Welcome to the Brussels Edition, Bloomberg’s daily briefing on what matters most in the heart of the European Union.
Tomorrow’s election in Northern Ireland could set off a profound shift in the EU’s post-Brexit fight with the U.K. Negotiations have been at a standstill as Brussels and London await the outcome of the vote. The long tussle over how to keep Northern Ireland’s trade flowing with Ireland after Brexit has played into Sinn Fein’s message and helped boost nationalist sentiment. Sinn Fein, whose ultimate goal is a united Ireland, led the pro-British Democratic Unionist Party in final polls ahead of the ballot for an assembly that gets to vote on key parts of the Northern Ireland Protocol issue in 2024. And having a Sinn Fein first minister would be a clear sign that Belfast is not following London’s preferred path.
Shifting Goals | Nearly 10 weeks into the war and with its troops making only marginal gains in Ukraine’s east, Russia is focused on cementing both military and political control over the territory it has taken so far. Though far short of President Vladimir Putin’s original aims of installing a pro-Russian regime in most of Ukraine, the latest efforts pose a new obstacle for already-stalled peace talks. Read our rolling Ukraine coverage here.
German Backing | Olaf Scholz is considering sending seven rapid-fire artillery systems to Ukraine in another step to shore up its efforts to fend off Russian forces, we’re told. The German chancellor also pledged his support for a potential bid from Sweden and Finland to join NATO and sought to calm fears about the security risk on the path to membership.
Refugee Appeal | Since Warsaw started taking in Ukrainian refugees, the Polish capital’s population has increased by more than 15% and it now hosts around 300,000. The city is reaching its capacity, Warsaw Mayor Rafał Trzaskowski told us, urging the EU and the UN to initiate an immediate and coordinated strategy across Europe and saying the city won’t be able to deal with a potential second wave.
Inflation Overtakes | For the first time in over a decade, traders are anticipating faster inflation in Europe than the U.S. as the war in Ukraine drives up energy prices. It makes for an uncomfortable situation for the ECB, which has to balance the need to curb inflation with threats to economic growth. More economists are talking about a possible recession.
July Hike | Isabel Schnabel, considered one of the ECB Executive Board’s most influential members, said it’s time for policy makers to take action to tame inflation, and that an interest-rate hike might come as early as July. “It’s not enough to talk now — we have to act,” Schnabel said in an interview with German newspaper Handelsblatt published late yesterday.
In Case You Missed It
EU Overhaul | Italian Prime Minister Mario Draghi called for a swift rethink of EU mechanisms — and an end to member states’ vetoes over foreign policy — to help the bloc address unprecedented challenges. In a speech to the European Parliament, he dubbed his vision a form of “pragmatic federalism” that would include joint decision-making for sectors including the economy, energy, defense and foreign policy.
Wine Barometer | As the only Moldovan company listed on a foreign stock exchange, Purcari Wineries is a barometer for risk sentiment in the small nation situated precariously on the edge of Russia’s war against Ukraine. Recent bombings in the pro-Russia breakaway territory of Transnistria have triggered further turmoil for the vineyard that’s been housing Ukrainian refugees.
Megayacht Dispute | Fiji’s High Court gave the green light for U.S. and local authorities to seize the $325 million megayacht Amadea, setting the stage for a legal showdown to determine whether the owner is Russian billionaire Suleiman Kerimov as the U.S. claims. The case highlights the difficulties officials face in seizing and selling such vessels.
Health Data | EU patients will be allowed to move their health-care data across the bloc, part of a proposal unveiled by the commission. The European Health Data Space aims to get citizens access to their e-prescriptions and health records online. Starting by 2025, the system will be connected across all 27 member states, meaning people can travel around the bloc and still access their health information.
Rules Shelved | Germany’s financial regulator has shelved planned rules for classifying investment funds as sustainable, after Russia’s invasion of Ukraine sent shockwaves through global energy markets. The move by BaFin comes as governments seek to counter threats to energy security amid looming restrictions on oil and gas trade with Russia.
Chart of the Day
German joblessness dropped at the slowest pace in a year, pointing to labor-market vulnerabilities as the war in Ukraine and surging inflation weigh on Europe’s largest economy. Unemployment fell by 13,000 in April, keeping the jobless rate at the pre-pandemic level of 5%. The outlook for Germany’s economy has darkened in recent weeks as the country’s key manufacturing sector suffers from input shortages and record prices pressures resulting from the war.
All times CET.
- 8.30 a.m. Commission President Ursula von der Leyen takes part in European Parliament debate on Russian invasion of Ukraine
- 9:15 a.m. German Economy Minister Robert Habeck speaks at 21st International Conference on Competition in Berlin
- 9:30 a.m. Council President Charles Michel holds news conference in Moldova with President Maia Sandu
- 11:30 a.m. German Chancellor Olaf Scholz, Habeck, Finance Minister Christian Lindner news conference after two-day cabinet retreat near Berlin
- 3 p.m. European Parliament debates use of Pegasus software by member states
- 4 p.m. Scholz, Kosovo Premier Albin Kurti news conference after talks in Berlin
- 6:30 p.m. Scholz, Serbia President Aleksandar Vucic news conference after talks in Berlin
- EU foreign policy chief Josep Borrell visits Panama, gives news conference
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