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Monday, 4 November – Kemi Badenoch to name her shadow Cabinet after winning race to replace Rishi Sunak’s Conservative party’s leadership
On Saturday, the Conservative Party's leadership race was settled, with 44-year-old Kemi Badenoch beating former Levelling Up Secretary Rober Jenrick by 12,418 votes.
Kemi Badenoch, a former Business Secretary, has positioned herself as the choice for those within the party who want a clear ideological distinction from Labour, warning that the Conservatives need to “stop acting like Labour” to regain power. This appeals to members who favour a more right-leaning direction for the party. In her victory speech, Badenoch pledged to win back voters that the Conservative party had lost in previous years and promised to ‘’renew the party’’. Later today, Badenoch will announce her shadow Cabinet. Subsequently, she is expected to address backbench Tory MPs on the 1922 committee later this week.
Reacting to her victory, the UK Chancellor Rachel Reeves challenged Badenoch to back the Labour government’s new £40 billion Budget, unveiled last month. The budget includes tax hikes and increased public spending and there are no clear indications that the new Conservative leader will back it. Nevertheless, she told BBC over the weekend that her leadership is ‘’not going to be able to oppose anything in terms of getting legislation through’’.
Despite a massive defeat for the Conservatives in the 4 July general election, the Badenoch will take over a party with renewed momentum in the polls as the popularity of the governing Labour party has nosedived over the past month.
W/C Monday, 4 November – Parliamentary hearings of Commissioners-designate to kick off
In September, President von der Leyen presented her list of the 26 nominees for the next European Commission to MEPs, along with their proposed portfolios, which include key areas such as competition, trade, and defence. The proposed vice-President Commissioners include Estonia’s Kaja Kallas as the bloc’s foreign policy chief, Finland’s Henna Virkunen with a portfolio in charge of tech sovereignty, Italy’s Raffaele Fitto with a portfolio focused on economic affairs and cohesion, France’s Stephen Sejourne overseeing European industry and competitiveness, and Spain’s Teresa Ribera leading a powerful portfolio comprising both competition policy and the green transition.
Each commissioner-designate will undergo confirmation hearings before the European Parliament, often lasting several hours, where they will face rigorous questioning. Originally planned for late September, these hearings will take place from 4-12 November. Historically, it is not uncommon for some nominees to be rejected; indicatively, during the last cycle, three did not make it through at this stage. Nevertheless, it appears that this time all 26 nominees could pass. This would mark the first time since 2004 that all nominees proceed without disruption, a possibility driven largely by political pragmatism rather than unanimity. Although Socialists and Democrats (S&D) and Renew Europe members have expressed concerns over specific candidates, such as Italy’s Raffaele Fitto, aligned with ECR and Giorgia Meloni, and Hungary’s Oliver Varhelyi, nominated by Viktor Orban, they are constrained by the EPP’s capacity to retaliate against their own key candidates. Hearings kick off today with Slovakia’s Maros Sefcovic, Malta’s Glenn Micallef, Luxembourg’s Cristophe Hansen, and Greece’s Apostolos Tzitzikostas.
The goal is for the new European Commission to begin its term on 1 December. However, any complications or additional hearings could further delay the process, potentially extending it into January 2025.
Wednesday, 6 November - Thursday, 7 November – Court of Justice and General Court to rule on state aid cases involving Ryanair and Wizz Air, respectively
On Wednesday, the Court of Justice (CJEU), the EU’s higher court, will rule on a Ryanair state aid case. The following day, the General Court, the EU’s lower court, will issue its decision on a similar case involving Wizz Air.
The first ruling (C-588/22 - Ryanair v Commission) concerns Ryanair’s 2022 appeals against the judgments of the General Court in case T-657/20 where the court dismissed actions brought by the airline challenging the June 2020 decision of the European Commission authorising Finland’s aid measures to support Finnair’s recapitalisation in response to the COVID-19 pandemic. By filing an appeal, Ryanair claimed that ‘’the General Court and the Commission failed to adequately state reasons’’. In total, Ryanair has filed 16 lawsuits against the Commission for allowing state aid to airlines across Europe during the Covid-19 pandemic, including Lufthansa, Austrian Airlines and TAP.
The General Court’s ruling on Thursday concerns a similar appeal (T-827/22) filed by Hungarian low-cost air carrier Wizz Air against the Commission’s decision to green light a Romanian 2022 state aid scheme in support of Romanian flagship airline Tarom €1.9 million for the damages suffered due to the travel restrictions during the period from 1 July to 31 December 2020. By filing an appeal, Wizz Air seeks annulment of that decision claiming incorrect application of Article 107(2)(b) TFEU, errors of assessment as to the proportionality of the measure, breach of the principles of non-discrimination, freedom to provide services and freedom of establishment, and failure to initiate a formal investigation procedure.
Thursday, 7 November – Parliament likely to be dissolved in Ireland, paving the way for a general election on 29 November or 6 December
The Oireachtas (Houses of Parliament) returns on Tuesday for what is likely to be the final week of this iteration.
The two “essential” pieces of government business that the Taoiseach Simon Harris said must be passed before a general election can be called are the Social Welfare Bill and the Finance Bill. These give effect to most of the provisions contained in the government’s giveaway 2025 budget announced last month. The Social Welfare Bill went through all the remaining stages in the Seanad two weeks ago which leaves the Finance Bill. When the Dail returns on 5 November, the remaining stages of the Finance Bill will be pushed through without debate, also known as “guillotined”. There are 10 other pieces of legislation that various ministers are seeking to have finalised this week before the Oireachtas is dissolved on Thursday.
