Week Ahead (18 May)

Monday, 18 May – Pressure intensifies on Sanchez after Socialists suffer historic defeat in Andalusia; PP moves towards likely Vox-backed government

Sunday’s Andalusia regional elections delivered a mixed but politically significant outcome for Spain’s centre-right Popular Party (PP), while dealing a major blow to Prime Minister Pedro Sanchez and the Socialist Party (PSOE) ahead of the 2027 general election cycle.

Although incumbent regional president Juanma Moreno and the PP comfortably finished first and retained control of Spain’s most populous autonomous community, the party narrowly fell short of maintaining the outright parliamentary majority it secured in 2022. With nearly all ballots counted, the PP was projected to win 53 seats in the 109-seat regional parliament, losing five seats compared to the previous election and missing the majority threshold by two seats.

The result means the PP will now likely require the support of the far-right Vox party in order to form a stable regional government, further reinforcing the growing pattern of PP–Vox cooperation already seen in other Spanish regions including Extremadura and Aragon. Vox itself modestly improved its representation, rising to 15 seats, and is expected to seek concessions in exchange for parliamentary backing, particularly on immigration and access to public services.

Politically, the outcome is particularly notable because Andalusia had increasingly been presented by moderate factions within the PP as a potential blueprint for the party’s national strategy ahead of the 2027 general election. Moreno has cultivated a relatively centrist image and had sought to demonstrate that the PP could govern large regions without relying on the far right. The loss of the party’s majority therefore partially weakens the argument that a more moderate strategy alone is sufficient to secure durable electoral dominance nationally.

At the same time, the election nevertheless confirms the continued territorial strength of the PP at a national level. The conservatives have now emerged as the largest force in four consecutive regional elections this year, following victories in Extremadura (December), Aragon (February) and Castilla y Leon (March).

For Sanchez and PSOE, however, this is a painful result. Andalusia was historically one of the Socialist Party’s strongest electoral bastions, with PSOE governing the region continuously for almost four decades before losing power in 2018. Sunday’s result marks the party’s worst-ever performance in the region, with PSOE falling further to 28 seats despite Sanchez heavily investing political capital in the campaign and selecting former deputy prime minister and finance minister Maria Jesus Montero as the Socialist candidate.

The broader political backdrop remains difficult for Sanchez. Corruption investigations involving figures close to the government and members of his political circle continue to weigh on the administration domestically, even as his more confrontational positioning toward Washington and Israel over the Middle East conflict in recent months has helped partially consolidate support within parts of the left-wing electorate.

Importantly, the Andalusia result also highlights the continuing fragmentation of the Spanish left. Even though PSOE underperformed again, parties positioned further to the left made gains, with Adelante Andalucia and Por Andalucia collectively increasing their representation.

Overall, while the election does not immediately threaten Sanchez’s government, it reinforces the increasingly fragmented nature of Spanish politics ahead of 2027. It also strengthens expectations that future governments at both regional and potentially national level may increasingly depend on formal or informal cooperation between mainstream conservatives and Vox, further distinguishing Spain from other European countries where centre-right parties continue to maintain stricter “cordon sanitaire” approaches toward the far right.

W/C Monday, 18 May – EU-US trade deal trilogues enter critical phase amid continued deadlock over safeguard clauses and growing fears of renewed US tariffs

Tomorrow, negotiators from the European Parliament, Council and Commission are set to hold another key trilogue round on the ratification of the July 2025 EU–US trade framework agreement.

The agreement originally aimed to de-escalate the trade tensions that followed President Trump’s return to office by establishing a baseline 15% US tariff ceiling on most EU exports, alongside tariff reductions on selected industrial goods and increased EU purchases of US energy products. However, the political and legal environment surrounding the agreement has since deteriorated considerably, particularly following the February 2026 US Supreme Court ruling invalidating large parts of the administration’s original “Liberation Day” tariffs imposed under emergency powers.

Although the White House rapidly moved to preserve tariff leverage through alternative legal mechanisms, including Section 122 and new Section 301 and Section 232 investigations, this uncertainty has complicated the EU ratification process and intensified demands within the European Parliament for stronger safeguard mechanisms capable of protecting the bloc from future unilateral tariff escalation.

The main unresolved issue heading into this week’s negotiations concerns the so-called “sunrise clause,” one of the Parliament’s key demands. MEPs, led primarily by Parliament trade committee chair Bernd Lange, have been pushing for implementation of the agreement to remain conditional on the US reducing tariffs on EU steel and aluminium exports and maintaining compliance with the broader framework commitments. In practice, the clause is intended to provide the EU with a mechanism to suspend or reverse tariff concessions if Washington reintroduces higher duties or deviates from the agreement.

Earlier this month, the Commission floated a compromise proposal aimed at softening the mechanism by integrating the “sunrise clause” into a broader suspension framework. Under this approach, the EU would retain the ability to suspend its tariff concessions on US industrial goods if Washington fails to reduce steel and aluminium tariffs within a specified timeframe. However, the proposal has so far failed to satisfy key Parliament negotiators. Lange publicly rejected the latest compromise as insufficient, warning that “elements that now are tariffed higher than 15% need to be reduced, otherwise we will restart tariffs.” The stakes are particularly high because the Trump administration has threatened to raise tariffs on imported vehicles to 25% by early July should implementation of the agreement fail to advance.

At the same time, the negotiations continue to expose deeper divisions within the EU itself. Germany and several export-oriented member states remain strongly supportive of preserving the agreement with minimal changes, while France and parts of the European Parliament, by contrast, continue to push for more robust defensive mechanisms reflecting broader concerns over the increasingly transactional nature of US trade policy. 

