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Brussels Edition: What a Mess

Brussels Edition: What a Mess

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

It’s a war of all against all: Those expecting that France and Germany would cut a deal over who will lead the EU’s top institutions instead saw Angela Merkel and Emmanuel Macron slinging arrows at each other. Those fearing  that the European Parliament would unite against attempts to impose a new head of the EU Commission from outside the universe of formal candidates, instead saw the Liberals breaking ranks from the rest of the parties. After a summit last night which failed to make much headway, Donald Tusk was given a mandate by leaders to broker a compromise package on who will succeed him as president of the European Council, Mario Draghi as head of the European Central Bank, and Jean-Claude Juncker at the Commission, by next month. We don’t envy his job. 

What’s Happening

Finnish Finale | Finland may have a coalition government by next week, according to Antti Rinne, the head of the Social Democrats and leader of the talks, who said the five parties attempting an alliance hope to reach agreement today. An accord would mark the end of prolonged coalition negotiations since the April election, just before Finland assumes the rotating EU presidency on July 1.

Got Mail | The European Commission is due to send a letter to Italy asking if it has anything to say for itself before Brussels decides next week whether to trigger a discipline procedure that might end up in a hefty financial penalty. There’s no indication whatsoever from Rome that it’s willing to take any measures to put its finances in order, so brace for a showdown.

Greek Guide | Greek voters will return to the polls in snap elections in early July, following Prime Minister Alexis Tsipras’s defeat in the European Parliament elections on Sunday. Here’s all you need to know about the process, the scenarios and what will lead to the formation of a new government. 

Seven Pack | The European Commission may recommend today that EU governments start accession negotiations with North Macedonia. The issue is due to be discussed as part of a package of commission progress reports on seven aspiring EU members that also include Turkey, Serbia, Albania, Montenegro, Bosnia and Kosovo.

In Case You Missed It

AKK Trouble | Angela Merkel’s heir apparent, Annegret Kramp-Karrenbauer, has seen her popularity slide since she took over as CDU leader, roiled the party with a failed effort to accelerate Merkel’s exit, and on Sunday oversaw the CDU’s worst ever result. All that has persuaded Merkel that AKK might not be up to the job. There may not be much the chancellor can do about it now.

Still Grounded | European regulators assessing changes to Boeing’s grounded 737 Max will scrutinize the jet’s entire flight-control system before a return to the skies can be approved. The review by the European Union Aviation Safety Agency will include the plane’s displays, alerts and air-data systems, as well as the aircraft’s autopilot function.

Illiberal East | Nationalists in Hungary and Poland celebrated two of the biggest victories in the EU ballot, but their dream of a coalition between conservatives and far-right nationalists has been dashed by a likely pro-EU centrist alliance. Unless they change direction, they may be isolated in the bloc, where they face proceedings for suspected violations of democratic norms. 

Weekly Quiz | A not-so-tough quiz for this week: Which former European Commissioner now produces wine? You’ll find the answer in Friday’s newsletter. Tomorrow is a holiday in Belgium and much of Western Europe, so enjoy. 

Chart of the Day

Brussels Edition: What a Mess

For drinkers in the Baltic region, there’s cause to toast:​​​​​​ First, Estonia announced it would reverse tax increases on alcohol after they hurt sales and dented budget revenue. Next, Latvia — which saw an influx of thirsty visitors thanks to its neighbor’s excise hikes — said it may cut its own duties in response. The moves could herald a race to the bottom on alcohol taxation, delighting those who enjoy a tipple while hurting government coffers. 

Today’s Agenda

All times CET.

  • Meeting of the College of EU Commissioners, in Brussels
  • EU Commission VP Valdis Dombrovskis receives Ladislav Kamenický, finance minister of Slovakia
  • European Central Bank Vice President Luis de Guindos presents the semi-annual Financial Stability Review highlighting risks to the euro-area financial system

To contact the editor responsible for this story: Jerrold Colten at jcolten@bloomberg.net, Zoe Schneeweiss

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