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Brussels Edition: The tricky issue of who to let in

Brussels Edition
Bloomberg

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

As the coronavirus spread slows and governments ease border controls, diplomats from the European Union's 27 members will today grapple with the tricky issue of who to let back into the bloc. They'll seek to agree on a set of criteria for lifting a curb on non-essential travel to the region as of July 1 amid differences among governments over how much weight to put on reciprocity and the number of cases. Yet even as officials warn that an agreement may be elusive and talks could drag on, one thing seems increasingly likely: the EU looks set to keep the door shut to American travelers next month. 

Viktoria Dendrinou

What's Happening

Pipeline Politics | Germany is preparing to strike back against the U.S. if President Donald Trump follows through on his threat to kill off the Nord Stream 2 gas pipeline with additional sanctions. Chancellor Angela Merkel's administration is considering pressing for coordinated EU action, German officials told us.

Green Decision | The future of Irish politics lies in the hands of about 2,500 Greens. Their party will today announce whether its members have voted to enter a coalition with the nation's traditional parties of government. If they sign up, it will create Ireland's first grand coalition. If they reject the deal, the nation could face another election within months.

Euro Race | Finance ministers from Ireland, Luxembourg and Spain threw their hats in the ring to be the next president of the Eurogroup. Whoever gets chosen in July will have their work cut out for them. Not only must they steer the currency bloc through an unprecedented recession, they'll also need to redefine the purpose of the group and overcome longstanding obstacles to key reforms.

Polish Election | As Polish President Andrzej Duda seeks a second term on Sunday, the question is whether the us-against-them narrative that has made the governing Law & Justice party so powerful will yield another victory. It's a critical moment for a nation that until five years ago was hailed as a model of transformation from communism to a thriving democracy.

Tax Backtrack | France, the U.K., Italy and Spain offered to limit the scope of a proposed global digital tax, a concession after the U.S. threatened to hit those countries with tariffs if they moved ahead. The finance chiefs from the four countries offered to proceed with a "phased approach" that would initially only include automated digital services companies.

In Case You Missed It

Keeping Track | Europe's efforts to control the coronavirus have largely held up, but a key tool aimed at keeping the pandemic in check has struggled to gain traction. Apps to help authorities track contact between people have been slow to take off, with skeptical users balking at downloading the software. 

Clear Skies | Lufthansa won backing from shareholders for a government-orchestrated bailout, ending a nerve-wrecking week for everyone involved after billionaire investor Heinz Hermann Thiele had signaled that he opposed the deal. His vote was crucial, and thumbs down would have led the company into insolvency. He eventually came around.

Trade Slump | Global trade suffered a record plunge at the peak of the lockdowns to contain the coronavirus, dropping by more than 12% in April alone. At least, on the bright side, the World Trade Organization this week tempered its pessimism about the outlook, saying its worst-case scenario for a 32% drop in global commerce this year will probably be avoided.

Court Trouble | Just weeks after rattling global financial markets, Germany's top court rejected a second case challenging a key ECB bond-buying program. Officials at the central bank, meanwhile, insisted at their latest policy meeting that bond purchases are the best tool to stimulate the economy and have inbuilt safeguards against side effects, directly tackling the core argument of a German legal ruling against quantitative easing.

Austrian Antibodies | An Austrian ski resort nicknamed the Ibiza of the Alps may have the world's highest Covid infection rate with 42% of residents showing signs of antibodies in a study. The disease probably started spreading among locals at the resort, and health managers from the region are being investigated for failing to shut bars and hotels earlier.

Chart of the Day

The recovery trend for most major advanced economies continues, though none are yet close to pre-crisis levels of activity, according to Bloomberg Economics' daily activity gauges. Within that overall trend, there is significant divergence: Germany, France and Italy have made the most progress, while the U.K. and the U.S. are among the laggards. Progress in Japan appears to have leveled off.

Today's Agenda

All times CET.

  • 9 a.m. Commission Vice-President Maros Sefcovic speaks at EPC event on how to boost EU resilience in the aftermath of the pandemic
  • 2 p.m. Gert Jan Koopman, Commission director-general for budget, speaks at EPC event about the recovery plan and the bloc's next multiannual budget
  • 4 p.m. EU's antitrust chief Margrethe Vestager gives a speech at an online antitrust conference 
  • Irish Greens party vote on joining proposed coalition

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