15 June 2018

Government tables its amendment to EU Withdrawal Bill

The Government has yesterday published a compromise amendment to the EU (Withdrawal) Bill over the Parliament’s role in Brexit negotiations. It states that if the UK does not reach a deal with the EU on the Withdrawal Agreement or on the future relationship before January 21, 2019, a minister must make a statement to Parliament and allow MPs to vote “a motion in neutral terms,” which does not allow the motion to be amended. Rebel Conservative MP Dominic Grieve, who has led talks with Government over the compromise, yesterday told the BBC, “The Government has made the motion unamendable, contrary to the usual methods of the House of Commons and therefore it cannot be accepted.” The Bill, along with the new amendment, will return to the House of Lords on Monday.

Meanwhile, Viscount Hailsham has reportedly tabled an amendment in the House of Lords which would give Parliament the power to dictate the next steps in negotiations if the Government failed to strike a Brexit deal with the EU by 15 February 2019. Elsewhere, Brexit Secretary David Davis yesterday told the House of Commons that an amendment which would “allow Parliament to instruct Government on what steps it should take” in the Brexit negotiations would be “constitutionally unprecedented, [and] the current constitutional arrangements have served this country well for hundreds of years over thousands of treaties.”

Separately, Conservative MP and Chairman of the Foreign Affairs Committee Tom Tugendhat yesterday told Sky News, “I think we are going to get a meaningful vote anyway. The meaningful vote is going to be either the Government’s deal is accepted in which case that is the meaningful vote to accept it or it isn’t accepted, in which case frankly there is going to be a new government.”

This comes as a new poll for The Times finds that 66 per cent of the public believe the government is doing badly in negotiations with the EU, against 21 per cent who think the government is performing well. 39 per cent of the public believe Theresa May is most suitable to be Prime Minister, a rise in 2 percentage points from two weeks ago, and 15 percentage points ahead of Labour leader Jeremy Corbyn (24 per cent).

Elsewhere, Bloomberg reports that doubts concerning the development of the negotiations have led senior EU officials to informally discuss the possibility of the UK remaining part of the EU for a further short period of time after March 2019.

Source: Press Association The Daily Telegraph Politico The Times Bloomberg

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Commission rejects British post-Brexit external security plan

In a presentation to EU27 diplomats yesterday, the European Commission said “a number of UK requests [for a EU-UK post-Brexit foreign policy partnership] are contrary to the parameters” set by leaders in the negotiations, Bloomberg reports. The Commission cautioned that British participation in defence projects “should be decided on a case-by-case and exceptional basis” and allowed only “where it significantly participates to the fulfilment of the Union’s level of ambition.” British demands for a closer cooperation could, according to the Commission, threaten the “autonomy of the EU’s decision-making.”

Elsewhere, The Daily Telegraph reports that Germany’s Interior Minister, Horst Seehofer, has told his French and Dutch counterparts that “nothing must change” after Brexit that would harm the security of EU citizens. This is in opposition to the position the European Commission and German Chancellor Angela Merkel have taken on the future UK-EU security partnership. A source told The Telegraph, “Seehofer believes that the EU has such an interest in keeping high-level security co-operation that me must not allow any deterioration in the operability of schemes such as the European Arrest Warrant.” A separate source said Seehofer was urging EU security capabilities not to be diminished by Brexit, “even if it amounted to cherry-picking.”

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Varadkar: UK needs to stop delaying decisions affecting Irish border

Speaking after meeting the new Spanish Prime Minister Pedro Sanchez, Irish Taoiseach Leo Varadkar yesterday called upon the UK Government to stop “putting off difficult decisions” about solutions to the Irish border issue. He also warned that there should be no last-minute Brexit deal at the EU Council summit in October, explaining, “Of course it’s not the case [that] there is going to be some sort of compromise cobbled together late at night at the EU council meeting in October. [It] is not a negotiating meeting, the UK will not be there so any agreement will have to be concluded between the UK on the one hand and the EU taskforce on the other.”

Elsewhere, the Irish Central Bank yesterday released its macro-financial review in which it warns that Brexit is a key risk for the Irish domestic economy. The Bank’s Deputy Governor Sharon Donnery said, “The risks arising from Brexit, especially a ‘hard’ or disruptive Brexit, are far-reaching for Ireland. The window of opportunity for resolving a range of issues for firms is closing fast and contingency plans need to be fully prepared.”

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Scottish National Party threatens guerrilla tactics over Brexit legislation

The SNP’s leader in the Commons, Ian Blackford, has threatened to obstruct Brexit legislation in parliament with guerrilla tactics “day-by-day, week-by-week.” He accused the Scottish Secretary, David Mundell, of “shafting” the Scottish people by denying them a voice in the Brexit process and failing “in his role as secretary of state to protect our devolution settlement and stand up for the people of Scotland,” by ignoring Edinburgh’s withholding of legislative consent on the EU (Withdrawal) Bill. In response, Mundell said, “This is not a situation any of us would have chosen. It is not however a crisis, nor is it unforeseen. Whilst the devolution settlements did not predict EU exit they did explicitly provide that, in situations of disagreement, the UK parliament may be required to legislate without the consent of the devolved legislature.”

