Brussels Edition: A divided island

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

Rival leaders from the island of Cyprus meet today to see if there’s enough common ground to begin formal reunification talks after nearly 50 years of bitter division. Officials from Turkey, Greece and the U.K. will join top Greek- and Turkish-Cypriot politicians in Geneva for a scheduled three days of talks hosted by the UN. Proponents of reunifying the island point to the economic and security prizes it offers: a boost for the development and exports of eastern Mediterranean oil and gas to Turkey and Europe and strengthening NATO in a region where Russia is eager to expand its influence. But Turkey’s unilateral energy exploration in contested waters has inflamed ties with both Greece and the Republic of Cyprus, while Ankara’s purchase of missile technology from Moscow has soured its relations with European powers, making the outcome of this latest round of talks even more precarious. 

What’s Happening
Polish Hurdle |
Poland is on course to ratify the EU’s pandemic stimulus plan as the threat of losing billions of euros of aid forces the government to rely on opposition parties to prevent a coalition rift from torpedoing the deal. While approval of the aid package would be a critical step for Europe, it raises questions over the stability of the Law & Justice-led government after almost six years in power.

Brexit Vote | The European Parliament will today vote on the trade deal between the U.K. and the EU, completing the final step toward ratifying the post-Brexit accord. The vote comes after some lawmakers had threatened to withhold their approval because of what they saw as Britain’s refusal to implement the deal it signed covering Northern Ireland.

Helping Out | Sanofi will help make up to 200 million doses of Moderna’s Covid-19 vaccine, the French drugmaker’s third agreement to throw its weight behind another company’s shot. The contribution could be particularly useful if booster shots are needed. Moderna is testing boosters at half the dose of its existing 100-microgram shot, which would increase supplies but still require more vials.

Everyone’s Turn | Under pressure to lay out a path toward more normality, Germany will open vaccinations to all adults by early June and allow people who have been fully immunized or who have recovered from the disease privileges like going to the hairdressers without needing a negative test. Meanwhile, German and French finance ministers today will present their national recovery plans at a joint press conference.  

In Case You Missed It
Shot Exports |
WTO chief Ngozi Okonjo-Iweala urged rich nations to export more Covid-19 vaccines, singling out the U.K. and the U.S. Inoculation campaigns have been progressing at starkly different rates in wealthy and poorer nations, with pressure mounting to close the vaccine gap to successfully end the pandemic globally.

Suit Filed | The EU filed a lawsuit against AstraZeneca, raising the stakes in the spat between the drugmaker and the bloc’s 27 governments over vaccine deliveries. The legal action is yet another headache for the company, which faces concerns over alleged side effects that have led some EU members to limit its use to specific age groups.

Italian Ambition | Prime Minister Mario Draghi warned that Italy’s fate and credibility are on the line as it embarks on its most ambitious plan in decades to jump-start the economy and address shortcomings that have long scared off investors. At stake is also the success of Draghi’s government, as he attempts to pull off his country’s most ambitious overhaul since the end of World War II.

Navalny Crackdown | Russian prosecutors ordered Alexey Navalny’s national network of campaign offices to suspend operations because of alleged “extremism,” deepening the crackdown on the jailed opposition leader’s allies. The order bans the groups from posting online, organizing events and using bank accounts pending a permanent court ruling.

Spy Spat | Poland, Hungary and Slovakia backed the Czech Republic in its feud with the Kremlin, saying the alleged involvement of Russian agents in a deadly blast seven years ago was “an act of aggression.” The countries also ousted Russian embassy staff in their act of solidarity. 

Chart of the Day

German businesses unexpectedly became more pessimistic about the economic outlook as the country continues to battle a stubbornly high rate of coronavirus infections and supply constraints weigh on the recovery. The Ifo institute’s gauge of expectations for the next six months fell to 99.5 in April from 100.3. Economists surveyed by Bloomberg had predicted a gain. At the same time, an assessment of current conditions improved.

Today’s Agenda
All times CET.

  • 11:30 a.m. German Economy Minister Peter Altmaier presents the country’s updated growth forecasts 
  • 1 p.m. Alexandra Dimitrijevic, S&P Global Ratings’ head of research, and Daniel Vernazza, UniCredit’s chief international economist, speak at a Bruegel event on sovereign ratings
  • 2:30 p.m. French and German finance ministers present their national recovery plans in a joint press conference  
  • 4:45 p.m. EU climate chief Frans Timmermans gives a keynote speech at the Bloomberg Green Summit
  • The European Parliament will vote on giving its consent to the agreement that sets the rules for the post-Brexit EU-U.K. relationship; Commission President Ursula von der Leyen speaks to lawmakers
  • Three-day UN-led meeting on Cyprus begins in Geneva
Viktoria Dendrinou and Paul Tugwell