiations on their future relationship continue via video conference
  • 2 p.m. European Parliament’s Trade Committee to hold exchange of views with Trade Commissioner Hogan on making face masks subject to export authorization and on the EU’s response to the impact of the pandemic on trade
  • 3 p.m. The EU Parliament’s Environment, Public Health and Food Safety Committee will discuss the EU’s virus response with Health and Food Safety Commissioner Kyriakides and Crisis Management Commissioner Lenarčič, and the European Green Deal and the EU Climate Law with Executive Vice-President Timmermans
  • 5 p.m. The European Parliament’s Economic and Monetary Affairs Committee will debate policy measures intended to combat the economic, financial and social consequences of the virus crisis with Eurogroup President Centeno
  • Eurostat to publish data on employment in 2019
  • MEPs of the EU Parliament’s Transport and Tourism Committee will debate with Internal Market Commissioner Breton on the Commission’s response to the impact of the virus crisis on the tourism sector
  • Italian Prime Minister Conte speaks in Senate ahead of Thursday’s EU summit
  • Netherlands’ Premier Rutte briefs on virus measures
  • Judges of Polish Supreme Court convene to elect first president of top court

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.