Brussels Edition: Costa Hangs On, Pension Blues, Spying Mystery

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

The victory of the Socialists in Portugal contrasts sharply with the ebbing of center-left parties elsewhere in Europe, be it at the hand of the Greens or the far-right. The challenge for Antonio Costa in his second term will be to deliver the social gains that he promised while maintaining ambitious budget targets amid a slowing economy. Critics say Costa didn’t use the good times to carry out long-needed reforms and prepare the indebted Iberian nation for the next downturn. Growth is already at half the pace it was two years ago. 

What’s Happening

Still Talking | U.K. Prime Minister Boris Johnson remains defiant about Britain leaving the EU on Oct. 31, but only has until the end of this week to convince Europe’s leaders he has a realistic proposal in time for their next summit. Wonder where we’re headed? Robert Hutton answers your questions here.

Retirement Blues | Pension funds across Europe are struggling to generate the returns they need to cover their growing obligations. The industry is now urging the  EU Commission to change the rules, especially since a complex mathematical formula constructed by the European Insurance and Occupational Pensions Authority is not working as intended. 

Migration Debate | Home affairs ministers will debate the state of play on migration tomorrow as a recent spike in arrivals to Greece is pushing the issue back to the top of the EU’s agenda. Emma Vickers and Caroline Alexander explain why migration is expected to swell in the years ahead, but also how it benefits economies and can actually reduce crime rates. 

German Sluggishness | German factory orders and industrial production readings this week will give vital clues on the health of Europe’s biggest economy. The output data for August will provide the pivotal indication on whether gross domestic product declined for the second successive quarter, the official definition of a recession.

Tariff Reaction | Cheeses from France, Italy and the Netherlands, wines, Scotch whisky and Greek canned peaches are just some of the European exports whose prices are set to rise in the U.S. after the Trump administration announced new tariffs on billions of dollars of EU products starting next week. Here’s how the continent’s producers plan to react. 

In Case You Missed It

Aircraft Probe | Boeing’s ventures with Embraer face a deeper antitrust probe from the EU, as regulators said the transaction threatens to knock out an important rival to the world’s biggest planemakers. The  European Commission is worried the deal would “remove Embraer as the third largest global competitor” to both Boeing and Airbus, which “may therefore result in higher prices and less choice.”

Spanish Polls | Spain’s Socialists would once more be the most voted party in an electoral rerun but would still fall short of a majority, according to an IMOP Insights poll published by El Confidencial. The country is heading to its fourth election in as many years next month, and the survey suggests it may end up in the same stalemate. 

Maltese Mystery | And now to some spying news. Read how the strange case of a missing Maltese professor and former campus adviser is now one of multiple threads entangled in the dispute over Donald Trump’s efforts to show he was the victim of foreign meddling in the 2016 election and not the beneficiary of interference by Russia’s Vladimir Putin.

Bulgarian Star | Hot on the heels of Ukraine’s comic-turned-president, another showman wants to take on the political establishment — this time in nearby Bulgaria, the EU’s poorest member-state. Satirical TV host Stanislav Trifonov vows to fight against the “thick line dividing the party aristocracy and the Bulgarian people,” Slav Okov reports from Sofia. 

Breakaway Vote | Kosovo’s opposition parties won an early general election, signaling a turn away from politicians who rose to prominence as guerrilla fighters against Serbia in the 1990s. Serbian President Aleksandar Vucic said his country was ready to resume talks to normalize relations with whomever forms a new government in Kosovo if  punitive trade tariffs are lifted.

Chart of the Day

Turkey has been reinforcing army units at the Syrian border, after President Recep Tayyip Erdogan signaled an imminent cross-border operation against U.S.-backed Kurdish militants in Syria. The White House said U.S. forces won’t stand in the way.

Today’s Agenda

All times CET.

• 10 a.m. EU justice ministers meet in Luxembourg to discuss issues including corruption and online hate speech online
• 10 a.m. EU diplomats working on hybrid threats will have a confidential debrief on Chinese and Russian strategies
• 11 a.m. Eurostat to release house price index reading for the second quarter
• 1 p.m. PayPal CEO Dan Schulman and Luxembourg Finance Minister Pierre Gramegna speak at press conference in Luxembourg
• 2:30 p.m. European Parliament confirmation hearings for EU foreign policy chief Josep Borrell and Commission Vice President-designate for Values and Transparency Vera Jourova
• 7 p.m. Commission President Jean-Claude Juncker and Council President Donald Tusk have working dinner with NATO Secretary-General Jens Stoltenberg
• EU foreign policy chief Federica Mogherini meets Jordan’s King Abdullah II and Foreign Minister Ayman Safadi

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

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