Week Ahead (29 September)

Monday, 29 September – Moldova elections secure pro-EU majority, strengthening EU momentum 

Moldova’s ruling party, Party of Action and Solidarity (PAS), pulled comfortably ahead in Sunday’s parliamentary election, easing fears that the country might drift back into Russia’s orbit. With more than 90% of ballots counted,  PAS held 47% of the vote compared to 27% for Igor Dodon’s pro-Russian Patriotic Bloc. Expatriate votes, nearly 70% of which went to President Maia Sandu in her 2024 re-election, are expected to further consolidate a pro-EU majority once fully counted. 

The result is a relief for the government and the allies of President Sandu, which had faced months of mounting economic discontent and unprecedented Russian interference. In the run-up to the vote, Moldova’s electoral commission suffered cyberattacks, police intercepted groups accused of plotting violent unrest, and polling stations were targeted by fake bomb threats. Officials accused Moscow of spending “hundreds of millions of euros” on vote-buying, while AI-driven disinformation and fabricated scandals flooded social media. 

Despite these pressures, PAS’s stronger-than-expected showing is a strong sign that the promise of EU integration still resonates. Moldova was granted candidate status in June 2022 and began accession talks alongside Ukraine in December 2023. Brussels has praised reforms on rule of law and digitalisation but warned momentum must be sustained.  

Looking ahead, the electoral outcome in Chisinau poses new questions for the EU. The risk of backsliding remains, as seen in Georgia, where democratic erosion has already led the EU to freeze its candidacy. While Moldova has clearly chosen the European path, Brussels must now ensure that enlargement continues despite Hungary’s veto on Ukraine’s accession, which has held up Moldova’s process as the two bids are politically linked. European Council President Antonio Costa has recently floated a possible shift from unanimity to qualified majority voting for the opening of negotiating clusters, the key milestones of accession. Full consensus would still be required to close clusters, but such a move would keep enlargement momentum alive and prevent one member state from stalling the process. 

W/C Monday, 29 September – Possible Statement of Objections from DG COMP on the Mars-Kellanova merger deal 

This week could see the European Commission issue a Statement of Objections (SO) in its Phase II probe of Mars’ $36 billion acquisition of Kellanova.  

Following its EU notification in May, the case was escalated on 25 June over concerns that combining Mars’ confectionery and pet snack brands (M&M’s, Snickers, Pedigree, Whiskas) with Kellanova’s Pringles, Cheez-It, Eggo and Pop-Tarts could give the merged group outsized bargaining power over Europe’s concentrated grocery market. The investigation was paused in late July after DG COMP judged the parties’ responses to be incomplete and relaunched on 17 September with a new decision deadline of 19 December. Since then, officials have been running fresh market tests with retailers and rival suppliers, focusing on whether the combined portfolio creates additional leverage due to ‘’must-stock’’ status across categories that retailers cannot credibly delist. 

Remedies are already under discussion. It is understood that the two entities originally focused on behavioural commitments such as non-bundling, separate negotiations by product line, and safeguards on promotional access, monitored by a trustee. Yet there is scepticism within DG COMP about whether these commitments can be monitored effectively or enforced over time. This has kept structural remedies in play, with the possibility of targeted divestitures of snack or breakfast brands in member states where the merged entity’s market share raises red flags. 

An SO would lock in the Commission’s theory of harm and force Mars to address each point directly, leaving less flexibility to negotiate a tailored solution and a higher bar to secure clearance. Indeed, the earlier remedies are tabled in Phase II, the more scope there is for compromise. The case is also tied into a broader political debate about retailer-supplier relations in Europe at a time of high food inflation, with EVP Ribera stressing the need to protect the “shopping basket.” 

If an SO is issued in the coming weeks, Mars would be expected to table remedies quickly, with market testing by retailers likely in November.  

Wednesday, 1 October – EU leaders to hold informal summit in Copenhagen; likely to decide on the 19th sanctions package 

EU leaders will gather in Copenhagen on Wednesday for an informal European Council focused on Europe’s common defence, continued support for Ukraine, and the 19th package of sanctions against Russia. The meeting comes against the backdrop of renewed Russian provocations, including airspace violations in Poland and Estonia. Leaders are expected to discuss concrete steps to deepen defence cooperation, framed as essential for ensuring the EU can respond effectively and autonomously to common threats. 

