5 October 2018

Donald Tusk: EU offers UK a “Canada+++” deal

Speaking in Brussels yesterday, European Council President Donald Tusk said, “The EU wants a relationship with the UK that is as close and special as possible. From the very beginning, the EU offer [for a Brexit deal] has been not just a Canada deal, but a Canada+++ deal. Much further-reaching on trade, on internal security and on foreign policy cooperation. This is a true measure of respect. And this offer remains in place. The EU is serious about getting the best possible deal.”  Responding to UK Foreign Secretary Jeremy Hunt’s previous comments which were seen to obliquely compare the EU to the Soviet Union, Tusk said, “The Soviet Union was about prisons and gulags, borders and walls, violence against citizens and neighbours. The European Union is about freedom and human rights, prosperity and peace, life without fear, it is about democracy and pluralism; a continent without internal borders or walls.”

Commenting on Tusk’s statement, the chairman of the Eurosceptic European Research Group (ERG), Jacob Rees-Mogg, wrote that the “Canada+++” proposal “is a good solution for everyone and the ERG’s proposals for the Irish border mean it could work for the UK as a whole.” Meanwhile, former Brexit Minister Steve Baker said, “I am deeply encouraged that President Tusk wants a deal and is clear about the framework of that deal. This does once again reinforce that Eurosceptic Conservatives are campaigning for what the EU wants to give us.”

Elsewhere, in an interview with Bloomberg, the international trade secretary Liam Fox said that he would support Theresa May’s Brexit plan despite having “reservations” about it. He said, “We should try to get as much of a final deal as we can get by the 29th of March, but it’s self-evident that if it’s a bilateral treaty, it can be revised later on.”

Source: European Council The Sun Sky News Bloomberg

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EU27 call for a "workable solution" on Irish backstop

In a press statement alongside Irish Taoiseach Leo Varadkar, European Council President Donald Tusk yesterday said that “the EU is united behind Ireland and the need to preserve the Northern Ireland peace process. Despite the UK government’s rejection of the original EU backstop proposal, we will not give up seeking a workable solution that fully respects the Good Friday Agreement as well as the integrity of the Single Market and the Customs Union,” adding, “What needs to be done is maximum progress by the October European Council… We should get down to business.”

Varadkar said that he agreed with Tusk’s call to “get down to business,” adding, “I am very keen to see an agreement concluded by November if at all possible – that is the interest of Ireland, the EU and the UK.”

Separately, Politico quotes a senior UK government official as saying that a Brexit deal will be very difficult to reach without concessions from three separate groups: the EU, the Democratic Unionist Party (DUP) and Conservative Eurosceptic MPs. “If they don’t move — all of them — we’ve got a problem,” the official said.  This comes as four Northern Ireland parties will today meet EU chief Brexit negotiator Michel Barnier. Ahead of the meeting, Sinn Féin vice-president Michelle O’Neill said, “I think the EU has heavily invested in our peace process both politically and financially down through the past 20 years, so they need to remain firm on their commitment [to no hard border on the island of Ireland].”

Meanwhile, Bloomberg reports about a European Commission official saying that the UK’s new proposal for an Irish backstop solution should be acceptable to the EU. However, this proposal has not yet been received by the Commission.

Open Europe’s David Shiels appeared on TRT World News yesterday to discuss the UK Government’s opposition to the EU proposals for an Irish backstop.

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EU shows solidarity with UK and Netherlands over Russian cyberattacks

Following the Dutch government’s revelation of an attempted cyberattack against the Organisation for the Prohibition of Chemical Weapons (OPCW) by four Russian espionage operatives in April, the EU yesterday said they “deplore” such actions. In a joint statement, European Council President Donald Tusk, European Commission President Jean-Claude Juncker, and High Representative for Foreign Affairs Federica Mogherini said, “This aggressive act demonstrated contempt [for the OPCW] … which works to eradicate weapons worldwide under a United Nations mandate. We deplore such actions, which undermine international law and international institutions. The EU will continue to strengthen the resilience of its institutions and those of its Member States, and international partners and organisations in the digital domain.”