The latest polling data in Ireland indicates that Fine Gael is polling at a range of 22-27%; its highest in three years. This is largely attributed to the energy brought about by the leadership of Simon Harris. Sinn Féin's support has declined to around 16-20%, down from a high of 36% in 2022. Fianna Fáil and the Green Party maintain steady support at around 18-21% and 3-5%, respectively.
While polling suggests that Fine Gael and Fianna Fáil will likely return to office, with Simon Harris returned as Taoiseach, this should not be considered a foregone conclusion and election campaigns in Ireland can often take on a life of their own. During the European elections, around half of Irish voters in a post-election survey indicated that they made up their minds who to vote for in the final week of the election campaign.
From a Fine Gael perspective, 18 of their current 35 TDs (MPs), including Leo Varadkar, Simon Coveney, Heather Humphreys and several other prominent TDs, are not seeking re-election. With them goes a lot of name recognition and local profile – it remains to be seen whether strong polling numbers for the party will compensate for the removal of the advantages associated with incumbency.
It is also difficult to predict the composition of the next government, even if the polling numbers prove accurate. The Green Party may be replaced by Labour or by Independent TDs. Indeed, Independent candidates won around 28% of the vote in both the local and European elections in June.
While momentum is strongly against them, most polls over the past months show that Sinn Fein remains in a virtual dead heat with Fianna Fail for being the second most popular party in the State. While they had a very poor local election result, finishing with 11.8% of the vote, this was also the case in 2020 when they went on to win 35 seats and tie with Fianna Fail as the largest party in the Dail. While a role for Sinn Fein in the next government cannot be ruled out entirely, the emergence of three recent sexual harassment related scandals will hurt the party and they go into this campaign very much on the back foot.
As regards the process, while it is a decision for the Taoiseach to go to the President and seek a dissolution of the Dail, it is then up to the Minister for Local Government, who is Fianna Fail’s Darragh O’Brien, to decide on the polling date. Electoral law gives the Minister to power to decide when the polling day is and whether the campaign should be 18 or 25 days (excluding Sunday and public holidays). Our understanding is that Fine Gael prefer a short campaign of 18 days in order to capitalise on it momentum – this would see the election take place on 29 November. The length of the campaign should be agreed in advance by the governing parties. There is a possibility that Fianna Fail will not agree on to a shorter campaign, being confident in their own “ground game” – this would see the election take place on 6 December.
Thursday, 7 November – Bank of England committee to decide on interest rates; expectations of a rate cut slightly tempered following Budget announcement
The Monetary Policy Committee (MPC) of the Bank of England (BoE) will meet on Thursday, with a 25-basis point cut widely priced in, bringing the Bank Rate down to 4.75%. In the previous September meeting, the BoE opted to hold rates at 5%, after a tight vote in August led to the first interest rate cut since March 2020.
According to a Reuters poll conducted from 22-28 October, all 72 surveyed economists forecasted a 25-basis point cut this week, but nearly two-thirds expect the BoE to hold rates steady in December. The poll took place after it was revealed that inflation fell to a three-year low of 1.7% in September, below the BoE’s 2% target. Nevertheless, Finance Minister Rachel Reeves’ budget may complicate the BoE’s plans for continued cuts. The budget, unveiled last Wednesday, introduced significant tax increases and spending on public services, with the Office for Budget Responsibility, the UK’s fiscal watchdog, raising its inflation forecast for next year to 2.6%, up from 1.5%.
The international context also adds pressure, with the US Federal Reserve and the European Central Bank moving faster on easing, each expected to implement more substantial rate cuts by the of the year. For the BoE, however, this Thursday’s expected reduction will most likely represent a modest step rather than the beginning of a rapid rate-cutting cycle as key figures including its governor Andrew Bailey and MPC members Megan Greene and Catherine Mann have warned that a sustained reduction will take time.
Friday, 8 November – EU leaders to discuss competitiveness in informal Budapest summit
On Friday, EU leaders will hold an informal summit in Budapest to discuss competitiveness based on the key findings of Mario Draghi’s report. Released in September, the report highlighted the EU's widening productivity gap with China and the US, especially in key technological and innovative sectors. Member States have since reviewed the report, and a declaration is expected this week.
The initial draft version of the ‘’Budapest Declaration on the New European Competitiveness Deal’’ called on the European Commission to present a comprehensive "European Tech Strategy" by mid-2025 which will aim to bolster the EU's technological capabilities, drive digitalisation across industries, and promote innovation, with a strong focus on cutting-edge areas like quantum technologies and AI. However, last week’s updated version has a more watered-down tone, calling for ‘’package of measures’’ to be presented by June 2025 instead of Strategy. The leaders also set a target to increase spending on research and innovation to 4% of GDP by the end of the decade. Indicatively, the EU average is still currently well below the EU’s recommended 3% (2.27% in 2022). Of interest is also the call for ‘’the European Investment Bank to assess and further adapt its policy for lending to the European defence industry’’ ahead of the White Paper on Defence, which is expected in Q1 2025. Nevertheless, the draft declaration is expected to once again undergo changes before the summit: EU ambassadors are meeting today to agree on a final compromise, aiming for a shorter and less controversial text.
Another key issue to be discussed by EU leaders is the financial and political instruments needed to implement the competitiveness goals, given that Draghi’s report estimated that the outlined competitiveness objectives, the EU will need €750 to €800 billion in additional annual investment, equivalent to 4.4-4.7% of EU GDP in 2023. To that end, Member States are expected to call for the establishment of a new Sovereignty Fund for equity investments and new common revenues, along with the completion of the Banking Union and the Capital Markets Union by 2026. Overall, this week’s summit will indicate the extent to which Member States embrace Draghi’s findings.
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