14 September 2017

Juncker says Brexit is not the “be all and end all” of the EU, as he outlines plans for further integration

In his annual State of the European Union address, President of the European Commission, Jean-Claude Juncker, told the European Parliament that “Brexit is not the future of Europe. It is not the be all and end all.” He added that Brexit is a “very sad, tragic moment in our history,” which the EU “will always regret,” but the EU will move on. However, he told British MEPs, “You will regret it [Brexit] soon.” Responding to Juncker’s speech, which called to extend the Schengen area and proposed all EU member states join the euro, German government spokesman Steffen Seibert said the EU is in a better position than it was last year and the proposals will be discussed at the European Council summit. On the euro proposal, a spokesman for German Finance Minister Wolfgang Schäuble said “certain criteria should be met” before joining the euro. However, France, Germany and Italy welcomed Juncker’s proposal to impose greater regulation on foreign investment in European infrastructure, manufacturing and energy.

Meanwhile, according to Reuters, French President Emmanuel Macron will present euro zone reform proposals on 26 September, two days after the German election. Macron has previously called for a Eurozone finance minister, parliament and budget.

Separately, Prime Minister Theresa May will make a speech in Florence on 22 September that has been labelled as an “important intervention” on the Brexit negotiations. May’s spokesman said, “The Prime Minister wanted to give a speech on the UK’s future relationship with Europe in its historical heart. The UK has had deep cultural and economic ties spanning centuries with Florence, a city known for its historical trading power. As the UK leaves the EU we will retain those close ties. As the Prime Minister has said on many occasions, we are leaving the EU, not Europe.” He added that the speech was an opportunity to “update on Brexit negotiations so far.”

Elsewhere, according to The Times, Foreign Secretary Boris Johnson has two red lines in the Brexit negotiations: the size of any financial settlement and that any transition deal should last no longer than two years.

Source: Press Association Reuters

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Hammond suggest “bespoke deal” for UK financial services post-Brexit

In a speech to UK Finance last night, Chancellor Philip Hammond suggests the government intended to construct a “bespoke deal” for UK financial services in Brexit negotiations. He said the deal would represent a “new paradigm” given “no existing trade agreement, nor third-country access to the EU, supports the scale of reciprocal trade in financial services that exists between the UK and the EU.” In reference to the EU’s plan to reform oversight of euro clearing operations, he warned that the UK would not accept “protectionist agendas disguised as arguments about financial stability.”

Meanwhile, in an interview yesterday, former Bank of England governor, Lord King, said, “I don’t think that the negotiations are going in the way we might hope.”

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Toyota warns future investment in UK is at risk over Brexit uncertainty

Toyota Executive Vice President, Didier Leroy, has warned that if the company has to wait “two to three more years” to have clarity on the future trade relationship between the UK and EU, “We will have a big question-mark about our future investment in the country.” He added, “A few months ago the UK government was saying, ‘We’re sure we’ll be able to negotiate [a dea]) without any trade tax…They are not saying that anymore.”

This comes as France’s economy minister, Benjamin Griveaux, has said that while failure to reach a Brexit deal would be felt in Europe, it would be “worse in Britain”. He warned the current uncertainty was bad for business, and blamed the difficult negotiations on Britain’s “changing” positions.

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Michael Gove says new trade deals will not compromise food and animal welfare standards

Giving evidence to the House of Commons’ Environment, Food and Rural Affairs Committee, Environment Secretary Michael Gove said the UK would not relax standards on food and animal welfare in order to secure new trade deals. He said, “We want to have a free trade deal, but, of course, we need to have those protections, and if we can’t achieve protections in those areas then any deal will necessarily have a slightly narrower scope.” He also said a UK-US trade deal could be delayed over the issue of chlorine-washed chicken. Asked if agriculture and fisheries sectors would be “sold out” in negotiations with the EU to achieve preferential access in other sectors, he said, “Absolutely not. In the conversations that I have had with Cabinet colleagues so far there is a deep appreciation that it is not just the case that agriculture matters because food and drink is our biggest manufacturing sector, it goes far beyond that. There are specific opportunities for agriculture and fisheries outside the European Union, greater than perhaps any other sector … for a potentially rapid growth.”

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UK and EU share equal responsibility for concluding a successful Brexit negotiation, says Australian High Commissioner

In a piece for The Financial Times, earlier this week, the Australian High Commissioner to the UK, Alexander Downer, writes, “Once Britain leaves the EU it will have to calibrate its own economic policies to try to make the best of new circumstances. If it retains competitive markets for goods and services, successfully manages fiscal policies, ensures the labour market is fair but flexible, and has an open approach to trade and investment, the UK will do perfectly well. After all, many countries, including Australia, prosper outside the EU. Their prosperity is largely a function of their domestic economic settings, not membership of clubs.” He adds, “Without Britain, there is a risk that the EU becomes introverted, less global and less transatlantic in outlook. If that happens, then the West as a whole will be weakened — even if Britain becomes more “global” than it already is. This is not a prediction. It is a risk. And it is one that the EU and the UK must work to avoid. That is why countries outside Europe believe that the UK and the EU share equal responsibility for concluding a successful Brexit negotiation over the next 19 months. This is not just an economic question. The unity of the Western world is at stake.”

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Alistair Darling: Brexit would not have happened without financial crisis

Speaking at an event yesterday marking ten years since the collapse of Northern Rock, Lord Darling, former Chancellor of the Exchequer, said, “I don’t think Brexit would have happened if it hadn’t been for the political and economic events of the preceding ten years. People were disillusioned. They felt badly treated. They felt squeezed.” He claimed austerity had been the “biggest political failure”, saying it had created a “direct line” to the outcome of the Brexit referendum.

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DUP to vote with Labour on NHS pay and tuition fees

The Democratic Unionist Party (DUP) has announced that it will vote against the Government on the two issues of NHS pay and tuition fees. The DUP, which reached a ‘confidence and supply’ deal with the Conservatives after the general election in June, has not voted against the Government since the deal was concluded. Labour will force votes later today on a “fair pay rise” for NHS workers and against increases to tuition fees. As the debate began DUP MP Ian Paisley Jr said, “I must say that myself and my colleagues are minded to support the [Labour] motion… put before the House this evening.” The Government is expected to allow the Labour motions to pass, as they are not legally binding.

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