Brussels Edition: Sign of the times

Brussels Edition
Bloomberg

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

Donald Trump's decision to pull 9,500 U.S. troops out of Germany caught Angela Merkel off guard, even after years of tension over her country's military spending. In practical terms, a U.S. troop reduction may make sense, since Germany nowadays serves mostly as a hub for U.S. operations in other parts of the world. But given the divisions between Berlin and Washington over global trade and divergence over how to manage the coronavirus crisis, Trump's decision and the way it was communicated is yet another sign of the new world order. It's also a reminder of how much Germany's relations have cooled with a U.S. president who publicly questions NATO's value.

Viktoria Dendrinou

What's Happening

Virus Update | Europe's post-lockdown progress is not all smooth. Health officials said that the U.K. should prepare for a second wave of infections, as Boris Johnson finalizes plans to rebuild the economy and stop the hemorrhaging of support for his government. And Poland's figures showed the pandemic is spreading at a quicker pace. Still, the number of hospitalizations in France declined. Read all the latest here.

Moral Hazard | Italy is set to become the biggest beneficiary of an EU recovery plan that may form a blueprint for joint fiscal borrowing. That, along with European Central Bank stimulus, is buying time for the highly indebted country to contain the virus, and to address the problem of weak growth in its own way, possibly at its own glacial pace.

Economic Boost |The world's governments and central banks are shifting from rescue to recovery mode as the deepest slump since the Great Depression shows signs of bottoming out. Read how they are now doubling down with even more spending to backstop a rebound as lockdowns ease.

Spanish Anger | Pedro Sanchez's widely-panned handling of the pandemic has seen Spain suffer one of the highest death tolls in Europe and triggered harsh reactions against the premier. Even as the country puts the worst of the trauma behind it, the vitriol has only gotten worse.

Flying Blind | European airlines are set to resume flying this month, just in time to help travelers willing to don a face mask escape into the sunshine. But while the summer season has the potential to bring relief for the industry, pulling the fleet out of mothballs also bears risks.

In Case You Missed It

Greek Woes | Greece is gradually welcoming back international visitors, with flights set to restart next week, but most hotels are still waiting to see whether it's worthwhile. With tourism accounting for around a fifth of jobs, that's a sign unemployment in the crisis-hit nation is set to surge.

Bulgarian Reversal | The EU's poorest nation is backtracking on nearly 25 years of post-communist transformation by boosting the government's influence across the economy. It's inserting itself into businesses, reshaping industries controlled by some of the country's richest people.

Twitter vs Trump | Twitter took a brave stance to label some of Donald Trump's tweets and the move echoes the EU's ideas for fighting disinformation online, transparency chief Vera Jourova told Bloomberg TV. Her comments come as the commission will this week announce plans for how it intends to tackle disinformation surrounding the Covid-19 virus.

Bailouts All Over |As the pandemic ramps up pressure to bail out companies, fights are erupting over the fragile set of rules designed to curb unfair support. Read more here about the current state of state aid.

Chart of the Day

Germany's 130 billion-euro recovery package puts the focus on climate-friendly industries and technologies, underscoring Angela Merkel's pledge to reboot the economy and wean it off fossil power and polluting cars. Divided into 57 different points addressing sectors from taxes to families to agriculture, the plan allocates about 41 billion euros to areas like public transport, electric vehicles and renewable energy, according to calculations by Bloomberg News.

Today's Agenda

All times CET.

  • 3 p.m. NATO Secretary General Stoltenberg launches his reflection on strengthening the Alliance in a post-COVID19 world

  • 3:45 p.m. ECB President Lagarde at European Parliament hearing 

  • EU Justice Commissioner Reynders speaks about consumer protection after the virus crisis at European Parliament committee

  • Video conference of EU agriculture and fisheries ministers

  • Video conference of EU international development ministers

  • Belgian central bank gives bi-annual economy projections

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