Week Ahead (3 March)

Monday, 3 March – Thursday, 6 March – Mobile World Congress to take place in Barcelona 

This week, GSMA’s Mobile World Congress (MWC) takes place in Barcelona from 3 March to 6 March, marking the first edition of the event since Mario Draghi’s influential report on EU competitiveness. The report highlighted the EU’s growing gap with the US and China and backed key telecom industry demands, including a centralized spectrum allocation framework and a more flexible approach to mergers. With an estimated €200 billion needed to meet the bloc’s 2030 Digital Decade goals, telecom policy is gaining prominence on the agenda. 

The “fair share” debate is set to resurface, with Vodafone already pitching a “framework for responsible use of networks.” The company argues that content providers worsen network congestion with unoptimised traffic, straining investments needed for 5G and rural coverage. Telecom operators claim Europe is at risk of a “capacity crunch” without intervention, while tech firms counter that digital services drive telecom growth rather than exploiting networks. 

Telecom consolidation will be another hot topic. The Draghi report and the European Commission’s February 2024 White Paper flagged market fragmentation as a barrier to investment. With over 140 operators in the EU compared to far fewer in the US and China, a shift towards greater acceptance of mergers is expected. The upcoming Digital Networks Act in Q4 2025 is likely to reflect this trend. The UK’s recent Vodafone-Three merger approval could further bolster arguments for a more flexible EU stance on competition policy. Spectrum policy and infrastructure funding will also be central to discussions. Operators continue to push for harmonised spectrum allocation, despite resistance from member states eager to retain national control over auctions.  

With policymakers, regulators, and industry leaders gathering, the event will be a crucial moment for the future of Europe’s digital infrastructure. Confirmed speakers include DG CONNECT’s Renate Nikolay, DG JUST’s Lieven Brouwers, EDPB’s Anu Talus, and ESA’s Laurent Jaffart. EU Competition Commissioner Teresa Ribera is also expected to deliver a closed-door keynote speech today, after having a roundtable with telecoms CEOs last night. Her peer, tech sovereignty Commissioner Henna Virkkunen will also attend and is planned to meet with the chair of the US Federal Communications Commission Brendan Carr. Any signals on mergers and regulation will be closely watched. Overall, the Commission is expected to take stock of all these key issues raised at MWC in preparation for the Digital Networks Act. 

Monday, 3 March – Eurozone flash inflation estimate for February 

Today, Eurostat will release its Eurozone flash inflation estimate for February. After dipping below the ECB’s 2% target in September (1.8%), inflation climbed for three consecutive months, reaching 2.4% in December 2024. According to Eurostat, inflation rose further to 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, the eurozone economy remains fragile, with growth for 2024 forecasted at just 0.7%, compounded by geopolitical uncertainties, US tariff concerns, and the political uncertainty in France and Germany, the bloc’s two largest economies.   

Hence, this week’s inflation data could play a key role in influencing the ECB’s policy trajectory in the coming months, albeit a rate cut in its upcoming monetary policy meeting on Thursday is already widely priced in.  

Thursday, 6 March – ECB governing council to meet with another rate cut widely expected despite latest inflation uptick 

On Thursday, the European Central Bank’s Governing Council (GC) will hold its second monetary policy meeting for 2025 with another rate cut widely expected.  The ECB is anticipated to reduce its deposit rate to 2.50%, according to the latest Reuters poll of 82 economists, all of whom predicted a cut, with markets pricing in two more cuts by mid-year before the central bank holds steady. 

Despite the latest inflationary uptick, weak economic growth and geopolitical uncertainties continue to justify further easing. The ECB Governing Council in January decided to cut rates by 25 basis points to 2.75% in its first monetary policy meeting for 2025. ECB President Christine Lagarde suggested there was room for further adjustments, citing weak economic growth and geopolitical tensions. She specifically left the door open for another potential cut in March, depending on new data.  

However, the outlook beyond mid-year remains uncertain. Most recently, in an interview with FT on 14 February, ECB’s Isabel Schnabel argued that ‘’we are getting closer to the point where we may have to pause or halt our rate cuts’’. Although Schnabel is one of the GC’s most prominent ‘’hawks’’ her comments further fuelled speculation over ECB’s monetary trajectory beyond its upcoming March meeting.  

Adding to the ECB’s dilemma is the latest global trade uncertainty sparked by President Donald Trump’s renewed tariff threats. Last week, Trump proposed a 25% “reciprocal” tariff on European cars and other goods, a move that could weigh on eurozone economic growth. If implemented, these tariffs could put additional pressure on the ECB’s monetary policy stance.  

Thursday, 6 March – EU leaders to hold extraordinary summit focusing on support for Ukraine and the long-term financing of the bloc’s defence needs 

On Thursday, the EU leaders will convene for an extraordinary summit to   deliberate on additional military and financial support for Ukraine, European security guarantees, and the long-term financing of EU defence needs. The meeting follows growing divisions over how to approach Ukraine’s security, after US President Donald Trump’s decision in February to hold direct peace talks with Russia in Saudi Arabia, without involving Ukraine, the EU, or the UK. 

