Week Ahead (27 November)

W/C Monday, 27 November – Coalition talks to continue in the Netherlands, following last week’s

surprising electoral results

Coalition talks will resume this week in the Netherlands, following last week’s surprising electoral results.

On Wednesday, Eurosceptic populist leader Geert Wilders won a dramatic victory in the Dutch general election. After 25 years in parliament, his Freedom party (PVV) won 37 seats, well ahead of the Green-Left coalition led by former vice-President of the European Commission Frans Timmermans, which secured 25 seats. The ruling liberal conservative VVD and the recently formed centrist New Social Contract (NSC) trailed behind with 24 and 20 seats, respectively. Following the announcement of the results, Wilders declared that ‘’the PVV can no longer be ignored’’ expressing his intention to govern. Wilders is a far-right ideologue who opposes Islam, advocates for the Netherlands' withdrawal from the EU, and cessation of support for Ukraine. As a result, his unexpected lead has sent shockwaves through Dutch politics and could have implications across Europe.

Nevertheless, to fulfil his aspiration of becoming "prime minister for everyone," Wilders will need to form a coalition by persuading other parties to join, aiming for a total of 76 seats in the 150-seat parliament. While some party leaders, such as Frans Timmermans, have ruled out collaboration with Wilders, Pieter Omtzigt of the NSC remains less definitive. Meanwhile, Dilan Yeşilgöz of the VVD stated on Friday that she would support ‘’a centre-right Cabinet with good policies’’ in parliament but not join the next governmental coalition, raising the possibility of her party voting with a minority government on a case-by-case basis. In other words, the possibility of a coalition centred around the Party for Freedom remains a long shot but cannot be ruled out. Alternatively, Timmermans’ Labour-Green alliance could form a centrist coalition with 78 seats, in collaboration with VVD, NSC, and the liberal D66 party, representing a narrow majority.

Following the last general elections it took 9 months for a coalition government to be formed and a similarly lengthy negotiating process is anticipated this time.

Monday, 27 November - Deadline for AliExpress to provide clarifications on combatting illegal products

On 6 November, the European Commission formally requested information from AliExpress, a subsidiary of Alibaba, regarding its efforts to combat the sale of illegal products, with a specific focus on counterfeit medicines. The request was made under the Digital Services Act (DSA), which imposes obligations on major tech companies to take active measures against illegal and harmful content on their platforms.

Thierry Breton, the EU's Internal Market Commissioner, emphasised in his statement that the scope of the DSA goes beyond addressing issues like hate speech and disinformation. Instead, he added that the DSA ‘’is also there to ensure removal of illegal or unsafe products sold in the EU via e-commerce platforms, including the growing number of fake and potentially life-threatening medicines and pharmaceuticals sold online’’.

Sending a formal request for information is a preliminary step before the potential initiation of a formal investigation. AliExpress has been given until today, 27 November, to provide the requested information, with the possibility of facing an investigation and fines of up to 6% of its global revenue if it fails to do so. This move is part of the European Commission's efforts to ensure online marketplaces take responsibility for removing illegal and unsafe products from their platforms. AliExpress is considered a "very large online platform" (VLOP) under the new EU law, which subjects it to more stringent obligations in combating such content.

Thursday, 30 November - Friday, 1 December – Deadline for major online platforms to provide the Commission information about their child protection efforts

By Thursday and Friday, major online platforms, namely Meta, YouTube, TikTok, and Snap will have to provide the European Commission with information about their child protection efforts. Similar to the case of Alibaba, online platforms are once again under scrutiny by the European Commission over their content moderation efforts under the DSA.

More specifically, on 9 November, the Commission sent a formal request to TikTok and YouTube to provide additional information on their efforts to protect minors online, specifically regarding mental and physical health. The following day, the EU regulator sent similar requests to Meta, Facebook’s and Instagram’s parent company, and Snap, parent company of Snapchat, which will also have to share details on measures taken to safeguard underage users on their platforms by 1 December. All these platforms fall into the category of ‘’very large online platforms’’, according to the DSA, subjecting them to enhanced obligations for child protection, including conducting risk assessments and implementing mitigation measures. In October, the Commission also sent such formal requests for information to Meta, TikTok, and YouTube, asking them to provide details regarding their efforts to combat the spread of illegal content, disinformation, and hate speech on their popular platforms, in the wake of growing concerns surrounding the Israel-Hamas conflict and its associated disinformation.

Overall, the DSA aims to force tech companies to increase advertising transparency, take more responsibility for illegal content on their platforms, including any content promoting terrorist organisations, and improve data access. It also outlaws advertising that is targeted at users on the basis of their race, gender, politics, or religion, as well as any advertising aimed at children. Investigations could lead to fines of 6% of online platforms’ global revenue.

Thursday, 30 November – Eurostat flash inflation estimate for November

On Thursday, Eurostat will publish Eurozone flash inflation data for November.

In September the European Central Bank (ECB) raised its inflation forecasts for the next two years, projecting that the headline rate will run at 5.6% in 2023, falling to 3.2% in 2024 and 2.1% in 2025. Nevertheless, following the bigger-than-expected fall of core inflation in September, the ECB decided on 26 October to keep rates unchanged at 4%, following 10 consecutive interest rate hikes since July 2022, shifting its focus from raising rates to keeping them sufficiently high for as long as it takes to curb inflation. The following week, Eurostat’s latest Eurozone flash estimate demonstrated a sharp decline with inflation projected to be 2.9% in October, down from 4.3% in September. This was its lowest point in over 2 years, and after peaking at 10.6% in October 2022. Likewise, core inflation in October dropped to 4.2% year-on-year in October from 4.5% in September, indicating a broader deflationary trend.

Some ECB Governing Council members, including Irish Central Bank Governor Gabriel Makhlouf, usually in dovish camp, are warning that a further hike may be necessary before easing can commence. Nevertheless, the latest significant decline in inflation, coupled with a weakening Eurozone economy, could force an earlier than an originally projected rate cut. Indicatively, according to Eurostat’s flash estimates, the eurozone economy contracted by 0.1% in Q3 2023. Although initially priced by the market for July, this could happen as soon as April, with the ECB becoming the first major central bank to ease interest rates. Thus, this week’s inflation figures could be an indication of whether to expect monetary policy easing to begin in Spring, especially in the context of ongoing economic stagnation in the eurozone.