13 September 2017

Junker uses State of the Union address to reject multi-speed EU

Jean-Claude Juncker, President of the European Commission, this morning addresses the European Parliament to give his annual State of the Union speech. He has opposed proposals for a multi-speed EU, instead calling for greater integration and more countries joining the common currency. Juncker has offered funding to help countries meet the criteria to join the eurozone, but will oppose the creation of a new EU finance minister. He will also set out an 18-month roadmap for the EU, culminating in a summit on the day of Brexit in March 2019, and has outlined plans for Free Trade Agreements with Australia and New Zealand to be agreed by 2019, an extension of the Schengen area to Bulgaria and Romania, and no Turkish accession “in the foreseeable future”.

Source: Politico Politico 2

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MPs table 157 amendments to the EU Repeal Bill

A total of 157 amendments have been tabled to the government’s EU (Withdrawal) Bill, also known as the Repeal Bill, following the vote yesterday to pass the Bill at second reading. Amendments put forward by Labour leader Jeremy Corbyn seek to prevent ministers using executive powers to alter workers’ rights, fundamental rights or health and safety regulations. They also call for the timing and broad terms of a transitional arrangement to be decided by parliament. Conservative MPs have also tabled amendments to the Bill, including former Remain supporters Dominic Grieve, Ken Clarke, Anna Soubry and Nicky Morgan. These call in particular for a limit to so-called ‘Henry VIII’ powers, which allow ministers to pass reforms with little parliamentary scrutiny. The Independent reports that twelve Conservative MPs have threatened to rebel against the Bill unless such executive powers are restrained. Amendments will be debated and voted on during the eight-day committee stage of the Bill, due to start next month.

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Verhofstadt: Security cooperation cannot be used as a “trade off” against future trading arrangements

Speaking in response to the UK’s position paper on security cooperation post-Brexit, the European Parliament’s chief Brexit coordinator Guy Verhofstadt has told a press conference, “In the European Parliament’s resolution we have already said that we think there needs to be close cooperation on internal and external security, but we also said this cannot be used as a trade off on other issues like trade relations. It’s not ‘oh, if you give us a good deal on one we’ll offer you cooperation on security’. For us, it’s absolutely key that there is a close relationship on the issue — it’s in the interest of everybody and our citizens — but there can be no trade off one against the other.” Verhofstadt also urged Prime Minister Theresa May openly to address MEPs when she visits the European Parliament, after confirming that May had only agreed to speak behind closed doors. He said it would be “helpful because it will be the European Parliament at the end that will need to give green light to outcome of negotiations”.

Meanwhile, the fourth round of Brexit negotiations has been postponed a week to 25 August, according to reports. The delay comes as Verhofstadt, earlier revealed that May is said to be preparing to make an “important intervention” that might require rescheduling. May’s spokeswoman said, “Both sides have agreed to be flexible, but nothing is agreed formally” on the dates.

Separately, Manfred Weber, leader of the European People’s Party and a senior ally of German Chancellor Angela Merkel has criticised May’s approach to negotiations, telling reporters, “It seems to be that Great Britain is still thinking that it can follow the full cherry-picking approach. That will not work – you have to decide whether you want to have the advantages of the European Union or you have to leave the European Union. For me it looks like all the documents are defining what is in the interests of Great Britain and that is what Great Britain wants to sustain, wants to keep – and the rest is not acceptable. That will not fly.”

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Labour will seek “full access” to the EU single market

Speaking at the Trades Union Congress (TUC), Labour leader Jeremy Corbyn said a “Tory approach to Brexit is to use the process of leaving to…deliver a deregulated free market tax haven on the shores of Europe.” He added that the government will turn Britain into “a Shangri-La for bosses and bankers but nothing of the kind for everybody else.” Corbyn argued that Labour would seek “a jobs-first Brexit that guarantees full access to the European single market as part of a new trade agreement and relationship with the EU.”

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Deutsche Bank report suggests reduced immigration post-Brexit is unlikely to raise UK workers’ wages

A new report by Deutsche Bank suggests that restrictions on immigration to the UK post-Brexit will likely lead to increased use of automation and off-shoring, rather than higher wages for UK workers. The report warns, “Companies faced by higher labour costs would simply offshore production rather than make investments. This would be bad for labour in aggregate, as output and employment would disappear with no compensatory improvement in real wages…The conclusion is that UK companies exposed to foreign competition have limited ability to raise wages in response to a labour supply shock.”

