Populism may have taken a breather in Europe for the moment, with the likes of Prime Minister Mario Draghi at the helm in Italy and Germany’s anti-immigrant AfD on the back foot. But in France, Emmanuel Macron’s allies are starting to get worried about the challenge posed by Marine Le Pen, despite talking up her supposed incompetence for months. The far-right leader has learnt from mistakes made during her previous attempts to clinch the presidency. After working to soften her image, she’s gained support among women, young people and even, according to one political scientist, homosexuals and Jews. She also says she no longer wants to leave the EU. All told, it means that things are set to hot up ahead of next year’s elections, so best keep a close eye on the polls. 

What’s Happening
Tariff Talks | The Biden administration is in talks with the EU to avoid an escalation in a dispute over tariffs on European metals exports. Yet while both sides are eager to resolve the issue, the bloc is waiting for a U.S. offer but a concession is unlikely to happen by June 1 to prevent the EU’s levies from increasing.

Variant Proof | As the battle with the Covid-19 rages around the world, a small French biotech has a possible solution for the long-term war against the virus and the rapidly spreading mutations: a shot that could be variant proof. Here’s the latest virus news from around the world. 

Polish Banks | The EU’s top tribunal will today hand down another crucial verdict in Poland’s decade-long saga over foreign-currency mortgages, potentially weakening the position of banks in tens of thousands of court battles against borrowers. Polish banks were sued in more than 30,000 Swiss loan cases last year alone.

ECB Crackdown | In a non-binding opinion, we’ll get the hints about the scope of the immunity people on the ECB Governing Council enjoy. Bribery charges against former member Ilmars Rimsevics, who was also Latvia’s central bank governor, forced EU judges for the first time to weigh the limits of such impunity.

Safe Havens | Islands in Italy and Greece are rapidly inoculating residents against Covid-19, with the hope of creating a pandemic-free zone and mopping up the biggest gains from a rebound in summer travel. It’s another example of how the coronavirus has shaken up the global economy, carving out new winners and losers.

In Case You Missed It
Brexit Farewell | Four years of Brexit drama finally came to an end yesterday with European lawmakers approving the trade accord struck with the U.K. It means commerce will continue without the chaotic disruption a no-deal Brexit once threatened. There are still issues rumbling on though — City of London firms have been told not to expect quick access to the single market.

China Cooperation | Chancellor Angela Merkel is urging Germany to join forces with China to defeat the coronavirus pandemic, raising the prospect of deeper cooperation on Covid-19 vaccines — including the possibility of recognizing each other’s shots.

Meltdown Averted | European banks are joining U.S. peers in saying the pandemic won’t wreak as much havoc on their balance sheets as feared. Almost all big European lenders to report first-quarter earnings so far have bolstered profit by stashing less money for doubtful loans than last year or by freeing up reserves.

Banking Fines | Bank of America, Credit Suisse and Credit Agricole were fined about 28.5 million euros by EU regulators for colluding on trading of U.S. supra-sovereign, sovereign and agency bonds. While the fines may dent the reputations of the companies, they’re far lower than previous EU cartels, as enforcement in the bloc lags the U.S. and the U.K.

Staying Home | ECB President Christine Lagarde said her institution will probably adopt a mix of home- and office-based working after the pandemic, acknowledging that the crisis has shown how much can be done remotely. Lagarde herself has temporarily moved her own base from the central bank's headquarters in Frankfurt to her native France.

Chart of the Day

There might be a global shift taking place in appetite for big government. An OECD report yesterday showed the economic disruption from the Covid-19 pandemic combined with heightened concerns about health and finances are fueling demands for greater government spending in most of the world’s richest countries. That’s despite an awareness it could mean more tax.

Today’s Agenda
All times CET.

• 9:30 a.m. The EU’s top court will rule on a case referred from a Polish court in a dispute over unfair terms in foreign-currency loans
• 9:30 a.m. The EU’s top court gives a non-binding opinion in a case concerning the limits of immunity for central bank governors
• 9:30 a.m. The EU’s top court gives a non-binding opinion in a challenge against a Commission decision that the Nuerburgring racetrack in Germany benefited from illegal state aid
• 11 a.m. Commission press conference by Vice-President Maros Sefcovic on better regulation
• 1:30 p.m. EU foreign-policy chief Josep Borrell receives Albin Kurti, the prime minister of Kosovo; Commission President Ursula von der Leyen meets him at 4 p.m.