2 November 2018

EU concerned about offering a UK-wide customs union without agreeing fishing rights

EU member states are opposed to granting the UK a temporary customs union to solve the Irish backstop without agreeing access to UK territorial waters for EU fishing fleets, according to The Guardian. EU member states including France, Germany, Denmark, the Netherlands, Spain and Belgium, are reportedly concerned that agreeing a UK-EU customs union would give British seafood exporters tariff and quota free access to the EU single market, without the EU obtaining reciprocal assurances on fishing rights. An EU diplomat told the paper, “Access to waters will remain a priority.”

Source: The Guardian

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New compromise on Irish backstop proposed by EU

A new compromise solution to the issue of the Irish backstop has been proposed by EU Brexit negotiators, the Financial Times reports. The proposal would keep Northern Ireland fully aligned with the EU’s customs code and single market regulations, while the UK would be in a more “bare-bones” customs arrangement, applying the common external tariff on non-EU imports. These conditions would be in place until a permanent trade agreement is struck between the UK and the EU. The UK government is expected to respond to the proposal next week.

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Michel Barnier denies deal has been reached on post-Brexit financial services

The EU’s chief Brexit negotiator, Michel Barnier, denied reports yesterday that the EU and UK have reached a deal on post-Brexit financial services. The Times newspaper had reported that a deal had been done on the basis of “equivalence,” but Barnier called these reports “misleading.” He added, “[The] EU may grant and withdraw equivalence in some financial services autonomously. As with other third countries, [the] EU [is] ready to have [a] close regulatory dialogue with [the] UK in full respect for autonomy of both parties.”

Meanwhile, Downing Street also described the reports of a deal as “speculative.” A UK Government source told the Financial Times, “There’s a big difference between having constructive talks and declaring deals have been done.”

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Road haulage industry “nowhere near prepared” for No Deal Brexit

Speaking to the House of Lords EU Internal Market Sub-Committee, Duncan Buchanan, the Policy Director of the Road Haulage Association, said, “We are nowhere near prepared [for a No Deal Brexit]. Our industry is not prepared; the European industry is not prepared. No-one is ready.” He added that without a transition period there would be “chaos” for the road haulage sector. James Hookham, deputy head of the Freight Transport Association, told the Committee that the Department for Transport’s plans for No Deal “would probably not make a significant difference to the almost virtual collapse of trade across the channel.”

Elsewhere, the chief executive of Translink warned the same Lords Committee that it remains unclear whether his company will be able to run cross-border bus services on the island of Ireland in the event of No Deal.

Meanwhile, local councils, emergency services and town hall chiefs have been told to prepare for a “disruption period” and  “reasonable, worst case scenarios” of three months in case of No Deal Brexit, the Daily Mirror reports. According to a briefing circulated at a Local Resilience Forum meeting, the disruption could include shortages of food and petrol and could last until May 2019. A Government spokesperson said, “We are working with Local Resilience Forums across the country to ensure they are fully prepared. While it is the duty of responsible planners to consider the worst case scenarios, this is not a prediction of what is going to happen.”

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No Deal Brexit would hit economies of south-eastern Europe, says European development bank

In a new report, the European Bank for Reconstruction and Development (EBRD) warns that a No Deal Brexit scenario “would hit south-eastern European countries hardest among the emerging economies where the EBRD invests.” It adds that the economic impact on this region would be “mainly through disruption to trade linkages encompassing the UK and other advanced economies in Europe, the impact on the EU accession reform momentum and a reduction in the EU structural and cohesion funds.” The report also states that a No Deal Brexit may “weaken the (perceived) prospects of EU accession for candidate and potential candidate countries [in the Western Balkans]. A slower reform momentum in these countries will then weigh on growth.”

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Brexit will not affect UK-EU cybersecurity cooperation, says NCSC chief

The Chief Executive of the UK National Cyber Security Centre (NCSC), Ciaran Martin, yesterday said that UK-EU cooperation on cyber security will continue at the same level after Brexit. He told RTÉ, “I look at relationships with other EU member states, for example the very productive relationship we have with French counterparts, that’s neither been enhanced nor hindered by EU membership over the last four or five years, so it follows that the type of cooperation that we’re building can continue.” Ahead of his meeting with the Irish National Cyber Security Centre, the Irish police and defence forces yesterday, Martin said, “Whatever the future shape of the relationship between the UK and the EU takes, we’ll be able to continue that [cooperation] next year and beyond.”

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Mark Carney: Future interest rate rises will be “gradual” in case of a No Deal Brexit

The Governor of The Bank of England, Mark Carney, yesterday announced that while interest rates remain unchanged, future rises would be “gradual” and that the bank’s forecasts indicated that it would need to increase rates to 1.5%, from 0.75%, to keep inflation on target. These forecasts assume a smooth Brexit. However, under a disorderly exit, Carney said interest rate changes “will not be automatic and could be in either direction.” He added, “The economic outlook [for the UK] will depend significantly on the nature of EU withdrawal, in particular the form of new trading arrangements, the smoothness of the transition to them and the responses of households, businesses and financial markets.”

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Italian PM confident of reaching budget deal with European Commission

Italian Prime Minister Giuseppe Conte yesterday said he was confident his government and the European Commission could come to an agreement on Italy’s budgetary plans. Conte said, “In my contacts [with the European Commission] I register openness and a willingness to dialogue… I am confident that in our discussions… we will be able to demonstrate the goodness of a growth manoeuvre such as the one we have planned in order to change Italy.” He also said, however, that his government “is an expression of demands for change, and it is natural that European markets and institutions want to understand in which direction we intend to move,” stressing that the country needed to spend more money to tackle “social and economic emergencies.”

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European Monetary Fund “poses substantial risks” to German budget, audit court warns

Germany’s Federal Audit Court warns in a new report that the establishment of the planned European Monetary Fund (EMF), “together with the changes sought by the European Commission, poses substantial risks for the federal budget.” It also writes in the report seen by the Frankfurter Allgemeine Zeitung, that it may become necessary to increase the capital stock of the EMF, which would result in Germany having to take on further liabilities. The audit court calls on the German federal parliament to publish a statement on the planned changes, which the government should then take as a basis for negotiations.

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Arron Banks referred to National Crime Agency

The National Crime Agency (NCA) has launched an investigation into Arron Banks, the co-founder of Leave.EU, for alleged offences committed during the 2016 Referendum campaign. Banks was referred to the NCA by the Electoral Commission along with Elizabeth Bilney, the Leave.EU Chief Executive. The Commission said that it suspected that Banks was “not the true source” of £8m of loans to Leave.EU and another entity called Better to the Country.

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Dutch government publishes advice for No Deal customs measures

The Dutch Government has published advice to assist Dutch SMEs with customs preparations for a No Deal Brexit, including an online platform and a flowchart indicating preparatory measures firms can take. Nanette van Schelven, the managing director of Dutch Customs, said, “We want to help entrepreneurs get on with the preparations as well as possible. Recent research commissioned by the Ministry of Foreign Affairs shows that many SMEs do not know how to prepare and where to start. That is why we have bundled all relevant information for entrepreneurs on the [online] platform.”

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Czech PM to propose following Hungary and Austria out of UN migration pact

Czech Prime Minister Andrej Babis has said that he will propose his country follows Hungary, Austria and the USA in withdrawing from the United Nations pact on migration. Speaking to Czech Deputies yesterday, Babis said, “I do not like the pact… I will be proposing to my partners in government that we act in the same way as Austria or Hungary.” This comes despite the European Commission expressing its “regret” on Wednesday at Austria’s decision not to sign the pact.

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