21 June 2016

Cameron pledges to continue with EU reform if Remain wins, as former aide criticises him over “undeliverable” migration target

Prime Minister David Cameron told The Sun in an interview, “If we stay in [the EU], that is not the end of reform. Britain will be in a very enhanced position. There is no doubt that a British Prime Minister with a mandate from the election, a re-negotiation, and a referendum would have the ability in Europe to drive forward changes that are needed.” Swedish daily Dagens Industri runs a special edition pleading with the UK to stay in the EU. It quotes Swedish business leaders as saying, “Sweden should have done more to support Cameron’s reform agenda”. Meanwhile, Cameron’s former closest aide Steve Hilton writes in The Daily Mail, “I remember the meetings on immigration towards the end of my time in Downing Street…We were told, directly and explicitly, that it was impossible for the government to meet its immigration target as long as we remained members of the EU.” He goes on to argue, “In the 2015 Conservative manifesto, the Prime Minister re-affirmed his commitment to the immigration target he had been told was undeliverable. When I saw that, I assumed this was either because he was certain he could negotiate a solution within the EU, or was assuming we would leave.

Meanwhile, UK and global stocks rallied yesterday as markets expressed relief at signs that the Remain campaign had regained the lead ahead of Thursday’s EU referendum. The Pound rose 2.4% against the US Dollar, its largest single day gain since the end of 2008. Separately, George Soros, famed investor, said in the Guardian that if the UK voted to leave the EU, “I would expect this devaluation to be bigger and also more disruptive than the 15 percent devaluation that occurred in September 1992,” when the UK fell out of the Exchange Rate Mechanism. The Daily Mirror reports that a number of former senior executives from Tesco, Sainsbury’s, Marks & Spencer, Asda, Waitrose and Morrisons have warned that Brexit could see household shopping bills rise by £580 per year. Writing in The Daily Mirror, Simon Wolfson, Chief Executive of Next and Open Europe advisory Council Member, argues that it would be “Better to risk success outside the EU rather than guarantee failure within.” He however argues that Brexit will only be a success if Britain strikes as many free trade agreements as possible and remains open to immigration.

Writing in The Daily Telegraph, former Foreign Secretary William Hague argues that “The truth about leaving Europe is not just that it is risky, but that it is not necessary to run those risks. We won most of our battles to be a different sort of EU member. We may have to fight more. But those are easier to win than the new battles forming in the minds of others.”

Separately, Len McCluskey, Secretary General of the Unite trade union, writes in The Guardian, “In the past ten years there has been a gigantic experiment at the expense of ordinary workers. Countries with vast historical differences in wage rates and living standards have been brought together in a common labour market”, but adds that “pulling up the drawbridge against the rest of Europe is the wrong answer” because “leaving the EU will not stop the supply of cheap labour to Britain.” Labour leader Jeremy Corbyn said yesterday, “I’m not going to take the blame for people’s decisions…I’m hoping there is going to be a Remain vote, there may well be a Remain vote, there may well be a Leave vote…Whatever the result, we have got to work with it.”

Open Europe’s Raoul Ruparel appeared on Bloomberg TV’s What Did You Miss show yesterday discussing the economic impact of Brexit, noting that there is likely to be a negative effect from Brexit in the long run but the question is whether this can be offset with new found freedoms.

Source: The Sun: Cameron The Daily Mail: Hilton The Guardian: McCluskey BBC News The Financial Times The Wall Street Journal The Times The Guardian: Soros EurActiv Daily Mirror

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Referendum on knife-edge according to polls

Two polls released on Monday suggested that Remain has regained some ground, whilst a third one found Leave ahead. A telephone poll by ORB for the Daily Telegraph puts Remain on 53% (+5) and Leave on 46% (-3). The poll finds that turnout among Remain voters has risen nine points in the last week to 69%. Amongst those who say they are “certain to vote” Remain is ahead by five points. An online YouGov poll for The Times, however, put leave on 44% (+1) with Remain on 42% (-2). Meanwhile, a survey by NatCen conducted over phone and online also found Remain on 53% with Leave on 47%. Professor Curtice, a Senior Fellow at NatCen, and President of the British Polling Council said that the results are ‘within the margin of error’ and that either result is still possible.

An EU-wide poll by the Bertelsmann Stiftung finds that 54% of EU citizens want the UK to remain in the EU. Spain and Poland are most in favour with 64% and 61% support for Remain respectively. 55% and 54% of Italians and Germans say they want the UK to Remain. France is the only country where voters would rather the UK left, with only 41% supporting Remain. Separately, a Dutch Public TV poll finds that 54% of Dutch also want a referendum on their EU membership, with 48% saying they would vote to Leave, and only 45% saying they would opt to Remain.


