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Merkel's Succession Plan Is Lying in Tatters: Brussels Edition

Merkel's Succession Plan Is Lying in Tatters: Brussels Edition

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

There may be trouble brewing in Germany. Less than a year after Angela Merkel’s party designated a successor, the plan looks to be unraveling. A consensus is building among officials in her Christian Democratic Party that Annegret Kramp-Karrenbauer is not suited to run for chancellor after a series of gaffes and poor election results. That raises the prospect of an open power struggle at the party’s upcoming national convention. One of her rivals has already launched a full-scale attack amid concerns that the junior coalition partner could blow up the government. 

What’s Happening

French Renaissance | The pace of job growth in the euro area’s second-largest economy is so fast that economists are struggling to explain it — a sign that Macron’s reforms may be starting to reap dividends. That runs in stark contrast to Germany, which is slipping toward recession. Here’s the secret.

Ceausescu’s Specter | As the world marks the 30th anniversary of the fall of the Berlin Wall, Romania offers a reminder of how the continent has struggled to shake off the legacy of dictatorship

5G Hungary | Prime Minister Viktor Orban is giving his backing to Huawei to help develop the country’s ultrafast wireless networks, in defiance of Donald Trump’s efforts to quarantine the Chinese telecom giant on national security grounds. Huawei will work with Vodafone and Deutsche Telekom.

Nuclear Friction | Iran is starting to inject gas into centrifuges at its Fordow research plant today as the landmark nuclear pact shows further signs of breaking apart. President Hassan Rouhani said the steps would be reversed if European nations ensure Iran can sell its oil and reap the economic benefits promised by the deal, but they’ve been left scratching their heads.

Malmstrom Farewell | Trade Commissioner Cecilia Malmstrom is due to give a fresh assessment late this afternoon in Brussels of a much-feared scenario: Imminent deadlock on the WTO’s appellate body as a result of the U.S.’s refusal to consider new appointments. Malmstrom is making her final scheduled appearance at the European Parliament’s trade committee and has repeatedly urged the U.S. to preserve the WTO’s ability to resolve disputes.

In Case You Missed It

Old Judges | Poland’s ruling Law & Justice Party is feeling the full force of the law after it lost the latest in a string of cases against the Commission. This time round, the EU’s top court ruled that the government’s cuts to judges’ retirement ages and different rules for men and women were discriminatory. Here’s how relations between the two sides have been deteriorating.

Budget Clash | The EU’s poorer nations snubbed plans to cut regional development funds in a move that could escalate a clash over how the bloc spends its trillion-euro budget. A group of 16 countries, known as the Friends of Cohesion, called for spending that targets wealth disparities to remain at the current pace.

Immigration Fix | France plans to set annual quotas for professional immigration in a model that’s “quite similar” to that used by Australia and Canada. The new system should be in place by summer, and  roofers and geometricians are welcome to apply. 

Goldman Pain | The ECB has yet another critic of its negative-interest policy. Goldman Sachs CEO David Solomon told Bloomberg that history would take a dim view of the monetary tool, which has drawn criticism for stoking inequality and encouraging 40% of Germans not to trust the institution. A key Merkel ally also took an early swipe at President Christine Lagarde.

Russian Love | A Bulgarian accused of spying for Russia received an award from President Vladimir Putin. Released on bail of $28,000, the former lawmaker was allowed to travel to Moscow, and official Kremlin footage captured the moment. 

Chart of the Day

Merkel's Succession Plan Is Lying in Tatters: Brussels Edition

Italy’s economic prospects remain gloomy, adding pressure on the government that’s trying to contain its deficit without raising taxes in fraught budget negotiations. Despite unexpectedly growing in the third quarter, the country is set to underperform its euro-area peers.

Today’s Agenda

All times CET.

  • 9 a.m. ECMI conference on EU Capital Markets with German, EU officials
  • 1:45 p.m. German Finance Minister Scholz speaks at Bloomberg’s Future of Finance event in Frankfurt
  • 4:30 p.m. Trade Commissioner Malmstrom speaks to the European Parliament’s trade committee about the WTO
  • 7 p.m. Commission Vice President Valdis Dombrovskis will be a keynote speaker at a Bloomberg event in Brussels
  • Commission Vice President Frans Timmermans meets Tony Blair in Brussels
  • Competition chief Margrethe Vestager receives U.S. Congress delegation
  • EU government envoys in Brussels meet to discuss sanctioning Turkey

--With assistance from Chris Reiter, Alessandro Speciale, Jonathan Stearns and Nikos Chrysoloras.

To contact the editor responsible for this story: Emma Ross-Thomas at erossthomas@bloomberg.net

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