Edging toward rescue

Follow Us Get the newsletter After three days of negotiations, European Union leaders are on the brink of approving a jumbo stimulus package aimed at pulling the region out of its worst recession since World War II. But it's not yet a done deal, and localized interests could still scuttle it when the 27 heads of state and government reconvene this afternoon. Just hours ago, an agreement was in jeopardy as familiar fault lines emerged between the richer northern nations and the southern countries worst affected by the coronavirus. Budget hardliners led by Dutch Prime Minister Mark Rutte opposed most of the plan's architecture, including its size: as much as 750 billion euros ($859 billion); the fact at least half of it wouldn't need to be repaid; and that the package would be financed by jointly issued bonds. But in the wee hours of today, a new offer gained traction: 390 billion euros would be made available as grants, down from an original 500 billion euros. The holdouts are also expected to get rebates from what they pay into the EU's budget — an earlier proposal would have pegged that at 46 billion euros over seven years. Two contentious issues remain: how to set cast-iron guarantees that the funds will go to projects that will upgrade their economies and whether to make distributions contingent on member states' adherence to European democratic standards — a prospect that Poland and Hungary are fervently against. Leaders have already been arguing for months over the package. Failure to get a deal this week risks exacerbating the economic damage. — Richard Bravo Rutte, German Chancellor Angela Merkel, European Commission President Ursula von der Leyen and French President Emmanuel Macron. Photographer: Francisco Seco/AFP Tell us how we're doing or what we're missing at balancepower@bloomberg.net. Global Headlines Economy panic | Donald Trump and Republicans in Congress have little time to shore up a key pillar for re-election in November: a strong economy. With the U.S. president's promise that it will come "roaring back" just before the vote looking less certain, the coronavirus worsening in states he needs to win, and polls showing greater trust in rival Joe Biden's stewardship, administration and Senate leaders will begin today hammering out the details of a roughly $1 trillion plan for new relief for individuals and businesses. Then comes the hard part — reconciling that with the Democrats' $3.5 trillion proposal. Read here how many voters aren't that impressed with the stock market rebound. Litigious ballot | The 2020 election is shaping up to be the most litigated in U.S. history, as changes to balloting prompted by the pandemic spur lawsuits that could leave the outcome in suspense for weeks. As Ryan Teague Beckwith and Erik Larson report, a recent count by Loyola Marymount University law professor Justin Levitt found 154 cases already filed. Many more are expected. Picking a fight | Foreign Secretary Dominic Raab is expected to announce today that the U.K. will suspend its extradition treaty with former colony Hong Kong after China imposed a national security law on the city. It comes as China's ambassador to London threatened the U.K. with retaliation and accused it of bowing to U.S. pressure by banning Huawei from its 5G network. Secretary of State Michael Pompeo is due in London later today for meetings with Raab and lawmakers from all main parties. Brexit intransigence | Initial optimism from the EU and U.K. that a deal can be clinched on their post-Brexit relationship is fading. Meetings between chief negotiators have failed to make progress since last month, with EU officials saying their attempts to compromise haven't been reciprocated and their U.K. counterparts retorting that the bloc's concessions haven't gone far enough. Monarchs ill | Aging monarchs in two oil-rich Gulf Arab nations have been hospitalized in the past week. Saudi Arabia's King Salman bin Abdulaziz, 84, is undergoing tests linked to a gallbladder inflammation, while Kuwait's 91-year-old emir, Sheikh Sabah Al-Ahmed Al-Sabah, underwent "successful surgery" yesterday for an unspecified condition. The economies of both nations face a double crisis from the pandemic and crude market turmoil. King Salman bin Abdulaziz Photographer: Dan Kitwood/Getty Images Europe What to Watch This Week: A lawsuit alleging that police in Portland, Oregon, assaulted journalists at Black Lives Matter protests will now include federal agents as defendants, after the plaintiffs claimed that Department of Homeland Security officers and U.S. Marshals coordinated the response with local authorities. Four German state leaders whose regions host most U.S. troops based in the country asked lawmakers in Washington to stymie Trump's plan to withdraw about 9,500 service members, a newspaper reported. President Aleksandar Vucic is holding a final round of talks this week before deciding whether his Serbian Progressive Party will form a coalition or rule alone after its landslide win in June elections. The Hagia Sophia opens for prayers on Friday after its reconversion to a mosque, a symbol of President Recep Tayyip Erdogan's drive to mark Turkey's rebirth as a powerful Muslim nation. Thanks to all who responded to our pop quiz Friday and congratulations to Stephen Markscheid, who was first to name the U.S. as the country which said for the first time that China's territorial claims in the South China Sea were unlawful. And finally ... Scores of members of Russia's business and political elite were given early access to an experimental vaccine against Covid-19 as the country races to be among the first to develop an inoculation. As Stepan Kravchenko, Yuliya Fedorinova and Ilya Arkhipov report, billionaires, government officials and top executives at companies including aluminum giant Rusal began getting shots developed by Moscow's state-run Gamaleya Institute as early as April. Covid-19 vaccine production in Khimki, Russia. Photographer: Andrey Rudakov/Bloomberg     Like Balance of Power? |  Get unlimited access to Bloomberg.com, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters.   You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. Unsubscribe | Bloomberg.com | Contact Us Bloomberg L.P. 731 Lexington, New York, NY, 10022