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Week Ahead (24 January)


Monday, 24 January - Process to elect new President of Italy gets underway  

The process to elect a successor to President Mattarella gets underway today.  The President of Italy is elected by Italy’s 321 Senators, 630 Deputies, and 58 regional representatives via secret ballot. For the first three rounds of voting a two-thirds majority of the 1,009 voters (or 673 votes) is required to elect a President. Starting from the fourth ballot, an absolute majority is required for candidates to be elected, or 505 votes. The presidential term lasts seven years.   

Although significant elements of the Italian establishment would like to see him remain as Prime Minister, our base case is that Draghi will be elected President.  This presents a certain amount of risk to the implementation of the necessary reforms associated with the Italian recovery fund (PNNR).  On the other hand, as President it could be argued that Draghi could better oversee implementation of the PNRR over a seven year term, than in the 15 or so months he has left as Prime Minister, with elections scheduled to take place no later than 1 June 2023.  As President, he will have to sign off on ministerial appointments following the 2023 election and this could be a way of ensuring continuity in the PNNR reform process.    

Another potential scenario is that President Mattarella agrees to remain in office until the general election in 2023, when he would step aside to facilitate Draghi or another mainstream candidate.  While Mattarella has repeatedly indicated that he does not want to serve another term, this was also the position of Giorgio Napolitano in 2013 who eventually agreed to do so for a time limited term in order to safeguard political stability. 

W/C Monday, 24 January – Investigation into possible breach of Covid restrictions at Downing Street to conclude

Senior Civil Servant Sue Grey is expected to complete her report into alleged breaches of Covid-19 restrictions at Downing Street. Ms Grey’s report had been expected last week, but it is understood that the scope of her investigation has widened to include 16 possible gatherings, including the Prime Minister’s attendance at a drinks reception in May 2020 and a gathering the night before the funeral of Prince Philip in April 2021.

Ms Grey’s report is likely to be a statement of facts about the gatherings, but may also refer to breaches of the guidelines or, indeed, the law. Should Ms Grey find that a breach of the law indeed took place the matter is likely to be referred to the police. Johnson will be expected to deliver a statement to the Commons on the report, which will no doubt result in another round of sharp criticism of his leadership.

Tuesday, 25 January - European Commissioner for Economy Paolo Gentiloni to meet European fiscal board, French Finance Minister Bruno Le Maire to address European Parliament ECON committee

On Tuesday, Paolo Gentiloni will meet with the European Fiscal Board (EFB) to discuss inter alia the redesign the European Stability and Growth Pact (SGP) – a priority of successive Italian governments.   

The SGP requires EU Member States to implement a fiscal policy aiming at keeping a government deficit below 3% of GDP and overall debt levels at 60% of GDP. Where debt levels exceed 60%, they should be reduced by 5% of the distance from the 60% objective every year. 

France, Italy and Spain back a redesign of the SGP.  French Finance Minister Bruno Le Maire will appear at the European Parliament ECON committee to make the case for this.  As ever, the position of Germany and its new finance minister Christian Linder will be critical – he has stated that the SGP in its current form provides plenty of flexibility and is unlikely to support significant change.  While Le Maire has indicated that the differences in outlook between France and Germany are overstated, finding an agreement on how to balance shoring up government finances while maintaining economic growth is unlikely to be a smooth process.   

Wednesday, 26 January - Central Statistics Office to release data on Irish port traffic in Q3 2021

The Irish Central Statistics Office will release data on Q3 2021 port traffic on Wednesday. Data from Q2 2021 showed that Great Britain and Northern Ireland accounted for 32.1% of the total tonnage of goods handled in the main ports, a drop on the 37.3% recorded in Q2 2020. Over the same period the tonnage of goods handled from other EU countries accounted for 41.9% of the total in the main ports, a 4.1% increase compared with Q2 2020.

Despite an increase in the overall tonnage of goods passing through Irish ports in Q2 last year, Dublin Port - by some distance the largest in the state - has said that full year figures for 2021 show that the so-called British "landbridge" transit route, which used the UK mainland as a bridge to transport goods to and from Ireland, has collapsed.

Wednesday, 26 January - General Court to rule on Intel appeal against 2009 European Commission fine

The General Court will rule on Wednesday on Intel's appeal against a €1.06 billion fine imposed on the company in 2009 by the European Commission in a landmark antitrust case. The case is on its second run through the European courts; the ECJ in 2017 disagreed with the General Court's decision of 2014 to back the Commission's decision to fine the company.

The case centres around whether the Commission used an appropriate test when deciding that Intel had tried to block market access to the American multinational semiconductor company, Advanced Micro Devices, by giving rebates to computer manufacturers Dell, Hewlett-Packard, NEC and Lenovo for purchasing most of their microchips from Intel. The General Court's decision will be read as a comment on the Commission's ability to pursue US companies for offering incentives to lure customers from rival sectoral competitors, and may have knock-on effects for ongoing antitrust cases involving other large technology companies such as Google and Qualcomm.

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