Brussels Edition: Charting revival

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

When global finance chiefs gather in Venice today, they’ll be focused on charting a course to move beyond the economic toll of the Covid-19 pandemic, even as the threat of new variants clouds the outlook. The Group of 20 will be able to tout its unity over a sweeping global taxation deal (that’s still years away from becoming a reality), but more thorny topics like climate change will likely expose some of the seams. While some European leaders want G-20 nations to use their tax codes to reduce the use of carbon and emissions more broadly, U.S. Treasury Secretary Janet Yellen will likely reiterate the U.S. view that marshaling private finance will be crucial in addressing the problem. In any case, officials can look to the name of the lagoon city’s fire-cursed opera house — La Fenice, or the Phoenix — for inspiration on what to strive for in the embers of an unprecedented crisis.

What’s Happening
Digital Tax |
The EU’s plan for a new digital-services tax is unlikely to undermine global talks aimed at eliminating such levies, Mathias Cormann, the OECD secretary general, told Bloomberg Television. French Finance Minister Bruno Le Maire said this week that EU proposals are not yet finalized but that it’s approach won’t entail reallocating profits between countries.

Green ECB | European Central Bank President Christine Lagarde said policy makers will inject climate-change considerations into its process for key decisions such as asset purchases and broader monetary policy. The bank also announced it is raising its goal for inflation and may let it overshoot the target for a while, giving officials more discretion in how to bolster the economy after years of lackluster performance.

Pared Penalties | A total of 875 million euros in EU fines for Volkswagen and BMW for collusion left the carmakers relatively unscathed after regulators dropped some of the more serious allegations. Both saw shares clipped but the fines were lower than initial expectations, with BMW paying nearly 373 million euros — well below an anticipated 1.4 billion euros.

Nuclear Fight | A group of European Parliament members are calling on the EU to include nuclear energy in its classification system for green investment to help the bloc meet its ambitious climate-neutrality goal. Countries that don’t have nuclear power — or are phasing it out — will try to persuade the bloc to oppose a green label for this source of energy, warned lawmakers led by Sara Skyttedal, a Swedish Christian Democrat.

Venezuelan Mission | An EU team arrived in Venezuela to assess whether it should deploy an electoral observation mission during the November governor and mayoral votes. The group will meet with officials at the Foreign Affairs Ministry and the Electoral Council and hold conversations with leaders of parties participating in the elections and political experts.

In Case You Missed It
Denting Tourism | The rapid spread of the delta variant of Covid-19 could still wreck Europe’s summer. A French minister issued a “message of caution’’ and advised travelers to avoid vacationing in Spain and Portugal, which rely heavily on tourism and are experiencing a spike in cases.

Travel Curbs | U.S. Transportation Secretary Pete Buttigieg told Bloomberg Television that the Biden administration isn’t yet ready to lift restrictions on international travel to the U.S., even as it touts progress against Covid-19 in other areas, including domestic travel.

U.K. Loosens | British travelers who are fully inoculate against coronavirus will no longer need to isolate when they return home from moderate-risk countries, starting this month. The government plans to extend the approach to visitors from major markets including the U.S. and EU later this summer.

Brexit Tab | The EU concluded that the U.K. owes it 47.5 billion euros as part of the Brexit settlement — about 6 billion euros more than the U.K. had originally estimated. There could still be additional discussions about the final tab, which is to be paid out in the coming years.

Jets Scrambled | Officials abruptly halted a news conference with Spanish Prime Minister Pedro Sanchez and Lithuanian President Gitanas Nauseda at an airbase in Lithuania yesterday as pilots charged for their jets to intercept two Russian aircraft. Such incursions by Russia over the Baltic Sea surged after Vladimir Putin annexed Crimea from Ukraine in 2014, triggering EU sanctions.

Hungary Shift | Hungary is loosening rules for foreign workers in a push to accelerate the recovery from the pandemic. It’s a sign that concerns about the country’s economy are outweighing, at least for now, Prime Minister Viktor Orban’s anti-immigrant policies that have sparked frequent clashes with the EU.

Chart of the Day
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The ECB’s move to consider the impacts of climate change in its decisions surrounding its asset purchases and broader monetary policy is partly aimed at protecting the bank’s balance sheet from climate and transition risks. While officials in some countries are leery of stepping too deeply into the politics surrounding climate change questions, there is strong interest in steering investors toward backing projects with a lower pollution footprint and considering the long-term risks that they incur through support for industries that are causing the most damage to the environment.

Today’s Events
All times CET

  • 8:30 a.m. EU Economy Commissioner Gentiloni interview on Bloomberg TV
  • 9:30 a.m. French Finance Minister Le Maire interview on Bloomberg TV
  • G-20 finance ministers, central bank governors begin two-day meeting in Venice
  • EU Competition Commissioner Vestager participates as a keynote speaker in the Three Seas Summit in Sofia, Bulgaria
Kevin Whitelaw
 
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