Brussels Edition: Showdown at Westminster

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The second day of one of the most explosive weeks in modern British political history will shape the future of Boris Johnson’s fledgling government and likely dictate when and how the U.K. leaves the European Union. The House of Commons returns, with opposition and rebel Conservative MPs tabling a bill to force the prime minister to seek a Brexit delay until Jan. 31 unless he can get a deal by mid-October. In a dramatic ultimatum, Johnson said he would rather risk losing office than have his negotiations with the EU undermined. He vowed to try and trigger a snap election on Oct. 14 if he loses tonight’s crunch vote in Parliament.

What’s Happening

Italian Poll | About 50,000 Five Star activists vote online today on the unlikely tie-up with the Democrats — the latest hurdle for Giuseppe Conte to overcome in order to remain Italy’s prime minister. For all the fanfare about direct democracy, the party leadership usually wins these votes, yet this outcome might be more uncertain given Five Star’s misgivings toward its new partner.

Transatlantic Reset | U.S foreign policy chief Michael Pompeo continues meetings in Brussels with the EU’s incoming leadership, hoping to put transatlantic ties on a fresh footing following a turbulent two years. But “turning the page” and engineering a “reset” is easier said than done, as the two sides are still oceans apart in many key areas — from climate to trade to Middle-East policy.

Tax Talks | French Finance Minister Bruno Le Maire will travel to the U.S. today for talks with counterpart Steve Mnuchin on French plans to tax digital companies. The two countries reached a tentative deal last week on the sidelines of the G-7, following a feud over France’s plan for a levy. That averted — for now — retaliatory taxes on French wine threatened by Donald Trump.

ECB Stimulus | Bank of France Governor Francois Villeroy de Galhau has yet to say whether he thinks the bloc needs a major stimulus package, including an interest-rate cut and the restart of quantitative easing. His silence is becoming conspicuous after a week which exposed divisions among European Central Bank officials over the way forward.

In Case You Missed It

Populist Threat | A day after narrow victories in regional polls, the two parties in Angela Merkel’s coalition realized once again that they need to do far more to stem the rise of populism in Germany. While the result staved off a deeper political crisis, many in the ruling alliance say the elections signal a change in policy is required to more closely target the underlying causes of the rise of the far-right AfD party.

Off the Hook | A Prague prosecutor decided against charging Czech Prime Minister Andrej Babis in a fraud case involving an EU subsidy to one of his former companies, a major step toward clearing the biggest political risk for the billionaire leader. The legal complications have been the biggest challenge for the second-richest Czech, who rose to power attacking the establishment.

Protest Balloon | A giant Trump Baby balloon hovered above Copenhagen’s tourist hotspot yesterday as part of a series of demonstrations planned for the U.S. president’s now canceled trip. Trump’s first visit to Denmark, a founding member of NATO and a U.S. ally in the Iraq war, was scrapped after his offer to buy Greenland was met first with bemusement, then flat refusal.

Bug’s Life | Rapeseed, easily spotted with its bright yellow flowers, is used for meal and oil in products ranging from biofuel to mayonnaise. Yet even as prices surge, EU farmers are debating whether to keep growing the difficult crop due to the increased threat of insect attack. Growers have struggled to control pests since a ban on neonicotinoids, insecticides linked to harming bees.

Chart of the Day

Unemployment might be at its lowest in over a decade, but euro-area companies don’t expect to be hiring in the next few months as a global downturn looms. Intentions to employ more staff are sliding across sectors, according to the latest European Commission data. Industry and retail are particularly downbeat.

Today’s Agenda

All times CET.

11 a.m. EU officials meet behind closed doors in Brussels to discuss no-deal Brexit preparations

3 p.m. French Finance Minister Le Maire meets U.S. counterpart Mnuchin in Washington

German Chancellor Merkel hosts ECB President Draghi in Berlin

NATO Secretary General Stoltenberg meets U.S. Secretary of State Pompeo in Brussels

EU Commission President Juncker addresses annual EU Ambassadors Conference in Brussels

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–With assistance from Nikos Chrysoloras and Alessandro Speciale.

To contact the authors of this story: Viktoria Dendrinou in Brussels at vdendrinou@bloomberg.netIan Wishart in Brussels at iwishart@bloomberg.net

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

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