Brussels Edition: Swedish lesson

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

Stefan Lofven, who resigned as Sweden’s prime minister last month, is looking to put an end to the political turbulence that’s beset the Nordic nation when parliament votes on a new government today. And while Lofven says he has enough support to form a coalition that would avoid snap elections, any victory will likely be by a razor-thin margin. The turmoil reflects a shifting political landscape in which a right-wing, anti-immigration party has upset the traditional two-bloc paradigm. Even if Lofven, a Social Democrat, garners enough votes, his new ruling coalition would still be on shaky ground. And Sweden’s problems serve as a warning to other countries with key elections looming — like Germany and France — where fractured politics have also upended old alliances. - Ott Ummelas and Richard Bravo

What’s Happening

Covid Rebound | New economic forecasts from the commission today will provide an updated view on the strength of Europe’s recovery. Fresh data from Germany is pointing to a bumpy road ahead, and the spread of the more aggressive delta variant of the coronavirus is a growing risk, especially for the EU’s tourism-dependent south. Rising oil prices meanwhile threaten to boost inflation.

Green Finance | With little more than a week to go before the EU unveils its landmark green deal, the bloc has set out the steps for how it wants the financial sector to fund it. That means a crackdown on “greenwashing” and a new green-bond standard that will help govern debt issuance for sustainable projects. The question is whether the lofty ambitions can be met.

Jansa Jitters | A cold welcome for Slovenia’s EU presidency. Nationalist Premier Janez Jansa endured reprimands from lawmakers in Strasbourg on the rule of law, judicial independence and media freedom. They warned that the country’s antagonistic stance could hamper EU business — just as Brussels gears up to dole out billions of euros of stimulus money.

Forest Fight | A leaked EU plan to boost forest protection has turned a simmering scientific debate into a full-blown firestorm, pitting one of the bloc’s oldest industries against a perceived power grab by technology-driven regulators. While the strategy could be a boon for the environment — as well as the emerging climate-data industry — timber merchants wary of stronger restrictions have rallied to fight the proposal.

In Case You Missed It

Digital Tax | French Finance Minister Bruno Le Maire said his country could make a legal commitment to withdraw its tax on tech giants to help smooth the way to a global agreement on the issue. His comments come ahead of a G-20 meeting later this week, when finance ministers are expected to strike a deal on minimum corporate taxation.

Extreme Weather | Towns and villages above the Arctic Circle are experiencing the hottest weather in decades, with scientists able to detect the influence of climate change nearly in real time. Temperatures in Nikkaluokta, Sweden, reached 29.9 Celsius on Sunday, the hottest since 1950 when records began.

Border Force | Britain’s Border Force will be given powers to seize people smugglers at sea and send migrants who’ve crossed the English Channel back to France, in new legislation that puts Prime Minister Boris Johnson on a diplomatic collision course with the EU.

Chart of the Day

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Investor confidence in Germany’s economic recovery eased in July as supply bottlenecks weigh on manufacturing and spreading coronavirus variants threaten the revival in services. A ZEW gauge of expectations slipped to 63.3 from 79.8, the lowest since January and below all estimates in a Bloomberg survey.

Today’s Agenda (All times CET.)

  • 9 a.m. European Council President Michel and Commission President von der Leyen speak to lawmakers in Strasbourg about last month’s summit
  • 10:15 a.m. European lawmakers debate the rule of law in Hungary and Poland
  • 11 a.m. European Commission publishes updated economic forecasts
  • 2 p.m. Swedish parliament meets to vote on a new government
 
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