| Welcome to the Brussels Edition, Bloomberg's daily briefing on what matters most in the heart of the European Union. And you thought Brexit was over? Not so fast. As with many divorces, antagonism has refused to fade even after the separation has been sealed. Tensions between the EU and Britain ramped up considerably when the U.K. announced it will ignore some crucial obligations of their agreement and the EU responded with a dramatic threat of legal action. We take a look at why. In a nutshell, Boris Johnson is already under pressure from members of his own party to rip up the Northern Ireland part of deal, meaning the risk is further escalation. That could have spillover effects far beyond politics. With the bloc yet to ratify December's trade deal and a fear in Brussels that this may not be the government's last attempt to scrap what it previously agreed, the next few months will be rocky. — Ian Wishart andNikos Chrysoloras What's HappeningNo Equivalence | A widening gap between Britain and the EU over finance regulation is also starting to emerge, with a post-Brexit alignment dropping down the U.K. agenda. The sparring highlights the tense relationship marked by British assertions of sovereignty and EU concerns of being undercut on taxes and regulations. Vaccines Ban | Italy blocked a small shipment of AstraZeneca vaccines to Australia, a country which may not need them quite as desperately (even as it complained). It's a symbolic move, meant to send a message to drugmakers about fulfilling their delivery commitments. But the decision may have unintended consequences, as countries across the world vie for vaccine supplies. Digital Plans | A network of Security Operations Centers powered by artificial intelligence to form a "cybersecurity shield," computers with quantum acceleration and cutting-edge semi-conductors. No, it's not a sci-fi scenario, it's the Commission's plans for the EU's tech policy in the next decade. It's due to be unveiled next week, and we have the draft. Alitalia's Fate | Italian Prime Minister Mario Draghi is set to resume talks with EU authorities on the future of cash-strapped Alitalia in an early test of his new government's relationship with Brussels. The Commission is seeking a radical overhaul of the airline, which has endured losses for years. Discussions on restructuring are entering a crucial phase, and Draghi is set to join a call this morning. Apple Charges | The Commission may soon escalate its probe into how Apple allegedly squeezes rival music-streaming service Spotify. The probe is the most advanced among EU investigations looking into Apple's payment system and e-books service and adds to a growing backlash against the levies Apple and Google charge outside developers for using their app stores. Orban's Party | Hungary's Prime Minister Viktor Orban set out to build his own right-wing political force across the EU after a decade-long row over democratic values led to the his party's exit from the center-right group in in the bloc's parliament. The European People's Party has been the longtime home of Hungary's ruling Fidesz party and provided Orban crucial links, legitimacy and votes. It seems this isn't the case anymore. In Case You Missed ItSputnik Signal | The EMA started a rolling review of Russia's Sputnik V Covid-19 vaccine, the first major step in gaining approval for use in the EU. The shot started to gain recognition after The Lancet published peer-reviewed results of interim trials showing 91.6% efficacy. But the Commission said there are currently no talks with Russia for a collective purchase agreement. French Model | France unveiled a long-awaited plan for using state aid to prevent a wave of bankruptcies after the pandemic, hailing it as a model for the rest of Europe. The program, which has now been approved by the EU, will combine private and public money to provide as much as 20 billion euros to strengthen the finances of small and medium-sized companies. Meanwhile, the country tightened regional restrictions. Borrowing Costs | Rising government bond yields are a "positive story" because they reflect expectations for an improving economy, European Central Bank Governing Council member Klaas Knot says. Although countries such as Greece and Italy may not see their increasing borrowing costs that way, ECB officials have downplayed concerns, suggesting they can manage the risk with verbal interventions including a pledge to accelerate bond-buying, if needed. Carbon Prices | The EU shouldn't weaken the world's biggest carbon market after prices surged to a record last month, according to two of its founding architects. While the sharp gain helps the environment by making power generation from fossil fuels more expensive, many European companies are increasingly concerned that surging costs will hurt their competitiveness. Bad Air | The U.K. was handed a stinging rebuke from the EU's top court for failing to clean up the dirty air in big cities from London to Glasgow. While the U.K. is no longer part of the bloc, it remains bound by rulings in cases that were brought before its exit. In theory at least. Barcelona's Taxes | Still on legal news, FC Barcelona lost the final round of a fight with the EU over allegedly unfair tax breaks. The Court of Justice upheld an order by the Commission classifying the tax arrangements of four Spanish professional football clubs, including Real Madrid, as illegal state aid. Chart of the Day Questions like "how much are you making in your current job" may be banned from job interviews, under proposed new EU rules aimed at reducing the pay gap between men and women in the bloc. Here's what the Commission proposes to increase pay transparency. Today's AgendaAll times CET. - 9 a.m. German parliament continues its Wirecard inquiry
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