11 April 2019

European Council agrees on flexible Brexit extension until 31 October

At the special European Council summit yesterday, the UK and EU27 leaders agreed to extend the Article 50 process until 31 October 2019, with a possibility to terminate the extension once the Withdrawal Agreement is ratified. The Council conclusions explain, “If the Withdrawal Agreement is ratified by both parties before this [31 October], the withdrawal will take place on the first day of the following month.” They also state that the Withdrawal Agreement will not be renegotiated and that the “extension cannot be allowed to undermine the regular functioning of the Union and its institutions,” adding that the UK committed “to act in a constructive and responsible manner throughout the extension in accordance with the duty of sincere cooperation.” If the UK does not hold European Parliament elections, it will leave the EU on 1 June. There will also a review of the situation at the Council meeting in June.

European Council President Donald Tusk said the UK “can still ratify the Withdrawal Agreement, in which case the extension will be terminated. It can also reconsider the whole Brexit strategy. That might lead to changes in the Political Declaration, but not in the Withdrawal Agreement. Until the end of this period, the UK will also have the possibility to revoke Article 50 and cancel Brexit altogether.”

Prime Minister Theresa May said in a statement, “The UK should have left the EU by now and I sincerely regret the fact that I have not yet been able to persuade parliament to approve a deal,” adding, “Further talks will also take place between the Government and the opposition to seek a way forward. I do not pretend the next few weeks will be easy or that there is a simple way to break the deadlock in parliament. But we have a duty as politicians to find a way to fulfill the democratic decision of the referendum, deliver Brexit and move our country forward.” May will make a statement to the House of Commons this afternoon.

Source: European Council European Council II UK Government

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Macron: longer Brexit extension was "not logical"

Following the European Council meeting yesterday, French President Emmanuel Macron said, “The majority position was rather to give a very long extension but in my view it wasn’t logical and above all it was neither good for us nor for the British people,” adding, “There were temptations to go very far in granting deadlines, and in my view it wasn’t about respecting the vote of the British people but rather to get them locked into membership.”

German Chancellor Angela Merkel commented that the delay “gives the British more time and space to decide what they want to do,” adding, “From our point of view it was important not to put pressure on [the UK].”  Merkel added, “It was clear that … Germany, would fight for an orderly exit — not because of British demands but for our own interest.”

Maltese Prime Minister Joseph Muscat said, “A Brexit extension until 31 October is sensible since it gives time to UK to finally choose its way. The review in June will allow [the European Council] to take stock of the situation.”

Polish Prime Minister  Mateusz Morawiecki said, “We moved away a risk for No Deal brexit for a several months. It gives a chance to overcome the ratification crises in UK. It is now up to UK to take this opportunity. ”

Separately, Dutch Prime Minister Mark Rutte warned, “At the end of October we are six months down the road. It will be increasingly difficult to grant an extension,” adding, “Most likely by the end of October, it’s signing of the Withdrawal Agreement or a No Deal.”

Source: Politico The Financial Times Twitter

Irish PM: UK could have a say in a future customs union with EU

Arriving to the European Council summit yesterday, Irish Prime Minister Leo Varadkar said the proposal for the UK to stay in a customs union with the EU after Brexit “has real merit,” adding, “I think we’d be generous in negotiating that, understanding that the UK couldn’t be a silent partner in such an arrangement, it would have to have a say in decisions being made.” He explained, “I believe as the EU having the UK in a customs union means we could get the best deals for all of us…We would be able to develop something ‘sui generis’ so that they would have a say around things in terms of future trade deals, and a level playing field around labour rights and environmental rights.”

Meanwhile, Foreign Secretary Jeremy Hunt yesterday told ITV’s Peston show, “A customs union [with the EU] would not work for a large economy the size of the UK … I don’t think it’s the right solution.”

Source: BBC News The Independent Reuters

DUP leader to meet Michel Barnier in Brussels today

The leader of the Democratic Unionist Party (DUP), Arlene Foster, will meet EU chief negotiator, Michel Barnier, in Brussels today. She will be accompanied by DUP MEP Diane Dodds, the Conservative MP and former Northern Ireland Secretary, Owen Paterson, and former Conservative leader, Iain Duncan Smith. Speaking to the BBC, Forster said she will use the meeting to “set out why we oppose the Withdrawal Agreement,” adding she wanted a “sensible deal which works for every part of the UK and respects the referendum result.” She also said that Prime Minister, Theresa May’s, approach to the Brexit negotiations “demeans the strength of this great nation.”

