Brussels Edition: Traveling in different directions

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Welcome to the Brussels Edition, Bloomberg's daily briefing on what matters most in the heart of the European Union. European governments will soon be handing out travel certificates to the fully vaccinated, but they may not be the golden ticket to the beaches many were hoping for as the delta variant spreads. Portugal, which a few months ago was one of the few designated safe spots, has seen its tourism industry dealt a hammer blow by the U.K. and Germany, with both those countries now mandating quarantines for visitors returning home. Further complicating the summer season and risking another divide between the sun-seeking northerners and the tourist-dependent south, not all EU leaders agree on which vaccines count. French President Emmanuel Macron and German Chancellor Angela Merkel last week scolded Greece for welcoming travelers with Sputnik and Sinopharm shots, vaccines not authorized by the EU's drug regulator. And if any reminder were needed of the ever-present risk of contracting Covid, Luxembourg Prime Minister Xavier Bettel tested positive for the virus, just days after rubbing shoulders with his EU peers in Brussels. — Katharina Rosskopf and Heather Harris  What's Happening French Fatigue | The outcome of next year's French presidential election looks increasingly uncertain after incumbent Emmanuel Macron and far-right leader Marine Le Pen registered dismal showings in a regional ballot yesterday. A record low turnout of around one third of voters makes it hard to read too much into the results, yet the traditional center-right looks set to obtain 38% and left-leaning parties 34.5%, a boost they will try to use to gain momentum as the campaign gathers pace. Carbon Change | The EU carbon market, the world's biggest, is poised to expand and impose tougher limits on emitters. The European Commission plans to phase maritime transport into the EU Emissions Trading System from 2023 and improve a mechanism to control the supply of carbon permits as part of the biggest overhaul of the market to date. We have the draft. Swedish Deadline | Sweden is facing its worst political crisis in decades after Social Democrat leader Stefan Lofven became the country's first prime minister to lose a confidence vote in parliament. He has until midnight tonight to broker a new deal and try to stitch together a new coalition. Failing that, he can let the opposition have a go at forming a government or call a snap election. Venezuela Review | The U.S., EU and Canada said they are "willing to review sanctions policies" against Venezuelan President Nicolas Maduro and his regime provided there are "substantive, credible advancements" in negotiations to restore the democratic process. The parties called for the unconditional release of political prisoners, the autonomy of political parties, freedom of expression and the media, and an end to human rights violations. In Case You Missed It Farming Overhaul | The EU reached a provisional agreement on a reform of its farming policy for 2023-2027 that aims to make it simpler and more sustainable. Measures involving support of farm incomes and production account for about a third of the EU's overall budget. The deal still needs to be approved by agricultural ministers, who are meeting today and tomorrow in Luxembourg. Eastern Intolerance | Czech President Milos Zeman backed ally Viktor Orban of Hungary in his spat with the EU over LGBTQ rights by calling transgender people "disgusting." Zeman also criticized feminist activists, the Me Too movement and Pride Month events. The Commission has triggered legal proceedings against Hungarian legislation outlawing content for children that can be deemed to "promote homosexuality." German Polls | As German Chancellor Angela Merkel edges closer to retirement, her party is widening its lead in the polls. Combined support for Merkel's CDU and its Bavarian CSU sister party was unchanged at 28% in Insa's weekly poll for Bild am Sonntag newspaper, while the Greens retreated one point to 19%. Polish Outrage | Poland drew the ire of the U.S. government and Jewish groups for draft legislation that would make it more difficult for survivors of the Holocaust to recover property seized by the Nazis on Polish soil. The nationalist Law & Justice Party approved a law last week in the lower house that establishes a 30-year limit for restitution claims. Chart of the Day ECB President Christine Lagarde has urged leaders to keep their fiscal purse strings loose, warning that a premature brake on stimulus measures could derail a nascent recovery. As an official told us, Lagarde cited the example of the aftermath of the financial crisis, when a rebound failed to be sustained because "green shoots were not watered."  With coronavirus infections dropping, and booming demand triggering inflation, pressure is building in some quarters for the ECB to consider exiting emergency stimulus, and for governments to think about how to reduce debt. Today's Agenda All times CET. 11 a.m. German Chancellor Merkel, French Prime Minister Castex take part in Franco-German parliamentary assembly 1:00 p.m. Executive Vice-President Dombrovskis, Commissioner Schmitt hold a press conference on EU Strategic framework on health and safety 2021-2027 EU agriculture and fisheries ministers begin a two-day meeting in Luxembourg The European Parliament holds a Western Balkans summit ECB's de Guindos, Weidmann, European Commission President von der Leyen at the Frankfurt Euro Finance Summit 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.

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