19 May 2017

Conservative manifesto pledges to withdraw UK from the Customs Union

Prime Minister Theresa May introduced the Conservative election manifesto yesterday, saying, “The next five years are the most challenging that Britain has faced in my lifetime. Brexit will define us: our place in the world, our economic security and our future prosperity. So now more than ever, Britain needs a strong and stable government to get the best Brexit deal for our country and its people.” On Brexit, May repeated previous pledges to withdraw from the Single Market and EU Customs Union, to end “vast annual contributions” to the EU budget but reserve the possibility of participating in “specific European programmes,” and to give both Houses of Parliament a vote on the “final agreement.” She added, “We continue to believe that no deal is better than a bad deal for the UK.” She also renewed the Conservative commitment to reduce net migration to “sustainable levels” in the order of the tens of thousands, and said that there would be tighter restrictions on student visas, post-course working visas, and family visa sponsorship.

Elsewhere, speaking on Newsnight last night, Defence Secretary Michael Fallon said of the Conservative commitment to reduce immigration to the tens of thousands, “We haven’t set out a formulation of how much it will reduce by each year, what we have set out is our ambition to continue to bear down on immigration.”

Writing for Open Europe’s blog, Alex Greer comments, “The separate references to EU and non-EU migration give Theresa May the option of offering some form of preferential access to the UK labour market for citizens of the EU-27 countries, presumably as an incentive for the EU to grant other UK demands. This would of course be a matter for negotiation, but the nuance in the Conservatives’ position as set out would allow them to strike a tough tone on migration while giving the EU a face-saving pretext for granting, say, preferential market access for UK financial services firms while still preserving the integrity of the Single Market.”

Source: Open Europe: Greer Press Association The Conservative Party

EU’s chief Brexit negotiator warns issue of ‘Brexit bill’ could jeopardise negotiations

According to the minutes of a meeting of the European Commission, the EU’s chief Brexit negotiator Michel Barnier told EU commissioners and Commission President, Jean-Claude Juncker, that the issue of Britain’s exit ‘bill’ “would doubtless be one of the most difficult in the negotiation.” Barnier expressed concern that the “European Council [EU heads of states and governments] wanted a single settlement to cover all the financial relations between the EU.” The minutes read, “Should there be no agreement on this point he believed that the risk of failing to reach an agreement on an orderly withdrawal of the UK would become real, since none of the EU-27 member states wished to contribute more to the current multiannual financial framework or receive less in projects financed under the framework.”

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Taoiseach says Ireland could request EU assistance to mitigate “serious disturbance” of Brexit

Irish Taoiseach Enda Kenny yesterday said that Ireland may request EU assistance to mitigate any “serious disturbance” to the Irish economy following Britain’s withdrawal from the EU. He said, “[It is] more than likely [that Ireland] will have to make a case for assistance from the European Union in this regard, because all of the economic reports would indicate that Ireland would be most adversely impacted by a difficult Brexit.”

Meanwhile, the assistant secretary for customs at Ireland’s Revenue Commissioners, Tony Buckley, told the same conference that customs posts would not be necessary at the Irish border following Brexit. He added, “The main image that comes to people minds when they think of a border is cars being stopped and searched. Not going to happen. There’s no reason for it.” He also said that Ireland could rely on a self-assessment scheme for customs, and could move any required inspections away from the border.

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Liechtenstein PM warns that UK must not be better off than members of the EEA after Brexit

The Prime Minister of Liechtenstein, Adrian Hasler, has said, “Liechtenstein said ‘Yes’ to the EEA [European Economic Area] membership 22 years ago to get access to the EU market, and we consciously accepted the duties this entails…The effort is enormous for such a small country. It’s absolutely key for us that this is recognized by the EU and we don’t find ourselves suddenly worse off than the UK, which turned its back on the EU.”

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EU states preparing joint military fund

According to a senior EU official quoted yesterday by Reuters, next month nineteen EU states are expected to start discussing the creation of a joint fund to pay for common military projects, the so-called Cooperative Financial Mechanism (CFM). The official said, “This is about liquidity. Too often, projects cannot get off the ground or are delayed because countries don’t have the money available. This would ring-fence funds especially for defence.” The participating countries, which are said to include Germany, France, Italy, and Spain, would contribute to the fund on a voluntary basis, while payments could also come from the Commission.

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EU to rethink capital markets union after Brexit

Brexit will force the EU to rethink plans for its flagship capital markets union (CMU) project, which aims to increase access to capital markets, and to search for an alternative financial centre to London, according to a leaked document seen by Reuters.  The document, written by the European Commission, says, “The CMU reform programme must be updated so that it can meet the challenge of creating a more autonomous capital market for the EU-27 economy…The departure of the UK from the single market reinforces the need and urgency of further developing and integrating EU capital markets.” The document suggests the EU-27 want to replicate London’s financial industry as far as it can, rather than focusing on retaining full access to London.

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