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Brussels Edition: Turkey Tests EU’s Resolve

Brussels Edition: Turkey Tests EU’s Resolve

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

Migration is proving to be Europe’s soft underbelly again. EU foreign policy is being held hostage by Recep Tayyip Erdogan, who signaled that Turkey won’t stand in the way if refugees it hosts want to leave. Greece responded by announcing the suspension of fundamental principles of international and EU law to cope with the looming crisis. After failing to agree on a joint position over the weekend, government envoys will meet in Brussels today. Critics might say that the EU could have saved itself from such embarrassments if it had managed to agree on a system to control migration and share any burdens that come with it.

What’s Happening

Brexit’s Back | Today sees the EU and the U.K. resume battle in Brussels, kicking off four days of what will almost certainly be heated discussions. Things have changed radically since negotiators last met, with Britain no longer a member of the bloc, and talks are now about the future rather than the exit. People familiar with the discussions even question whether they’ll last more than a month or so, so far apart are the two sides.

Virus  Response | With the WHO warning that the window is narrowing to contain the coronavirus, the EU this week steps up preparations to manage a wider outbreak. Commission President Ursula von der Leyen will host a press conference with other officials in Brussels today to discuss the bloc’s emergency response. Finance chiefs hold a call on Wednesday as governments seek to coordinate their efforts.

Climate Law | The Commission is seeking more powers to ensure the bloc delivers on the unprecedented Green Deal strategy for the region to become climate-neutral by 2050. In its climate law to be unveiled on Wednesday, the EU’s executive may make it harder for governments and the EU Parliament to object to intermediate targets.

OECD Outlook | Whether the virus will increase the risk of recession in several European countries is a key question. The OECD gets a chance to weigh in today when it updates its economic outlook for the first time since November, while surveys of manufacturing activity across the continent could also help gauge the impact of the virus on the battered sector.

Bailout Talk | Two of Europe’s most senior banking regulators will have to explain why, more than ten years after the financial crisis, taxpayers are still bailing out banks. Following the EU’s controversial green light for Germany’s NordLB rescue, lawmaker Sven Giegold will quiz the Single Resolution Board’s Elke Koenig and the ECB’s Andrea Enria in a “webinar” on the matter tonight.

In Case You Missed It

Slovak Vote | Slovak anti-corruption parties scored an unexpectedly large majority in elections. The result leaves the nation rooted in Europe’s mainstream — heading off the risk it could deviate along the rebellious paths followed by neighboring Hungary and Poland. It comes less than a year after voters elected their first female president.

Pushing Ahead | Emmanuel Macron’s plans to push through a controversial pension reform without a vote in the lower house of parliament sparked protests among opposition lawmakers, who called for a no-confidence vote to oust the government. The decision comes ahead of municipal elections next month, and as strikes against the planned reform have largely died down.

Weidmann’s Words | ECB Chief Christine Lagarde has repeatedly argued that countries with the means should help out monetary policy with stimulus of their own. Germany is a prime candidate to do that, but a preference for fiscal rectitude is just one of the reasons why it won’t oblige for now. Here’s a closer look at what Bundesbank chief Jens Wedmann had to say.

Home Crisis | Boris Johnson’s government was thrown into fresh turmoil after the top civil servant at the Home Office resigned and launched an unprecedented attack on one of the premier’s most powerful allies. The public spat and subsequent lawsuit against the government for constructive dismissal further damages the reputation of Johnson’s administration at a critical time.

Chart of the Day

Brussels Edition: Turkey Tests EU’s Resolve

According to national statistics agency Insee, the French are consuming less and less of their nation’s trademark tipple as younger generations switch to beer. They still spend slightly more on wine, but what used to be a predilection for reds, whites and rosés has all but evaporated compared to the heady highs of half a century ago.

Today’s Agenda

All times CET.

  • 12 p.m.  Commission President von der Leyen hosts a news conference with commissioners to discuss the response to the coronavirus
  • 8 p.m. Webinar organised by MEP Giegold on state aid for failing banks with SRB’s Koenig, ECB’s Enria

  • EU tech and antitrust chief Vestager speaks at the College of Europe

  • EU economy chief Gentiloni in Rome, speaks at the European House Ambrosetti

  • First round of post-Brexit negotiations begins in Brussels
  • Manufacturing PMIs for euro area

  •  OECD interim economic outlook

--With assistance from Alexander Weber, Andrew Langley, Zoe Schneeweiss and Ian Wishart.

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

©2020 Bloomberg L.P.