The transatlantic rift deepened further last Friday when Trump and Ukrainian President Volodymyr Zelenskyy publicly clashed during a tense White House press conference. Originally, Zelenskyy had travelled to Washington to sign a critical minerals deal with the US, which would have granted American companies priority access to Ukraine’s vast reserves of rare earth minerals after the war. Trump has framed the potential deal as an economic-based security guarantee for Ukraine, arguing that stronger US investment in Ukraine’s economy would deter future Russian aggression. However, the agreement was not signed on Friday due to the fallout in the Oval Office meeting. 

In response to the failed White House talks, European leaders rushed to reinforce their own security commitments, with UK Prime Minister Keir Starmer hosting an emergency summit in London yesterday. Leader sought to forge a more unified European position on security guarantees for Ukraine and ensure continued military assistance. Following the summit, Starmer announced that a coalition of willing nations had agreed to send troops to Ukraine as part of a future peacekeeping force. Macron confirmed that the UK and France are leading efforts to draft a new peace proposal, which will be presented to Washington. Meanwhile, Meloni has stepped up efforts to mend transatlantic relations, leveraging her close political ties with Trump to propose an EU-US summit aimed at preventing a Western split over Ukraine.  

At the EU level, defence financing remains a major challenge. Overall, the European Commission estimates that EU defence investment will require €500 billion over the next decade. However, joint borrowing, long resisted by fiscally conservative member states such as Germany, the Netherlands, Sweden, and Austria, remains unlikely. Instead, leaders will explore alternative funding mechanisms. European Commission President Ursula von der Leyen has called for a “comprehensive plan” to be unveiled at Thursday’s summit, arguing that “we urgently have to rearm Europe”. Macron has also ramped up pressure for defence spending, urging EU states to increase their military budgets to over 3% of GDP, estimating that at least €200 billion in investment is needed. He has suggested utilising EU cohesion funds, common borrowing, and the European Stability Mechanism to finance rearmament. 

Von der Leyen has already hinted at a proposal to finance defence spending by utilising a combination of EU-level funds and national contributions. She has suggested leveraging existing EU budgetary mechanisms while expanding the flexibility of the Multiannual Financial Framework to accommodate increased defence spending. Additionally, von der Leyen is expected to advocate for an exemption of defence-related expenditures from the EU’s fiscal rules under extraordinary circumstances, a measure that would allow countries to increase military investments without breaching EU deficit and debt constraints. Her proposal on Thursday will also include exploring public-private partnerships to bolster defence funding and encouraging the European Investment Bank to increase its support for defence-related projects. These measures will be further elaborated in the European Defence White Paper, set to be published on 19 March which will outline long-term strategies for EU defence and security financing.  

Thursday, 6 March – Deadline for UK CMA’s decision on Synopsys’ $35 billion acquisition of chip design rival Ansys 

The UK’s Competition and Markets Authority (CMA) is set to decide by Thursday on Synopsys’ proposed $35 billion acquisition of chip design rival Ansys, with approval likely if the companies' proposed remedies are deemed sufficient. The CMA has been evaluating potential competition concerns, particularly in chip design and light simulation software, where the two companies have significant market shares. To address regulatory concerns, Synopsys and Ansys have proposed divesting Ansys’ power consumption analysis tool for digital chips and Synopsys’ global optics and photonics software business. The CMA announced in January that it was considering accepting these remedies and has until 6 March to finalise its decision, though an extension to 6 May remains a possibility. 

The European Commission, meanwhile, conditionally approved the deal on 9 January,  subject to similar divestitures. The EU antitrust regulator raised concerns over high market concentration in power analysis and photonics software but ruled that selling Synopsys’ optical solutions business and Ansys’ PowerArtist tool would preserve competition. EU approval represents a major step forward for the transaction, which is the largest tech deal since Broadcom’s $69 billion acquisition of VMware in 2023. 

The CMA has historically been one of the most aggressive regulators when it comes to US tech firms, having blocked Microsoft’s $69 billion acquisition of Activision Blizzard in April 2023 (before later approving a modified version) and forcing Meta to unwind its $400 million purchase of Giphy.  However, there are growing indications of a shift toward a more business-friendly approach. The UK Labour government has recently urged the CMA to be more cautious about intervening in international deals “where there is no special UK issue.” This shift aligns with the government’s broader shifting stance, as seen with the appointment of Doug Gurr, a former Amazon UK executive, as CMA’s chair in January. 

Although the UK’s approval appears to be progressing smoothly, regulatory scrutiny remains in other key jurisdictions. The US and China are still conducting their own investigations, with particular focus on whether the deal could reduce competition in the semiconductor design ecosystem. The outcome of these reviews will determine whether the companies can close the deal within the first half of 2025 as planned.