Week Ahead (15 June)

Wednesday, 17 June – CJEU to hear landmark case on whether companies can seek reimbursement from executives for cartel fines 

On Wednesday, the Court of Justice of the European Union (CJEU) will hold a hearing in Zapp (C-347/25), a preliminary reference from Germany's Federal Court of Justice concerning whether companies fined for breaches of EU competition law may subsequently seek reimbursement from their own directors or managers for those penalties and related legal costs. 

The dispute stems from proceedings brought by German steel manufacturer Zapp against a former executive following a competition-law infringement. Even though at first glance the case formally concerns the interaction between German corporate law and EU competition rules, it raises broader questions regarding the objectives and effectiveness of the EU's antitrust enforcement framework. 

More specifically, at the centre of the referral lies a fundamental issue: whether allowing companies to pass on the financial consequences of cartel fines to individuals involved in the infringement reinforces or undermines the deterrent effect of competition sanctions. On the one hand, permitting such recourse actions could strengthen incentives for senior managers to ensure robust compliance programmes and exercise greater oversight over competition risks. On the other hand, competition fines are traditionally designed to sanction the undertaking itself, raising questions as to whether shifting liability to individuals could dilute the preventive function of public enforcement. 

The hearing therefore sits at the intersection of competition law, corporate governance and private liability. Although the underlying dispute originates in Germany, the Court's eventual ruling could have implications well beyond a single jurisdiction. A judgement endorsing recourse claims may encourage companies across the EU to pursue former executives following cartel investigations, while a more restrictive approach would reaffirm the principle that undertakings must ultimately bear responsibility for infringements committed in their name. 

Hence, the case has the potential to shape how costs of antitrust enforcement are allocated between companies and their management. 

Thursday, 18 June - Friday, 19 June – EU leaders to tackle competitiveness, defence and the bloc’s next long-term budget in June European Council 

EU heads of state and government will gather in Brussels this week for the June European Council, with discussions expected to focus heavily on competitiveness, defence readiness as well as the negotiations on the EU’s next Multiannual Financial Framework (MFF) for 2028–2034. 

The summit comes at a crucial stage in the budget negotiations. Following the presentation of Cyprus’ first detailed negotiating framework, leaders are expected to provide political guidance ahead of the Irish Presidency, which has identified the MFF as one of its four flagship priorities and aims to secure a final agreement before the end of 2026. 

The debate reflects broader shifts in EU priorities. The European Commission’s proposal seeks to redirect resources towards competitiveness, innovation, defence and economic security, building on recommendations contained in the 2024 Draghi Report. At the same time, proposed changes to traditional spending areas, particularly agriculture and cohesion policy, have reignited familiar divisions between member states. 

Recent discussions under the Cypriot Presidency illustrate the scale of the challenge. Nicosia’s compromise proposal last Wednesday introduced modest overall reductions while largely shielding Common Agricultural Policy (CAP) funding and regional spending from significant cuts. However, this approach has drawn criticism from net contributors such as Germany, the Netherlands and Austria, which argue that the proposal remains insufficiently ambitious in containing expenditure. By contrast, several Southern and Eastern member states like Spain, Italy and Greece have broadly welcomed efforts to preserve cohesion and agricultural funding. 

Beyond the budget, leaders are also expected to assess progress on the EU’s competitiveness agenda under the "One Europe, One Market" initiative, including efforts to deepen the Single Market and address structural weaknesses affecting Europe's long-term growth prospects. 

Geopolitical developments will feature prominently throughout the meeting. President Zelenskyy is expected to address leaders as discussions continue on military support for Ukraine, additional pressure on Russia and the next steps in the enlargement process, including the opening of accession chapters with Ukraine and Moldova. The discussions will also take place amid renewed calls from Kyiv for additional support. Ukrainian officials are reportedly planning to request next week a further $20 billion in assistance from allies to capitalise on what they describe as a temporary battlefield advantage over Russia. Recent security incidents along the EU's eastern flank, including the crash of a Russian drone carrying explosives into a residential building in Romania, are also expected to reinforce calls for faster progress on defence capabilities and preparedness. 

Thursday, 18 June – High-stakes Makerfield by-election could reshape Labour’s leadership debate and Britain’s political trajectory 

On Thursday, voters in Makerfield will head to the polls in a by-election that has assumed significance far beyond its status as a contest for a single House of Commons seat. The vote is increasingly being viewed in Westminster as a potential turning point for the future of the Labour government and, by extension, the likely next occupant of Downing Street. 

