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Brussels Edition: Waiting for Joe

Brussels Edition
Bloomberg

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

The EU is already moving to bury Donald Trump's transatlantic legacy. The bloc's leaders will make an appeal to U.S. President-elect Joe Biden to make things right, according to a draft of next week's summit communique that we have seen, and the European Commission will today publish a sweeping proposal to that effect. The "new EU-U.S. agenda for global change" seeks to overcome frustration and bitterness in Europe resulting from Trump's "America First" agenda, which has shaken the world order in general and longstanding European assumptions in particular. The blueprint, being drawn up before any meaningful EU contact has taken place with members of the incoming administration, aims to leverage transatlantic unity to shape global developments in policy areas ranging from trade and health to technology and security.

Jonathan Stearns and Viktoria Dendrinou

What's Happening

Brexit Sprint | British and EU negotiators are racing to strike a post-Brexit trade deal before next week, with officials on both sides saying the outcome is still too close to call. The EU's chief negotiator, Michel Barnier, will brief diplomats from the bloc's 27 member states this morning on progress.

Budget Spat | Envoys in Brussels will probably decide today that they are going to continue negotiations over the EU's budget as if Hungary and Poland hadn't blocked the whole package. The idea is to agree on next year's spending, so that when the two Eastern governments lift their veto, stimulus funds can be deployed without delay. That's all assuming of course that leaders manage to resolve the mess at next week's summit.

Stimulus Talks | The ECB should focus on keeping financial conditions at current levels rather than announcing a blockbuster stimulus package that beats market expectations, Executive Board member Isabel Schnabel said in an interview. And ECB policy maker Martins Kazaks the governor of Latvia's central banktold us that an expansion of the bank's emergency bond-buying program by 500 billion euros would be "reasonable" and he's ready to support an extension until mid 2022.

Tesla Spat | As Tesla builds its first European car factory in a patch of forest outside Berlin, CEO Elon Musk is on a collision course with Germany's powerful IG Metall labor union. The conflict centers on Tesla's refusal to sign the kind of collective wage agreements that are standard in Europe's biggest economy, and threatens to either undermine Musk's ambitions or diminish an organization that's long had an outsize role in the country's auto industry.

Holiday Hopes | The Commission will today produce another set of non-binding health recommendations for EU countries in a bid to facilitate cross-border travel over the end-of-year holidays while guarding against a resurgence of the coronavirus. Read the latest developments in the pandemic here.

In Case You Missed It

Vaccine Push | Pfizer and partner BioNTech sought regulatory clearance for their Covid-19 vaccine in the EU, putting the shot on track for potential approval there before the end of the year. The European Medicines Agency said yesterday it could issue an opinion within weeks, as governments around the bloc say they could start vaccinations as soon as the end of this month or early next year.

Conservative Values | A close ally of Viktor Orban in Brussels has been caught carrying drugs while trying to escape a police raid. Just days after the Hungarian premier blocked Europe's landmark recovery fund on the grounds that it undermines the country's conservative morals, Jozsef Szajer stepped down as an MEP and admitted to breaking Belgian quarantine rules by attending a party.

Factory Strength | The world's factories are powering along, providing vital support for economies as renewed virus restrictions take a toll on growth. Indexes of manufacturing activity in the U.S., China and parts of Asia improved in November, and Germany saw solid expansion, according to reports yesterday. The strength of trade activity is giving a lifeline to the recovery, though the situation remains fragile.

NATO's Focus | The North Atlantic Treaty Organization took another step toward making China a strategic focal point, after the alliance published a report stressing Chinese geopolitical threats. The recommendations follow a series of high-profile splits in NATO.

Ethiopia Woes | EU officials are considering suspending budget support to Ethiopia because of the month-long conflict in the Horn of Africa nation's Tigray region. Any decision to reduce aid that finances about 13% of the nation's budget would strain an economy already struggling to deal with the impact of the coronavirus pandemic and the conflict.

Chart of the Day

The resurgence of the coronavirus pandemic has dramatically weakened the global recovery and it could get a lot worse if governments withdraw support too soon or fail to deliver effective vaccines, the OECD warned. Cutting its 2021 global growth forecast to 4.2% from 5% in September, the Paris-based organization said a pattern of outbreaks and lockdowns is likely to continue for some time with rising risks of permanent damage.

Today's Agenda

All times CET.

  • 11 a.m. Eurostat to publish October unemployment reading
  • 12:45 p.m. European Parliament President Sassoli, Portugal's Prime Minister Costa give press conference to discuss the priorities of the Portuguese EU Council Presidency
  • 1 p.m. EU Commission President von der Leyen and Industry Commissioner Breton speak at the virtual Web Summit conference Wednesday ahead of big announcements by the EU on tech regulation
  • 4.30 p.m. ESM Chief Economist Strauch speaks at the Financial Times' Global Banking Summit 2020
  • 5:45 p.m. European Parliament holds hearing with ESMA Chair Maijoor about Germany's failings in supervising Wirecard
  • 6 p.m. EU Industry Chief Breton is due to have a video call with more than a dozen tech executives, including from Google, Facebook and Amazon, to discuss the new platform rules 
  • Video conference of EU health ministers 
  • EU justice ministers will discuss counter-terrorism and rule of law over video conference

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