Separately, UK ambassador to the Netherlands Peter Wilson said yesterday that Russian intelligence operatives attempted similar attacks against Foreign Office systems last March. In a joint statement, British Prime Minister Theresa May and Dutch Prime Minister Mark Rutte condemned the “unacceptable cyber activities” of Russia as well as the country’s “disregard for the global values and rules that keep us all safe,” adding, “Our action today reinforces the clear message from the international community: We will uphold the rules-based international system, and defend international institutions from those that seek to do them harm.”

Meanwhile, UK Foreign Secretary Jeremy Hunt said the UK was in talks with its allies regarding additional sanctions against Russia.

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RBS CEO warns of potential recession after Brexit

The CEO of the Royal Bank of Scotland, Ross McEwan, has said that a “bad Brexit” could lead to the UK economy going into recession. McEwan added that the uncertainty over Brexit had made large businesses such as RBS more cautious about investing in the UK.

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No Deal Brexit threatens UK access to new medicines, warns regulator

A ‘no deal’ Brexit would threaten the UK’s ability to access new medicines, the UK drugs regulator has warned. In a consultation paper assessing the impact of a ‘no deal’ exit, the Medicines and Healthcare products Regulatory Agency (MHRA) also warned that businesses would face further regulatory hurdles, as only MHRA-authorised products would be able to reach the UK market. Products authorised by the European Medicines Agency (EMA) would face additional checks, according to the paper.

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HMRC failed to inform small traders of ‘no deal’ Brexit risks, Public Accounts Committee warns

The House of Commons’ Public Accounts Committee has criticised HMRC for failing to inform 100,000 small businesses of potential customs charges looming under a ‘no deal’ Brexit. The committee’s chairwoman Meg Hillier MP said, “I’m both concerned and a little disappointed that nearly two months on you [HMRC] have made little progress… You gave us no assurance that HMRC has a plan to ensure businesses are aware of what they will need to do.” An HMRC representative said they were lacking contact details for those small businesses since they were not VAT registered, adding that there were “well-developed” plans.

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EU financial market authorities call on lawmakers to mitigate Brexit risks

Steven Maijoor, chairman of the European Securities and Markets Authority (ESMA), yesterday called on EU lawmakers to adopt a “transitional provision” to ensure EU27 banks will not suddenly lose access to London clearinghouses in the event of a ‘no deal’ Brexit. Maijoor added that ESMA was about to launch talks with the UK’s Financial Conduct Authority to put in place a partnership agreement in time for Brexit. This comes as the European Central Bank’s head of supervision, Daniele Nouy, yesterday said his institution was “ready to help ensure a smooth Brexit, no matter the outcome of the political negotiations.”

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Low-skilled men most likely to suffer unemployment in event of ‘no deal’ Brexit

The Institute for Fiscal Studies (IFS) has warned that men with few qualifications are most at risk of unemployment from a ‘no deal’ Brexit. The IFS found that 20% of men with low levels of formal qualification work in industries that would lose out significantly from the UK trading with the EU with World Trade Organisation (WTO) tariffs in place. In total, the IFS found that 3.7 million workers (14% of the workforce) are employed in affected industries.

Elsewhere, The Times reports that UK car sales declined by 20% in September, their worst performance since 2008. This comes amidst widespread concerns expressed by the car industry over the negative consequences of a ‘no deal’ Brexit.

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Unilever withdraws plan to move headquarters out of the UK

Unilever, the British-Dutch consumer goods company, has abandoned its plan to move its headquarters from the UK to the Netherlands after opposition from UK-based shareholders. The company announced that, following a consultation period, the planned move had not received shareholder support and had therefore decided it was “appropriate to withdraw”. However, Chairman Marijn Dekkers said in a statement that the board continued to view the corporate overhaul as in the “best long-term interests of shareholders,” adding that it would now “consider its next steps.”

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Discussing Brexit: Open Europe's Henry Newman in conversation with Dominic Raab

On October 2, Open Europe held a fringe event at the Conservative Party Conference in Birmingham, where director Henry Newman discussed UK-EU negotiations with Brexit Secretary Dominic Raab. Issues addressed included the Withdrawal Agreement, the Irish backstop, the future economic and security relationship, as well as preparations for a possible ‘no deal’ Brexit scenario. For a summary of the discussion, see Anna Nadibaidze’s new Open Europe blog.