Week Ahead (29 August)

W/C Monday, 29 August – Greek parliament to announce inquiry into wiretapping scandal

This week, the Greek parliament will launch an investigation into the wiretapping of MEP and leader of the centre-left PASOK party, Nikos Androulakis, by the Greek National Intelligence Service (EYP). The parliamentary inquiry will follow last Friday’s debate between party leaders.

The government insists that the surveillance was legal on national security grounds, following the approval of a prosecutor. Nevertheless, it has refused to disclose what method was used to tap the phone of the MEP and whether EYP used the illegal Predator spyware, which was detected on Androulakis’ phone by European Parliament cybersecurity experts.

Even though the Greek government has promised to reform how the EYP is supervised, the issue has led to a heated political debate as a series of questions remain unanswered. It remains to be seen whether the government will successfully manage to evade increasing calls for snap elections in this heated political climate.

Wednesday, 31 August – Nord Stream 1 to shut down for 3 days of ‘’routine maintenance’’ on Wednesday

Earlier in August, the Russian state-owned Gazprom announced it would temporarily shut down its gas supplies to Germany and Europe via the Nord Stream 1 pipeline for ‘’routine maintenance’’. The shutdown is scheduled for Wednesday and is expected to last until Friday. Upon completion, the company confirmed that gas flows will resume at a rate of 33 cubic meters daily, ‘’in the absence of technical malfunctions’’, which equals the 20% capacity in effect now.

Despite the short shutdown period, the move is likely to trigger more uncertainty in Europe. There are increasing fears that Gazprom could extend the shutdown of the pipeline, using maintenance as a pretext, to retaliate for the economic sanctions imposed by Europe in response to the Russian invasion of Ukraine. This is the second time the pipeline will shut down this summer, following a 10-day annual maintenance in July, after which supply resumed at reduced levels, operating at nearly 30% of its full capacity.

Germany is particularly exposed to Russian gas imports and is currently aiming to fill its gas storage sites to 95% capacity by November. Meanwhile, in Norway, gas supplies to Europe have fallen nearly 5%, down by about 34 million cubic meters per day, due to gas field production outages, fueling energy security fears ahead of winter.

Wednesday, 31 August - Eurostat flash inflation estimate for August to be released

Eurostat will publish its latest flash estimate of inflation on Wednesday, showing early results for the month of August. July's reading showed inflation had increased to 8.9% across the eurozone, up 0.3% from June. For the EU as a whole, inflation stood at 9.8%, up 0.2% from June.

The continued high rate of inflation has led to speculation about further European Central Bank interest rate hikes, with reports this week suggesting that the ECB is now likely to announce two further increases to the rate before the end of the year. The Governing Council of the ECB announced last month that it was increasing rates by 0.5%, double the expected increase and the first such hike in over 11 years. The minutes of that meeting, released yesterday, show members of the Governing Council expressing concern of an increased risk that inflation expectations would become “unanchored” – a euphemism for a loss of faith among consumers and businesses that the ECB can get inflation under control. Additionally, last week the euro slid to its lowest rate against the dollar in two decades and is currently trading at below parity.

Wednesday, 31 August - German digital strategy to be announced

The German government will announce details of its digital strategy on Wednesday at a cabinet meeting. While early drafts have been leaked, there is as yet no confirmation of the budget to be attached to the new strategy. The government has attracted criticism for delays in the publication of the digital strategy and the vagueness of earlier iterations of it.

Three key pillars are identified in the leaked draft, namely a focus on network strengthening, frameworks for interoperability and the introduction of electronic identities, with key targets outlined for a 2025 deadline.

The draft plan has had a lukewarm welcome from industry figures in Germany, who have previously noted that Germany is lagging behind many other European member states in terms of its digitalisation programme. The Federation of German Industries (BDI) has said that discussion still "falls short of the promise of digital awakening".