The state of the EU economy will be in focus today when the bloc’s executive arm publishes its latest growth forecasts. The likely projections for a frustratingly slow recovery will highlight how governments are struggling to find the right balance of restrictive measures amid new virus mutations, and how vaccinations are progressing at a slower pace than in Britain and the U.S. Despite better-than-expected growth at the end of 2020, lockdowns are probably costing the EU economy about 12 billion euros a week. That means that unless the bloc meaningfully picks up the pace of immunizations, restrictions will further weigh and the onus will be on the European Central Bank to provide monetary support to underpin the euro region’s recovery.

What’s Happening
Talking Again | The EU rebuffed the U.K.’s call to reset the two sides’ relationship, saying Britain needs to honor the promises it made on Northern Ireland as part of the Brexit deal. In a letter ahead of a meeting between Commission Vice President Maros Sefcovic and Cabinet Secretary Michael Gove, the bloc gave a cool response to Britain’s request to delay the implementation of border checks.

Nuclear Questions | Today’s plenary session of the EU Parliament will start on an atomic note, with lawmakers questioning Energy Commissioner Kadri Simson about the safety of the Astravets nuclear plant in Belarus. The parliament is set to adopt a non-binding resolution calling for suspending Astravets’s commercial operation until all the safety improvements recommended by the EU are in place.

German Easing | Schools and daycares in Germany may resume later this month, a win for state leaders over Chancellor Angela Merkel in a wider battle of over how quickly Europe’s biggest economy reopens. The easing plan comes as the Ifo institute estimated that the restrictions depressed output by half a percentage point in the fourth quarter and will slice about one point off in the first three months of 2021. 

No Confidence | Slovenia’s government will face a second no-confidence vote this year as the opposition criticizes Prime Minister Janez Jansa’s nationalist agenda. Pressure is mounting on the premier to step down before the motion takes place — probably next week. The populist leader recently faced protests over corruption allegations he denies, as well as attacks on media and his handling of the coronavirus pandemic.

Production Boost | BioNTech started production at a new Covid-19 vaccine facility in Germany, moving closer to its goal of boosting output in Europe by some 750 million doses a year. The Marburg factory is a key piece of a plan by Pfizer and the German company to boost production of their shot to 2 billion doses this year as pressure is mounting on vaccine makers to produce more.

Extreme Mainstream | Donald Trump’s exit from the White House is unlikely to end the populism gripping many Western nations, according to the head of an EU member that’s just ended a stint with a far-right party in government. New Estonian Prime Minister Kaja Kallas says the mainstream has been forced to become more extreme but hopes the anti-immigrant EKRE group in her country will quieten down in opposition.

In Case You Missed It
Astra Shot | A WHO panel recommended AstraZeneca’s vaccine for all adults over the age of 18. That may encourage more countries to use the shots after some EU nations advised against giving it to the elderly, citing insufficient trial data. Crucially, the move is good news for developing countries, many of which are waiting to start inoculations.

Trade Snag | The impact of Britain’s departure from the EU’s single market isn’t letting up after five weeks of the new trade deal, with high-frequency data showing freight volumes from the U.K. to the bloc down by about 25% from year-ago levels. The figures highlight the damage inflicted on the U.K. economy at the start of 2021 after the worst contraction in three centuries last year.

Mea Culpa | Ursula von der Leyen told EU lawmakers yesterday that the Commission would have to see “what lessons we can draw” from the vaccination delays and admitted mistakes on the Brexit issue, which she said she deeply regretted. Her mea culpa came as she encountered the wrath of members of the European Parliament following the latest set of difficulties with the bloc’s immunization push.

Media Tax | With blacked out or blank television screens, front pages and web portals, private Polish media companies protested against a plan to implement an advertising tax they say is a disguised government attempt to muffle criticism. The proposal is likely to further enflame tensions with the EU which accuses Poland, along with Hungary, of undermining the bloc’s democratic values.

Green Light | The EU said yesterday it has approved a further 23 requests to ship Covid-19 vaccines to other parts of the world under the bloc’s new export-licensing regime, bringing the total to 27. The disclosure follows an announcement last week that it had endorsed four vaccine shipments from the bloc — two to Canada and one each to Japan and the U.K.

Chart of the Day

Europe’s battered banks, reporting their toughest year in a decade, are signaling that the worst of the pandemic’s damage has passed. While profit at the 19 major EU lenders that have published results dropped below 10 billion euros, several firms have proposed resuming payouts to shareholders as loan-loss provisions are forecast to ebb and cost-cutting efforts begin to kick in.

Today’s Agenda
All times CET.

• 9 a.m. Energy Commissioner Kadri Simson talks to EU lawmakers about safety of Belarusian nuclear plant; Parliament is expected to later request the suspension of its launch in a non-binding resolution
• 9 a.m. Chancellor Merkel addresses parliament in Berlin on Germany’s virus strategy
• 11 a.m. European Commission releases quarterly economic forecast 
• 12 p.m. ECB’s Klaas Knot speaks at Bruegel event on Green Finance
• 5:30 p.m. EU-Ukraine Association Council
• EU Commission Vice President Sefcovic meets U.K. Cabinet Secretary Gove to discuss the Northern Ireland Protocol