Week Ahead (27 June)

Monday, 27 June - CSO releasing data on FDI in Ireland for 2021

Today, the Central Statistics Office will release data on foreign direct investment in Ireland during 2021. In 2020 flows of direct investment into Ireland increased by €71 billion, the third-strongest result for the country since 2012. The presence of many multinational companies headquartered in Ireland also contributes to Ireland's strong corporation tax take, the second largest contributor to the overall tax take in the country last year.

While the OECD-level tax agreement, if enacted, will represent an end to Ireland's 12.5% corporation tax rate (with a global minimum to be set at 15%), no multinational company has signalled an intention to move operations from Ireland on foot of it.

Tuesday, 28 June – Scotland’s First Minister Sturgeon to outline plans to hold a second referendum on Scotland’s future in the UK

On Tuesday, Scotland’s First Minister Nicole Sturgeon will unveil her plans to hold a second referendum on Scotland’s future in the UK in front of the Scottish parliament.

According to her plans, the referendum could be held in October 2023, provided that her government secures the necessary approval from the UK government to stage it – something the current government has ruled out. Although the Scottish people voted against independence in 2014, the Scottish government has argued that a new referendum should take place, mainly due to Brexit. Current polling suggests 52.5% of Scots are against independence with 47.5% in favour.

Wednesday, 29 July – UK prime minister faces PMQs after by-election defeats in Wakefield and Tiverton & Honiton

This Wednesday, Boris Johnson will face parliament at Prime Minister’s Questions (PMQs), the first to be held following last week’s by-elections in Wakefield and Tiverton & Honiton, where the Conservative party lost both strategically important parliamentary seats. In Tiverton & Honiton, traditionally a Conservative stronghold, the Liberal Democrats managed to overturn a Tory majority of more than 24,000 votes. Wakefield’s seat was returned to Labour in a boost for the party’s effort to regain ‘’red wall’’ seats in the industrial north of England.

Johnson has suffered another significant blow to his ambitions to lead the Conservatives into the next election. He is currently facing down a rising number of rebels in his party and an ongoing cost-of-living crisis in the UK. The Prime Minister is likely to find himself under renewed pressure despite surviving a vote of no confidence following controversies over lockdown-breaking scandals earlier this month. According to the current party rules, a new vote of no confidence cannot be held before June 2023. Nonetheless, the rules can be changed, and an increasing number of party rebels could set such a change in motion.

Friday, 1 July - Czech Republic to take over rotating presidency of Council of EU

On Friday, the Czech Republic will take over the rotating presidency of the Council of EU from France. Czech officials have made clear that the ongoing war in Ukraine and dealing with the multifaceted challenges related to the conflict, including energy security, will be the key priority for the country’s presidency.

Rather than dealing with longstanding issues, Prague has chosen to label its upcoming presidency as “crisis-management”, given the far-reaching consequences of the war in Ukraine. Securing economic support for Ukraine and addressing the massive influx of refugees fleeing the war in Ukraine will be among the priorities. A staunch supporter of the EU’s Fit for 55 and REPowerEU legislative packages as the basis for decarbonisation and the transition to hydrogen, the Czech presidency will also have to push for short-term solutions to the ongoing crisis. It is also expected to stress the importance of nuclear energy in ensuring EU energy security, currently a hotly debated topic.

Friday, 1 July - Flash estimate for inflation Euro area

The latest Eurostat flash estimate for inflation will be released on Friday, showing an early estimate for June. The final data for May showed that inflation had reached a record 8.1%, up from 7.4% a month previously. The inflation rate is currently more than four times higher than the European Central Bank's target rate of 2%.

In May the main components of inflation in the euro area were, unsurprisingly, energy at 39.1% and food, alcohol and tobacco at 7.5%.

With energy prices continuing to rise at record levels, this week's discussion on external energy engagement at the Committee for Industry, Research and Energy (ITRE) is likely to be instructive. The Commission's strategy in this area was published in early May and is targeting inter alia the overall reduction of energy use, fair competition for resources, preparations for the introduction and widespread adoption of green hydrogen and a weening of Europe from dependence on Russian gas and oil.