Week Ahead (28 April)

Tuesday, 29 April - Wednesday, 30 April – EPP 2025 Congress in Valencia to decide new leadership and future direction 

This week, the European People’s Party will convene its congress in Valencia on 29–30 April, the first such gathering of the European Parliament’s largest political group since the European elections of June 2024. The congress will confirm Manfred Weber’s re-election as EPP President, with no opposing candidate standing. Weber, a German MEP who also leads the EPP group in the European Parliament since 2014, is set to secure a second three-year term. 

A central item on the agenda will be the election of 10 vice-presidents, with 12 candidates competing for the posts. Among them are two sitting European Commissioners, Migration Commissioner Magnus Brunner and Mediterranean Commissioner Dubravka Suica, as well as prominent national figures like Finnish Prime Minister Petteri Orpo and Italian Foreign Minister Antonio Tajani. MEPs close to Weber, such as Siegfried Muresan and David McAllister, are also strong contenders, reflecting the ongoing centralisation of power around the European Parliament delegation. The congress will also formalise the appointment of Spanish MEP Dolors Montserrat as the new Secretary-General, the first woman to hold the role. 

The event takes place against the backdrop of an ongoing debate within the EPP since last June’s elections. Divisions have deepened over whether the party should pursue closer cooperation with more conservative forces, such as the Meloni-backed European Conservatives and Reformists (ECR) group, or maintain its traditional pro-European alliances with Renew Europe and the Socialists & Democrats (S&D). While Weber has advocated pragmatic outreach to parts of the right, amid a broader rightward shift of the electorate across Europe, many in the party, including several national delegations like the Polish one, remain wary of diluting the EPP’s centrist, pro-EU profile. 

Wednesday, 30 April – Member states to discuss new draft on SAFE, discussions to revolve around eligibility criteria for third countries 

EU ambassadors will meet on Wednesday to examine a new draft of the Security Action for Europe (SAFE) regulation, as efforts to finalise the €150 billion defence loan facility enter a critical phase. The revised text, prepared under the Polish Council presidency, is expected to serve as the basis for a potential deal at the 13 May Ecofin meeting. 

The fresh draft incorporates feedback gathered during a series of “confessionals”, confidential one-on-one meetings with national delegations over recent days. Unsurprisingly, the most sensitive issue remains the eligibility criteria for third-country participation, particularly concerning the UK, Canada, and Turkey. 

Member states are divided over whether non-EU countries should be allowed to participate in joint defence procurements backed by SAFE loans. Germany, the Netherlands, the Nordic and Baltic countries are among those pushing for an inclusive approach, particularly to accommodate the UK. Diplomats suggest a possible solution could involve granting the UK and Canada privileged access, akin to Norway’s treatment. Crucially, SAFE's structure excludes a role for the Court of Justice of the EU, removing one major obstacle for London. The 19 May EU–UK summit is seen as a key moment to determine whether a formal security and defence pact can be reached. 

Meanwhile, Turkey continues to protest its likely exclusion, blaming political opposition from Greece and Cyprus. Although Ankara's arms industry is seen as competitive, diplomatic efforts are focused primarily on securing UK involvement rather than widening access further. 

Beyond third-country eligibility, member states are also seeking clarifications on other points, including whether final funding decisions should rest with capitals or the Commission, and whether VAT exemptions will apply across entire defence supply chains or only to final products. 

Wednesday, 30 April – Deadline for member states to request activation of ‘’escape clause’’ for defence spending 

Last month, in parallel with its White Paper on European Defence, the European Commission proposed the activation of an emergency clause allowing member states to exceed EU fiscal constraints for defence spending. More specifically, Brussels called member states to request activation of the Fiscal Rule Exemption for Defence, also known as ‘’escape clause’’, by 30 April, which would allow EU countries to boost defence spending by 1.5% of annual GDP for a period of four years, without this spending counting towards debt and deficit rules. The Commission calculated at the time that this could boost defence spending by €650 million and therefore formed the bulk of the €800 million RE-Arm Europe initiative. It is worth noting that only strictly defined military expenditures will be eligible, after the Commission rejected Spain’s bid to include climate-related security costs. 

Earlier in April, Belgium’s Budget Minister Van Peteghem revealed plans to invoke the clause in order to formally reach for the first time NATO’s longstanding 2% target, while on Wednesday, Portugal followed suit announcing its intention to activate the clause but has not yet done so.  

Within the Commission, there is a view that the timing is tricky because governments had already finalised budget plans by the time the scheme was announced in March.  Countries already facing budgetary pressure, such as Italy (which ruled out triggering the clause) and France are reluctant to add to overall debt levels, Commission forbearance notwithstanding.  Due to the absence of any takeup to date, the Commission has been briefing in recent days that the 30 April deadline is a “soft” deadline and that further applications will be considered throughout May. The Commission is of the view that Germany will apply once the new government is in place, expected in the first week of May, and this will encourage further uptake among member states. 

Wednesday, 30 April – General Court to rule on Lufthansa legal challenge against state aid granted to Frankfurt airport 

On Wednesday, the EU’s General Court is set to deliver its judgement in the case Deutsche Lufthansa v Commission (T-218/18 RENV), a significant development in a prolonged legal dispute concerning state aid in the aviation sector. 