Meanwhile, Paterson said the meeting would be an opportunity “to discuss how the Alternative Arrangements Working Group proposals can deliver a seamless [Northern Ireland / Republic of Ireland] border with a WTO Deal or by replacing the Backstop as per the Brady amendment.”

Elsewhere, Foreign Secretary Jeremy Hunt appeared on Peston last night where he expressed his opposition to a general election. He said, “It would be absolutely catastrophic for us to face the people again in a general election if we have not delivered Brexit, which was our central promise at the last election.”

Elsewhere, Shadow Chancellor John McDonnell said yesterday that he did not expect a Brexit deal to be achieved in time to avoid holding European elections. Speaking on ITV’s Peston show, McDonnell said, “The best thing for Britain if we are going to have legislation going through, [it] has got to be legislation that has been properly scrutinised, that is effective, that will stand the test of time,” adding, “I can’t see that being done quickly … If we could do it by June, fair enough — I can’t see it, because the government has put us in an impossible position.”

Source: BBC News Twitter London Playbook

BCC Director: Businesses frustration with Brexit is palpable

Commenting on the further Brexit extension, Director General of the British Chambers of Commerce Dr Adam Marshall said, “[businesses] frustration with this seemingly endless political process is palpable,” adding, “For most businesses, the ‘flextension’ agreed by the European Council will be preferable to deadlines that are repeatedly moved forward at the last possible moment.”

Separately, Director General of the Confederation of British Industry (CBI) Carolyn Fairbairn said, “This new extension means imminent economic crisis has been averted, but it needs to mark a fresh start. For the good of jobs and communities across the country, all political leaders must use the time well. Sincere cross-party collaboration must happen now to end this chaos.”

Source: The Telegraph The Guardian

GDP grows in UK despite Brexit uncertainty

The Office for National Statistics (ONS) has reported that the UK economy has continued to grow despite the uncertainty over Brexit. GDP grew at 0.2% in February compared to the previous month, and at 0.3% in the three months to February. The head of GDP at the ONS, Rob Kent-Smith, commented, “Services again drove the economy, with a continued strong performance in IT. Manufacturing also continued to recover after weakness at the end of last year with the often-erratic pharmaceutical industry, chemicals and alcohol performing well in recent months.” However, he added that the growth figures themselves were “modest.”

Source: The Guardian

David Shiels: European Parliamentary elections would pose problems for the main parties. But especially for the Conservatives.

In a new blog for Conservative Home, Open Europe’s David Shiels examines the results of the Open Europe poll published yesterday of voting intentions for the European Parliament elections. He writes that participating in the European elections was “never going to be an attractive one for the Conservative Party,” adding “If they go ahead, these elections will offer voters a chance to register a protest against the incumbent Government and also send a strong signal about Brexit, whichever way they are inclined on the matter.” He adds, however, that “there could be confusion on both the Remain and Leave side as the new parties compete for attention and send conflicting messages, resulting in greater fragmentation – and the regional list system could produce some quirky results.”  He concludes, “Labour has more to lose by having its divisions forced into the open, and clearly risks losing support of Remainers unless it delivers another referendum. The Conservatives’ pro-Brexit credentials will be challenged, while they could also lose support from Remainers.”

Separately, in a piece for The Article, Open Europe’s Dominic Walsh writes, “European elections will reflect public polarisation over Brexit. With both Labour and the Conservatives confused and divided on the issue, voters look set to opt for the clarity provided by parties at either extreme of the Brexit spectrum.” He adds, “Support for the two new parties [Change UK and the Brexit Party] appears modest… but the survey showed that once voters were given more information on the two new parties, they were much more likely to support them.” However, Walsh also points out that “The combined 18% for the Brexit Party and UKIP… is far lower than the 27% UKIP managed in the last European elections in 2014. There is a distinct possibility that the UK will actually elect fewer hardline Eurosceptic MEPs after voting for Brexit than it did five years ago.”