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Week Ahead (29 November)

W/C Monday, 29 November – German parties to put coalition deal to members

The three parties that are expected to make up Germany’s next government – the Social Democrats (SPD), the Greens and the Free Democrats (FDP) - will begin the process of seeking approval from their memberships for the coalition deal announced last week by the parties. If all three parties endorse the coalition deal, as is expected, the SPD’s Olaf Scholz will likely be sworn in as chancellor the week commencing Monday 6 December.

The wide-ranging compromise will see the FDP's Christian Lindner take the finance ministry while the Greens' Chancellorship candidate Annalena Baerbock will take charge of the foreign ministry. A new ministry of the economy and climate will be headed up by Baerbock's party colleague Robert Habeck. The Greens have extracted some significant concessions from the talks; coal will now be phased out by 2030, earlier than had previously been mooted. The party has also won the right to nominate the next German EU Commissioner, which is likely to mean a new President of the European Commission will be in place when Ursula von der Leyen's five-year term expires in 2024. Other policy proposals to be announced include an increase in the minimum wage from €9.60 to €12 per hour, the legalisation of marijuana, €1 billion extra spending on nurses and a new Health Data Usage Act.

Monday, 29 November - French Commercial Court ruling on Google v France dispute postponed for the second time

After postponing a ruling from 2 November, the French Commercial Court had rescheduled its ruling until today on a dispute between Google and France over Google’s contracts with app developers. The ruling has now been postponed a second time and no alternative date has been given.

The French Directorate General for Competition, Consumer Affairs and Fraud Control has argued that Google has abused its dominant position through agreements with app developers, highlighting in particular Google’s ability to unilaterally modify or suspend contracts with app developers and Google’s ability to freely use information gained from developers without any reciprocity.

The complaint, filed with the French Commercial Court, asks the Court to remove clauses which are alleged to be illegal and pay a €2 million fine. Google has denied any wrongdoing and claims that there is no proof that its app store’s contractual clauses harm developers.

Flash inflation data for November will be released on Tuesday. The Eurostat release on inflation for October showed that the Eurozone inflation rate increased to 4.1%, up from 3.4% in September. This is the highest inflation rate in over 13 years. The inflation rate was -0.3% in October of last year. In the European Union as a whole, inflation reached 4.4%, up from 3.6% in September. In October 2020, the EU-wide inflation rate stood at 0.3%.

Core inflation, which strips out items which are prone to fluctuation including energy, food, alcohol and tobacco rose to 2.1% up from 1.9% in the previous month.

Tuesday, 30 November - Deadline for Commission to approve Poland's recovery and resilience plan

The European Commission must decide on whether it will approve Poland's recovery and resilience plan by Tuesday. Poland is seeking €36 billion in grants and loans to finance its recovery and economic transformation, but its request has stalled as the Polish government remains at loggerheads with the Commission over the future of its disciplinary chamber for judges. The Commission has made the dismantling of the disciplinary chamber a prerequisite for receipt of funding, as well as reinstating judges who have been fired on foot of disciplinary chamber proceedings. Poland is yet to compromise on its position. The draw-down of the first tranche of funding under the Commission's recovery plan, worth 13% of the overall envelope (or approximately €5 billion for Poland) must be completed by the end of the year.

A compromise may be difficult to reach; as well as satisfying the European Commission and Poland's ruling Law and Justice Party (PiS), any deal must be backed by the right-wing United Poland group, PiS's coalition partner, which is decidedly Eurosceptic. Opposition to the provision of funding while the disciplinary chamber remains in place is also clear in the European Parliament; while it has no role in the authorisation of funding, the leaders of the main political groupings in Parliament signed an open letter to the Commission on 15 November urging it to avoid authorising Poland's spending plan until concerns about the judiciary and the rule of law in general are assuaged.

Wednesday, 1 December - ECON/LIBE to meet to discuss AML package

Two European Parliament Committees - the Economic and Monetary Committee (ECON) and the Civil Liberties, Justice and Home Affairs (LIBE) - will hold a joint hearing on Wednesday on the Anti-Money Laundering package announced on 20 July. The package introduces a Europe-wide supervisory authority for money laundering, to be known as the Anti-Money Laundering Authority (AMLA), which the Commission has said will be operational by 2024, while taking up its direct supervisory duties in early 2026.

Specifically, the package unveiled will involve the introduction of four major pieces of legislation. As well as a regulation establishing the Anti-Money Laundering Authority, a new regulation on AML/CFT rules will also be introduced which will contain some directly applicable provisions on due diligence and beneficial ownership, thus avoiding the possibility of distinct interpretations in different member states. A sixth AML directive will also come into effect, should the institutions agree, which will deal with inter alia national supervisors, FIUs, and measures tackling the use of cryptocurrencies which have "specific anti-money laundering vulnerabilities". Finally, the package proposes a revision of the 2015 Regulation on Transfers of Funds to trace transfers of crypto-assets.

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