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Week Ahead (8 November)

Monday, 8 November - Eurogroup meeting to discuss rising inflation rates and digital euro

Eurozone finance ministers will meet today to discuss the ongoing high level of inflation in the bloc. Inflation has grown to 4.1%, more than twice the European Central Bank's target of 2%, reflecting the rising cost of doing business in Europe as companies struggle to cope with supply chain bottlenecks. This has led to increased costs for consumers and attendant political worries for governments.

The ECB has long said that the rise in inflation is a temporary phenomenon associated with the reopening of economies after lockdowns and the strong economic rebound that entailed. However, the position of central bankers on the issue is far from unanimous, with Vice-President Luis de Guindos saying at the weekend that an anticipated slowdown in inflation next year will happen at a slower rate than had previously been expected.

The issue is threatening to become a major electoral issue in France, Europe's second largest member state economy, when it goes to the polls in April next year. Centre-right and right-wing candidates are pledging to cut tax on gas in an effort to stem rising costs, while a so-called "inflation compensation bill" is currently before the French Parliament which will see citizens earning less than €2,000 per month given an extra €100 to help meet the rising cost of living.

The digital euro project will also be discussed. The ECB recently moved to the investigation phase of the project, which is expected to last for 24 months. It recently appointed 30 members to its Digital Euro Market Advisory Group, which will advise Eurosystem on the design of the proposed currency as well as matters related to its distribution.

Tuesday, 9 November - Ecofin meeting to approve European Semester plans

The Economic and Financial Affairs Council will meet on Tuesday to finalise plans for the European Semester programme for the first 6 months of 2022.  The "Spring Package" was announced in June and provides that member states make the best possible use of the Recovery and Resilience Facility funding they receive, and confirms that economic policy should remain supportive throughout the coming year. The Commission said in June that the swift roll-out of national recovery and resilience plans would be key to supporting the recovery and to modernising member state economies via green and digital transitions.   

All member states, except for the Netherlands, have now submitted recovery and resilience plans to the Commission.  Last week Economic and Finance Ministers approved the plans of Estonia, Finland and Romania; these member states will now be able to draw down up to 13% in pre-financing from their allocations.  22 member states have had their national recovery plans adopted so far, with 17 member states having received their requested pre-financing. The total amount disbursed so far is around €52.4 billion. 

Wednesday, 10 November - European Parliament to debate public country-by-country reporting for multinationals  

The European Parliament is expected to approve a deal which will introduce public country-by-country reporting (pCBCR) at the 10 November plenary session. The Council of the European Union adopted its position on proposals for country-by-country reporting, CBCR, on 28 September and this was accepted by the European Commission on 1 October.   

Multinationals with revenue of €750 million or more will have to disclose the amount of income tax they pay in the countries in which they have operations; this will apply, for the first time, to non-European companies operating in the bloc via subsidiaries. 

Wednesday, 10 November - Decision expected in Google antitrust appeal

The Court of Justice of the European Union will rule on Google's appeal of a 2017 decision by the European Commission to fine the company €2.4 billion for abusing its dominant position in the online shopping sector.  On 10 November 2010, the European Commission opened a formal investigation into Google's search practices, following claims from smaller companies that Google's Universal Search algorithm change promoted Google's own products in search engine results pages and downgraded the placement in results of competing products, thus stymieing competition.

Google has complied in part with the Commission ruling by allowing rival companies to advertise in its "shopping box" - effectively allowing them to appear at the top of search results - by bidding for the positions via an online auction. However, rivals remain dissatisfied with the level of control Google has over the market.  Two separate investigations since then have resulted in substantial fines for the company, appeals for which are pending; Wednesday's decision may set a precedent for those appeals.   

Thursday, 11 November - Irish Consumer Price Index to be released

The latest Irish Consumer Price Index report will be released on Thursday, reflecting the prices paid for goods in the country through October.  In common with the rest of Europe, the report is likely to show strong growth in prices due to ongoing inflationary pressures on the economy caused by supply chain issues and high energy costs.   

In September average prices rose year on year by 3.7%, and by 0.5% when compared to August.   

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