Brussels Edition: Ringing in Lagarde, London’s Last Chance(s)

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

Everybody who’s anybody on this continent will be in Frankfurt this afternoon for Mario Draghi’s farewell ceremony. Following speeches by the likes of Angela Merkel and Emmanuel Macron (watch for potential Brexit comments), Draghi will hand over the most powerful instrument in the euro area — the bell for the ECB’s Governing Council meetings — to Christine Lagarde. Before officially assuming her duties on Friday, a series of economic data to be released this week will give Lagarde a reality check of the challenges that she will be facing. It doesn’t look pretty. 

What’s Happening

London Stalling | The Westminster chess match continues with a vote over whether to grant Boris Johnson the early election he is seeking to break the Brexit deadlock — even though there is no sign the opposition will grant it. Back in Brussels, EU envoys will discuss the latest recommendation that they allow Britain a maximum extension of three months, with the earliest get-out date of Nov. 30. Will that be enough to appease Macron?

Turkish Text | EU diplomats today will continue debating the draft legal acts for imposing sanctions on Turkey over its drilling activities off the coast of Cyprus. The plan is to reach agreement on the texts by next week, so that foreign ministers can sign off on the targeted punitive measures when they meet in Brussels on Nov. 11. 

Gas Talks | A secure natural gas supply this winter will be at stake in EU-brokered talks between Russia and Ukraine when officials from Kiev and Moscow meet today in Brussels. Don’t hold your breath though; no deal is expected before Ukraine fully implements EU gas market rules.

Booze News | And now to some serious news: EU diplomats will today seek to bridge their differences over taxing homemade booze. Excise duties on moonshine has proved a remarkably controversial topic, with EU finance ministers famously being served alcohol at a morning meeting discussing the matter earlier this year. Even that didn’t work.

In Case You Missed It

Tangled Thuringia | The splintering of European politics was at its most evident in the eastern German state of Thuringia, where Merkel’s Christian Democratic Union got a pasting as support for the far-right AfD party surged. The result was so fractured that it looks unlikely any traditional coalition will succeed in forming a government, raising the possibility of fresh elections. 

SPD Contest | Trying to stanch a hemorrhaging of support not just in Thuringia, but across Germany, the Social Democratic Party — the junior partner in Merkel’s government — held a leadership vote over the weekend. Finance Minister Olaf Scholz snatched a first-round win, boosting the chances of survival for the ruling coalition. Scholz, the only candidate who unequivocally backed staying in the government, will face leftist government critics in the November run-off.

League Victory | And in another regional election, this time in Italy, it was the right gaining ground again. The League, which was unceremoniously booted out of government after Five Star walked off with a different partner, won over half the vote in the Umbria region. 

Death Canal | The canal from the Danube River to the port of Constanta is notorious in Romania, with thousands of political prisoners dying to start it and a brutal dictator bankrupting the country while finishing it. Read how this symbol of oppression and totalitarian vanity has now become an example of transformation in a country that endured some of the harshest conditions during the Cold War.

Chart of the Day

Brussels Edition: Ringing in Lagarde, London’s Last Chance(s)

Farmers in Europe, one of the world’s leading food producers and exporters, are on the front line of global warming. After three straight years of crop losses due to soaring temperatures and crippling droughts, judges in the German capital will hear the case of one farmer who’s taking Europe’s most powerful government to court over its failure to reign in greenhouse gas emissions.  

Today’s Agenda

All times CET.

  • 10 a.m. EU 27 ambassadors discuss length of Brexit extension in Brussels
  • 1 p.m. Germany’s CDU party leader Annegret Kramp-Karrenbauer and Thuringia candidate Mike Mohring hold press conference after state election
  • 3 p.m. ECB farewell event for Mario Draghi - speakers include Merkel and Macron
  • 4:45 p.m. ESM banking chief Nicoletta Mascher speaks at financial stability conference in Berlin
  • 6 p.m. EU Commission Vice President Maroš Šefčovič press conference after chairing trilateral gas talks between Russia and Ukraine in Brussels
  • House of Commons due to vote on whether to hold a snap election in the U.K.
  • Slovenia's upper chamber of parliament will discuss and probably veto a controversial bailout law criticized by the ECB. The veto, however, can still be overruled by the lower house
  • Bank of England policy maker Silvana Tenreyro speaks at the John Flemming Memorial Lecture in London

©2019 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.