These tensions are unfolding against a wider backdrop of growing structural friction in EU–US economic relations. Beyond tariffs themselves, disputes over EU digital regulation, industrial policy and technological sovereignty have become increasingly intertwined with trade negotiations. US officials have repeatedly criticised enforcement of the Digital Markets Act (DMA) and Digital Services Act (DSA), while Washington’s ongoing Section 301 investigations into EU digital regulation continue to raise the possibility of future retaliatory measures targeting European exports. At a broader strategic level, Brussels remains heavily reliant on American cloud infrastructure providers, AI ecosystems and LNG supplies, limiting its room for manoeuvre in an increasingly confrontational and transactional transatlantic environment.

Should negotiators succeed in reaching a compromise this week, the agreement could move toward a plenary vote in the European Parliament by mid-June. However, failure to bridge the remaining gaps would significantly increase the risk of renewed tariff escalation over the summer, particularly in sensitive sectors such as automotive trade, steel and industrial goods.

Tuesday, 19 May – European Parliament to debate cybersecurity risks posed by frontier AI systems and growing scrutiny of Anthropic’s Mythos model

The European Parliament is set to hold a plenary debate on Tuesday on the cybersecurity and strategic implications of increasingly advanced AI systems capable of identifying and exploiting software vulnerabilities beyond human level, following mounting political concern in Brussels over frontier AI oversight and access.

According to Parliament officials, lawmakers will debate “EU cybersecurity and preparedness in view of advanced AI systems,” with both the European Commission and the Cypriot Presidency of the Council expected to participate in the discussion. The debate comes amid intensifying scrutiny of Anthropic’s controversial “Mythos” model and similar cyber-capable AI systems that have triggered growing anxiety among European regulators and national authorities in recent weeks.

Tensions escalated late in April after Anthropic disclosed that Mythos was capable of outperforming many human experts in identifying and exploiting cybersecurity vulnerabilities, while simultaneously limiting access primarily to a narrow group of trusted US-based organisations. The company’s refusal to grant broader access to European regulators and cybersecurity authorities has increasingly become a politically sensitive issue in Brussels, feeding concerns over Europe’s limited visibility into the governance and testing of frontier AI systems developed abroad.

The issue gained further attention earlier in May after Anthropic declined to participate in a hearing organised by the Parliament’s Internal Market Committee (IMCO) on the risks associated with frontier AI systems, citing scheduling constraints. The absence drew criticism from several lawmakers and reinforced calls for stronger EU-level oversight mechanisms. Officials from the European Commission and ENISA, the EU’s cybersecurity agency, nevertheless participated in the discussion.

Meanwhile, the broader debate has evolved following OpenAI’s recent decision to offer EU authorities access to “5.5 Cyber,” a specialised cyber-focused version of GPT-5.5 designed to identify software vulnerabilities. The move was positively received in Brussels and widely interpreted as a contrast with Anthropic’s more restrictive approach. Commission spokesperson Thomas Regnier welcomed OpenAI’s “transparency,” arguing that such cooperation could help the EU “monitor the deployment of this model” and “potentially address security concerns.”

The Mythos controversy is increasingly feeding into wider European debates around technological sovereignty, strategic dependencies and the practical limits of EU oversight over frontier AI systems. French AI company Mistral AI has also entered the debate, with chief executive Arthur Mensch recently warning French lawmakers that Europe cannot rely on foreign-controlled AI systems for sensitive defence and government applications.

Tuesday, 19 May – CJEU to rule on post-Brexit application of UK law implementing EU directives in Credit Agricole case

Tomorrow, the European Court of Justice (CJEU) is set to deliver its ruling in Case C-350/24, Credit Agricole Corporate & Investment Bank, an important Brexit-related preliminary reference concerning the continued application and interpretation of UK law transposing EU directives in disputes linked to facts arising before the end of the Brexit transition period.

The case originates from proceedings before the French courts involving HJ, an employee of Credit Agricole Corporate & Investment Bank who worked in the UK under a UK law-governed employment contract concluded in 2007. The dispute reportedly concerns employment rights linked to periods of sick leave and allegations relating to discrimination.

At the centre of the case lies a broader legal question regarding the interpretation of the EU–UK Withdrawal Agreement and the continued legal relevance of EU-derived UK legislation after Brexit. More specifically, the French Cour de cassation asked whether courts within the EU remain required to interpret UK law implementing EU directives in conformity with EU law where the underlying facts occurred before the end of the transition period, even if the judicial decision itself is delivered afterwards. The case also concerns the interpretation of the Equal Treatment Directive (2006/54/EC), particularly rules governing the burden of proof in sex discrimination disputes.

Importantly, in her Opinion delivered last September, Advocate General Juliane Kokott broadly sided with maintaining the continued interpretative relevance of EU law in such “legacy” situations. She argued that UK law transposing EU directives must continue to be interpreted consistently with EU law for situations established before the end of the transition period. The Opinion further stated that courts should continue to follow pre-transition CJEU case law while also taking post-transition judgements into consideration where relevant. Although Advocate General opinions are not legally binding, the Court frequently follows or broadly aligns with their reasoning, meaning Kokott’s Opinion is widely viewed as a strong indicator of the likely direction of the final judgement.

Overall, even though at first glance the case remains legally technical and relatively narrow in scope, the ruling is expected to clarify an important aspect of the Withdrawal Agreement’s long-term legal effects and could carry broader implications for cross-border employment disputes, contractual rights and legal certainty in post-Brexit EU–UK relations.