6 April 2018

EU shipping community increases direct freight routes between Ireland and EU to bypass UK ports post-Brexit

Shipping companies are planning to increase direct freight services between Ireland and continental Europe in order to bypass UK ports after Brexit. This is due to freight hauliers’ concerns about the queues and customs checks at the borders of UK ports. Shipping company CLdN, which introduced vessels on new direct freight routes between Ireland and Belgium and the Netherlands, said, “In anticipation of Brexit, the shipping community was looking for alternative solutions . . . seeking a good balance between costs, frequency and lead-time.” While there is a possibility of 57 percent of Irish exporters shipping directly to the EU if transit through the UK becomes too costly, direct routes are unlikely to heavily disrupt the Ireland-UK links, given Ireland’s dependence on trade with the UK. President of the Irish Road Haulage Association, Verona Murphy, said that new direct routes would offer more certainty over schedules. She added, “We’ve got three expected checks [at the UK border after Brexit]: customs, the department of agriculture and then immigration… From our [businesses’] perspective it just couldn’t be worse.”

Separately, The Guardian reports that proposals on the Irish border tabled by the UK last week are very similar to those that were rejected by the EU last summer. The Prime Minister Theresa May’s Europe advisor Oliver Robbins, will meet with the EU’s deputy Brexit negotiator Sabine Weynad on 18 April to discuss the issue further.

Source: Financial Times The Guardian

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Barclays boss says Brexit impact on UK GDP will be so minor “it won’t make the headlines”

Barclays chief executive Jes Staley has said that although there is “reason to believe that for some period of time, the GDP of the UK will probably grow at a slower rate than it might otherwise have grown save for Brexit,” it’s going to be “incremental and so it won’t make the headlines.” Staley noted, “The question is, down the road – 10, 20 years from now – will the flexibility of managing a modern economy, having the power centre in the UK and in London for the British economy, will that then become a competitive advantage?” He added, “In some ways bigger than Brexit is the decision of the US government to drop tax rates down to 20 per cent.”

Separately, Elke König, chair of the EU’s banking watchdog the Single Resolution Board (SRB), has warned that Euro area banks could face a capital shortfall as bonds issued by under UK law might no longer be recognised as a buffer after the UK formally leaves the EU in March 2019. Speaking at a news conference, she said, “Banks must plan for any possible outcome in the ongoing [Brexit] negotiations and we are closely monitoring their plans.”  The SRB cited banks in Italy, Germany, France and Finland in particular.

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France to launch European military crisis force outside of EU framework

France will launch a European military crisis force in June this year, Reuters reports, quoting a source from the French Defence Ministry saying, “It [military crisis force] would not be within the European Union and would allow countries outside it, like Britain, to be part of it.” The force would be independent from the EU’s Permanent Structured Cooperation (PESCO) on security and defence, and instead be based on “a smaller group of countries that have common analysis and procedures.” France held a working group with Germany, the Netherlands, the UK and Denmark last month, with German defence minister Ursula von der Leyen meeting her French counterpart in Paris yesterday to discuss the project.

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UK-India trade deal "not going to be done overnight," says Indian High Commissioner

In an interview with Politico, India’s High Commissioner to the UK, Yashvardhan Sinha said a UK-India free trade agreement was “not going to be done overnight,” adding, “I don’t think India is in a rush. I think India would like certainly, and I’m sure the UK would too … to get the best deal possible.” He also stressed that “easier access, the ease of travel” for Indian citizens to the UK “has to be looked into” as part of the agreement. Sinha said that a “great deal” with the EU would be “very important,” highlighting that the EU is “one of our largest trading partners.”

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Donald Trump threatens further $100bn in tariffs against China

US President Donald Trump has instructed his administration to consider applying a further $100 billion in import tariffs against China, arguing this could be appropriate “in light of China’s unfair retaliation.” This would be in addition to the $50 billion in tariffs already proposed. He also instructed his agriculture secretary to “implement a plan to protect our farmers and agricultural interests.” Elsewhere, China has opened proceedings at the World Trade Organisation, arguing that US tariffs would represent a “serious violation” of international trade rules.

Separately, Larry Kudlow, director of the White House’s National Economic Council, yesterday stressed that the UK would engage in discussions with the Chinese government before introducing new tariffs on imports from China. He said, “Our intention is not to punish anybody. Our intention is to open markets and investments and lower barriers — that’s the deal.” But Kudlow added, “The damage of our economy comes from China’s restrictive practices,” and highlighted that the US would seek a “coalition of the willing” to support its position against China, saying, “I think everybody in the world knows that China has not played by the rules for many years.” This comes after the White House’s trade adviser, Peter Navarro, also said that the US would seek discussions with China “to get to some place where China stops doing what it’s doing in terms of its aggressive attacks on our economy,” adding, “If we don’t do what we are doing now then we are going to lose our future economically and we are going to face national security risks.”

