22 May 2018

May: backstop would only apply in “a very limited set of circumstances”

A “backstop” plan to keep the UK aligned with the EU’s customs union after 2020 would only apply “in a very limited set of circumstances for a limited time,” the Prime Minister said yesterday. Speaking in Macclesfield, she said, “Nobody wants this to be the solution that is achieved,” adding that she would prefer the customs issue to be solved “through our overall relationship with the European Union.” Striking a similar note, Environment Secretary Michael Gove said the “whole point” of the backstop arrangement was “that it’s intended not to be implemented but is there just in case.” The “strictly time-limited” arrangement would ensure a free flow of goods across the Irish border if the UK and EU cannot agree alternative arrangements, he said. Arlene Foster, leader of the Democratic Unionist Party (DUP), also emphasised that there had to be clarity about how long the backstop arrangement would last.This comes as talks on the future UK-EU relationship restart in Brussels today.

Meanwhile, the president of Chartered Accountants of Ireland issued a call for “political stability” in order to enhance the competitiveness of the all-island economy in Ireland, saying that businesses on both sides of the border have been “hedging” investment decisions due to Brexit-related uncertainty.

Source: BBC Reuters Irish Times

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Five Star Movement and League propose name of new Italian PM

Following their meetings with the Italian President of the Republic Sergio Mattarella yesterday, the Five Star Movement and the League have named Giuseppe Conte, a Law professor, as their preferred prime ministerial candidate. Mattarella will consult with the speakers of the two chambers of the Italian parliament today before making a decision on the nomination.

Meanwhile, Italian bond and equity markets registered negative trends yesterday due to the political uncertainty in the country. The premium of Italian 10-year bond over equivalent German debt increased to 180bp, the highest level registered since last July. Speaking yesterday, League leader Matteo Salvini said, “Nobody has anything to be afraid of.”

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Boris Johnson dismisses snap election reports

Foreign Secretary Boris Johnson has dismissed recent reports that Conservative MPs are preparing for a snap general election this autumn. Speaking to reporters in the Argentinian capital Buenos Aires, Johnson said, “We had a general election in June last year, which followed hard on the heels of a referendum, which itself followed hard on the heels of an election in 2015. I think the British public deserve a break from politicians.” Another senior ministerial source told the Express yesterday: “There are certainly some MPs that are getting ready and asking their local parties to do work… But this is definitely not something that is being talked about among ministers or at Conservative campaign headquarters. We saw what happened last year when the party went into a general election campaign that it was completely unprepared for. There is no way we want to go through that again.” But another Conservative MP reportedly said: “We do need to be ready for an election… We haven’t got a majority to get a full Brexit through Parliament and calling a snap poll on the issue could be the Prime Minister’s only option.”

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May says UK seeking to “fully associate” with Euratom’s research arm after Brexit

Prime Minister Theresa May has said that the UK will seek to “fully associate” with a range of European Union science and innovation programmes after Brexit, including Horizon 2020 and the Research and Development (R&D) arm of Euratom. Speaking at the Jodrell Bank Observatory in Cheshire, May said that full association with programmes such as Euratom R&D was “in the mutual interest of the UK and the EU,” and added that “of course such an association would involve an appropriate UK financial contribution, which we would willingly make.In return for that contribution, we would look to maintain a suitable level of influence in line with our financial contribution and the benefits we bring.” Sue Ferns, deputy general secretary at a leading science trade union Prospect, said that the clarification was “extremely welcome news,” but asked, “On Euratom, if the government can accept that an association for R&D is advantageous to the UK, why do they continue to insist that such an association is legally impossible in other areas, for example nuclear safeguards?”

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Davis told tracking lorries that cross the Irish border is a “non-starter”

The Freight Trade Association in Northern Ireland yesterday told Brexit Secretary David Davis that the use of tracking devices on lorries crossing the Irish border was a “non-starter”, stressing that a haulier could be transporting “40 different consignments from 40 different producers…so a tracking device telling you the original truck had crossed a border doesn’t tell you anything.” The head of the association, Seamus Lehany, also said, “We told them that customs was only the tip of the iceberg and the biggest problem was sanitary and phytosanitary checks on agrifood.” The president of the Derry Chambers of Commerce, Jennifer McKeever, said, “Ninety per cent of our 400 members want to remain in the customs union and the single market.”

Separately, the Department for Transport (DfT) yesterday published proposals to manage traffic in the event of severe disruption at Channel ports after Brexit. The new proposal, Operation Brock, would see a 13-mile stretch of the M20 used to park heavy goods vehicles (HGVs). The London-bound M20 would also become a contraflow system to allow traffic to keep moving. A representative from the Road Haulage Association said, “We don’t think that this goes far enough . . . It does feel pretty much a drop in the ocean if you’re trying to accommodate many, many thousands of vehicles that might be backed up in the event of a bad Brexit.”

