15 May 2018

Federica Mogherini: Future UK-EU security partnership will be “positive and constructive”

EU Foreign Affairs High Representative, Federica Mogherini, yesterday said that the future UK-EU security relationship will be “radically different” after Brexit, as the UK “will not be a ‘half-member’, or a member ‘ad honorem’,” but a “third country.” She added that the partnership “will and could be a positive and constructive one.” Speaking at the EU Institute for Security Studies conference in Brussels, Mogherini said the EU was “ready to work together [with the UK] at the diplomatic level, on the ground, and when it comes to our [military] capabilities,” explaining that the security of the UK and the EU is interconnected and that “there are bonds that cannot be broken.”

Speaking at the same conference, EU chief Brexit negotiator Michel Barnier reiterated the EU’s readiness to “establish a close partnership with the UK in foreign, security and defence policy” post-Brexit, while also warning that the UK’s departure from EU institutions means “it cannot be business as usual.” Barnier mentioned “five dimensions” for the future UK-EU security partnership, including “close and regular consultations,” UK contribution to EU-led operations, UK participation in the European Defence Agency (EDA), exchange of information, and a Security of Information Agreement.

On the UK’s participation in the Galileo satellite system post-Brexit, Barnier said, “We need to put the cooperation on Galileo between the EU and the UK on a new basis. In doing so our responsibility is to maintain the autonomy of the EU and to protect our essential security interests,” adding that the EU’s rules on Galileo “do not prevent the UK, as a third country, from using the encrypted signal of Galileo, provided that the relevant agreements between the EU and the UK are in place.”

Elsewhere, following increasing tensions between the UK and the EU over future British participation in the EU’s Galileo satellite programme, the UK space agency has written to thirteen UK companies working on the project, warning them to seek government authorisation before signing any new contract related to the project’s encrypted system. The letter, which was sent on behalf of Business Secretary Greg Clark, states, “I regret that these steps are a necessary consequence of the position taken by the European Commission.” Meanwhile, the government has reiterated that all options, including the development of a separate satellite programme, remain on the table should the EU keep refusing UK access to Galileo’s encrypted system.

Source: European External Action Service European Commission Financial Times The Times Financial Times Press Association

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Theresa May briefs Conservative MPs on customs options

Prime Minister Theresa May has held a meeting with Conservative backbench MPs in order to heal the split in the party over post-Brexit customs arrangements with the EU. The technical briefing aimed to demonstrate the benefits and drawbacks of the government’s customs partnership proposal and the maximum facilitation solution. The Prime Minister told MPs that neither plan was perfect. This comes as Sweden’s Europe Minister Ann Linde, yesterday said, “[EU chief Brexit negotiator] Michel Barnier said that the two British proposals the Cabinet is disagreeing about — none of them are realistic. So he thinks it’s unnecessary to fight about it, as none of them are realistic, no matter which one they choose.”

Elsewhere, the Brexit cabinet committee is set to meet today to discuss both customs options. International Trade Secretary Liam Fox is also expected to make a speech in London today where he will call for the UK “to lift our horizons up from the short-term politics of the European Union, to the global opportunities that await us.” He will say, “56 per cent of exports are now to outside the EU, compared with only 46 per cent in 2006. What is more, while our EU exports are still dominated by goods, our non-EU exports are evenly split between goods and services. Yet it is services that present the greatest opportunity to expand Britain’s trade.”

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European ministers concerned there is “no clear position from the British” on key Brexit issues

Ministers from EU27 countries yesterday warned of the lack of substantial progress in Brexit negotiations. German EU Minister Michael Roth said, “We are concerned that there is no clear stance, no clear position from the British. The clock is ticking… We need now to be making substantial progress, but that is not happening. What is worrying us in particular is the Northern Ireland question where we expect a substantial accommodation from the British side.” Bulgaria’s Deputy Prime Minister, Ekaterina Zaharieva, said yesterday, “The Council was informed [by the EU’s chief Brexit negotiator Michel Barnier] that not much progress has been made.” She called for “more intensive engagement” from the UK, noting that the October deadline is “only five months away.” Commenting on an extension of the timeframe for negotiations, Dutch Foreign Minister Stef Blok said, “The aim is now to conclude a deal in the time schedule that has been agreed on … I very much hope we will agree but there are no guarantees, unfortunately.”

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Cross-party campaign calls on MPs to support Withdrawal Bill amendments

Former Labour Foreign Secretary David Miliband, former Liberal Democrat leader Sir Nick Clegg, and Conservative MP and chairwoman of the Commons Treasury Committee Nicky Morgan, yesterday launched a cross-party campaign calling on MPs to support amendments to the EU (Withdrawal) Bill that make membership of the European Economic Area (EEA) and a customs union UK negotiating objectives. David Miliband said, “This is about calling for MPs of all parties to stand together,” adding, “It is very, very important that the country is not held to the kind of ransom that at the moment threatens living standards as well as the political influence of the UK in a very fundamental way.” Arguing that Brexit-supporters wanted to force their will on the Parliament and the citizens, Nicky Morgan said, “There are no precedents [for the Brexiters’ vision] so the UK has been asked to experiment on other people’s whims with a new trade policy when they have no idea what the cost will be for business and people in this country.” Sir Nick Clegg added that the Brexiters’ policies would result in the “greatest introduction” of trade barriers since the Second World War.