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Macron faces violent protests over employment reforms

Tens of thousands of people took part in marches against French President Emmanuel Macron’s proposed reforms of employment law. Left-wing protestors hailed the protests as a success, but Bruno Le Maire, Macron’s economy minister, has vowed that they will “hold firm” in implementing the reforms. This comes after Macron angered opponents by saying he would never give way to “slackers”.

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Merkel calls Hungary’s rejection of ECJ ruling “unacceptable”

German Chancellor Angela Merkel has called Hungary’s refusal to comply with a European Court of Justice (ECJ) decision on refugee relocation “unacceptable”, and indicated that it could endanger its membership of the EU. Budapest rejected the ruling, which dismissed Slovakia and Hungary’s legal challenge to the EU’s refugee relocation scheme, calling the decision “outrageous and irresponsible”. Merkel told Berliner Zeitung, “That a government says a ruling by the ECJ does not interest them, that is unacceptable.” When pressed on whether Hungary’s rebuttal means that it must exit the EU, Merkel stated that the issue “touches on one of Europe’s fundamental questions, because Europe is, for me, a common area of justice. We will have to talk about this at the European Council in October.” The Chancellor downplayed the effect of dissent on EU migration policy, saying, “When it comes to the redistribution of refugees, only three or four out of 28 states have outright refused to cooperate. The rest have said that they are ready to share the burden, and after the ECJ decision we have even seen some movement in the Slovak prime minister’s position.”

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UK inflation reaches five-year high

UK inflation rose to 2.9 percent in August, a joint five-year high, according to data published yesterday by the Office for National Statistics. Figures showed that inflation rose from 2.6 percent in July, driven by record price rises in the clothing and footwear sector and accompanied by small increases in the cost of petrol, holidays and hotel rooms. The value of the pound rose after the figures were published, increasing by 0.9 percent against the dollar – reaching its highest level since September 2016 – and by 0.6 percent against the euro.

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European Commission sets deadline for Poland to remedy controversial judicial reforms

The European Commission has given Warsaw has one month to remedy flaws in controversial legislation which is designed to overhaul Poland’s judicial system, declaring that the changes to Polish law imposed by the ruling Law and Justice (PiS) party threaten the independence of the judiciary and subvert the rule of law. In a statement on Tuesday, the Commission said that it had “carried out a thorough analysis of the response of the Polish authorities to the Letter of Formal Notice sent in July 2017” and “finds that its concerns have not been adequately addressed and therefore has moved to the next stage of the infringement procedure”. It added, “The Polish authorities have one month to take the necessary measures to comply. If the Polish authorities do not take appropriate measures, the Commission may decide to refer the case to the Court of Justice of the EU.”

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Pieter Cleppe – summary of a conversation between Martin Selmayr and EU-28 diplomats

Writing for Open Europe’s blog and quoted in the Telegraph, Pieter Cleppe, head of the Brussels office, summarises the minutes of a dinner conversation that took place on September 5th between Martin Selmayr, the European Commission President Jean-Claude Juncker’s chef de cabinet, and deputy permanent representatives from the 28 EU Member States. Selmayr discussed a draft of today’s ‘State of the Union’ speech, emphasising references to “the creation of a federal eurozone finance minister and treasury” and the use of “passerelle clauses” that allow reform without the necessity for treaty change.

On the EU’s future, Selmayr said the Commission was happy with Member States’ response to the five scenarios Juncker proposed earlier this year, but added that the Eurozone would likely be the “core” of the European project as time went on. In response to a point from the Czech deputy permanent representative that more should be done to make the euro an attractive proposition if this was to be the case, Selmayr said that greater inclusiveness from the Eurozone could only be forthcoming with appropriate levels of engagement from Member States, with reference to the Visegrad group of countries.

Selmayr also discussed in general terms the future profile of the EU’s budget and Brexit, as well as the Commission’s working programme, which he said would focus on completing current initiatives rather than undertaking new work. On the latter point, the French and German representatives pushed for “investment screening” as a means of ensuring a “global level playing field.” On Brexit specifically, Selmayr expressed concern that unity amongst the EU-27 might be put at risk unless agreement was reached on certain EU policies, including social dumping regarding the use of posted workers, energy union, climate change, and migration.

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