6 November 2017

The Sunday Times: EU27 begin preparing trade talks as the UK signals willingness to pay €62bn bill

The Sunday Times reports that the EU27 have begun outlining their vision for future UK-EU trading relations after receiving signals that the UK government would be prepared to pay over €60 billion as financial settlement. The financial commitments already made by the Prime Minister in her Florence speech are estimated to amount to €20 billion. The EU estimates the UK share of other liabilities, including past commitments and pensions payments, at around €42 billion. The Prime Minister’s Brexit advisor, Oliver Robbins, was reportedly told by EU officials that they only needed a “single sentence” in writing guaranteeing the UK would pay its share of other liabilities. A senior UK government official told The Times, “The value of getting a smoother process of transition and a smoother process of trade in the end game is worth quite a lot. These are sums that make any lubrication of the process look like small change.”

Elsewhere, Michael Gove has been added to the Prime Minister’s so-called “war cabinet” – a group of ministers who are in charge of plotting the government’s Brexit negotiation strategy. A senior government source said, “The PM wanted to get Michael on the committee,” and that, “He’s full of ideas and you need buy-in from Michael, anyway, so he might as well help find the solutions rather than create problems. It is a recognition that we are getting to the point where we will start the main negotiations and there is a need for more ministers to be involved.” The Times reports that Gavin Williamson is also expected to join the committee.

This comes as the Telegraph has reported that senior Whitehall officials have said this week’s talks will be little more than “talks about talks” and will barely touch on the UK’s financial obligations. The sources added that the two days of negotiations that will take place on Thursday and Friday are “not a proper round” of talks but a “stock-taking exercise”. The revelations have reportedly been poorly received by EU sources, with one saying, “The EU is coming to the table to negotiate, […] not for a discussion of the state of play.”

Meanwhile, the sexual harassment scandal continues to rock Westminster, with the most recent allegations of pornographic material being found on First Secretary Damien Green’s computer in his Westminster office during a raid in 2008. The First Secretary denied the allegations over the weekend, and said the claims made in the Sunday Times by ex-police chief Bob Quick’s were “completely untrue” and “political smears”.

Source: The Times The Times BBC The Telegraph

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Mark Carney: Economy would struggle in event of no-deal Brexit

Speaking during an interview on ITV on Sunday, the governor of the Bank of England said the UK economy would grow more slowly in the short term in the event of a “no-deal” Brexit.  He said, “In the short term without question if we have less access, materially less access than we have now this economy is going to need to reorient. And during that period of time it will weigh on growth.” He added that uncertainty is already having an effect on the economy, and said, “Since the referendum what we have seen is that business investment has picked up but it hasn’t picked up to any of the extent one would have expected given how strong the world economy is … I think we know the reason why this is the case – they are waiting to see the nature of the deal with the European Union.”

Nevertheless, Carney added that, “We actually think profitability is going to pick up over the next couple of years, but not by the same degree as the past, and it’s that Brexit affect which is weighing on it,” and that, “This uncertainty is going to be resolved in the relatively near future. UK businesses are in very good shape, their balance sheets are in good shape, the financial system is in excellent shape. People are in work and the opportunity is going to be to, once that uncertainty dissipates, is to put that money to work.”


Theresa May to reassure business leaders of access to EU market on current terms during Brexit transitional period

Prime Minister Theresa May and Labour leader Jeremy Corbyn will today address the CBI focusing on Brexit and Britain’s economic future. May is expected to stress the importance of a “strictly time-limited [Brexit] implementation period”. She will say, “During this period, our access to one another’s markets should continue on current terms and I want us to agree the detailed arrangements for this period as early as possible.” She will add that the government’s overall ambition is “to forge an ambitious economic partnership, out of the single market but with a new balance of rights and responsibilities between us and the European Union … we should be excited by the possibilities which this new relationship presents for the future, just as we are realistic in acknowledging that it will take time to finalise.” Corbyn will tell the CBI, “A bad Brexit deal risks exacerbating existing weakness in our economy: low investment, low productivity, low pay.”

Speaking at the same conference, the President of the Confederation of British Industry (CBI), Paul Drechsler, is expected to describe the Brexit negotiations as “a prime-time soap opera”, and he will reportedly say, “We need a single, clear strategy, a plan for what we want, and what kind of relationship we seek with the EU,”.


