30 June 2016

Gove and Leadsom declare Tory leadership bids as poll finds May would beat Johnson among party members

A number of Conservative MPs have today formally announced they are standing for the leadership of the party including Energy Minister Andrea Leadsom, Justice Secretary Michael Gove and former Defence Secretary Liam Fox, all of whom backed leaving the EU. Gove, whose entry into the race was widely seen as a surprise, said that he was standing because he had concluded that Boris Johnson “cannot provide the leadership or build the team for the task ahead.”

Writing in The Times, Home Secretary Theresa May formally launched her own leadership bid, vowing to put herself and her party at the service of ordinary people in a “mission to make Britain a country that works for everyone”. The Independent notes her pledge to hand the job of ‘Secretary of State for Brexit’ to an MP who campaigned to leave the EU, in a bid to woo Brexit MPs. In a speech this morning, she also argued that there should be no early general election and that Article 50 mechanism for leaving would not be triggered until next year. In the exit negotiations she suggested she would try to end free movement “as it currently stands” while securing the maximum degree of market access for goods and services possible.

In a YouGov poll of Conservative Party members carried out for The Times, Theresa May leads on 36% ahead of Boris Johnson on 27%, with Andrea Leadsom and Stephen Crabb on 7% each and Liam Fox on 4%. In the final head-to-head contest, May leads Johnson by 55% to 38%.

Meanwhile, a leader in The Times argues that “Having voted for EU withdrawal, Britain must take radical steps to galvanise business and avoid a recession”, and suggests the next government cuts corporation tax.

Source: The Times The Independent The Daily Telegraph The Times: Leader

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EU leaders warn UK no access to the single market without acceptance of freedom of movement

Speaking following an informal meeting of the leaders of the other 27 EU states, European Council President Donald Tusk said, “Leaders made it crystal clear today that access to the single market requires acceptance of all four freedoms, including the freedom of movement. There will be no single market ‘à la carte’”. Tusk’s comments were echoed by German Chancellor Angela Merkel and French President François Hollande. However, French Finance Minister Michael Sapin, appeared to open the door for compromise on the freedom of movement issue telling BBC Newsnight, “Everything will be on the table because Britain will make proposals, and we will negotiate all these aspects with a desire to come to an agreement. But we’re not there yet, until we have an official decision from the UK.”

In an interview with French daily Le Figaro, UKIP leader Nigel Farage said Britain could make compromises with EU in order to secure continued access to the single market. He said, “There can be compromises with the EU, including on a possible British contribution to the EU budget, even if I don’t quite see the logic for it. But there will be no compromises on what Europe calls ‘freedom of movement.’”

Meanwhile, Merkel also said that all EU member states agreed there would be “no Treaty change” in the foreseeable future. She commented that Brexit means there will have to be “more Europe when it makes sense, but also less Europe where it makes sense.” In terms of who will handle the negotiations with the UK, Merkel suggested the European Council, Commission and Parliament would all be involved and will work in tandem. Separately, Hollande also said that it would make “no sense” to put the Le Touquet Treaty, which allows the UK to have its border in Calais, into doubt. He also ruled out an EU referendum in France, saying the Presidential election was the opportunity for voters to choose what approach to Europe they want.

Open Europe’s Pieter Cleppe was interviewed by BBC Radio 5 Live, Reuters Polish press agency PAP and BBC World Service Radio “If you look at it rationally, there is a good case to be made for the EU to become more flexible. At the end of the day, reason will prevail, though there will be a lot of screaming and shouting before then.”

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French and Spanish leaders reject EU talks with Scottish nationalists

French President François Hollande and Spanish Prime Minister Mariano Rajoy have both said they are opposed to the EU negotiating potential membership for Scotland before the UK as a whole leaves. Scotland’s First Minister Nicola Sturgeon has raised the possibility of a second independence referendum but said all of the potential options for keeping Scotland in the single market would be explored. “If the UK leaves, Scotland leaves,” Rajoy said. “Scotland has no competences to negotiate with the EU. The Spanish government rejects any negotiation with anyone other than the United Kingdom.” Contending with a powerful independence movement in Catalonia, Madrid has been a longstanding opponent of the creation of breakaway states in Europe.

