Brussels Edition: Rescue Response

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

(Bloomberg) 

Faced with an unprecedented recession, the EU is working overtime to come up with a joint response to complement the extraordinary stimulus already unleashed by national governments and central banks. Its key planks are taking shape and include the euro area’s bailout fund, the European Investment Bank and an EU-wide unemployment reinsurance. But senior finance ministry officials discussing this response today will be faced with a tricky dilemma: are these measures sufficient to deal with the crisis at hand, or is it time to finally leave behind old taboos and put some kind of joint debt issuance on the table?

What’s Happening

Virus Update | A slowdown in the rate of deaths in Spain and Italy continued over the weekend, with Spain registering a fall for the third consecutive day and Italy reporting the lowest single-day coronavirus deaths in over two weeks. In the U.K., Prime Minister Boris Johnson was admitted to hospital after failing to shake off the virus 10 days after being diagnosed.

Defense Debate | EU defense ministers will today discuss how can they maintain the bloc’s military presence abroad as the virus spreads in areas of deployment, and how armies can assist governments in what increasingly looks like a wartime effort. Crucially, ministers will have a first debate about the geopolitical implications of the pandemic, which is changing the shape of our world. 

Insolvency Laws | European governments are ripping up their insolvency laws to stem the tide of companies set to collapse over the Covid-19 pandemic. But for many businesses it may be too little too late, Katie Linsell reports.

Search for a Cure | The huge field of potential treatments represents an almost unparalleled mobilization of medical science. The downside? Pharmaceutical-research experts are raising concerns that attempts to offer desperate coronavirus patients some form of treatment may hobble crucial studies to find drugs that really work.

In Case You Missed It

Airline Refunds | The fight to survive the Covid-19 crisis is pitting airlines against their customers. There’s been conflicting guidance from EU regulators — who insist airlines must offer cash refunds for canceled flights, should passengers ask — and countries that have loosened rules to prevent airlines from collapsing. So the big question is: will you get your money back? 

Privacy Predicament | EU governments have pushed the bloc’s stringent data-privacy rules to their limits by tapping the biggest telecom and tech companies for information to tackle the coronavirus outbreak. Data sharing is helping government officials fight the spread of the illness but also putting privacy experts on edge. 

Italy’s Fate | It may lack the allure of Rome or Venice, but Italy’s economic engine will drive its post-virus recovery. Here’s why the fate of Milan will be the fate of the country.

Keeping Your Religion | Easter, Ramadan and Passover are all celebrated this month, and religious leaders find themselves giving thanks to the internet. With roughly half the world locked down, keeping the communal spirit will be a struggle. But the pandemic, however painfully, has breathed fresh meaning into these holidays, all rooted in hardship and renewal. 

Chart of the Day

Sweden’s experiment has drawn international bewilderment as schools, restaurants and cafes have remained open, and the government relies on the common sense of its citizens to carry the country through the pandemic. But with much of the rest of the world in lockdown, Sweden’s efforts to keep its economy open aren’t doing much to shield it from recession.

Today’s Agenda

All times CET.

  • 10 a.m. Video conference of EU justice ministers
  • Euro Working Group of senior EU finance ministry officials discuss details of bloc’s plan for an economic response to the pandemic
  • Video conference of EU defense ministers to discuss military implications of the Covid-19 pandemic
 
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The American-Hellenic Chamber of Commerce organized on Tuesday, June 2, a virtual roundtable discussion, entitled “East Med the trilateral partnership (Greece-Israel-Cyprus) and its role in regional energy security and economic cooperation in the age of Covid-19 and beyond”.

Speaking in the virtual roundtable discussion, Cyprus Minister of Energy, Commerce and Tourism, Georgios Lakkotrypis underlined that Cyprus, Greece and Israel, share common principles, as well as a joint vision for the future. As he said, the Cyprus-Greece-Israel trilateral cooperation instigated further multilateral alliances in the region.

Minister Lakkotrypis expressed the view that the three countries’ determination to find joint solutions reinforces the confidence of the energy companies, which intend to invest in the energy field of the region. As he said, following the approval of the intergovernmental agreement for the construction of the EastMed pipeline by the Greek Council of Ministers, the Cyprus House of Representatives will soon proceed to its approval too.

During the discussion Lakkotrypis underlined that the Republic of Cyprus remains firm in its will for a solution to the Cyprus Problem, calling repeatedly on Turkey to return to the negotiation table. Turkey’s negation to discuss the open issues, as well as its unfounded invocation of the international Law, proves that its accusations about the Greece-Cyprus-Israel trilateral cooperation are also unfounded, Lakkotrypis said.
On his part, Greek Minister of Energy and Environment Kostis Hatzidakis expressed the view that while the Greece-Cyprus-Israel cooperation is focused on the fields of natural gas and electric energy, the three countries could further their cooperation in the environmental and the green agenda issues.

As regards Turkey’s recent moves in the energy field, Hatzidakis stressed that the Greek government remains decisive against Turkish provocativeness, while making clear that the Greece-Cyprus-Israel alliance is not aimed against any country, but rather promotes regional stability and peace.

During his speech, Israeli Minister of National Infrastructures, Energy and Water Resources Yuval Steinitz said that the energy field plays a decisive role in the Greece-Cyprus-Israel trilateral cooperation. He also expressed the view that the EastMed pipeline –while being an ambitious project– represents the best and most secure solution for the transport of natural gas. EastMed constitutes a long-term investment, the construction of which is absolutely viable, Steinitz suggested.

US Assistant Secretary of State for Energy Resources Francis Fannon speaking at the roundtable discussion, stressed the importance of ending all provocative actions that could undermine the investors’ trust and the political stability in the region. Concerning Turkey’s recent actions in Cyprus’ EEZ and on the possibility of attempting oil explorations in the Greek Continental Shelf, Fannon said that according to the international law all islands have an EEZ and a Continental Shelf. “We are not commenting on future actions that may happen or not, but we are encouraging states to stop provocative actions, behaviors and statements. Turkey is an important country and we want that it preserves its Western orientation”, Fannon said.

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(CNA)

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