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In a letter to the House of Lords’ EU committee, Brexit Secretary David Davis has said the EU is offering British nationals living in EU member states restricted residency rights post-Brexit. He outlines, “Their [EU] offer only guarantees residence rights in the member state in which a British national was resident at the point of our exit from the EU. It does not guarantee the holder… any right to onward movement within the EU, for example to work or study in a neighbouring member state.” Davis added that the UK has questioned whether this is “consistent with the principle of reciprocity, and also with the Commission’s desire to protect rights currently enjoyed under EU law,” but it is expected to be the subject of further discussions. A European Commission spokeswoman said the negotiations should start addressing the uncertainty caused by Brexit, “that includes the financial settlement and the uncertainty that surrounds the rights of EU citizens in the UK and of UK citizens in the EU. This should be agreed on the principles of continuity, reciprocity and non-discrimination.” She added that the triggering of Article 50 “does not change the right to free movement… Nor should it affect the rights of citizens who have made life choices on the basis of EU law and EU membership.” The third round of Brexit negotiations is due to take place in the last week of August.
A report by the Bank of England’s regional agents has found that UK manufacturing exports rose in June and July due to the drop in the value of Sterling following last year’s Brexit referendum. The Bank found that this rise has incentivised manufacturers to increase investment in improving efficiency and expanding capacity, with manufacturer investment plans reportedly at their strongest since Q1 2015. Manufacturers are reportedly not boosting employment plans, given their “stronger focus on improvements and automation over job creation.”
Politico reports that the UK has set up an “engagement unit” in an effort to communicate the UK’s Brexit strategy to government, business and other stakeholders across the EU and within the UK. Referencing a key European Council summit in October that will decide whether negotiations can move on from exit issues to trade talks, a spokesperson from the Department for Exiting the European Union (DExEU) said, “As we approach the next stage of negotiations — discussing our future relationship with the EU once we’ve left — we want to ramp up the communications work, campaigns and stakeholder engagement that will enable the government to communicate its messages effectively in EU member states as well as at home. Staff from DExEU and FCO are working together to deliver this. This is about making the most effective use of specialist knowledge across both departments.” It is thought that the unit will seek to make use of the UK’s ambassadorial presence across the EU more intensively, with a UK official telling Politico, “Ambassadors know who to talk to and how to talk to them, but they have been a relatively untapped resource… They can have more influence than an opinion piece by a minister in a newspaper.”
Despite what he called “useful” and “civilised” talks with First Secretary of State Damian Green yesterday, Scotland’s Brexit Minister Mike Russell said, “Right now, the recommendation the Scottish government will make will be to say that we could not approve [the Repeal] bill. It’s not a veto, and the UK government will be aware of that. But it would deepen what is already a very significant crisis in my view, if they were to overrule the Scottish Parliament.” The Repeal Bill, due for second reading in the House of Commons next month, will transpose EU law onto the UK statute book. Green said, “We want more powers to come to the devolved administrations. That has to be done in the context of keeping free trade within the United Kingdom, but we’ve agreed more talks in a few weeks’ time.”
German Chancellor Angela Merkel’s approval rating has dropped by 10 points compared to the previous month, according to a survey by Infratest Dimap on behalf of German broadcaster ARD. 59% of respondents said they were satisfied with Merkel’s political work, while SPD chancellor candidate Martin Schulz has dropped four points to 33%. The drop in approval rating has been attributed to Merkel’s handling of the “dieselgate” scandal.
The European Commission has defended its use of air taxis for international meetings after Spanish NGO Access Info and Belgian magazine Knack published details of Commissioners’ travel costs stretching into the tens of thousands of euros. The reports showed Commission President Jean-Claude Juncker spent €25,000 on a flight to Rome, while Foreign Affairs and Security Representative Federica Mogherini spent €75,000 on a journey to Baku and Yerevan. Mina Andreeva, a Commission spokesperson, defended the costs, saying Juncker’s flight to Rome carried eight other people, and cost only €2,900 per person. She said Commissioners took standard flights when available, but they chartered planes when normal flights were unavailable or if there were “security reasons”. She also defended the Commission’s decision not to automatically post expenses online, describing the organisation as “one of the most transparent administrations in the world.”
In a blog, Open Europe’s Aarti Shankar writes, “Without greater understanding of what bilateral trade relations [between the UK and EU] will look like, it is impossible to know what the new border must be designed to achieve…This is just one illustration of the impracticality of EU demands to structure the Brexit negotiations in separate phases, with the withdrawal agreement to be addressed before discussions on future trade deals.” She argues, “If the UK and EU establish a comprehensive free trade agreement – as both [the Irish Taoiseach] and the UK government propose – with agreements for customs facilitation and mutual recognition of product standards and regulations, then the border’s function will be largely limited to ensuring revenue collection. This would require least change and, arguably, no infrastructure at the border.” She continues, “However, new security controls may be required at the border if the UK and EU only succeed in striking a limited FTA, with no deal on regulatory equivalence,” concluding, “Until trade is discussed, little more can be achieved.”