Week Ahead (30 September)

w/c Monday 30 September, Coalition negotiations to get underway with Kurz all but certain to return as Prime Minister

Yesterday’s parliamentary election saw Sebastian Kurz’s OVP party win by a clear margin with 37.1% of the vote – up from 31% at the last election. The Social Democrats led by the new leader Pamela Rendi-Wagner finished second on 21.7% while the far-right FPO undershot polling expectations to finish third on 16.1%.

Kurz is expected firstly to explore the possibility of a new coalition with the Greens and the Liberals NEOS who finished on 14% and 7.8% respectively. A renewed arrangement with the FPO is also possible provided it demonstrates a clear break with former leader Christian Strache who was filmed in Ibiza offering to help a fake Russian oligarch win government contracts.

Monday, 30 September – Italian government set to publish its “Economic and Financial Document”

The Italian government’s “Economic and Financial Document”, scheduled for publication on 30 September, will contain the growth, deficit, and debt targets that will underpin the 2020 budget. The macroeconomic assumptions contained in the document will indicate whether the new coalition is willing to adhere to the EU’s budgetary restrictions. As a former chair of the European Parliament Economic and Monetary Affairs Committee, newly appointed finance minister Gualtieri is well placed to steer the budget through the European approval process while also adding the necessary stimulus to the Italian economy.

w/c Monday 30 September, European Parliament hearings for designated Commissioners

Earlier in September, Commission President Ursula Von der Leyen nominated her team of commissioners. Between 30 September and 8 October, the 26 designated commissioners will address the committees of the European Parliament in order to receive the necessary confirmation before taking office. The parliament’s legal affairs committee has already rejected two candidates. Should parliament confirm the nominees the Commission will officially enter office after the European Parliament plenary session foreseen for the week

commencing 21 October.

Thursday 3 October 2019, European Court of Justice expect to rule of the legality of 2008 Polish mortgage lending linked to the Swiss franc

Polish banks are bracing for 3 October, when they expect the EU court to decide a potentially costly case over mortgages denominated in foreign currencies. The ruling will likely set an important precedent and could see the banks could face a bill of €10 billion, or the estimated equivalent of 3-4 years’ worth of profits. However, the cost is expected to be spread over several years and regulators are expected to step in if solvency was threatened.