The case originates from a decision made by the European Commission in July 2017, where it approved operating aid granted by Germany to Frankfurt-Hahn Airport without initiating a formal investigation. Lufthansa, Germany’s flag carrier, challenged this decision, arguing that the aid distorted competition by favouring low-cost carriers operating at the airport.   

In May 2023, the General Court annulled the Commission's decision, citing that the Commission should have initiated a formal investigation to assess the compatibility of the aid with the internal market. The Court argued that there were serious difficulties in the assessment, which necessitated a more in-depth re-examination of the case. As a result, the case was re-opened under the designation T-218/18 RENV. 

The forthcoming decision will reassess the validity of the Commission's approval of the state aid in question and could have significant implications for the European Union's state aid policy, particularly concerning regional airports and their relationships with various airlines. It may also influence how the Commission approaches future state aid assessments in the aviation sector. 

Thursday, 1 May – Local elections to be held in the UK, a litmus test for Labour’s government 

On Thursday, voters across England will head to the polls for a broad set of local elections, the first major electoral test since the July 2024 general election, which brought Labour back to power after 14 years in opposition. Although local contests are often shaped by local-level issues, this year’s vote is widely seen as a litmus test for Keir Starmer’s government, offering an early indication of public sentiment after more than nine months of Labour rule. 

More specifically, three distinct types of elections will take place: council elections in 23 local authorities, six directly elected mayoralties, and a parliamentary by-election triggered by the resignation of Labour MP Mike Amesbury, following a criminal conviction. In total, more than 1,600 council seats are up for grabs, with 14 county councils, eight unitary authorities, and Doncaster borough (Labour-held) holding votes. Four of the six mayoral elections will decide the leadership of powerful combined authorities, two of which are newly established.  

The local council elections will be contested against a high benchmark for the Conservatives. These seats were last fought in 2021, during the peak of Boris Johnson’s popularity, when the Tories won large majorities in many rural and suburban counties. Today, the party is defending 19 of the 23 authorities, placing it at the greatest risk of losses. With national polling showing Labour and Reform UK neck-and-neck around 24–25%, and the Conservatives trailing at 21%, the outcome is highly unpredictable. 

For Labour, Thursday’s vote will be closely scrutinised as the first post-election measure of performance in government. Local elections often prove difficult for ruling parties, particularly during economic downturns. The Conservatives are expected to lose hundreds of seats. In previous days, its leader, Kemi Badenoch, has signalled lower expectations, warning that the party could suffer heavy losses in several councils. For the far-right Reform UK, these elections are a chance to prove it can convert polling support into tangible political gains. Meanwhile, the Liberal Democrats are targeting county councils in the South West, including Devon and Cornwall, where they exceeded expectations in last summer’s general election. The Greens and independents also hope to benefit from disillusioned Labour voters in urban areas. 

Turnout in these elections is typically lower than in national votes. However, the scale of the contests and the volume of seats at stake will provide a good indication of the evolving dynamics between Labour, the Conservatives, and Reform UK ahead of future electoral cycles. 

Friday, 2 May – Eurozone flash inflation estimate for April 

On Friday, Eurostat will release its Eurozone flash inflation estimate for April. After dipping below the ECB’s 2% target in September (1.8%), inflation climbed for four consecutive months, reaching 2.5% in January 2025, suggesting sticky core inflation (2.7% for four consecutive months) and persistent price pressures driven by energy costs and wage growth. However, inflation ultimately eased to 2.2% in March, from 2.3% in February. More importantly, core inflation, the key measure for underlying inflation as it strips out the effect of volatile energy and food prices, dropped to 2.4%, its lowest since January 2022.  

Among the main inflation categories, services continued to drive price growth, though the annual rate moderated to 3.4% from 3.7% in February. Prices for food, alcohol, and tobacco rose 2.9%, up from 2.7%, while non-energy industrial goods held steady at 0.6% year-on-year. The sharpest swing came in the energy component, which recorded a year-on-year decline of 0.7%, reversing from a slight increase (0.2%) the month prior. At the national level, Greece saw the highest monthly inflation rise across the Eurozone, with overall inflation reaching 3.1% in March with monthly inflation rising by 1.8%, the steepest increase among member states. 

This continued disinflationary trend has provided the ECB with further room to adjust policy. On 17 April, the ECB’s Governing Council announced its third rate cut for this year, reducing the deposit rate by 25 basis points to 2.25%. The move, which was widely anticipated by markets and economists, marked the seventh rate cut since June 2024. 

The ECB's decision comes amid an increasingly fragile economic environment. Growth momentum remains weak across the bloc, while uncertainty around global trade policy is mounting. Even though the US administration announced on 9 April a temporary suspension for 90 days of its broad ‘’reciprocal’’ tariffs against the EU, there are still concerns that the potential absence of a breakthrough in the coming weeks remains a key downside risk. Against this backdrop, this week’s inflation data could play a key role in influencing the ECB’s policy trajectory in the coming months, along with external factors such as the US trade policy under Trump.