The by-election was triggered following the resignation of Labour MP Josh Simons and has quickly evolved into a highly symbolic contest between Labour and Nigel Farage's insurgent Reform UK. However, the broader political focus centres on Labour candidate Andy Burnham, the long-serving Mayor of Greater Manchester, whose return to Westminster would provide him with a clear pathway to challenge Keir Starmer for the party leadership. 

The contest comes at a particularly delicate moment for Starmer. Following Labour's heavy losses in last month's local elections, internal discontent within the parliamentary party has intensified, with growing concerns over the government's lack of strategic direction, sluggish economic performance and inability to halt Reform UK's advance across traditional Labour strongholds. Although Starmer continues to insist he will lead Labour into the next general election, speculation over his successor has become increasingly difficult to contain. 

Burnham enters the race with considerable political capital. Since becoming Mayor of Greater Manchester in 2017, he has cultivated an image as a pragmatic and locally focused leader, championing initiatives such as the Bee Network public transport system while positioning himself as an advocate for the interests of northern England. Supporters argue that his electoral appeal extends beyond Labour's traditional base and could help reconnect the party with voters who have drifted toward Reform UK. 

Nevertheless, the outcome remains uncertain. Makerfield has elected Labour representatives for more than a century, yet Reform UK performed strongly in the area during the recent local elections, winning the overwhelming majority of council seats contested. Immigration is expected to feature prominently during the campaign, alongside persistent concerns over the cost of living, public services, crime and economic stagnation. 

The fragmented nature of the opposition could prove decisive. Reform candidate Rob Kenyon is seeking to translate the party's local-election momentum into parliamentary representation, while the smaller Restore Britain party risks dividing parts of the right-wing vote. On the centre-left, the Greens have adopted a relatively low-profile campaign amid indications that Burnham's support for electoral reform and proportional representation may encourage greater cooperation between progressive parties in future electoral contests. 

The implications of the result extend well beyond Makerfield itself. A Burnham victory would significantly strengthen pressure on Starmer to outline a timetable for departure and could accelerate a leadership transition later this year, potentially ahead of Labour's annual conference in September.  Conversely, a Burnham defeat would not necessarily secure Starmer's position. Rather, it could deepen Labour's leadership dilemma by removing the party's most obvious successor while emboldening alternative contenders such as Angela Rayner, Ed Miliband and Wes Streeting.  

Thursday, 18 June – Bank of England expected to keep rates unchanged in a balancing act amid weakening growth and high inflation 

Also on Thursday, the Bank of England's Monetary Policy Committee (MPC) is widely expected to leave interest rates unchanged at 3.75%, despite mounting inflationary pressures linked to the ongoing Middle East conflict and the recent shift toward tighter monetary policy by several major central banks. 

The decision comes just one week after the European Central Bank decided to raise rates in response to the inflationary consequences of the conflict, increasing its deposit rate by 25 basis points to 2.25%. By contrast, the BoE is expected to maintain its current wait-and-see approach as policymakers attempt to navigate an increasingly stagflationary environment characterised by rising prices alongside weakening economic momentum. 

Recent UK economic data have reinforced the dilemma facing the MPC. Figures released by the Office for National Statistics (ONS) last Friday showed that the economy contracted modestly in April, suggesting that the fallout from the prolonged disruption to global energy markets and supply chains is beginning to weigh on activity.  

Despite the deteriorating growth outlook, inflation risks remain elevated. The effective closure of the Strait of Hormuz continues to sustain higher energy prices, raising concerns that second-round effects could increasingly feed into transport, food and other consumer prices over the coming months. However, unlike the ECB, the BoE has so far signalled greater caution about tightening policy prematurely in response to what remains, at least initially, an externally driven supply shock.  

Nevertheless, market expectations have shifted noticeably in recent weeks. Investors are increasingly pricing in a rate increase later this year, with September emerging as the most likely window for action. Notably, the BoE's decision at its previous meeting to abandon its traditional central forecast in favour of alternative scenarios highlighted the unusually high degree of uncertainty surrounding the outlook. 

Overall, the most likely outcome this week remains an unchanged policy stance. However, the accompanying statement and voting split will be closely scrutinised for any indication that the MPC is moving closer to joining the growing number of developed-market central banks tightening policy in response to persistent war-related inflation pressures.