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Michael Gove: UK has become more open towards migration after Brexit

Speaking yesterday at a ‘Union and Unionism’ event hosted by Policy Exchange, Environment Secretary Michael Gove said, “The referendum campaign has led to Britain becoming more welcoming towards migration and more open to new people arriving.”

Speaking at the same conference, the Democratic Unionist Party (DUP)’s leader Arlene Foster accused the Irish government of being “very, very aggressive” over the Irish border issue and saying that “The only people stirring up the myths of border checkpoints are those who are committed to unpicking the Union”. Foster also argued that some people used Brexit as a way to divide Northern Ireland, adding, “The overwhelming majority of people in Northern Ireland understand and appreciate that they are better off being part of the United Kingdom.”

Separately, in response to Scottish First Minister Nicola Sturgeon’s floating of a second Scottish independence referendum after Brexit, the Prime Minister’s spokesman told reporters, “Now is not the time for another divisive independence referendum and there is no appetite for one”.

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US presents demands for new Iran nuclear deal and seeks European support

In a speech yesterday, US Secretary of State Mike Pompeo called for a new nuclear treaty with Iran to replace the previous agreement from which President Trump withdrew, setting a list of demands for Iran to comply with in order for the US to lift its sanctions and restore diplomatic ties. Pompeo warned that the US could use “unprecedented financial pressure” on Iran and implement the “strongest sanctions in history”. Pompeo added, “I know our allies in Europe may try to keep the old nuclear deal going with Tehran. That is certainly their decision. They know where we stand.” He explained, “We understand our re-imposition of sanctions and the coming pressure campaign on the Iranian regime will pose financial and economic difficulties for a number of our friends,” but added, “We will hold those doing prohibited business in Iran to account.” Officials from the US State Department are due to discuss the details of the strategy with Germany, France and the UK this week.

Replying to Pompeo’s speech, EU Foreign Affairs High Representative Federica Mogherini said that the EU “is and will remain committed to the continued full and effective implementation of the JCPOA [Joint Comprehensive Plan of Action] as long as Iran abides by all its nuclear-related commitments, as it is doing so far.” Mogherini added, “Secretary Pompeo’s speech has not demonstrated how walking away from the JCPOA has made or will make the region safer from the threat of nuclear proliferation or how it puts us in a better position to influence Iran’s conduct in areas outside the scope of JCPOA. There is no alternative to the JCPOA.”

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Airlines seek EU shareholders in preparation for no-deal Brexit

Airline companies Easyjet Plc and Ryanair Holdings Plc are making preparations for a no-deal Brexit by increasing their shareholder bases in the EU27, Bloomberg reports. In order to be able to operate in the EU, airline carriers must be more than 50 percent owned by EU shareholders. Ryanair Chief Executive Officer Ryanair Michael O’Leary told Bloomberg that the company remains concerned about the risk of a no-deal Brexit, explaining that in such a scenario, Ryanair would restrict the voting rights of non-EU shareholders because “it is imperative that ownership and control remains in EU shareholders” for the company to maintain its EU routes. 

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Spanish government to extend direct rule regime in Catalonia

 The Spanish government has decided to extend its direct rule over Catalonia. The decision follows the appointment of jailed and exiled politicians in the cabinet of Quim Torra, who was elected as the new Catalan president earlier this month. The Spanish Prime Minister, Mariano Rajoy, said that Catalonia’s autonomous status will be restored once a full and lawful regional government is in place. Meanwhile, 52 percent of Spaniards believe that Catalan separatists are succeeding in winning the public opinion fight, according to an opinion poll commissioned by Spanish online newspaper El Español.

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Open Europe: Marriage Italian style - The Five Star Movement-League coalition agreement and its implications for Europe

Following the agreement reached by the anti-establishment Five Star Movement and the anti-immigration League on a new Italian government, Open Europe has published a new briefing considering the implications that the new coalition could have for Italy’s role in the EU. Enea Desideri, the author of the report, writes, “A M5S-League government can leave a deep mark” on Italy and on Europe, and could lead to a break away from “previous positions taken by Italy at EU level.” He continues, “Demands to review key European policies, from overcoming the Dublin Regulation to the relaxation of fiscal rules governing the Eurozone, will become even more vocal. At the same time, support for further integration in other key areas including an integrated European defence, may turn more lukewarm or reverse altogether.” However, “The implications of this new government might take some time to become apparent” and “There are important differences between the approaches of the two coalition partners.” Desideri concludes, “It will be crucial to see which of the two comes out on top,” adding, “Given the differences between the M5S and League… the stability of their coalition remains to be tested.”