Week Ahead (14 September)

W/C Monday, 14 September - UK Parliament to debate Internal Markets Bill

MPs will today hold the first substantive debate on the Internal Market Bill. The publication of the bill last Wednesday prompted a deterioration in relations between the UK and the EU and threatened the future of negotiations on a trade agreement. The UK revealed that it was openly considering breaking international law by overriding elements of the Withdrawal Agreement via the bill. If enacted in its current form, it would breach the Withdrawal Agreement's provisions on state aid

and customs arrangements for Northern Ireland.

On the publication of the bill, the EU Commission Vice President, Maroš Šefčovič, requested an extraordinary meeting of the EU-UK Joint Committee. The meeting, held last Thursday, saw the Commission Vice President call on the British Government to withdraw the offending measures from the bill before the end of September, calling it "an extremely serious breach of international law".

The bill will now be considered by the House of Commons and will have to pass through the House of Lords before becoming law. It will have its second reading today and move to committee stage tomorrow, where amendments can be tabled. The bill may substantially change by the time it passes to the House of Lords. Despite the acrimony prompted by the introduction of the bill, trade talks are set to continue between the blocs this week.

Monday, 14 September - European Parliament to debate role of EU supervisors in Wirecard scandal

The European Parliament will today debate the role of EU supervisors in the Wirecard scandal. The debate follows a vote at the Economics committee (ECON) in favour of regulatory changes in response to the scandal on Thursday. The vote, while non-binding, called for the European Commission and other EU authorities to assess whether the Germany payments company’s collapse could have happened due to “deficiencies in the EU regulatory framework”, including in the areas of audit and supervision.

The after-effects of the scandal will be felt for some time. In July, the European Securities and Markets Authorities (ESMA) announced that it had begun an investigation into the regulation of German financial markets following Wirecard’s collapse, which will conclude by 30 October.

Thursday, 17 September - Eurostat Inflation statistics to be released

On Thursday, Eurostat will release inflation data for August. The data release comes after the flash estimate earlier this month showed that Eurozone inflation is likely to have entered negative territory, with published estimates of headline inflation at -0.2% in August, down from 0.4% in July. Core inflation, which strips volatile items such as oil prices from the estimate, fell to 0.4% in August, according to the flash estimate, down from 1.2% in July. Despite the levels of surprise expressed by analysts at the decline in the inflation rate, ECB President, Christine Lagarde, said at the ECB Governing Council meeting on Thursday that the low flash estimate was " as expected", ascribing it to an extensive VAT cut in Germany and the postponement of summer sales across Europe.

The Governing Council declined to alter its response to the economic crisis this month, but said that it would adjust all of its instruments as it deemed necessary to meet its long-standing inflation target of below, but close to, 2%. Ms Lagarde stated that the €1.35 trillion pandemic emergency purchase programme would continue and that it was "very likely" to be spent in its entirety, despite suggestions by some governing council members recently that the figure should be seen as a ceiling rather than a target. Indeed, many observers expect PEPP to be extended before the end of the year if there is no improvement in the inflation rate.