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Week Ahead (24 October)

W/C Monday, 24 October – New British Prime Minister to be announced this week, with Rishi Sunak leading the race after Johnson’s withdrawal

This week, the new Conservative Party leader and British Prime Minister will be announced. According to the contest rules, candidates will need the backing of a minimum of 100 from a total of 357 Conservative MPs by Monday 2 p.m. to secure their nomination. In that scenario, a vote will be held on Monday among MPs to eliminate one. An indicative vote among MPs will then take place, to encourage the losing candidate to stand down in order to have a new PM in place on Monday evening. If neither candidate stands down, a grassroots vote will be held until Friday morning, with Conservative members voting online.

The withdrawal of Boris Johnson from the leadership race on Sunday leaves former Chancellor Rishi Sunak as the leading candidate to replace the outgoing Prime Minister, after finishing second in the leadership race six weeks ago with 137 MP votes in the final round. Having previously warned of the effects of Truss’ economic agenda, he will aim to present himself as the best option to restore economic credibility to the country, capitalising on his previous criticism of Truss’ policies.

Former Defence Secretary Penny Mordaunt is in a race against time to secure 100 backers. Mordaunt could pose a serious challenge to Sunak in case the final vote is determined by the Conservative members across the country, due to her popularity among the grassroots. Nevertheless, her strategy of attracting the support of former Johnson supporters does not seem to work, after prominent party figures such as Chancellor Jeremy Hunt, Foreign Secretary James Cleverly, Cabinet Office Minister Nadhim Zahawi, and Business Secretary Jacob Rees-Mogg threw their support behind Sunak’s candidacy.

As this currently stands, Sunak is most likely to be announced as Prime Minister today without the need for a ballot of the party grassroots, as the only candidate to have secured the backing of more than 100 MPs. A survey published last week by Redfield & Wilton shows the scale of the challenge facing any new Conservative leader, with Labour 36% ahead of the Conservatives – the largest lead in any poll since 1997.

W/C Monday, 24 October – New Italian administration to take office, after the announcement of coalition cabinet on Saturday

The new Italian administration will take office this week, after the announcement of the coalition cabinet on Saturday.

Earlier this week, the coalition’s unity was temporarily threatened, after two leaked recordings emerged with Silvio Berlusconi’s comments on Ukraine and Russian President Putin, prompting a strong response from Georgia Meloni, who assured Western allies of her coalition’s pro-Ukrainian stance. The appointment of Antonio Tajani, former President of the European Parliament with strong EU credentials and a deputy leader of Berlusconi’s party, as foreign minister illustrates continuity in Italy’s pro-NATO stance. Lega’s leader Matteo Salvini has been named as transport minister and will be the government’s deputy premier alongside Tajani.

The largely Eurosceptic right-wing coalition has promised to reform parts of the national recovery plan, setting billions of EU funding at risk. Nevertheless, Meloni has shown increased signs of pragmatism which will be welcomed by investors, European political leaders, and officials in Brussels. The appointment of Giancarlo Giorgetti, a moderate and relatively pro-EU member of Lega, who was previously serving as industry minister in the Draghi government, aims to send a positive message to markets.

Meloni will present a more detailed account of her government’s plans this Tuesday when she addresses the Lower House ahead of a confidence vote in both houses.

Tuesday, 25 October – Uber to face hearing in the European Parliament

Uber will face a hearing in the European Parliament following a series of revelations over its past lobbying practices. A series of leaks of confidential files in July had previously exposed Uber’s breach of the ethics code and the company’s efforts to lobby policy-makers, including senior politicians.

Last week, whistleblower Mark MacGann, Uber’s former chief lobbyist for Europe and the MENA region who was the main source behind the leaks in July, reaffirmed his attendance at the hearing, after having previously threatened to pull out. The four other speakers will be Job Commissioner Nicolas Schmit, former Uber driver and activist Brahim Ben Ali, Andreea Nastase, assistant professor at Maastricht University, and the Uber Director for EU Public Policy Zuzana Pucikova.

Meanwhile, Uber secured a deal with the Belgian socialist union ABVV-BTB, agreeing to launch a dialogue on the working conditions of Uber’s drivers in the EU, an agreement that could serve as an example for other member states. Nevertheless, the agreement failed to address whether Uber’s drivers are independent contractors or employees. Currently, the European Parliament is assessing the Commission’s proposal to reclassify ‘’gig workers’’, including Uber drivers and couriers, as employees entitled to a minimum wage and legal protection.

Tuesday, 25 October – EU energy ministers to meet in Brussels, following agreement at the European Council to work on measures to reduce energy prices for households and businesses

EU energy ministers will meet on Tuesday to discuss the proposal for a directive on the energy performance of buildings and to hold a policy debate on the gas package, which includes a proposal for a regulation on common internal market rules for renewable and natural gases and hydrogen.

Nevertheless, the meeting will take place only a few days after the EU leaders agreed at the European Council to work on measures to contain energy prices for households and businesses, following the Commission’s latest energy emergency package, unveiled last week. The leaders agreed on voluntary joint gas purchasing, the introduction of a new gas trading benchmark for LNG, and a default solidarity mechanism for gas sharing in case of supply disruptions.

Failing to reach an agreement on a gas price cap, the EU leaders asked energy ministers and the Commission to come up with ‘’concrete decisions’’ on a ‘’temporary dynamic price corridor on natural gas transaction’’ and a limited price cap on gas used to generate electricity. Therefore, ministers in the upcoming energy council could also discuss ways of bridging the gap between member states on the gas price cap, despite not being part of the official agenda.

Thursday, 27 October – ECB to hold monetary policy meeting, another rate hike of 75 basis points widely expected

The European Central Bank will hold its regular monetary policy meeting in Frankfurt on Thursday to discuss monetary policy. The minimum markets expect is another 75 basis points hike, despite fears of a looming recession.

As of September 2022, the inflation rate in the Eurozone was 9.9%, marginally lower than the originally expected 10% but significantly higher than the ECB’s stated goal, largely driven by soaring energy and food prices. Furthermore, the Bundesbank announced last Friday that inflation in Germany would remain above double-digit levels in the coming months despite relief measures from the government. The Bundesbank also affirmed that it expects the German economy to slip into recession this winter. According to the ECB’s updated forecast, inflation is expected to average 8.1% in 2022, 5.5% in 2023, and 2.3% in 2024.

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