12 May 2017

Michel Barnier: Ireland’s interests will be the EU’s interests in Brexit negotiations

Addressing a joint sitting of the Irish parliament yesterday, the EU’s chief Brexit negotiator Michel Barnier said, “I want to reassure the Irish people: in this negotiation Ireland’s interest will be the Union’s interest. We are in this negotiation together and a united EU will be here for you.” He also said that while “Brexit changes the external borders of the EU,” he would “work with [Ireland] to avoid a hard border [with Northern Ireland].” However, Barnier suggested that customs controls would be necessary for goods crossing the Irish border post-Brexit, saying, “Customs controls are part of EU border management. They protect the single market. They protect our food safety and our standards.” But he went on to say, “If we put things in the right order, if we negotiate with mutual respect, without any kind of aggressivity… if we are open to finding solutions, there is no reason why a strong Europe cannot maintain a strong relationship with the UK.”

Speaking during the same sitting, Irish Taoiseach Enda Kenny said that Brexit “is not an Irish policy and it is not an EU policy,” adding, “For its part, Ireland remains committed clearly to the European Union and its future.” He also announced that “Ireland will bid along with other countries for the two EU bodies currently located in London, the European Medicines Agency and the European Banking Authority.”

Open Europe’s report ‘Nothing to declare’ concluded that the UK and the EU should aim for full cooperation on the practicalities and administration of customs as part of a comprehensive UK-EU free trade deal, and that leaving the EU’s Customs Union is the only logical step for the UK to pursue an independent trade policy.

Source: Open Europe Intelligence The Press Association

‘Smooth’ Brexit will lead to more normalised interest rates

Interest rates will be able to rise to “normal” levels if the UK negotiates a “smooth” Brexit, according to the Bank of England. The bank voted to keep rates at 0.25%, but published forecasts suggesting that the current economic slowdown will be temporary. Its quarterly inflation report predicted improved growth and a fall in the inflation rate back to around the 2% target. However it emphasised that its optimistic predictions were on the assumption that the UK negotiates a deal which does not leave businesses having to make sharp adjustments. The Bank also revised down its forecast for UK growth in 2017 from 2.0% to 1.9%.

Meanwhile, data from the Office for National Statistics showed British manufacturing and construction output fell in March and the trade deficit widened. Output decreased by 0.6% and construction by 0.7%, while the UK’s total trade deficit widened by £2.3bn.

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Schäuble gives mixed welcome to Macron’s proposed Eurozone reforms

German Finance Minister Wolfgang Schäuble told Italian daily La Repubblica, “President Macron and I totally agree on this: there are two ways to strengthen the Eurozone – change the treaties or do it with pragmatism, inter-governmentally. Treaty changes require unanimity and the ratification in national parliaments, or in some countries even a referendum. Given this is not realistic at the moment, we must try and move forward with the existing tools – that is, by developing the treaty on the ESM bailout fund.” He added, “We could create a Eurozone parliament, which could have consultative powers on the [ESM] bailout fund.”

On the Open Europe blog, Vincenzo Scarpetta argues, “If one juxtaposes Schäuble’s remarks with Macron’s programme, it is fairly easy to see that they do not quite have the same thing in mind when they speak of ‘strengthening the Eurozone’. Generally, Macron’s proposals are more political, while Schäuble’s have a more technocratic flavour.” He concludes, “The underlying differences between the French and the German view of what ‘more integration’ means have not gone away – which, in my opinion, makes expectations of a big leap forward slightly misplaced.”

Separately, discussing Macron’s statement that non-member states enjoying EU rights risked the Union falling apart, Open Europe’s Pieter Cleppe commented in E-sharp, “the point of the EU is to safeguard open trade, not to reserve it to its members… Once the EU goes down the road of actively pushing for more restrictions on trade, then the EU will be doomed [but] not when it makes sure the UK keeps a lot of trade access, as this benefits EU consumers.”

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Labour position on Brexit unclear to voters

A YouGov poll for The Times found voters split on Labour’s Brexit position, with 17 per cent thinking the party wants the UK to remain in the EU, 9 per cent thinking it wants a second referendum, 27 per cent thinking it wanted the UK to leave the EU but keep single market benefits, 4 per cent thinking it wanted a free trade deal with the EU, and 43 per cent either unsure or thinking it had no clear policy. The corresponding figures for the Conservatives were 6 per cent, 3 per cent, 21 per cent, 38 per cent, and 31 per cent.

This comes as a Clause V meeting of senior Labour figures approved the party’s election manifesto, details of which had leaked earlier. This confirmed that Labour would reject a ‘no deal’ scenario in Brexit negotiations, commit to unilaterally guarantee the rights of EU citizens resident in the UK, and scrap the government’s Brexit White Paper.

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Portuguese Foreign Minister confirms no firm amount has been established yet for ‘Brexit bill’

Asked whether the UK would be faced with a ‘Brexit bill’ of up to €100bn, Portuguese Foreign Minister Augusto Santos Silva said, “This is journalistic speculation. We need to agree on the formula and then apply it.” He added, “What the Brits are saying is that, from their point of view, the [financial] commitments they have to honour are those whose payments come due until 2019,” but noted that “the commitments made within this 2014-2020 [EU] financial framework are paid out in 2017, 2018, 2019, or 2020.” He concluded, “Let’s agree on this first, politically, and then the technical experts will do the numbers. It’s not difficult to do them. Until then, it’s speculation.”

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Visegrád group warns that Brexit must not be used to avoid EU reform

Speaking at a panel in London yesterday, ministers from the Eastern European Visegrád group (Czech Republic, Hungary, Poland, Slovakia) warned that the EU should not use Brexit as a reason to avoid undertaking necessary reforms. Hungarian Minister for EU Affairs, Szabolcs Takács, said, “The Brexit referendum was not the cause but rather the result of problems within the European Union…This is what we can’t ignore.” He also raised concerns about the future of decision-making within the EU, particularly in relation to the defence, saying, “The balance of power will go to the bigger members of the bloc…Germany and France if joined by Malta and Belgium can block legislation.” Poland’s Minister of European Affairs, Konrad Szymański, rejected the idea of a multi-speed EU, adding, “All of this is based on a perception that a divided EU would be more efficient. It is an absolutely false presumption.”

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Verhofstadt warns of veto if citizens' rights are not protected

The European Parliament’s chief Brexit co-ordinator Guy Verhofstadt has warned that the Parliament will block any deal that doesn’t guarantee citizens’ rights with “adequate protections.” Addressing a special session of the Parliament, he said, “We will never give consent if the issue of citizens’ rights, on both sides, has been dealt with in a satisfactory way.”

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ECJ rules non-EU citizens may have EU residency rights if their child is an EU citizen

The European Court of Justice (ECJ) has ruled that non-EU citizens may have residency rights in the EU provided their child is an EU citizen. The judgement favoured a non-EU mother whose visa had expired and was seeking access to benefits for her Dutch child, on the basis that not granting these rights would in turn prevent the child enjoying their EU rights.

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ECJ rules Uber can be regulated as a transport service not a digital platform

The European Court of Justice (ECJ) yesterday issued an opinion saying that Uber is a transport service and not merely a digital platform, as Uber has argued. Accordingly, Uber “can thus be required to obtain the necessary licenses and authorisations under national law.” The opinion is not binding and has no legal consequence.

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