11 January 2016

David Cameron says he will stay on as Prime Minister in event of Brexit vote

Speaking on the BBC’s Andrew Marr Show yesterday, Prime Minister David Cameron said he would stay on in the job if the EU referendum resulted in a vote to leave. Asked whether he would stay on as Prime Minister if he ended up on the losing side, he said, “The answer to that question is yes.” Asked whether he was suggesting the referendum could be held this summer, Cameron replied, “That is what I would like to see, is a deal in February, then a referendum that would follow.” He added that there was a “massive prize for Britain” if it could renegotiate EU membership, saying he did not think a UK exit was “the right answer” but promised “everything necessary to make it work” if there was a vote to leave.

David Davis MP, a former Conservative Europe Minister, said, “Departure is not difficult, but it is complicated. We should be getting on with this now. Let’s be pessimistic and say there’s a one in three chance of us leaving – that is still a big contingency, so it is nothing short of irresponsible not to have done any preparation. How on earth can you assess whether Brexit is right or wrong unless you assess how you would do it?” Fellow Conservative MP Bernard Jenkin tweeted that “the Prime Minister is right. He would be the best figure to implement Brexit if ‘Leave’ wins the referendum.”

Meanwhile, The Independent on Sunday quoted Open Europe’s Stephen Booth as saying that, although some Eastern European member states remained an obstacle for Cameron’s proposed reforms on migrants’ access to welfare, countries such as Hungary and Poland recognised the clear threat and effect of a British exit.

Source: BBC News The Financial Times The Times Independent on Sunday The Guardian The Daily Mail (Saturday) The Times: Montgomerie

Heads of UK big businesses want UK to be part of a European economic, not political community

A new survey by Ipsos Mori of heads and senior managers of the UK’s largest companies found that 49% want the UK to be part of a European economic community without political links, compared to 39% who want UK-EU relations to stay the same. 87% of respondents said they wanted to remain in the EU both professionally and personally. Half said a Brexit would make no difference (positive or negative) to the UK’s trade with the rest of the world, while three quarters said it would not make it harder to attract or retain talent.

Source: The Financial Times

European Commission to consider initiating probe into Polish government’s Constitutional Tribunal reforms amid war of words between Polish and German politicians

Frankfurter Allgemeine Sonntagszeitung reported that the European Commission will on Wednesday initiate an investigation into the Polish government’s controversial changes to the country’s Constitutional Tribunal which will be headed up by Vice-President Frans Timmermans. A Commission spokesperson confirmed to Politico that the College of Commissioners will hold an “orientation debate” about the issue, and that “any further steps will depend on the outcome of that debate.” However, in an interview with Kossuth Rádió on Friday, Hugarian Prime Minister Viktor Orbán said, “The European Union should not think about applying any sort of sanctions against Poland because that would require full unanimity and Hungary will never support any sort of sanctions against Poland.”

Meanwhile, the Polish government also hit back at the Commission after it expressed concern over a new law giving the government the ability to directly hire and fire the heads of public broadcasters. Deputy Foreign Minister Aleksander Stępkowski wrote to Timmermans arguing that “freedom of information and freedom of speech are fully respected and obeyed by the Polish government.” He added that “exposing the Polish Government to interventions inspired by unjust, biased and politically engaged enunciations might have an undesirable effect.” Thousands of Poles again took to the streets of Warsaw and other major cities over the weekend to protest the new media law.

Separately, following European Parliament President Martin Schulz’s claim on Saturday that the Polish government was applying “Putin-style methods”, Polish Foreign Minister Witold Waszczykowski this morning met with Rolf Nikel, Germany’s ambassador in Poland, to complain about the recent spate of “anti-Polish comments by German politicians.” In an open letter to EU Digital Market Commissioner Günther Oettinger, Polish Justice Minister Zbigniew Ziobro argued, “You have demanded that Poland be placed under ‘supervision’. Such words, spoken by a German politician, have the worst possible connotations for Poles.”

Source: Open Europe Blog Politico The Financial Times EUObserver Frankfurter Allgemeine Sonntagszeitung Rzeczpospolita

Bundestag to debate new measures following Cologne sex attacks as Merkel comes under increasing pressure

The German Bundestag will today debate new measures following the New Year’s Eve sex-attacks in Cologne.  Justice Minister Heiko Mass told Bild am Sonntag that he believes the attacks were coordinated. Speaking at a meeting of her CDU party on Saturday, German Chancellor Angela Merkel said that the perpetrators “must feel the full force of the law” and backed plans to tighten laws to deport asylum seekers who have committed serious crimes. Merkel faces serious pressure from within her own party and her critics, with the immigration-sceptic Alternative für Deutschland (AfD) calling for her resignation.

Protesters vented their frustrations in Cologne on Saturday, with thousands of right-wing, left-wing and women’s rights organisations demonstrating outside the main station. A Bild am Sonntag poll suggests that 48% of Germans are in favour of an upper limit on the number of refugees arriving in Germany annually, compared to 44% who are opposed. Meanwhile, the German authorities have come under further pressure as it has emerged that a lone terrorist killed in a shootout with police in Paris last week was registered as an asylum seeker in Germany, and was known to authorities having spent time in jail.

Open Europe’s Nina Schick appeared on Channel 4 News arguing that the Cologne attacks will further undermine popular support for Merkel and exacerbate tensions with the CSU – her Bavarian sister party. They are also likely to consolidate support for the AfD in the upcoming regional elections.

