Brussels Edition: Merkel, Macron make another pitch

Brussels Edition
Bloomberg

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

With weeks to go until European leaders finally meet in person to debate a plan to revive the region's economy, the heads of France and Germany gave the initiative a fresh push. Speaking alongside Emmanuel Macron near Berlin, Angela Merkel made a pitch for a radical recovery proposal for the virus-ravaged EU and warned her cohorts that there was no time to lose — words that carried extra weight given Germany's longstanding aversion to joint risk. "Talks won't fail because of us," Merkel said. Yet with opposition brewing from many sides of the region, the question is: will other holdouts feel the same way?

Viktoria Dendrinou

What's Happening

Boris's Plan | Boris Johnson will commit to spending on infrastructure to rebuild the coronavirus-ravaged U.K. economy in a major policy speech today. Balancing the books will have to wait until a recovery is secure, the prime minister will say, according to extracts released by his office.

ECB Backing | A broad coalition of German parties has agreed on a draft motion to back the ECB's bond-buying program, according to officials familiar with the accord, likely ending a standoff that was triggered by the country's constitutional court last month. The parliament will have a final say later this week.

Travel Ban | EU governments are poised to extend a travel ban for U.S. residents for at least two weeks, according to a draft of a decision set to be adopted today. The ban disrupting business and leisure travel seems unlikely to be lifted until U.S. authorities control the spread of the virus.

Latvian Suspicions | Plunging international travel helped confirm Latvian suspicions that huge amounts of cash are smuggled each year into the nation. The Baltic country — already in the midst of a money-laundering crackdown — wants tighter restrictions as people start traveling again.

Apple Defense | A senior Apple executive will likely defend the company's app store policies when he gives a rare speech today. The head of app store and media services in Europe will speak as Apple faces antitrust scrutiny in the EU and U.S. over rules it imposes on developers to publish apps on its platform.

In Case You Missed It

European Chains | European leaders are keen to shore up local supply chains to reduce their dependence on Asia and protect against the kind of exposure laid bare during the height of the coronavirus pandemic. It's easier said than done. 

Staying Put | EU Trade Chief Phil Hogan won't enter the race to be the director-general of the WTO. Instead, he'll help shape policy at a critical time for the bloc, which is negotiating the post-Brexit relationship with the U.K. while also confronting trade tensions with the U.S.

Bouncing Back | Economic confidence is slowly returning to the euro area with companies from manufacturers to retailers picking up the pieces after lockdowns. Sentiment in a commission survey rose in June, though less than forecast, showing a full recovery is still a long way off.

French Sentence | Former French Prime Minister Francois Fillon and his wife Penelope were found guilty of embezzling more than 1 million euros for a fake job she held as a parliamentary aide lasting about a decade. Fillon faces two years in prison. They are both appealing the ruling.

Wirecard Fallout | Germany will be quick to overhaul its regulation of financial companies to repair the damage caused by Wirecard's collapse. The scandal exposed shortcomings in oversight in the country, where accounting enforcement is split across multiple bodies, a structure whose failings became apparent during the payment company's failure.

Spanish Spending | Spain has plans to shift to a greener economic model by easing its reliance on outdated manufacturing sectors, and the 140 billion euros it can access from the proposed EU recovery fund can accelerate that transformation, the deputy prime minister said in an interview.

Chart of the Day

French Finance Minister Bruno Le Maire proposed splitting off the debt piled up as a result of emergency spending to tackle the coronavirus and spreading out repayments over years. In a speech on Monday, he said the extra debt from the Covid-19 crisis would be separated from the pre-existing public debt that stood at close to 100% of economic output at the start of the year.

Today's Agenda

All times CET.

  • 9 a.m. EU leaders hold video conference with South Korean counterparts
  • NATO Secretary General Jens Stoltenberg speaks on the geopolitical implications of Covid-19 at the German Institute for Global and Area Studies 
  • EU Energy Commissioner Kadri Simson speaks at a conference on green recovery 
  • EIB Vice President Emma Navarro speaks at a European Policy Centre event on the European Green Deal
  • Brexit meetings continue in Brussels 
  • Euro-area inflation

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