10 April 2019

EU leaders to discuss Article 50 extension at special summit

EU leaders gather in Brussels today for an emergency European Council summit at which Prime Minister Theresa May will present justifications for her request to delay Brexit until 30 June. The Guardian reports that EU27 leaders are likely to offer a delay until 31 December 2019 or 31 March 2020.

In a letter to EU27 leaders ahead of the summit, European Council President Donald Tusk wrote, “Our experience so far, as well as the deep divisions within the House of Commons, give us little reason to believe that the ratification process can be completed by the end of June,” adding, “This is why I believe we should also discuss an alternative, longer extension. One possibility would be a flexible extension, which would last only as long as necessary and no longer than one year, as beyond that date we will need to decide unanimously on some key European projects. The flexibility would allow to terminate the extension automatically, as soon as both sides have ratified the Withdrawal Agreement.” He further explained, “The UK would be free to leave whenever it is ready. And the EU27 would avoid repeated Brexit summits. Importantly, a long extension would provide more certainty and predictability by removing the threat of constantly shifting cliff-edge dates. Furthermore, in the event of a continued stalemate, such a longer extension would allow the UK to rethink its Brexit strategy.”

Meanwhile, the draft conclusions of the European Council seen by the BBC state that the Article 50 extension would last “only as long as is necessary and, in any event, no longer than XX.XX.XXXX and ending earlier if the Withdrawal Agreement is ratified.” They also allow for an early withdrawal option if the deal is ratified and reiterate that the Withdrawal Agreement will not be renegotiated, adding that the UK is expected to “refrain from any measure which could jeopardise the attainment of the union’s objectives.”

Separately, Irish Taoiseach Leo Varadkar yesterday warned that the EU should not offer an extension on terms which the UK could not accept, as it could lead to a No Deal scenario. He said, “If we’re going to offer [the UK] a longer extension, it will have to be an offer they’re willing to accept…We don’t want to cause a crash-out on Friday by only offering them a long extension that they would be forced to refuse.”

May met with German Chancellor Angela Merkel and French President Emmanuel Macron yesterday, and spoke with Swedish Prime Minister Stefan Lofven.

This comes as MPs yesterday have approved a Government motion to seek an Article 50 extension and delay the date of Brexit to 30 June by 420-110.

Source: BBC News European Council Sky News Faisal Islam The Guardian I The Irish Times The Guardian II

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Labour and Government talks to continue after EU Council summit

A Downing Street spokesperson yesterday said that the Government and the Labour party delegation “had further productive and wide-ranging talks [Tuesday] afternoon,” adding, “The parties have agreed to meet again on Thursday once the European Council has concluded. We remain completely committed to delivering on Brexit, with both sides working hard to agreeing a way forward, appreciating the urgency in order to avoid European elections.” A Labour spokesperson commented, “We have yet to see the clear shift in the Government’s position that is needed to secure a compromise agreement.”

The Shadow Chancellor, John McDonnell, said yesterday that the main priority for Labour is a deal containing a permanent customs union with the EU. He said, “[The Government] are not even giving us any changes in language. But we will see what comes out of today [Tuesday],” adding, “What there hasn’t been sufficient discussion of so far is alignment with the single market.”

Elsewhere, Conservative MP Daniel Kawczynski quit the European Research Group (ERG) of Eurosceptic Conservative MPs yesterday. Kawczynski, who voted against the Withdrawal Agreement twice but changed his vote the third time, told BBC Radio 4’s Today programme that the group is “part of the problem in actually getting the Withdrawal Agreement across the finishing line,” and that is could “lead to possibly no Brexit at all.”

Meanwhile, the Daily Mail reports that the Government could try to pass the deal by bringing the Withdrawal Agreement Bill to the Commons, if a deal is reached with Labour. One reported proposal would be to allow MPs free votes on certain Labour demands, such as a customs union and a second referendum. If passed, these could be incorporated into the deal. However, a source told the Mail that this strategy was seen as “high-risk.”

Separately, the Telegraph reports that the Chancellor, Philip Hammond, has said that MPs could vote to revoke Article 50 rather than face a No Deal Brexit. Speaking in a ministerial meeting on Tuesday morning, Hammond added that a No Deal Brexit would cause the value of the pound to fall significantly, raising the prospect of reversing Brexit if the Prime Minister and the EU fail to reach an agreement on a Brexit extension.

Source: The Guardian I Reuters The Guardian II BBC News Daily Mail The Daily Telegraph

Barnier: length of Brexit extension should be proportional to its objective

EU chief negotiator Michel Barnier said yesterday that a further Article 50 extension should be “be useful, to give more time if necessary, to succeed in building majority [in UK Parliament],” adding that the “length of extension must be proportional to the objective.” He also warned, “It is up to [Theresa May] to indicate the way forward with a roadmap,” adding, “We are attempting to give the UK this last opportunity to achieve this orderly withdrawal, it’s as simple as that. More time might be needed or less time, depending on the pressure you wish to exert.”

