Week Ahead (19 August)

W/C, Monday 19 August – Ursula von der Leyen to interview prospective Commissioners; Member States heretofore ignoring requests for gender parity  

This week, European Commission President Ursula Von der Leyen will interview some of the candidates put forward by EU Member States to join the 2024-2029 Commission.   

Certain portfolios may be reorganised to reflect the changed priorities of the next Commission, which will be more protectionist than previous iterations.  There is some suggestion that housing, defence and the Mediterranean could have their own specific portfolios this term.  Another suggestion is that a new “super” portfolio will be created which would combine the traditional competition policy portfolio with a European competitiveness portfolio.  This would be highly controversial, particularly among Northern Member States that have asked the Commission to move away from the interventionist approach brought in since Covid and Russia’s invasion of Ukraine.    

In any case, Von der Leyen has asked EU Member States to submit their nominees to the next Commission by 30 August.  She has asked Member States to submit one male and one female candidate – however, of the 17 EU capitals that have named their Commissioner picks so far, none have done so.  Five have put forward female candidates with the remaining 12 putting forward males.  It remains to be seen how and whether Von der Leyen reacts to Member States ignoring her requests for gender parity.  This topic is certain to arise in the European Parliament hearings which will take place in late September/ early October before the 1 November target date for the new Commission to take office.   

Tuesday, 20 August – Eurostat to publish EU asylum applications for May 2024  

With immigration high on the political agenda across the European Union (EU), figures for asylum applications, to be published on Tuesday, will be closely watched.  Figures released by the European Union Agency for Asylum (EUAA) in February showed that the EU received 1.14 million asylum applications in 2023 – the highest level since the 2015-16 refugee crisis.   

Germany continues to receive the highest levels of applications, averaging around 25% of the total.  In the 12 months to May 2024, Syrians and Afghans lodged the most applications for asylum; while Syrian applications increased considerably (+27%) during that period, Afghan applications declined by 19%. EUAA figures show that the number of cases awaiting a first instance decision continues to increase, reaching 929,000 at the end of May 2024, which is the most for more than seven years.  

Nevertheless, a report issued last week by Frontex revealed a 36% decrease in irregular border crossings into the EU, totaling 113,400 people in the first seven months of this year compared to the same period in 2023. The decline is most significant in the central Mediterranean, following a series of EU deals with North African countries like Tunisia that provided the latter with financial incentives to curb illegal migration. However, irregular crossings have risen on the Western African route into the EU.  

In recent years, several EU governments, including Denmark and Sweden, have adopted a tougher stance on migration, partly aiming to prevent further gains from far-right parties.  However, this also comes against the backdrop of changing demographic realities and an increasing need to replenish declining labour forces in crucial sectors like healthcare and IT:  a recent study suggests that Germany, for instance, may need a net influx of 400,000 people annually to address these shortages, and Italy’s working-age population is projected to shrink by 630,000 in the next three years. 

In April 2024, the EU finalised the European Commission's Pact on Migration and Asylum which is intended to reform the EU migration system in order to prioritise “more secure European borders”, “faster and more efficient procedures for asylum and return” and “more solidarity with Member States at external borders”.  Most of the provisions will not take effect until 2026 so it remains to be seen how politicians will react if numbers continue to grow in the intervening period.  

Thursday, 22 August - ECB to release minutes of July meeting 

On Thursday, the European Central Bank will release the minutes of its July meeting where it held interest rates steady, following June’s decision to cut from 4% to 3.75%. The minutes of the June meeting showed that there was some disagreement with that decision, with Austrian Governor Robert Holzmann voting against a cut, while others expressed the view that “there was a case for keeping interest rates unchanged”.  Nevertheless, the minutes showed a “willingness to support the proposal [to cut rates] notwithstanding the reservations put forward”. 

At her press conference following the July meeting, Christine Lagarde stated that the Governing Council would not provide guidance on future rate decisions.  Nevertheless, market participants will look through the minutes for any sign of hawkishness which may diverge from the market consensus of two more interest rate cuts this year.  Indeed, on a poll conducted by Reuters on 8-13 August, 66 of 81 economists predicted that the ECB will deliver two more 25 basis point rate cuts this year, in September and December, taking the deposit rate to 3.25%.