Brussels Edition: Lagarde’s ‘Whatever It Takes’ 

Bloomberg’s daily briefing on what matters most in the heart of the European Union

The European Central Bank will be put to the test today, as a global effort to protect businesses and households from the economic repercussions of the coronavirus outbreak gathers momentum. President Christine Lagarde effectively committed herself to action this week when she told European leaders that the region risks a 2008-style shock unless they act urgently and said the central bank would do its part. Still, the ECB doesn’t have the same room to cut interest rates as its global peers, forcing policy makers to be more creative in crafting a stimulus package.

What’s Happening
No Go |
It’s getting hard to go anywhere. Passport-free movement is arguably the most successful feature of daily life for more than 400 million people in the EU. But now the coronavirus poses an existential threat to that right. On top of that, Donald Trump plans to significantly restrict travel from Europe to the U.S. for the next 30 days.

Essentials Only | Italy all but put a halt to normal life, paring the economy down to just essential services in a desperate bid to stem the advance of the deadly coronavirus. Prime Minister Giuseppe Conte ordered all shops in the country to close except for grocery stores and pharmacies until March 25. Here’s why you can’t fight the epidemic without hurting the economy.

Bank Demands | European banks are asking regulators to roll back safety measures agreed after the last financial crisis so that they can deal with the virus’s crippling effect on the region’s economy. Their requests range from lowering liquidity and capital buffers to looser rules on bad loans. Meanwhile, in the U.S., corporate titans are drawing down credit lines before they disappear.

Viral Opportunities | The spreading virus is spurring a silent revolution in at least one field: telemedicine. With hospitals struggling to cope, patients are turning to such services, and governments are setting aside reservations about the risks of “couch consultations” to ease regulations.

Testing Times | Speaking of new business opportunities, there’s one Berlin-based biotech that can’t keep up with customer orders and is running its machines through the night and on weekends. If you need a virus testing kit, make sure to call them — they have more than 4 million.

In Case You Missed It
Collateral Damage
| Negotiations between the U.K. and the EU over their post-Brexit relationship are being jeopardized by the pandemic. The two sides are discussing contingency plans — such as using video links — should next week’s talks get canceled. Meanwhile, Boris Johnson’s government is expected to focus on trying to slow the spread rather than contain the outbreak.

Quarantine Overdose | Some people are just unlucky. This is the unbelievable saga of a China-based entrepreneur from central Italy who has spent the last months between quarantines in different countries.

No Waste | Europe is taking consumer rights to a new level with a plan that would require manufacturers of everything from mobile phones to washing machines to offer repairs. The initiative, which aims to ensure devices last for longer and don’t go to waste, is part of a wide-ranging European campaign to curb pollution. 

Green Fashion | Europe’s fashion manufacturers and importers may face stricter environmental rules under a push to clean up textiles production. In a fresh sign of the EU’s ambitions to expand its green regulatory footprint around the globe, the bloc’s environment chief vowed to zero in on the apparel industry to ensure that it avoids using harmful chemicals and wasting water.

Correction: In yesterday’s newsletter, we inadvertently referred to Turkish President Recep Tayyip Erdogan as “prime minister.” Our apologies.

Chart of the Day
The coronavirus-driven lockdown in Italy is set to curb trade for some of Europe’s poorest member states. Bulgaria, Croatia and Romania count Italy as their biggest or second-biggest export destination and are bracing for a drop in sales. 

Today’s Agenda
All times CET.

  • 2:30 p.m. Press conference by Christine Lagarde, following ECB monetary policy meeting in Frankfurt

  • EU foreign policy chief Josep Borrell delivers a speech at the European Union Institute for Security Studies conference in Brussels

  • The EU’s top court gives a non-binding opinion in an appeal by Nexans to annul or reduce a 70.7 million-euro fine after EU regulators found companies had colluded to fix the price of high-voltage power cables

By Carolynn Look and Nikos Chrysoloras