Meanwhile, German European Affairs minister Michael Roth yesterday said he found the situation “very, very frustrating,” and that the EU was considering May’s request for a short extension as well as a “longer one, but this must also be subject to very strict criteria.”

French European Affairs minister Amelie de Montchalin said, “We want to understand what the UK needs this extension for.” Irish Foreign Minister Simon Coveney said, “No Deal in my view would be an extraordinary failure of politics and we need to ensure that that doesn’t happen.”

Romanian European Affairs George Ciamba commented, “We welcome the fact there is a commitment to organise European elections, it was one of the requirements to discuss the issue [of the extension],” adding, “It is not enough… It is important for us to understand why the UK wants to stay, you have to stay with a view to something.”

Dutch Foreign Minister Stef Blok said, “It is up to the UK to decide [when it leaves],” adding, “It is in the Dutch interest to avoid a hard Brexit, and if more time is needed to avoid a hard Brexit then we should allow for more time.”

Source: The Times Open Europe The Guardian Reuters Financial Times

Liam Fox: a customs union with EU would be the “worst of both worlds”

UK International Trade Secretary Liam Fox warned backbench Conservative MPs in a letter seen by the Telegraph that the UK being in an EU customs union would be the “worst of both worlds.” The letter said, “We would be stuck in the worst of both worlds, not only unable to set our own international trade policy but subject, without representation, to the policy of an entity over which MPs would have no democratic control,” adding, “We would ourselves be traded. As the famous saying in Brussels goes, if you are not at the table, you are on the menu. A customs union – where the UK was obliged to implement the common customs tariff – would allow the EU to negotiate access to UK markets as part of EU trade policy, irrespective of the interests or wishes of the UK.”

Source: The Daily Telegraph

IMF warns of UK recession in No Deal Brexit

The International Monetary Fund (IMF) yesterday released its World Economic Outlook, warning that the UK economy would be hit seven times harder than the rest of the EU and slip into recession in the event of a No Deal Brexit. The IMF forecast states that even if a No Deal Brexit did not cause disruptions to cross-border trade, the UK economy would enter a two year recession and even after a recovery in 2021, would be 3.5% smaller than in a soft Brexit scenario.

Source: Financial Times

EU and China release joint statement on future cooperation

European Council President Donald Tusk, European Commission President Jean-Claude Juncker and Chinese Premier Li Keqiang yesterday met in Brussels for the annual EU-China Summit. After the summit, they issued a joint statement saying, “The EU and China recognise their responsibility to lead by example, pursue policies that support an open, balanced, and inclusive global economy which is beneficial to all, and encourage trade and investment,” adding that they “firmly support the rules-based multilateral trading system with the WTO [World Trade Organization] at its core, fight against unilateralism and protectionism, and commit to complying with WTO rules.” Tusk said, “Our negotiations were difficult but ultimately fruitful. We agree on a joint statement setting the direction of our partnership based on respect and reciprocity.”

Source: European Council Reuters I Reuters II

US President threatens to impose tariffs on $11bn of EU goods

S President Donald Trump yesterday threatened to impose US tariffs on $11bn (£8.4bn) of EU goods, including wine and cheese. The White House said the additional levies on EU goods would be a response to subsidies for Airbus, the European aerospace and defence group, which it stated were harmful to the US.

Source: The Guardian Financial Times

New Open Europe poll on forthcoming European Parliamentary elections

Open Europe today published the results of a new poll looking at current voting intentions ahead of European Parliament elections, which are expected to take place in the UK on 23 May if the UK remains a member of the EU. The poll reveals that the level of support for the Conservatives appears to be in decline, with 23.0% of respondents intending to vote for them, while 37.8% of respondents said they would vote Labour. Turnout is expected to be reasonably low, with 35.2% of respondents saying they are 10/10 likely to vote, and Remain voters being more motivated to vote than Leavers. The poll registered some support for both new parties which emerged in recent months: the Brexit Party (10.3%) and Change UK – The Independent Group (4.1%). The poll results were mentioned in the Guardian, Politico’s London Playbook, and PoliticsHome.

In a piece for the Times Red Box, Open Europe’s Anna Nadibaidze writes, “As the campaign is only at its initial stage, voting intentions are likely to change. However, already at this point voters seem to be dissatisfied with the Conservatives and willing to send a message of protest on the direction that the Brexit process is taking, suggesting a further division in UK politics over Brexit.” She concludes, “The polarisation is likely to expand as the campaign progresses and as debates become more polarised. These new parties finding themselves at the ends of the Brexit debate may well prove increasingly popular once they receive more media attention and strengthen their own platforms. This will allow them to play a more important role in national politics, prepare for a future general election, and perhaps form a more sustained challenge to the mainstream parties in the longer term.”