21 March 2018

Germany provides unconditional support to Ireland on Brexit border issue

Following a meeting with Irish Prime Minister Leo Varadkar, German Chancellor Angela Merkel yesterday announced Germany’s full support for Ireland’s demands to avoid a hard border on the island of Ireland after Brexit. Merkel said, “Ireland can count on us – and that isn’t based on any other conditions… That’s valid in itself.” Commenting on the UK-EU Brexit transition deal agreed on Monday, Varadkar said, “The United Kingdom has agreed that the backstop solution to ensure the avoidance of a hard border will form part of the legal text of the Withdrawal Agreement… [Its] Inclusion is absolutely essential to avoid any doubt and I must be clear that it will apply unless and until a workable alternative agreed solution is found.”

Elsewhere, Irish Foreign Minister Simon Coveney yesterday said, “Without that backstop agreement in place in the Withdrawal Treaty, there will be no Withdrawal Treaty and there will be no transitional arrangements which are part of the Withdrawal Treaty.”

Separately, Lars Karlsson, President of KGH Border Services, said that a “smart border” could be a potential solution to avoid infrastructure on the Irish border. Giving evidence to the House of Commons Brexit Committee, Karlsson said that the form of the border infrastructure will depend on a common decision from the UK and Ireland, adding, “It doesn’t have to be gates, it doesn’t have to be number plate readers, it doesn’t have to be CCTV readers, it’s up to both sides to decide on the security level.” Answering the question on whether the UK staying in a customs union with the EU would help maintain a frictionless border in Ireland, Karlsson said, “From a technical point of view, it would not make any difference… It would make a difference from a tax perspective.”

Source: Press Association Bloomberg BBC News

Daily Shakeup RSS Feed

Commons Home Affairs Committee warns longer transition period may be necessary for UK-EU security cooperation

In a report published today, the House of Commons Home Affairs Select Committee calls for the UK and the EU to remain open to extending the Brexit transition period beyond 2020 if necessary to ensure sufficient time to establish a new security relationship. While the report welcomed proposals to replicate existing ties with EU on security and intelligence, including on programmes such as Europol and the European Arrest Warrant, it warned that complex legal and technical barriers could means a new relationship takes time to achieve. It also cautioned that the UK could not rely on receiving a more favourable deal than other third countries, warning, “This  attitude, along with lack of planning for alternative scenarios, suggests that the government is at risk of sleep-walking into a highly detrimental outcome.” Chair of the committee Yvette Cooper said, “Just  because we all want something, it doesn’t mean it will happen, unless enough work is put in in time to overcome the genuine legal, constitutional and political obstacles we have uncovered.” The report calls on the UK government to move beyond its own “red lines” on future cooperation.

Source: BBC

The Guardian: Spain wants reassurances on Gibraltar before agreeing to Brexit transition

According to The Guardian, the Spanish government has raised concerns at Brexit Secretary David Davis’ comment this week that the transition deal “does cover Gibraltar.” The Spanish government is concerned that the deal does not make clear that Spain must offer its approval for the transition to apply to Gibraltar. According to an EU official, Spain is calling for greater assurance on this before it formally agrees to the transition deal at the summit of EU27 leaders this Friday.

Source: The Guardian Bloomberg

Environment Secretary urges MPs to accept compromise over control of fishing waters

Speaking in the House of Commons yesterday, Environment Secretary Michael Gove urged MPs to keep their “eyes on the prize” of controlling UK fishing waters after the transition as he defended the deal reached on the Brexit transition period earlier this week. Gove said he understood “disappointment in fishing communities,” but added, “It is important that all of us accept that the implementation period is a necessary step towards securing that prize.” Gove added, “Our proposal to the EU was that during the implementation period we would sit alongside other coastal states as a third country and an equal partner in annual quota negotiations, and in making that case we did so after full consultation with representatives of the fisheries industries. We pressed hard during negotiations to secure this outcome and we are disappointed that the EU were not willing to move on this.”

Source: The Guardian

Removing tariffs post-Brexit could see prices fall up to 1.2%, suggests new study

According to a report by the Institute of Fiscal Studies, UK households could see prices fall by around 0.7-1.2% if the UK were to eliminate tariffs on all goods after Brexit. The report noted, “This compares with the estimated 2% increase in prices that followed the depreciation in Sterling in the wake of the referendum result. This suggests that the scale of ‘quick wins’ from running an independent trade policy is relatively small.” The report also argued that removing tariffs could “be very damaging for some UK industries in the short run.” The director of the IFS, Paul Johnson, said, “If we leave the customs union, we can come to our own trade deals with other countries, we can reduce tariffs. But even if we reduce that as much as possible, the effect on prices will be really quite small relative to what is still a big cost of leaving the customs union because it would make trade with the rest of Europe so much more expensive.”

