Brussels Edition: Breaking Europe’s Fall

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

(Bloomberg) 

There’s little doubt now that Europe is heading for recession, as ever vaster swaths of its economy are shut down in a desperate attempt to slow the spread of the coronavirus. Over a video call today, EU finance ministers will seek to come up with a plan to steer towards a hard landing rather than a catastrophic crash. The main elements of their response were laid out last week — in successive stimulus announcements by governments, the Commission’s effective suspension of state-aid rules for battered companies, and the ECB’s liquidity measures. The challenge for ministers today is to turn this impressive patchwork into a coherent narrative in order to restore confidence — and morale — to an increasingly claustrophobic continent.

What’s Happening

G-7 Call | Leaders of the G-7 advanced economies also hold a call today to synchronize their steps, though Europe isn’t particularly optimistic that Donald Trump will agree to cooperate. Meanwhile, the U.S. Federal Reserve slashed its main interest rate — in lockstep with the world’s big central banks — and sought to pump liquidity into the crumbling financial system.

Closing Borders | Among the many conference calls in lieu of actual meetings today, you should also pay attention to the one between EU home affairs and health ministers. We’re told about plans circulating to seal off the Schengen zone’s external borders and to tell citizens not to leave Europe. The Commission is also going to propose how to control internal borders without sealing them.

U.K. Tactics | Boris Johnson’s government is doing its own thing, adopting much fewer restrictive measures on daily activities than European peers. So far, the more relaxed approach on social distancing doesn’t seem to be working, as the death toll keeps rising.

French Elections | France’s first-round municipal elections gave President Emmanuel Macron’s party a taste of the challenge it faces among urban voters as his candidate for mayor of Paris trailed in exit polls. A record low number of voters braved the nation’s virtual lockdown to choose mayors for more than 35,000 municipalities in Europe’s biggest public ballot since it became the focus of the coronavirus pandemic.

In Case You Missed It

Hoarding Issues | Our Saturday grocery shop in Brussels showed that the toilet paper crisis is abating, but egg and disinfectant shortages were severe. Supermarkets have been asking people to stop stockpiling, but to no avail. 

Asian Lessons | European leaders looking for answers to the crisis could look to the experience of Asia, which has been battling the deadly pathogen since January — with some success. This is how they’re doing it.

Lagarde’s Gaffe | Christine Lagarde’s verbal faux pas on Thursday that triggered a spike in Italian borrowing costs places the European Central Bank chief in a club of global monetary officials whose words have inadvertently roiled financial markets. Here are the other members.

Life In Plastic | These are nervous times for activists working to wean the world off plastics. With health concerns at the top of consumers’ minds, companies are abandoning eco-conscious policies and re-embracing single-use items.

Chart of the Day

The viral outbreak will reduce real GDP growth in the EU by 2.5 percentage points compared to a situation where there would be no pandemic, the EU Commission said on FridayHowever, some of the direct impacts in 2020 can be offset by timely and effective policy action, according to the EU’s executive arm. 

Today’s Agenda

All times CET.

  • 10 a.m. Italian Cabinet meeting
  • 1 p.m. Meeting between EU Council President Michel, EU Commission President von der Leyen and ECB President Lagarde
  • 3 p.m. EU finance ministers hold Eurogroup meeting via video conference
  • G-7 leaders hold video conference on COVID-19
 
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