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Week Ahead (15 November)


W/C Monday, 15 November – Brexit negotiations to continue amid protocol tensions

Post-Brexit negotiations will continue this week between representatives of the EU, UK and Ireland as tensions around the Northern Ireland protocol remain unresolved. Commission Vice-President Maroš Šefčovič will meet with UK Brexit Minister David Frost today to assess whether any progress has been made by the two sides on the protocol. Irish Minister for Foreign Affairs Simon Coveney is set to meet with Šefčovič on Tuesday while Coveney has also said he is hopeful of meeting with Frost later in the week. 

Frost told the House of Lords last week that the UK would be left with no choice but to trigger Article 16 if talks with the EU failed but he said that he would continue negotiations for a few weeks. Concerns have been growing that the UK is preparing to trigger Article 16, but Irish Government sources have said that they believe the UK is “pulling back for now” on this option. However, the UK is insisting that the protocol needs more fundamental changes, including the removal of the European Court of Justice from its role in settling disputes about the EU-UK post-Brexit agreement. In response, EU officials have maintained that Northern Ireland cannot retain access to the single market without the ECJ having jurisdiction to settle related disputes. 

W/C Monday, 15 November - German government-elect preparing new rules to stem latest Covid-19 wave

The SPD, Greens and FDP have proposed legislation to tighten Germany's existing covid mitigation regulations, with the German parliament expected to vote the proposals into law this week.  The coalition government-in-waiting moved to introduce new rules after more than 50,000 cases were reporting in the country on Thursday, a record high daily figure. 

Katrin Göring-Eckardt, the parliamentary leader of the Greens, said last week that she was in favour of requiring people to be vaccinated or to prove their recovery from Covid in order to access restaurants and shopping facilities, as well as launching a campaign to encourage vaccine uptake.  Germany's vaccination rate is 137.0 per 100 citizens as of 10 November – significantly below similarly sized EU countries such as France, Spain and Italy.   

Monday, 15 November - Christine Lagarde to appear before ECON committee

The President of the European Central Bank, Christine Lagarde, will appear before the Economic and Monetary Affairs Committee of the European Parliament on Monday for the last in a series of monetary dialogues held this year.  Among the topics for debate will be the ECB's revised inflation target and possible improvements to the ECB's accountability framework.   

In July the ECB changed its long-standing inflation target from "below, but close to, 2%" to a 2% medium-term target.  The decision was made as part of an 18-month long strategy review, with the central bank describing the 2% target as “symmetric”, meaning that negative and positive changes to the inflation target are equally undesirable. Since July inflation has risen to a 13-year high, prompting expectations from some quarters that the ECB would raise its interest rates before the end of the year.  

  

Tuesday, 16 November - Inflation data for October to be released

Eurostat will release its latest data on inflation on Tuesday, showing price growth in the Eurozone through October.  Flash results from late October suggest that inflation has hit a rate of 4.1%, up from 3.4% in September and ahead of the expected figure of 3.7%, with increases recorded in every member state.  As noted above, this is the highest rate of inflation recorded since July 2008.   

The rise was prompted for the most part by higher energy prices, tax increases and continuing supply chain bottlenecks which have been blamed for a slowdown in industrial production.   Eurozone energy prices alone were up 23% compared to the same period last year, while services grew by 2.1%.  Excluding volatile components such as energy, food, alcohol and tobacco core inflation rates stood at 2.1% during the month, marginally above the ECB's target of 2%.

Wednesday, 17 November - European Commission expected to present competition policy reform proposals

The European Commission is expected to present its proposals for wide ranging reform of competition rules on Wednesday. With the Commission intent on steering Europe towards digital and green transitions, it was felt that a review of competition policies to ensure they work to facilitate these dual aims was warranted. The review is expected to address the tension between the aims of some within the Commission who want to open up markets to small and medium sized enterprises by introducing strong rules governing all companies regardless of size with the aims of others who want to promote the idea of "European champions" capable of competing on global markets.

Among the items under review are competition rules which are due to expire at the end of 2021, for example state aid rules for climate, energy and environment (the CEEAG rules) and rules governing Important Projects of Common European Interest. The vertical, horizontal and general block exemptions will also be considered, alongside definitions of state aid and rules on its use for company restructurings.

Splits between member states and the Commission on the policy review are already becoming apparent. A position paper drafted by ministers and competition regulators from Denmark, Finland, the Netherlands, Ireland, Romania and Sweden which leaked last week warned that wide-ranging changes to competition rules "could easily lead to negative effects on competition, markets and growth in the single market".

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