Because there is actually an advantage to the combination of smaller local constituencies with a global list for overall proportionality. Electing 46 seats in Germany by proportional representation leads to someon on the #20 slot of one of the big parties being elected. Who actually votes with the #20 candidate in mind? An EU-wide list of 250 candidates has the same problem - someone in position #100 of the EPP or PES list is likely to get elected. Also, I would say that you want to have representation from all combinations of nation+party, even if it is only one from each. That's for giving views a voice. The vote is the overall proportionality.

Also, what do we do with sub-national constituencies: apportition seats according to the Penrose law, or proportionally? I would abolish them. Or institute a similar EU-wide rule where if a country wants to have subnational constituencies they have to use the same Penrose + country-wide scheme as is used in the EU as a whole.

And won't this make elections in the smallest countries overly focused on the direct seats, as opposed to the largest countries?

As opposed to making the votes from the smallest countries all but irrelevant? Iceland will have 1/1500 of the EU's population. Why vote in the EU elections if there are only 750 seats to be filled?

The peak-to-trough part of the business cycle is an outlier. Carnot would have died laughing.