Brussels Edition: An Ocean Apart

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

The fragile transatlantic truce is splintering. After accusing the European Union of not delivering on alleged commitments to discuss a trade accord which will include agriculture, the U.S. administration is now formally considering whether to hit European car imports with punitive tariffs. Over the weekend, EU leaders made no effort to hide their dismay about Donald Trump’s decision to pull troops out of Syria and Afghanistan, while Trump threatened to release European citizens who joined the Islamic State. Nancy Pelosi leads a Congressional delegation in Brussels today, though it’s unclear whether the Democratic majority in the House of Representatives can turn the tide. 

What’s Happening

Pressure Points | Further transatlantic discord is in the offing, with EU governments set to finalize an agreement on Wednesday that will allow the construction of the Nord Stream 2 pipeline from Russia — a project the U.S. opposes. The bloc is also seeking to agree on the terms of participation of third countries in joint European defense projects. If the conditions appear to exclude American companies, don’t be surprised if there’s a vocal reaction. 

Tough Lunch | The most sensitive topics at EU meetings are often tackled during mealtimes, and the bloc’s foreign ministers will prove the point today by discussing the political crisis in Venezuela over lunch. The goal: how to prod Nicolas Maduro into holding new presidential elections, possibly using the threat of blacklisting more of his allies. Ministers may also discuss expanding the scope of sanctions against Russia to include another eight individuals over the harassment of Ukraine in the Sea of Azov. 

Stepping Up | U.K. Brexit Secretary Stephen Barclay meets EU chief negotiator Michel Barnier today for the second time in two weeks as talks between the two sides intensify again. It’s the first of a string of high- level meetings expected in Brussels this week to try to break the deadlock before Britain’s scheduled leaving day next month.

Salvini Survey | Italy’s anti-establishment Five Star Movement is putting its rivalry-ridden ruling coalition to a test — with an online vote. At stake in today’s web poll is whether Five Star should support immunity from prosecution for the anti-immigrant League party leader Matteo Salvini, who faces possible charges for refusing to let a migrant ship dock last summer in his role as interior minister. Legislators are weighing whether Salvini’s parliamentary immunity should be lifted. 

In Case You Missed It

Spanish Polls | Spain’s ruling Socialists gained support in the first opinion poll since Prime Minister Pedro Sanchez was forced to call early elections, though his current coalition would still fall short of a majority in parliament. The survey showed that the Socialists could form a government with the center-right Ciudadanos, but that party’s leader, Albert Rivera, last week ruled out a pact with Sanchez. A right-wing coalition would also fall short of a majority, according to the poll. 

Macron Recovery | Still on the subject of polls, French President Emmanuel Macron’s approval rating has inched higher for the second consecutive month, according to a poll carried out by Ifop for Le Journal du Dimanche. It seems Macron’s move to launch a series of national debates in an effort to respond to the grievances of France’s “Yellow Vest” protesters is working.

Kosovo’s Hopes | Kosovo President Hashim Thaci said 2019 will be the year his nation reaches a comprehensive agreement with Serbia to mend ties between the former foes and pave their path into the EU. The carrot of EU membership juxtaposed with Russia’s keenness to maintain influence in the region are testing traditional ties in the Balkans. 

Economic Malaise | The slowdown of the European economy is “significant” and the European Central Bank could change its interest-rates guidance if it becomes clear the situation isn’t temporary, according to Governing Council member Francois Villeroy de Galhau. The extent of the weakness at the end of 2018 has taken policy makers by surprise, with Italy entering a recession and Germany narrowly avoiding the same fate. 

Chart of the Day

The EU’s trade surplus with the the U.S. jumped 17 percent last year to the highest on record, potentially putting at risk ongoing negotiations just as President Trump is gearing up to decide whether to hit the bloc with a new set of tariffs. Exports to the U.S. from the EU rose 8 percent, while EU imports from the U.S. grew 3.9 percent, data released by Eurostat on Friday show. 

Today’s Agenda

All times CET.

• 9 a.m. EU foreign ministers meet in Brussels; to discuss the situation in Ukraine (including prospect of additional sanctions against Russia), Venezuela, the Horn of Africa, and Syria 
• 10 a.m. U.S. Senator Bob Menendez gives speech on Transatlantic Relations in a Changing World at German Marshall Fund event in Brussels
• 10:30 a.m. European Parliament releases first projections for seats to be won by national parties in the EU assembly's May 23-26 elections
• 2:30 p.m. EU chief Brexit negotiator Michel Barnier speaks at Bocconi University event on ‘‘Europe After Brexit. Shaping a New Era’’
• Brexit Secretary Steve Barclay will meet Barnier in Brussels 
• 6:10 p.m. ECB supervisory board chair Andrea Enria, EU commission’s Olivier Guersent speak at EU parliament event about the banking union
• EU Commission President Jean-Claude Juncker receives Nancy Pelosi, Speaker of the U.S. House of Representatives
• EU Competition Chief Margrethe Vestager in Copenhagen delivers a keynote speech at the “Women in tech” event at the DTU Technical University 

--With assistance from Jonathan Stearns and Ian Wishart.

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

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