Support for Ukraine will dominate the agenda. To date, the EU and its member states have provided more than €173 billion in assistance, but leaders will debate how to ensure this support remains predictable and long term. A central item will be the Commission’s new proposal to finance a €140 billion “reparations loan” for Kyiv using cash balances generated from frozen Russian assets held at Euroclear. According to a note circulated to ambassadors last Friday, the plan would involve Brussels entering a zero-interest debt contract with Euroclear, redirecting part of the €185 billion in available balances to Ukraine. The funds would cover both defence cooperation and Kyiv’s ordinary budget needs, complementing a G7-backed loan already in place. German Chancellor Friedrich Merz has publicly endorsed the idea, though he favours restricting its use to military aid. 

The initiative, however, faces resistance. Hungary objects outright, warning that since sanctions on Russian assets must be unanimously renewed every six months, a single veto could unwind the freeze and leave EU capitals liable for repayment. Belgium has also raised objections, citing the legal and financial exposure of Brussels-based Euroclear if Moscow were to mount a legal challenge. To mitigate these risks, the Commission is exploring whether sanctions renewal could be shifted from unanimity to qualified majority, building on European Council conclusions agreed in December 2024. But several capitals worry this approach would set a dangerous precedent and give Hungary grounds for a legal case. Leaders will voice their positions in Copenhagen, but final decisions are expected only at the next European Council summit, scheduled for 23-24 October 2025. 

The summit will also set the stage for the 19th sanctions package, which expands the EU’s focus beyond Russia to include third-country enablers of sanctions evasion. A draft annex foresees blacklisting nine foreign banks, two oil traders, a cryptocurrency exchange, multiple special economic zones and 120 tankers involved in shadow oil shipments. Entities from the UAE, Kyrgyzstan and Tajikistan are also named. The measures mark the first time Brussels has targeted crypto platforms and foreign banks linked to Russian payment systems. Commission President Ursula von der Leyen has billed the package as an effort to “close financial loopholes” and adapt to increasingly sophisticated evasion tactics.  

Notably absent are the sweeping tariffs of 50%-100% on India and China that US President Trump demanded earlier this month. These measures remain politically unfeasible given the risk of retaliation and the fact that tariffs fall under EU trade policy (managed by the Commission and subject to Council approval), whereas sanctions are a foreign policy instrument requiring member state consensus. 

Wednesday, 1 October – Eurostat’s flash inflation estimates for September 

Eurostat will publish its flash estimate of euro area inflation for September on Wednesday. In August, the euro area annual inflation rate stood at 2.0%, unchanged from July and exactly at the European Central Bank’s (ECB) target. Country-level divergences remained wide with France (0.8%), Italy (1.6%) and Cyprus (0.0%) recorded the lowest rates in the euro zone, while Estonia (6.2%) and Croatia (4.6%) sat at the top end. By component, services were again the main driver (+1.44 percentage points), followed by food, alcohol & tobacco (+0.62 pp). Energy subtracted 0.19 pp from the headline. 

In their monetary policy council earlier this month (11 September), ECB policymakers left interest rates unchanged at 2%, arguing that inflation is broadly at target and the outlook stable. Updated staff forecasts showed little change from June, with inflation projected just under 2% over the next three years. The Governing Council reiterated its meeting-by-meeting, data-dependent approach, signalling no rush to adjust further unless the outlook deteriorates. 

Markets have interpreted this as the ECB having found its “happy place”: with inflation, policy rates, and long-term expectations all near 2%, the ECB appears comfortable. Outgoing Portuguese governor Mario Centeno argued that the ECB’s next move is likely downwards if inflation undershoots 2%, stressing the need for agility in the face of rapid currency appreciation. His successor, Alvaro Santos Pereira, is expected to strike a more neutral tone. By contrast, Greek central bank chief Yannis Stournaras last week said the ECB is “probably done cutting,” describing policy as in “a good equilibrium” and stressing that only a major deterioration in the inflation outlook would justify more easing. 

Hence, this week’s flash inflation data will show whether the ECB’s September optimism is justified.