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On this second day of US president Joe Biden’s Brussels itinerary, he will hold a 90-minute summit with European Council president Charles Michel (who will focus on Covid-19 and foreign affairs) and European Commission president Ursula von der Leyen (climate and trade). We will look at what can be expected out of the meeting — notably an increasingly likely deal on the more than decade-long Airbus-Boeing dispute — and what irritants remain.

We will also explore a consequence of the EU’s imminent multibillion euro borrowing scheme: boosting employment, or at least calls for more hiring, at the European parliament.

Among the other things to watch for today, EU health ministers meet in Luxembourg to discuss ways of boosting access to medicines across the bloc. This will include provisions for smaller member states as well as ways of enhancing the role of the union’s medicines agency in preparing for the next crisis.

French wine, Harley-Davidson, ornamental fish . . . the products caught up in EU-US trade disputes over the past few years give a kaleidoscopic glimpse into the world’s biggest bilateral economic relationship. But to what extent can frayed transatlantic ties be mended under Joe Biden?

The US president continues his European tour today with the first EU-US summit of his presidency. Trade policy will be front and centre in talks with Ursula von der Leyen and Charles Michel in Brussels, writes EU correspondent Jim Brunsden.

Diplomats and officials confirmed last night that a deal to end a 17-year battle over aircraft subsidies was in sight. If agreed later today, it would be a real, tangible achievement. Contacts in the run-up to the summit have been intense: EU trade commissioner Valdis Dombrovskis met US trade representative Katherine Tai at least three times on Monday and also held talks in the evening with commerce secretary Gina Raimondo.

Bringing an end to the tit-for-tat subsidy complaints over Airbus and Boeing would do more than remove a long-running irritant from the trading relationship. It would also embody the sides’ desire to turn their fire away from each other and focus on the challenge posed by China.

EU officials and diplomats said last night that, barring last minute obstacles such as objections from national governments, a “multiyear” deal was at hand.

Sticking points had included wrangling over how much money EU governments will need to recoup from Airbus. Another item of contention was an EU push for US defence contracts and R&D funds to be covered by the subsidy rules.

The American Chamber of Commerce to the EU yesterday flagged an Airbus-Boeing deal as potential “low hanging fruit” for boosting the transatlantic relationship (trade officials who have slogged through the gnarly dispute for more than a decade might disagree with the designation).

Other items on companies’ wish lists included eliminating tariffs linked to a Donald Trump-era dispute over steel and aluminium. The business group also wants to establish a new framework for data transfers, after the European Court of Justice last year struck down a transatlantic agreement known as Privacy Shield.

But eliminating trade annoyances, even big ones such as the Airbus-Boeing dispute, is not the same thing as a shared agenda. Nor will it exclude new rows — for example over a planned EU digital tax (as we wrote about here) or over the EU’s queasiness about the Biden administration’s stated support for patent waivers on Covid-19 vaccines.

It is worth remembering that there was a time, in the distant past of the Obama presidency, when the EU and US were seriously attempting to pull off a huge bilateral trade deal. Such ideas are the stuff of sheer fantasy in today’s reshaped political landscape. Instead, there are more modest plans to boost co-operation, notably by setting up a Trade and Technology Council to improve co-ordination on rules and standards for emerging areas such as artificial intelligence and quantum computing.

Brussels is also eager to breathe life into the process of reforming the World Trade Organization. This is a longstanding goal that the EU (by definition a deep believer in multilateral institutions) sees as one of the prime levers available to address worries about China’s model of state-backed capitalism.

But all this raises the question of whether the Biden administration believes that disagreements with China can ultimately be tackled through rules-based institutions.

The Trump administration placed little to no faith in such notions. It turned to massive punitive tariffs on Chinese goods to try to wring meaningful concessions from Beijing on issues such as forced technology transfers. The ability to meaningfully co-ordinate policy with the EU on how to handle Beijing will be one test of where exactly Biden stands.

Line chart of Yield (%) showing Greek 5-year bond yield turns negative for first time

Greece’s five-year bond yield fell below zero for the first time on Monday, meaning that investors are in effect prepared to pay Athens to borrow for up to half a decade, a stunning comeback since the country was locked out of bond markets and needed a series of bailouts during the region’s debt crisis. Italy is now the only eurozone member with positive five-year borrowing costs — albeit only marginally above zero per cent. (Read more here)

The European Commission will begin formally approving its first batch of national Covid-19 recovery plans in the coming days — while also firing the starting gun on its mass borrowing exercise, write Mehreen Khan and Sam Fleming in Brussels.

The launch of the much anticipated Recovery and Resilience Fund will help finance the economic revival of the EU’s stricken member states well over a year after the onset of the pandemic. It could also provide a shot in the arm for one of its main institutions: the European parliament.

The parliament is making a bid for more than 140 additional staff to join its ranks next year, citing additional workload — including the policing of RRF spending — as the justification for the extra manpower. The parliament’s staffing needs are part of talks about how to divvy up the EU’s annual budget for 2022.

Damian Boeselager, the Green MEP in charge of talks on the annual budget, said the parliament’s request for 142 additional personnel reflected chronic shortages in important areas of its secretariat, including its budgetary control committee. “We have around 10 people in the staff controlling budgetary spending. This is far less than most national parliaments,” he said.

EP officials said the extra staff were needed in part because of the novelty of the recovery fund and the recently launched Conference on the Future of Europe. More parliamentary resources are also required because the commission has amped up proposed legislation in areas such as environment policy.

Still, the 142 figure (66 of whom would go to parliament staff and 76 to the political groups) has raised eyebrows among member states. For one, diplomats noted that the parliament does not have a strong say over how the recovery money is spent. MEPs have an advisory, non-binding role in scrutinising the plans.

The requested boost also exceeded the extra staffing needs of two EU institutions that will play more central roles in the RRF: the EU Council and the commission itself. Meanwhile, the newly formed European Public Prosecutor’s Office has yet to be granted approval to hire the 50 extra staff it requested to be able to investigate fraud and corruption with EU money, including the RRF (as we noted here).

None of that has deterred the parliament, however. “If we care about parliamentary scrutiny, and properly following up on the spending of EU money, then we need more staff in committee secretariat,” said Boeselager.

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