Source: Channel 4 News Handelsblatt EurActiv Frankfurter Allgemeine Zeitung The Financial Times The Wall Street Journal

Juncker: Refugees have to accept they also have obligations

European Commission President Jean-Claude Juncker told Dutch daily NRC Handelsblad, “What’s excessive is the behaviour of certain refugees. An asylum seeker shouldn’t be deciding where he wants to live. Refugees must accept that, apart from rights, there are also obligations…I have seen strange things in recent months. Luxembourg, my country, had to do great efforts to find fifty refugees prepared to go live there.”

On central and eastern EU member states’ opposition to EU refugee quotas, he said, “I called several leaders and told them: if you don’t want [the quotas] to be mandatory, at least commit to the numbers demanded by the Commission on a voluntary basis. They all said yes, but then their ministers in Brussels said no. It was astounding.”

On the future of the passport-free Schengen area, Juncker said, “We must review things without fundamentally changing Schengen…Older Europeans feel overburdened by the world. My father, my uncles, people who have more experience in life than myself, would like to see internal borders return. But if we do that, young people will one day accuse us of having caved in too quickly under the pressure of events.”

Source: NRC Handelsblad: Juncker

Putin: Failure to fully implement Minsk agreement is solely the fault of Ukraine

In an extended interview with Bild, Russian President Vladimir Putin described Western sanctions on Russia as “nothing but a theatre of the absurd”, adding that the sanctions “are foolish and are merely harming both sides.” He claimed that the failure to fully implement last year’s Minsk agreement was “without exception” the fault of the Kiev government as it had not delivered on its pledge to grant constitutional autonomy to its Eastern regions by the end of 2015. Asked about the need to respect national borders, Putin replied, “For me, borders and national territories are not important, but rather the fate of people.”

Source: Bild Politico

Brexit fears add to decline of sterling corporate bond market

The Financial Times reports that the market for sterling corporate bonds (excluding banks) failed to open in the first week of 2016 due to fears over the UK’s potential exit from the EU. This has only happened one other time (2013) in the past decade. However, the market has been in slow decline for the past few years with issuance down to £12bn last year from £26bn in 2012.

Source: The Financial Times

Poll: Three quarters of Dutch voters set to reject Ukraine treaty in referendum

Polling by EenVandaag, a Dutch television current affairs programme, found that almost three quarters of Dutch voters will “probably or definitely” vote against ratification of an EU treaty with Ukraine in a referendum this April. Separately, European Commission President Jean-Claude Juncker has drawn criticism from Dutch governing parties after he warned that a ‘No’ vote in the referendum “could open the door to a major continental crisis”.

Source: The Times NRC Handelsblad

Pay rise sees EU judges able to earn more than €300,000 a year

The Irish Times notes that judges at the EU’s Court of Justice have received a pay increase of 2.4% this year, bringing their basic salaries to almost €256,000. With an allowance for entertainment and a 15% residence allowance, a judge can earn more than €300,000 a year. When appointed, judges receive a one-off installation payment worth two months of their basic salary (€41,664), and when a judge finishes working for the court, he or she is entitled to a transitional allowance for three years – worth between €100,000 and €162,493.

Source: The Irish Times

European Commission to begin discussion on whether to consider China a ‘market economy’

The European Commission will this week hold an initial debate on whether to grant China “market economy status”. If granted, it would make it harder to impose import tariffs on goods from China and to make the case that any products were being ‘dumped’ into the EU market at artificially low prices. A decision will need to be taken by December.

Source: Bloomberg

Catalan separatist parties officially in power after eleventh-hour deal

Following a last-minute deal among separatist parties struck on Saturday, Catalonia’s regional parliament yesterday elected Girona Mayor Carles Puigdemont new regional President with 70 of 135 votes in favour. Puigdemont will be in charge of driving forward the political ‘roadmap’ whose last step would be a unilateral declaration of independence in 18 months’ time. Spanish caretaker Prime Minister Mariano Rajoy held an extraordinary press conference yesterday evening to reiterate that the government “will not allow a single action that goes against [Spain’s] sovereignty, Constitution and courts.”

Source: El País El Mundo The Financial Times

Greek opposition party elects free market reformer as leader

Kyriakos Mitsotakis was yesterday elected as the new leader of Greece’s largest opposition party New Democracy. Mitsotakis is seen as a free market reformer, but is considered unlikely to offer much support to the SYRIZA-led government in passing its package of reforms. Separately, EU officials expect the first review of the third Greek bailout to begin on 18 January – with pension reforms likely to be a significant sticking point.

Source: The Financial Times Reuters

Renzi plans to renegotiate EU fiscal treaty

According to Italian daily Il Foglio, Italian Prime Minister Matteo Renzi is planning to renegotiate the EU’s fiscal treaty on budgetary discipline as early as this year, taking advantage of the “widespread sentiment of discontent” across the Eurozone with the strict deficit and debt reduction targets imposed by the treaty. However, the article does not provide any further details with regard to the timing and the potential allies Renzi may find.

Source: Il Foglio

Five targets for the Dutch EU Presidency

In a comment piece for Politico, Open Europe’s Pieter Cleppe sets out “five targets for the Dutch EU Presidency to succeed”. He mentions: protect the external borders of the passport-free Schengen area “by exploring Australia’s approach”; make sure the UK gets the reforms David Cameron is seeking; “sharpen up” the EU’s better regulation agenda; reform the “wasteful” EU budget; and “push for a new round of EU services liberalisation through a coalition of the willing.”

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