Separately, UK inflation rate fell to 2.7% in February, down from 3% in January. This is also closer to the annual UK wage growth, which was estimated at 2.8% in December.

Source: BBC News The Guardian

MEPs query disappearance of freedom of movement rights for UK citizens in draft Withdrawal Agreement

UK MEPs have written to Brexit Secretary David Davis querying the disappearance of Article 32 in the recent draft Withdrawal Agreement, included in previous draft versions of the agreement. According to The Independent, the letter states, “Up until today, Article 32 of the draft Withdrawal Agreement stated that the Freedom of Movement rights of UK citizens and their families will cease to exist. However we noticed that Article 32 has suddenly vanished from the latest text. We would like clarification of what this removal of Article 32 means. Will UK citizens who already live in the EU27 after the end of the transition period be able to continue to move freely across the member states?”

Source: The Independent

Eurozone financial authorities tell banks to plan for Brexit without transition agreement

According to the Financial Times, the Eurozone’s banking authorities have told banks to plan for a full Brexit without any transition arrangements, despite the UK-EU transition deal agreed earlier this week. Officials confirmed that banks will need to apply for a Eurozone licence before the end of June if they wish to relocate from the UK after Brexit. Executive director for banking supervision at the German Central Bank, Andreas Dombret, yesterday said it was “too early to lay back,” adding, “Many issues are still to be discussed and the transitional period is still not fully guaranteed.”

Source: Financial Times

Scottish court accepts cross-party petition on unilateral revocability of Article 50

A Scottish court yesterday accepted a petition by a cross-party group of pro-EU Scottish politicians asking the Court of Justice of the EU (CJEU) to issue a definitive ruling on whether the UK could unilaterally revoke Article 50 without prior permission by the EU27. Overturning an earlier decision that had rejected the petition as “hypothetical and academic”, the panel of judges led by Scotland’s most senior judge Lord Carloway have ruled that the issue should be examined in court. They said, “The issue of whether it is legally possible to revoke the notice of withdrawal is, as already stated, one of great importance.” Lord Carloway added, “After all, if parliament is to be regarded as sovereign, the government’s position on the legality of revoking the notice may not be decisive.”

Source: The Guardian The Daily Telegraph

Verhofstadt criticises Juncker for congratulating Russian President Putin on re-election

Commenting on a letter of “congratulations” sent by European Commission President Jean-Claude Juncker to Russian President Vladimir Putin, Guy Verhofstadt, European Parliament Brexit coordinator and leader of the EP ALDE group, wrote in a tweet, “This is no time for congratulations. We will always need dialogue with Russia, but closer ties must be conditional on respect for the rules-based international order and fundamental values.” This follows the Salisbury spy attack last week, over which the EU offered the UK on Monday its “unqualified support.”

Source: The Telegraph Politico

German MEP elected leader of Socialist and Democrats EP group

German MEP Udo Bullmann was yesterday elected chairman of the European Parliament’s Socialists and Democrats with 86 votes, against 61 votes for his rival, Belgian MEP Kathleen Van Brempt. Commenting on his election and next year European elections, Bullmann said, “Already in April we’re going to discuss the cornerstones of our forthcoming campaign. Social democracy in Europe faces major challenges, but we are ready to respond.”

Elsewhere, Hungarian Prime Minister Viktor Orbán announced his Fidesz party will run the next European elections as part of the European People’s Party. Following a meeting with EPP leader Manfred Weber, Orbán said, “The European People’s Party is a big camp, there is room for our type of Christian Democrat.”

Source: Politico Brussels Playbook

Henry Newman: We were told progress on Brexit was impossible, but it keeps happening – thanks to compromise on both sides

Writing in ConservativeHome, Open Europe’s Henry Newman argues, “For all the Government’s Brexit mis-steps, political problems and delays in agreeing policy positions, it’s undeniably true that progress is being made in these [Brexit] negotiations. We were told again and again that agreement in December was not going to happen – that Brussels would not sign off on Phase One of the talks. But they did, and we already have the outlines of a compromise for the future UK-EU relationship. That outline is far from perfect. But it has at its starting point zero-tariff trade on goods.” Newman notes that “complex negotiations like these were always going to have plenty of downs as well as ups.” He concludes, “There’s good cause for optimism. Despite all the drama we have seen so far, there’s one fundamental important insight to consider: both sides want a deal. Both sides are compromising. Some will argue the UK is moving further, but undeniably both sides have shown flexibility.”