Brussels Edition: A costly blunder

Follow Us Get the newsletter Welcome to the Brussels Edition, Bloomberg's daily briefing on what matters most in the heart of the European Union. The EU's failure to get its vaccination campaign off to a swift start could turn out to be a costly blunder. European Central Bank President Christine Lagarde said this weekend that "everything will depend" on the immunization effort as far as the economic outlook is concerned, and she'll get another chance to drive home the message in the European Parliament this afternoon. Later this week, the European Commission will publish its latest forecasts for the economy amid drawn-out restrictions and new risks stemming from virus mutations. It will probably struggle to convey as much optimism as the Bank of England did last week when it confirmed that the U.K.'s vaccine strategy is putting the country on course for a powerful rebound. —  Alexander Weber What's Happening Weaker Euro | Even as bond markets applauded the appointment of Mario Draghi as Italy's premier-designate, the euro had to endure a second week of declines and fell below $1.20. It's a sign that the common currency area's problems may be more ingrained than the fate of its third-largest economy. Sputnik Success | President Vladimir Putin's announcement in August that Russia had cleared the world's first Covid-19 vaccine for use before it even completed safety trials sparked skepticism worldwide. Now he may reap diplomatic dividends as Russia basks in arguably its biggest scientific breakthrough since the Soviet era. Virus Update | The AstraZeneca vaccine showed limited efficacy against mild disease caused by the South African variant of Covid-19, according to early data. Germany reported a drop in the pace of new cases while the country's economy minister dampened hopes for a quick end to restrictions. Here's the latest. Staying Power | Societe Generale's Frederic Oudea has become the longest-reigning CEO of a major European bank even as the lender's shares lost 75% of their value. In a sector where churn in executive suites is common, with banks from Credit Suisse to UniCredit the latest to signal changes in top jobs, Oudea's staying power stands out. Dividend Drawback | Two years ago, Nordea Bank packed up and moved its headquarters to the euro area in search of a friendlier regulatory setup, but the decision has left shareholders worse off in one key area: dividends. The Nordic region lender's CEO suggests the euro zone's current cap on dividends ignores regional differences, putting healthier banks at a disadvantage, and wants the ECB to take a more nuanced view. In Case You Missed It Pipeline Politics | Austrian Chancellor Sebastian Kurz said the EU shouldn't jeopardize the Nord Stream 2 natural gas pipeline over Russia's imprisonment of Alexey Navalny, arguing that the project is in the in the interest of many of the bloc's countries. Construction has continued in Danish waters, presenting an early challenge to President Joe Biden's pledge to improve U.S. ties with Europe. Drifting Apart | After his return from "a very complicated visit to Moscow," the EU's top diplomat, Josep Borrell, concluded in a blog post that the two sides are "drifting apart." Russia expelled diplomats from Germany, Poland and Sweden for allegedly joining protests against the jailing of opposition leader Alexey Navalny, just hours after Borrell sat down with the country's foreign minister, Sergei Lavrov. Scholz's Mission | German Finance Minister Olaf Scholz yesterday stepped up his bid to return his Social Democrats to the chancellery after Angela Merkel leaves this fall, presenting a fiscally expansive platform. Scholz — whose party is trailing in third in the polls — sketched out a program dubbed "Social. Digital. Climate-Neutral," which calls for significant spending in coming years to finance digital infrastructure and cleaner energy. Nuclear Deal | Iran's Supreme Leader said the U.S. must effectively remove all sanctions on his country before it will agree to scale back its atomic work and help revive the beleaguered nuclear deal. The Islamic Republic will return to full compliance if "all sanctions are removed in practice, not just in words or on paper," Ayatollah Ali Khamenei said. Oil's Comeback | One year after the first glimmers of the catastrophe awaiting global oil markets — from deserted Chinese cities to grounded jets — crude is staging a remarkable turnaround. The sudden reversal is a salve for an array of producers and a lifeline for countries like Iraq and Angola, which have sought International Monetary Fund aid. Chart of the Day The U.S. gave its formal backing to Ngozi Okonjo-Iweala to lead the World Trade Organization, removing the final obstacle to her bid to be the first woman and the first African to run the Geneva-based trade body. World leaders hope Okonjo-Iweala can help steer the WTO out of its negotiating morass and make it fit to govern the modern global trading system. Today's Agenda All times CET. 5 p.m. EU Parliament debate with ECB's Lagarde Commission President von der Leyen briefs EU lawmakers from the Left political group Like the Brussels Edition? Don't keep it to yourself. Colleagues and friends can sign up here. For even more: Subscribe to Bloomberg.com for unlimited access to trusted, data-driven journalism and gain expert analysis from exclusive subscriber-only newsletters. How are we doing? We want to hear what you think about this newsletter. Let our Brussels bureau chief know.   Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. Learn more.   You received this message because you are subscribed to Bloomberg's Brussels Edition newsletter. Unsubscribe | Bloomberg.com | Contact Us Bloomberg L.P. 731 Lexington, New York, NY, 10022