Brussels Edition: Rumblings of Discontent

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

If you’re sick to the back teeth with Brexit, take heart, it’s all going to be over soon. Possibly. Aides to EU leaders from the 27 member states, known as sherpas, meet in Brussels today to sign off on the deal on future U.K.-EU ties. That should pave the way for a drama-free summit on Sunday — although there are rumblings of discontent in the capitals about Prime Minister Theresa May’s visit the night before. What can she possibly have left to say, diplomats ask?

What’s Happening

Cow Horns | Sunday isn’t just a big Brexit day. The Swiss hold a referendum on giving the country’s constitution supremacy over international law, potentially fueling nationalist tensions and making it harder to forge a new economic relationship with the EU. More important (for other species) is a vote on whether the state should subsidize livestock owners who keep the horns on their cows and goats, with its backers saying de-horning is cruel.

Euro Data | Results are due today for a euro-area PMI survey — which measures private-sector activity — giving ECB policy makers a window on the currency bloc’s economy as they prepare for a decision next month on ending quantitative easing. Minutes of their policy meeting a day earlier showed “uncertainties and fragilities” in the economy.

Week Ahead | Next week looks unusually quiet for Brussels as attention shifts to the other side of the globe, where leaders of the world’s 20 largest economies gather in Buenos Aires for their annual meeting. On their agenda are the future of work, infrastructure for development and sustainable food. But talks will be overshadowed by discussions on multilateralism and reforms to the WTO, amid escalating trade tensions between the Trump administration and China.

Swedish Stalemate | Yet another attempt to form a government in Sweden has failed, with Center Party leader Annie Loof saying the two largest parties had no will to compromise. Parliament speaker Andreas Norlen will need to get creative to break the gridlock  after an inconclusive election more than two months ago. Let’s see what he says in his press conference this morning.

In Case You Missed It

Kosovo’s Revenge | Move over Donald. Tiny Kosovo is launching a trade war of its own, imposing a 100 percent tax on Serbian imports and threatening more measures, after Belgrade lobbied to block the breakaway nation’s admission to Interpol. The EU is visibly irritated. As for Interpol itself? It has a new president after its previous one was arrested.

New Alliances | Relations between the three Baltic states on NATO’s eastern edge and Poland are blossoming thanks to a common enemy: Russia. With Trump in the White House and Merkel preparing to step down as Europe’s go-to leader, they figure it’s time to seek more allegiances to counter the threat from Putin’s Russia.

Italian Condoms | You should know by now that Italy is at loggerheads with the EU over its plans to widen its deficit next year. But what does it want to spend this money on? Among the big ideas doing the rounds in Rome is free condoms for all Italians under 26, low-income citizens, asylum seekers and women who’ve recently undergone abortion.

Keep Calm | If Brexit goes horribly wrong, don’t panic. Our U.K. readers can rest assured that they won't run out of medicine (or Rioja wine), as retailers stockpile to deal with any supply disruptions. A beer belly?  Don’t  worry about it — Businessweek has found machines that can do exercises for you. And if booze doesn't do it for you, Bloomberg Pursuits has suggestions for meditation apps to keep you sane no matter what you hear from Jacob Rees-Mogg.

Chart of the Day

Italian domestic investors have given a resounding thumbs-down to the populist government’s funding efforts in the nation’s first offering of inflation-linked bonds since the market turmoil in May. The vote of no-confidence will be a worry for Italy’s leaders as they look to borrow more money to finance their policy proposals. The government has penciled in a wider deficit target of 2.4 percent of gross domestic product, putting it in conflict with EU spending rules.

Today’s Agenda

All times CET.

• 11 a.m. Eurostat publishes data about EU taxation
• 10 a.m. Flash euro-area composite PMI data

--With assistance from Carolynn Look.

To contact the editor responsible for this story: Vidya N Root at vroot@bloomberg.net, Iain Rogers

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