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UK-Russia relations at its lowest level in years, says Russian Ambassador

Speaking yesterday, the Russian Ambassador to the UK, Alexander Yakovenko, said UK-Russian relations were “at the lowest level today at least for many years,” and warned, “The majority of the world community is not supporting the Western approach.” He also called for the results of the Organisation for the Prohibition of Chemical Weapons (OPCW) investigation into the Salisbury attack “[to] be confirmed by the international community,” adding, “We want transparency and we want an international presence in this so-called investigation.” This comes as a statement has been issued on behalf of Yulia Skripal, one of the victims of the Salisbury attack, which quotes her as saying her “strength is growing daily.”

Elsewhere, The Daily Telegraph reports that the US will impose a new set of economic sanctions against Russia, affecting oligarchs closely related to President Putin.  

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Finland approves Russia-Germany Nord Stream 2 gas pipeline

The Finnish government yesterday approved the construction of the Nord Stream 2 gas pipeline, which runs from Russia to Germany, with an additional local construction permit expected “within the next weeks” by the pipeline’s operator Nord Stream 2 AG. This comes as German authorities gave the green light for the construction of the pipeline last week. The project crosses from Russia through the territorial waters or economic zones of Finland, Denmark and Sweden into Germany, giving each country an effective veto right.

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EU member states and European Commission split over financing of EU-Turkey refugee deal

Several EU member states have protested against the financing of the EU-Turkey refugee deal, under which the Turkish government receives a total of €6bn from the EU for preventing refugees from crossing into Europe. Of the first €3bn already paid, €2bn had come from member states and €1bn from the EU’s common budget. While the European Commission has proposed the same splitting of costs for the second tranche of €3bn, France, Germany, Austria, Sweden, Denmark and Finland have sent a letter to the Commission demanding that the second tranche was entirely paid from the EU budget, Der Spiegel reports. This demand has reportedly been rejected by Commission President Jean-Claude Juncker. Der Spiegel reports that member states are worried about a lack of transparency over what the money sent to Turkey is used for.

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Mark Zuckerberg says Facebook will apply EU data protection standards globally

The CEO of Facebook, Mark Zuckerberg, yesterday said that Facebook will apply EU data privacy standards across its whole global network. It was previously expected only to implement part of the EU’s new data protection framework internationally. Zuckerberg said, “We need to figure out what makes sense in different markets with the different laws and different places. But let me repeat this, we’ll make all controls and settings the same everywhere, not just in Europe.” The EU’s overhaul of data protection regulations will come into force on 25 May.  

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First round of consultations produces no breakthrough on prospects of a new Italian government

At the end of the first round of consultations with the different parliamentary groups, the Italian President of the Republic Sergio Mattarella has announced that no parliamentary majority is at this stage within sight to support the formation of a new government. Mattarella said time was needed for parties to “responsibly reflect on the current situation and on possible programmatic convergences,” announcing that a new round of consultations will be held next week.

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Italian state lender set to buy shares in telecommunications company Telecom Italia

The board of the Italian state lender Cassa Depositi e Prestiti (CDP) has yesterday given its approval to the acquisition of a 5% shares in formerly Italian state-owned telecommunications company Telecom Italia. The move has been seen has an attempt to put breaks on the influence of French telecommunications giant Vivendi within Telecom Italia, of which Vivendi is the relative majority shareholder with just under 24%. The move comes ahead of an extraordinary meeting to be held on 4 May, when Telecom Italia’s shareholders will vote for a new company board. Vivendi said it did not consider the CDP’s move as “hostile” and that “any shareholder is welcome.”

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Enea Desideri: Eurosceptic or Europhile? Shedding light on the Five Star Movement’s stance towards the EU

In a new blog, Open Europe’s Enea Desideri analyses the stance of the Italian Five Star Movement (M5S) on the question of European integration, arguing, “Suggestions that the M5S would be a Eurosceptic force are not totally ungrounded,” but stressing equally how the profile of the M5S does not easily fit that “of a typical Eurosceptic force.” The Movement, he writes, “advocates not so much less Europe as much as a different Europe; one based on solidarity rather than rules, and where democratic checks and accountability are strengthened, be it at the national or supranational level.” While this cannot be considered “a Eurosceptic position per se… There is an aspect to the Movement’s European policy which could still create headaches in Brussels: its political malleability and hence unpredictability,” which “is reflected by support for policy proposals that appear to openly contradict, or at least rest uneasily with one another.” Desideri concludes, “The M5S cannot currently be considered simply as a Eurosceptic force. Given its inherent malleability however, it remains difficult to rule out that it could adopt a more EU-hostile stance in the near future.”