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Schäuble’s post-Brexit EU reform plan

German Finance Minister Wolfgang Schäuble has plans to reform the EU and the Eurozone into a more fiscally disciplined bloc with more financial oversight for independent authorities in the wake of the Brexit vote, reports Handelsblatt. A white paper from the German Finance Ministry entitled, “Initiatives after the UK-Referendum,” argues that, “Member States should not be allowed to shirk their responsibilities for a stable budget and growth-friendly structural reforms.”

Proposals include a “rejection law,” which would be introduced for the draft budgets of the Eurozone countries as an incentive for reform, and the implementation of country-specific economic recommendations to be linked to EU structural funds. Furthers proposals include narrowing the European Commission’s role merely to be the ‘Guardian of the Treaties,’ while the monitoring of the budgetary policies of the members states could be taken up by an independent authority.

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Irish and UK leaders will work together for best Brexit outcome, Irish PM says

Irish Taoiseach Enda Kenny yesterday sought to dispel concerns that Brexit would disrupt the peace process between Northern Ireland and the Republic, and said the UK would fight to keep free movement between the two countries. “We’ve had the common travel area since 1922 and the EU itself is involved in the peace process,” Kenny said. The Taoiseach called relations with the UK “stronger than ever before” and said if the UK’s access to the EU single market is cut off, trade with Ireland will suffer.

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John Kerry suggests Brexit could be reversed

The US Secretary of State John Kerry raised the prospect yesterday that Brexit could be reversed, The Times reports. He was asked at a conference in Aspen whether the Brexit decision could be “walked back” and if so how. “I think there are a number of ways,” he said. “I don’t, as secretary of state, want to throw them out today. I think that would be a mistake.” Reflecting on where Brexit left Britain on the world stage, Kerry added: “Do I think that Britain’s role has somehow been diminished? No, I think it’s been changed. That doesn’t mean we won’t miss that voice within the context of the EU. I personally will regret that Britain is not going to be at that table when there is a US-EU dialogue.” Meanwhile, US President Barack Obama warned that Brexit raises “longer-term concerns about global growth.”

In The Wall Street Journal, Henry Kissinger argues: “Punishing the UK will not solve the question of how to operate a common currency in the absence of a common fiscal policy among countries with disparate economic capacities, or of how to define a union whose ability to achieve common political strategies lags fundamentally behind its economic and administrative capacities. By the same token, Britain needs to put forward the concept of autonomy for which its people voted in a manner that embraces ultimate cooperation. Britain and Europe together must consider how they might return, at least partially, to their historical role as shapers of international order.”

Separately, the President of the European Stability Mechanism (ESM) Klaus Regling told WirtschaftsWoche, “Let’s see whether Brexit actually happens. The referendum was predominantly coined by emotions. Perhaps the last word is not spoken yet on this issue.”

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Rutte willing to sign Ukraine treaty despite Dutch ‘No’ in referendum

Dutch Prime Minister Rutte would be prepared to sign the EU’s economic association agreement with Ukraine, despite a non-binding “no” vote in a referendum by the Dutch earlier this year. Under this course, the Netherlands would obtain a declaration seeking to deal with Dutch concerns, reports De Volkskrant. European Council President Tusk said at the EU Summit on Tuesday, “We will do our best to find a legally binding solution that would allow Rutte to proceed with ratification.”

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Merkel opposes Renzi’s plan to sidestep EU rules to recapitalise Italian banks

EUobserver reports that German Chancellor Angela Merkel rejected Italian Prime Minister Matteo Renzi’s plans to temporarily side-step EU rules on state aid in order to help struggling banks in Italy. Merkel told reporters yesterday, “We cannot renegotiate every two years the rules of the banking sector.”

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German Vice-Chancellor calls European Commission “unbelievably foolish” over decision to sideline national parliaments in EU-Canada free trade deal

Following the European Commission’s proposal that the EU-Canada trade deal (CETA) should not be concluded without the involvement of national parliaments, German Vice-Chancellor Sigmar Gabriel told Der Tagesspiegel that the Commission’s decision is “unbelievably foolish.” He added, “If the Commission goes about CETA like this, then TTIP is dead.”

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