Brussels Edition: Europe’s Gas Alternatives

(Bloomberg) -- Welcome to the Brussels Edition, Bloomberg's daily briefing on what matters most in the heart of the European Union.

Less than a year after the EU and the U.S. pledged to strengthen their trade relationship and boost strategic energy cooperation, the two sides hold their first energy forum in Brussels. Europe's shrinking production of natural gas has made it an enticing target for exporters but it's also left the bloc facing hard choices at a time of growing political uncertainty. Today's discussions will focus on LNG exports to the EU, as it seeks to diversify gas supplies and reduce dependence on Russia.

What's Happening

Budget Talks | A contentious euro-area budget will dominate talks by the EU's finance ministry officials today, as they seek to find common ground on what it will be used for and how it will be funded. With a June deadline to reach a final deal looming, it remains unclear how ambitious the budget could be.

Greeks Paying Early | Meanwhile, Greece will ask euro-area officials today for their blessing to repay some more expensive IMF loans ahead of schedule. While the move would reduce the country's financing costs, it still needs the approval of euro-zone countries, some of which have been reluctant to reduce the IMF's involvement in the post-bailout regime.

Say Cheese | Queso Manchego is to Spain what Parmigiano Reggiano is to Italy or Feta to the Greeks. They're tasty, world famous, and an EU right, called designation of origin, guarantees that they come from these specific countries. EU court judges will today shed light on the exact scope of such rights in a binding opinion.

Libor Fine | An adviser to the EU's top court will give his view today on whether a lower court's decision to annul a 15 million-euro fine against ICAP for helping banks manipulate yen Libor derivatives was correct. The European Commission is challenging the decision to reverse the sanction, arguing it was a serious error with potentially “detrimental” effects.

In Case You Missed It

Spanish Pledge | Spain's government will raise taxes by more than 20 billion euros during the next several years if Socialist Pedro Sanchez secures support in Parliament to serve a second term. Sanchez sent his four-year economic plan to Brussels late Tuesday night. The tax increase would be used to narrow Spain's budget deficit from the projected 2 percent in 2019 to 1.1 percent in 2020.

Brexit Breakthrough | Theresa May and her arch political rival Jeremy Corbyn appear to be edging closer to a Brexit deal after a month of talks that seemed to be going nowhere. Both the U.K. government and the main opposition Labour Party talked up the prospects for a compromise, while hinting that this could include a customs union with the EU, and will hold more negotiations in the days ahead.

Shop-Free Sundays | Italy's ruling League and Five Star Movement have clashed on a raft of issues but there's one thing they agree on: shuttering stores on Sundays. While they differ on the details, they both argue planned legislation would reinforce long-standing traditions such as Sunday lunch at home, while giving retail workers a break and letting would-be shoppers go to Mass.

Trade Away | The EU's free trade accord with Canada overcame one more obstacle after the bloc's highest court dismissed Belgian concerns over the pact's dispute settlement process, saying it is in line with EU law. The binding opinion brings to an end a challenge by Belgium, which in the past threatened to torpedo the deal unless its concerns were addressed.

Chart of the Day

Europe's economy began 2019 with an unexpected growth spurt as Spain outperformed and Italy shook off a recession, easing pressure on the European Central Bank to add stimulus. The 0.4 percent increase in euro-region GDP during the first quarter was twice the pace at the end of last year and more than economists predicted.

Today's Agenda

All times CEST.

8 a.m. Informal meeting of EU competitiveness ministers in Bucharest
9:30 a.m. EU top court gives binding decision on scope of protection of EU designation of origin covering Spanish Manchego cheese
9:30 a.m. EU top court gives non-binding opinion in the European Commission's appeal of ICAP's court victory, in which it won the annulment of a 15 million-euro antitrust fine
EU trade chief Malmstrom participates in high-level panel at “The State of the Union” Conference organised by the European University Institute in Florence
First EU-US Energy Council B2B energy forum
Senior euro-area finance ministry officials meet in Brussels to discuss plans for budget instrument
Conservative Party faces big losses in U.K. local elections today. More than 8,000 local council seats are up for grabs in mainly rural parts of England.
Hutchison fights EU merger ban that helped halt a wave of telecom deals across Europe, EU court hears case on Thursday and Friday
Italy's President Matarella in Paris to mend relationship with France

--With assistance from Stephanie Bodoni and Ewa Krukowska.

To contact the editor responsible for this story: Zoe Schneeweiss at zschneeweiss@bloomberg.net, Iain Rogers