Guardian: EU officials suggest UK has privately agreed to set citizens’ rights’ cut-off date in March 2019

The Guardian reports EU officials who say the UK has privately agreed to set the cut-off date for protecting the rights of EU citizens in Britain as the date of its formal withdrawal in March 2019. This is reportedly due to the fall in EU immigration since the vote to leave. One EU source told the paper, “The UK has been softening up on the first cut-off date. At first they didn’t want it to be put at the Brexit date. Now, while they are not saying it publicly that it will be Brexit date, it is clearly understood that it will be. That is because something happened in the meantime: people stopped coming, or started coming in much lower numbers and some are leaving and industry and NHS are pointing that out.” A spokesperson for the Department for Exiting the EU has dismissed the claims, saying, “he specific date will be discussed as part of the negotiations, but it will be no earlier than the day we triggered article 50, and no later than the UK’s exit from the EU.”


Commercial Broadcasters Association (COBA): Brexit may threaten UK broadcasting jobs

The COBA has warned that some operations may need to move abroad and that thousands of jobs could be at stake in the event of a “hard” Brexit. The association said that, “No [trade] deal would jeopardise the UK’s status as Europe’s leading international broadcasting hub,” and that, “International broadcasters based here would, reluctantly, be forced to restructure their European operations. No deal would put at risk thousands of jobs in the UK broadcasting sector, hundreds of millions of pounds of investment every year, and would undermine the sector’s long-term global competitiveness.” It added, “like many sectors, broadcasters cannot wait until the cliff edge of March 2019 to make decisions about the future of their European businesses.”


Nevertheless, the Department for Digital, Culture, Media and Sport said, “The UK is currently the EU’s biggest broadcasting hub, and the sector makes an important contribution to our thriving creative industries”, and added, “During our negotiations with the EU we will work to get the right deal for broadcasters and will support their continued growth in the UK.” 


German military study: EU collapse is "plausible"

Der Spiegel reported on Saturday that it has seen a 102-page “Strategic Perspective 2040” report by the German military, adopted in February, which outlined six possible scenarios that could play out over the next few decades. It emphasises that all scenarios are being considered, but labels them as “plausible by 2040.”


Included is the worst-case scenario in which the international order unravels after “decades of instability” resulting in the collapse of the EU and forcing Germany in “reactive mode”. According to the weekly news magazine the report describes this scenario in which “EU enlargement has been largely abandoned, other states have left the community, Europe has lost its global competitiveness,” and that, “The increasingly disorderly, sometimes chaotic and conflict-prone world has dramatically changed the security environment of Germany and Europe.” Other scenarios outlined in the report include a “West versus East” scenario in which a group of Eastern European states freeze EU integration while other states join the eastern bloc. The scenario outlining “multipolar competition” envisions a return of extremism and a number of Eastern European states adopting Russia’s political model. 


Meanwhile, German Chancellor Angela Merkel said on Friday that the ongoing coalition talks have been “difficult”, but added that “we can tie up the loose ends if we try and work hard.”


Catalonia’s ex-president turns himself in to Belgian Police

The Former president of Catalonia Charles Puigdemont and four associates turned themselves in to Belgian police on Sunday. They were later freed with conditions, but were urged not to leave the country without permission while the case is been investigated. They should now appear in front of a Belgian court within two weeks. Belgium has 60 days to return the former Catalan leader and his ministers to Spain, a decision which might however arrive much sooner.


Enea Desideri: Elections in Sicily - An important test for Italian parties

The first projections following the regional vote in Sicily yesterday, suggest a close call between the candidate of the right-wing coalition, Nello Musumeci, and that of the Five Star Movement, Giancarlo Cancelleri. As largely expected, the left and centre-left coalitions did perform poorly. Commenting on the ballot, Open Europe’s Enea Desideri writes in a blog, the Sicilian vote “should ring major alarm bells for Matteo Renzi and his Democratic Party (PD).” The result, he continues “might prompt Matteo Renzi to question whether a broader left wing alliance at the national level would not be preferable to siding with centrist forces”, stressing that however “the hostility and substantial ideological divergences between Renzi and the leaders of Movimento Democratico Progressista (MDP) – the main party to the left of the Democratic Party – minimise the chances of seeing a broad left-wing coalition running together in the next national ballots.” Conversely, the Sicilian vote confirms that “Taken together… the Italian Right are a major force to reckon with and a strong contender in next spring’s election”, as is the Five Star Movement, although “its chances of forming a governing majority remain low even in the case of a relative victory.”