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Week Ahead (18 December)



Monday, 18 December – Final attempt under the Spanish Presidency to clinch a deal on the process of selecting host city for AMLA 

On 12 December, EU lawmakers and finance ministers reached a provisional agreement on the creation of the EU anti-money laundering Authority (AMLA). Nevertheless, the decision on its host city has been deferred until next year, as the power struggle between Council and Parliament on the exact selection process continues.  

  

On 13 November the European Commission confirmed the final list of the 9 bidding cities (Brussels, Dublin, Frankfurt, Madrid, Paris, Riga, Rome, Vienna, and Vilnius). However, a significant dispute exists between EU capitals and MEPs regarding the extent of the Parliament’s involvement in selecting the winning city. 

 

The Parliament and the Council have not yet managed to reach an agreement on the exact selection process for the winning bid. Hence, the Spanish Presidency will host one more round of trilogue negotiations today, aiming to clinch a last-minute breakthrough. Otherwise, the incoming Belgian EU presidency will have to complete the process before Parliament dissolves in April. Failure to designate a host for AMLA by April could leave the bloc without a crucial tool to address money laundering risks. 

 

W/C Monday, 18 December - UK government to resume talks with Northern Ireland’s parties to restore Stormont Assembly, following latest proposal to break 22-month gridlock 

Last Monday, the UK government proposed a financial package of £2.5 billion for Northern Ireland, contingent upon the revival of the Stormont Executive. 

 

Northern Ireland has been without an assembly since the elections of May 2022. The original deadline for the formation of a local government through a power-sharing agreement expired in November 2022, due to the unionist DUP’s opposition to the Northern Ireland protocol. The DUP has repeatedly reiterated that to end its boycott of a power-sharing agreement, London would have to deal with the protocol ‘’once and for all’’.  

 

Last week’s proposal, presented by Northern Ireland Secretary Chris Heaton-Harris, aims to address the ongoing political deadlock, budgetary challenges, and strained public services in the region. The comprehensive financial assistance is aligned with the Windsor Framework and includes a new funding formula for public services and a lump sum intended to settle ongoing pay claims, particularly those triggering industrial action in critical sectors like education, health, and transportation.  

 

The DUP is now under increased pressure to reconsider its power-sharing boycott, which has left Stormont and the assembly in a state of paralysis. While DUP leader Jeffrey Donaldson initially welcomed the proposal as a "first step," he tempered expectations, indicating that further deliberations are necessary before any potential breakthrough. Originally anticipated to conclude within three days, the talks at Hillsborough Castle have been extended into this week. 

 

Monday, 18 December – Deadline for the European Commission to announce decision on the acquisition of Viessmann Climate Solutions by Carrier 

Today is the deadline for the European Commission to decide whether to allow the acquisition of Viessman Climate Solutions, the largest segment of Viessman group, by Carrier, a Florida-based original equipment manufacturer (OEM) specialising in air-conditioning and commercial refrigeration.  The €12 billion deal was announced in April with the two sides filing a notice of the proposed acquisition to the European Commission on 13 November. 

 

Germany-based Viessmann Climate Solutions is a key player in Europe's energy transformation, with a focus on heat pumps, solar PV, batteries, and services, constituting 70% of its operations. The completion of the acquisition which has been deemed ‘’a game-changing opportunity’’ by Carrier’s Chairman & CEO David Gitlin is now subject to the approval of the European Commission this week. Once finalised, the collaboration between Carrier and Viessmann Climate Solutions is anticipated to generate a combined revenue exceeding €15.5 billion. 

 

Wednesday, 20 December – Virtual meeting of EU finance ministers to take place in order to clinch deal on new EU fiscal rules 

A provisional compromise on the fiscal rules reform was reached earlier this month by finance ministers from Germany, France, Italy, and the Spanish EU presidency, aiming to accommodate a series of red lines of Berlin and the so-called ‘’frugal’’ member states of the European North, including deficit and debt safeguards and stricter debt reduction targets. As a result, the Spanish presidency announced a virtual meeting of EU finance ministers on Wednesday in order to finalise the agreement before the end of the year. 

 

The Stability and Growth Pact (SGP), which has been suspended since the onset of Covid in 2020, set a government debt limit of 60% of GDP. However, the war in Ukraine has dimmed the prospects of a rapid post-pandemic economic recovery in Europe, forcing the Commission to reassess the reform of the SGP.  As a result, in April, the Commission unveiled its proposal for a reform of the current fiscal rules. President Macron has argued that the existing fiscal rules are preventing urgently needed public investments that would fuel recovery, especially for the green and digital transformation. However, the German finance minister of the liberal FDP party has been supportive of a return to the pre-pandemic status quo. In other words, there are two opposing views on fiscal reform, one prioritising the reduction of sovereign debt, expressed by Germany and the so-called ‘’frugal states’’, such as Netherlands, Austria, and Sweden, and one emphasising growth, expressed by France, Belgium, Italy and members of the European south. 

 

However, in the latest turn of events last week, Italy, the bloc’s third largest economy and second most indebted country, has hinted that it could oppose a final deal under the provisionally agreed terms. Speaking before Italy’s Upper House last Wednesday, Italian Prime Minister Meloni warned that she could not exclude the possibility of vetoing the reform of the EU fiscal rules. Notably, former Italian Prime Minister Mario Monti, known for his pro-EU credentials, has called on the government to veto the draft reform, deeming the new fiscal rules "unacceptable" for Italy and Europe.   

 

It remains to be seen this week whether Meloni’s recent statement was a tactical move to secure concessions or a genuine signal to block the deal. 

 

Friday, 22 December – Deadline for the European Commission to announce decision on the £4.46 billion acquisition of Dechra Pharmaceuticals by Swedish private equity group 

By the end of this week, the EU antitrust regulator will decide whether to greenlight the Swedish private equity group EQT's £4.46 billion takeover bid for British veterinary pharmaceuticals maker Dechra Pharmaceuticals.  

 

EQT proposed the cash acquisition in June, considered one of the largest deals in the UK private equity sector in 2023. Subsequently, on 17 November the two sides filed a notice of the proposed deal with the European Commission, pursuing a simplified procedure. 

 

The European Commission can either clear the deal with or without remedies after its preliminary review or open a four-month investigation if substantial competition concerns are identified during the completion of the preliminary assessment on Friday. 

 

 

  

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