When EU leaders hold their call on Thursday to discuss the unfolding pandemic disaster, there’ll be an unwelcome guest in the virtual room: the specter of another lockdown. With efforts to limit the virus’s spread with softer measures — from mandatory mask-wearing to curfews — failing (so far) to deliver results, the drastic step that no European politician wants to take is back on the agenda. Arguably, with travel, entertainment and an ever-increasing number of other activities suspended, we’re already in a lockdown in all but name. But it could get worse and spell new risks for the region. A nascent economic rebound is already losing steam, and the social backlash against the latest restrictions is gathering momentum. Ahead of the Commission’s latest proposals for measures tomorrow, pressure is mounting to come up with something resembling a coherent response.

What’s Happening
Defense Projects | EU governments are closing in on an accord to allow countries outside the bloc to participate in joint defense projects, although limiting access to U.S. and British firms on lucrative contracts. We have the draft of the deal that may be approved as soon as this week. 

Turkish Question | In addition to an escalating standoff with Greece, a conflict over Cyprus and a worsening currency rout, Turkey’s feud with Paris is intensifying, with President Erdogan urging a boyocott of French products. Decisions regarding Turkey are on the EU’s agenda for December, but the latest developments may give it a mention on the leaders’ call on Thursday. 

Fish & Chips | If Britain does tumble out of the EU’s single market without an agreement, it will be in no small part because of pressure fishermen will have brought to bear on French President Emmanuel Macron. Our dispatch from France’s northern coast shows what’s at stake as negotiations to reach a post-Brexit trade deal continue.

German Economy | Germany expects the economic impact of the virus to be slightly less severe this year than feared, according to forecasts to be published tomorrow. That’s the good news for Europe’s biggest economy. The bad news is that German companies are losing faith in the recovery, potentially marking the beginning of a major economic setback. 

Car Giant | Fiat and Peugeot are headed for EU antitrust approval for their plans to create the world’s fourth-biggest carmaker. Concessions offered by the companies to allay the bloc’s concerns received positive feedback, according to our reporting. 

In Case You Missed It
Tech Liabilities | Big technology platforms are calling on the EU to protect them from legal liabilities for removing hate speech and illegal content as government scrutiny over such posts grows. The Commission wants to hold the likes of Facebook more responsible for the content on their sites, from terrorist propaganda to unsafe toys.

Arms Control | President Vladimir Putin offered new missile verification measures to NATO countries following the U.S. withdrawal from a Cold War-era treaty as Russia seeks to preserve the collapsing framework of nuclear arms control. Putin also offered not to deploy the missiles in Europe, unless the U.S. and its allies station weapons in places Moscow deems to violate the treaty. 

EU Tariffs | The World Trade Organization formally authorized the EU to impose tariffs on about $4 billion worth of U.S. exports annually in retaliation for America’s illegal subsidies to Boeing. Nevertheless, officials in Brussels don’t expect to trigger retaliation until after the U.S. presidential election, in the hopes that Joe Biden wins and facilitates an amicable arrangement.

Polish Rights | Women’s groups are ramping up protests in Poland after the country’s top court practically banned abortion. The dynamic of the backlash has surprised the government, and more is to come this week. 

Chart of the Day

The European Central Bank’s Governing Council will probably announce in December an expansion of its pandemic emergency purchase program. The step is expected to be not only commensurate to the weakening economic outlook, but also allow room for maneuver if the situation deteriorates further. Here's the latest forecast from Bloomberg Economics. 

Today’s Agenda
All times CET.

• 9 a.m. EU’s antitrust chief Margrethe Vestager takes questions from European Parliament lawmakers

• 9:30 a.m. The EU’s top court gives a non-binding opinion in a challenge by Lufthansa against the EU’s approval of German aid to Frankfurt Hahn airport

• 11 a.m. EU budget chief Johannes Hahn participates in the Luxembourg Stock Exchange “Ring the Bell” ceremony for the listing premiere of the EU's SURE bonds

• 1:45 p.m. ECB Supervisory Board Chair Andrea Enria appears in European Parliament 

• 3:45 p.m. Single Resolution Board Chair Elke Koenig appears in European Parliament

• 5:15 p.m. EU Parliament Committees on Civil Liberties, Justice and Home Affairs discuss challenges for asylum and migration management in the Greek islands

• EU Parliament, Council of the EU and Commission continue talks on the rule of law conditionality regulation for the bloc’s next budget

• EU trade chief Valdis Dombrovskis participates via video conference in the WTO informal ministerial meeting