German Constitutional Court rejects legal challenge against ECB bond buying but supports certain conditions

The German Constitutional Court ruled this morning that the ECB’s bond buying programme – Outright Monetary Transactions (OMT) – is legal provided certain conditions are met. These are in line with the conditions laid down by the European Court of Justice (ECJ) in its own ruling on the issue and include: not announcing which bonds it will buy, limiting the volume of purchases, allowing a minimum period between the issuance of the bonds and their purchase by the ECB, only buying bonds from states which have market access and bonds are held to maturity. The court also hit out at the ECJ for not fully scrutinising the idea that the OMT was purely for monetary policy warning that the independence of the ECB “leads to a noticeable reduction in the level of democratic legitimation” and therefore requires “particularly strict judicial review”.


Hammond and Tusk both say UK’s referendum should cause EU to reassess its future

UK Foreign Secretary Philip Hammond has told The Times, “Clearly it is going to be a close result. I doubt the result in many EU countries would be that much different if there were referendums. I hope the message that the EU will take away is a message of humility. There’s a sizeable proportion of the population [not just] in the UK, but I suspect across the European Union, that is sending a message, that wants to see the EU focused on what matters to them, abandoning the grandiose rhetoric and projects.” European Council President Donald Tusk tweeted yesterday that, “Whatever the UK vote is, we must take long hard look on the future of the Union. Would be foolish to ignore such a warning signal.” Irish Taoiseach Enda Kenny told the Irish Independent that, “I think that either way Europe is going to be changed forever as a consequence of this particular vote.”

Meanwhile, Open Europe’s Pieter Cleppe was interviewed by France24TV and TRT World TV, saying, “whatever happens, those who are keen to centralise the EU have already lost, given the massive opposition within the UK and also on the Continent.” In a comment piece for EurActiv, Pieter stresses that “the forces of protectionism are gaining ground both at national and EU level.”


Polish Europe Minister: Any post-Brexit deal would need to address problem of free flow of labour force

Polish Europe Minister Konrad Szymanski told The Financial Times, “Any significant [post-Brexit] deal with Europe would need to address the problem of free flow of labour force and proper guarantees for migrant workers. We will prioritise it during possible future negotiations…Brexit is a bad scenario for Europe and for those who want to reform the Union to restore its principal roles. Disintegration of the EU means weaker Europe and weaker member states in the world.” Spain’s caretaker Economy Minister Luis de Guindos told a conference yesterday that holding the EU referendum in the UK “has been a mistake”, because “it has open Pandora’s box of populism in Europe. Let’s hope we are able to close it.” The Political Editor of Swedish daily Dagens Industry PM Nilsson writes, “It is easy to understand that the Brits lost faith in the EU..the crises are multiple..and an ever stronger eurocracy…But at the end of the day it is better to have permanent top meetings in Brussels than the many separate agreements that were Europe before the EU.”


The Daily Telegraph backs Leave and The Guardian backs Remain

The Daily Telegraph has declared for Leave arguing that “In supporting a vote to leave, we are not harking back to a Britannic golden age lost in the mists of time but looking forward to a new beginning for our country. We are told it is a choice between fear and hope. If that is the case, then we choose hope.” Meanwhile, The Guardian declares for Remain and argues that “the EU is not just the least bad of the available options. It is also the one that embodies the best of us as a free people in a peaceful Europe…Vote for a united country that reaches out to the world, and vote against a divided nation that turns inwards.”


Leaked letter shows Italy believes EU-Canada trade deal does not need to be ratified by national parliaments

A leaked letter written by Italy’s newly-appointed Economic Development Minister Carlo Calenda to EU Trade Commissioner Cecilia Malmström reads, “Italy, after a technical and political assessment, is ready to consider to support the [European] Commission on the ‘EU only’ nature” of CETA – the EU-Canada free trade deal – meaning that, according to the Italian government, the agreement would not need to be ratified by the national parliaments of all 28 EU member states. The text goes on, “Italy considers the CETA a milestone agreement, whose failure could have major negative consequences for the EU trade policy and for the credibility of Europe as reliable trade partner.” However, the letter makes it clear that the assessment is only valid for CETA, and “is without prejudice” to Italy’s evaluation of other EU trade deals – notably including TTIP, currently being negotiated with the US.


Merkel’s Union gains a point in the polls

The weekly Insa poll for Bild puts Angela Merkel’s CDU/CSU on 31% (+1), and her centre-left coalition partner, the SPD, on 20% (+0.5). The Greens rise one point to 13% as the right-wing AfD lose one point to also reach 13%: its lowest rating since mid-April. Hard-left Die Linke remain on 11%, while the Liberal FDP gain one point to get to 7%.


Turkey prevents Syrian refugees from leaving to Germany

Turkey has prevented dozens of Syrian refugees from leaving for Germany, even though they had already obtained visas under the EU-Turkey migrant deal, according the German Interior Ministry. 292 Syrians in total have been granted authorization since April, but 52 have now  been stalled. “Grounds for denial of exit permits have not provided,” said the German Ministry.