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UK Government should "come clean on Brexit", says Welsh First Minister

Wales’ First Minister Carwyn Jones has yesterday called for Prime Minister Theresa May to “come clean on Brexit, to erase the wobbly red lines and to get the country into a proper Brexit-ready position.” Speaking at the UK in a Changing Europe think tank in London, Jones said that the Brexit deal should allow the UK to “retain alignment with the Single Market as a regulatory space; and a new, durable, Customs Union with the EU.” He added, “The solution may not be to join EFTA and through it retain membership of the European Economic Area (EEA)… But at least a similar arrangement… where the clear and stated assumption is that, except in exceptional circumstances, we will not just have regulatory alignment on day 1 after we leave, but day 1,001 or 10,001.” Warning that the Government seems to be currently heading towards a scenario “where the UK neither has its cake nor gets to eat it,” Jones called for May to “use the opportunity presented by the White Paper to change direction; to challenge [Michel] Barnier and the EU27 to make good on their promises that it is our red lines that prevent a very different future partnership, and to be led by the national interest, not by fear of a few dozen backbenchers.”

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ECB announces its intention to end QE programme

Following a meeting in Riga, the President of the European Central Bank (ECB), Mario Draghi, yesterday announced the bank’s intention to end its Quantitative Easing (QE) programme. Bonds purchases will be halved to €15bn from September this year and phased out altogether after the end of the year, “subject to incoming data confirming our medium-term inflation outlook.” However, Draghi said the ECB was committed to reinvest the bonds’ proceeds for “an extended period of time” after the end of QE “and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.” He added that interest rates will unlikely be increased before “summer of 2019”, stressing that the Eurozone still needs “significant monetary stimulus.”

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Unilever “extremely unlikely” to remain in FTSE 100 after shifting to a single headquarters in the Netherlands

The consumer goods group Unilever has said it is “extremely unlikely” to continue trading on the UK FTSE 100 index after it consolidates its headquarters in the Netherlands. The group, which until now has been based in both the UK and the Netherlands, made the decision to move to a single-headquarters in Rotterdam earlier this year, arguing that more trading is done through the Dutch company’s shares. Unilever’s finance director, Graeme Pitkethly, said, “We understand and appreciate that a departure from the FTSE index has negative implications for some investors that are benchmarked to it, however simplification is the right thing for the company and our shareholders as a whole.”

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No compromise on migration policy in Merkel's coalition government

After emergency meetings of the German coalition government yesterday, a compromise on migration and asylum policy could not be reached due to the diverging views of the Christian Social Union (CSU) and those of Chancellor Angela Merkel’s Christian Democratic Party (CDU). Merkel opposes the CSU’s Interior Minister Horst Seehofer proposal for German border regions such as Bavaria to be able to reject migrants who have already registered in another EU member state. Urging for an EU-wide approach, the Chancellor has suggested a compromise in which Germany would negotiate bilateral treaties with countries where migrants first register before moving to Germany, such as Italy and Greece. The proposal was reportedly backed by many CDU lawmakers, but rejected by the CSU. A senior official from the CSU was quoted in the Augsburger Allgemeine newspaper reportedly saying the Party was considering leaving the coalition. However, veteran CSU politician Hans-Peter Friedrich later said that the CSU made no such threat.

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Italian Agriculture Minister says Italy will not ratify CETA

In an interview with the daily La Stampa, Italy’s Agriculture Minister Gian Marco Centinaio yesterday said that the government will ask parliament not to ratify the EU’s Comprehensive Economic and Trade Agreement (CETA) with Canada and “other similar treaties.” Centinaio, a member of the far-right League, said, “We will not ratify the free-trade treaty with Canada because it protects only a small part of our PDO (Protected Designation of Origin) and PGI (Protected Geographical Indication) products,” adding, “This is not just a nationalist position of the League. Many of my European colleagues have doubts.”

Separately, Italian Prime Minister Giuseppe Conte will today meet French President Emmanuel Macron in Paris after it had been suggested that their meeting could be cancelled amid tensions between Italy and France over immigration this week.

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Member states agree to EU scrutiny of foreign investments, but call to retain final right of action

EU member states have agreed to allow the EU scrutiny of inward foreign investment. However, they have underlined that individual member states should retain the right to decide whether to screen a particular investment, and argued that the screening process should not be conducted by the European Commission. Instead they have suggested the Commission should provide a “non-binding opinion” on screening, of which member states should take “utmost account.” Negotiations will now begin with the European Parliament.

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Open Europe event: The significance of London's financial cluster for mainland Europe

Ahead of the upcoming EU Council on 28-29 June, where Prime Minister Theresa May and the EU27 leaders will attempt to make progress on the Brexit issue, Open Europe and Thomson Reuters are hosting a panel, “The significance of London’s financial cluster for mainland Europe,” to draw attention to the importance of the City of London for financial investment in the EU27. The debate will address questions such as:

  • How crucial is London, the world’s leading financial center, for the EU27?
  • How material could be the possible loss of the UK’s financial passport post-Brexit, not only for British companies, but also for their European clients?
  • Are there ways to mitigate the risks by means of mutual recognition, equivalence or other methods?
  • Is there a risk UK clearing houses would no longer be able to clear Euros after Brexit and how may this affect European pension funds or industrial companies?
  • How could mutual divergence in services regulation be managed after the UK’s exit from the EU?

The event will take place on June 19 in Brussels. Tickets are available on Eventbrite.