Week Ahead (30 August)
Monday and Tuesday, 30-31 August – ECB Research Conference to discuss digital euro
The sixth annual Research Conference of the European Central Bank begins today. Tomorrow at 5pm a discussion on the digital euro will be held, with speakers including Professor Stephen Williamson from the University of Western Ontario and Professor Monika Piazzesi from Stanford University.
In July 2021, the ECB launched announced the investigation phase of the digital euro project, which is scheduled to begin in October and last for two years. The launch of the digital euro supports a number of policy objectives in the Commission’s wider digital finance plan, including the digitalisation of the European economy, strengthening the euro’s role in international finance and advancing the EU’s open strategic autonomy. The ECB has previously warned that countries risk handing control over a significant portion of payments to private technology companies if they do not introduce their own versions of a digital currency.
Tuesday, 31 August - Polish Constitutional Tribunal to rule on EU law supremacy dispute
The Polish Constitutional Tribunal will rule on Tuesday whether aspects of European Union Treaties are unconstitutional under Polish law. The Tribunal’s ruling will be made in response to a request from Polish Prime Minister, Mateusz Morawiecki – a request which the European Commission has urged the Polish government to withdraw. If the Tribunal rules that the Polish constitution takes precedence over the EU’s Treaties, this would directly challenge the supremacy of EU law – a fundamental principle of the European Union.
Tuesday’s ruling will be the latest development in an increasingly tense relationship between Poland and the EU. The European Commission is yet to decide to endorse Poland’s submission to the Recovery and Resilience Facility, under which the dispersion of funds is linked to country-specific recommendations on the rule of law. Depending on how the Constitutional Tribunal rules on Tuesday, the Commission may refuse to endorse Poland’s request for €23.9 billion in grants and €12.1 billion in loans under the RRF.
Tuesday, 31 August - Eurostat flash estimate for inflation to be released
Flash inflation data for August will be released on Tuesday. The Eurostat release on inflation for July showed that the Eurozone inflation rate increased to 2.2%, up from 1.9% in June. The inflation rate was 0.4% in July of last year. In the European Union as a whole, inflation reached 2.5%, up from 2.2% in June. In July 2020, the EU-wide inflation rate stood at 0.9%.
Economists expect that inflation in the eurozone will peak at 2.5% towards the end of 2021 but will fade early in 2022. Core inflation, which strips out items which are prone to fluctuation including energy, food, alcohol and tobacco, eased to 0.7%, down from 0.9% in June.