However, a senior Labour source has said, “The EEA packages that are currently in existence do not meet the needs and priorities that we’ve set out and the Norway option is not appropriate and will not work for the kind of Brexit we want to see.”

Elsewhere, the Scottish government will urge the Scottish parliament not to give consent to Westminster’s EU (Withdrawal) Bill in a motion for debate today. The motion, put forward by Scottish Brexit Minister Mike Russell, argues that the Withdrawal Bill would “constrain the legislative and executive competence of the Scottish Parliament and the Scottish government.” Scottish ministers have said they will rely on their own “legal continuity bill” passed by the Scottish parliament this year, but this is being challenged in the Supreme Court by UK officials. The motion is expected to pass today as the Scottish National Party, the Scottish Labour party and the Greens all oppose parts of the Withdrawal Bill.

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Nicola Sturgeon calls for devolved immigration policy post-Brexit

Scotland’s First Minister Nicola Sturgeon yesterday questioned whether the UK should maintain “a ‘one-size fits all’ immigration policy” post-Brexit, arguing that “the demographic and labour needs of different parts of the UK vary quite considerably.” She said that Scotland faced a “disastrous” fall in its working-age population after Brexit, adding, “Increasingly we see across business, across university, across society, much better support for Scotland having much more autonomy and flexibility around immigration.” However, she noted that there is “not much openness” in the UK government to pursue a devolved immigration policy.

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Merkel: our low defence spending “raises questions of Germany’s credibility”

German Chancellor Angela Merkel yesterday admitted that her country’s failure to meet Nato’s call for members to spend two percent of their GDP on defence “raises questions of Germany’s credibility.” Speaking at the same conference, German Defence Minister Ursula von der Leyen said that Germany wanted “to remain a reliable partner within our alliances,” and that although “we reached a low in terms of our defence expenditure in 2015 with 1.1 per cent of GDP… Next year, in 2019, we will probably reach 1.3 per cent. And we will notify the Nato summit in Brussels that we want to reach defence expenditure of 1.5 per cent of GDP in 2025.” This comes as German Finance Minister Olaf Scholz, who unlike Merkel and von der Leyen is a member of the Social Democratic Party, recently said that Germany’s budget would remain at next year’s level of €41.5bn or 1.28 percent of GDP “for the coming years.”

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Poland and Hungary criticise European Commission plan to link EU funds to respect for rule of law

Polish and Hungarian officials yesterday criticised the European Commission’s proposal to link certain EU funds to the rule of law in member states. Poland’s EU Affairs Minister Konrad Szymanski said, “The proposal seems like a massive power grab with too high a discretion in the [European] Commission’s hand… We are ready to support all the instruments to better control EU money, but we need something more intelligent and treaty-based.” The Hungarian ambassador to the EU, Oliver Varhelyi, warned, “One would have to be very careful when introducing such an instrument, one has to follow the law verbatim here,” citing the vagueness of the criteria on basis of which funds can be frozen as a serious concern. Meanwhile, Swedish Minister for EU Affairs and Trade, Ann Linde, said it was “very reasonable to ask to respect the rule of law as a prerequisite for EU funds.”

This comes as some member states also criticise the European Commission’s attempt to introduce new criteria for allocating EU cohesion funds in the future, with plans to take into account factors such as migration and unemployment. Central and Eastern European member states in particular fear that this means more money going to Southern member states in the next budget cycle, with Slovakia’s State Secretary for EU Affairs, Ivan Korcok, saying, “Should it stay as it proposed, politically we will not be able to explain or justify this approach that makes the least developed regions the losers [of the EU budget].”

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US and China remain “very far apart” on trade dispute

Terry Branstad, the US ambassador to China, has today said the US and China are “still very far apart” on trade disputes. Branstad added that the US wants to see a “specific timetable” and “China being just as open as the United States.” The comments come ahead of China’s vice-premier and top economic adviser to President Xi Jinping Liu He’s visit to Washington this Tuesday for at least three days of talks.

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Handelsblatt: European Commission to propose new “sovereign bond-backed securities”

The European Commission will next week publish its proposal to bundle sovereign debt from Eurozone countries, German newspaper Handelsblatt reports. These “sovereign bond-backed securities” would be marketed by a private special-purpose entity, with the European Commission reportedly hoping that this would “increase the availability of low-risk assets.” According to Handelsblatt, EU Vice President Valdis Dombrovskis, who will present the proposal next week, claims that these new securities would lead to no joint liability among member states.

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Henry Newman: The more we look back to the referendum, and re-fight its battles, the less we get ready for the future

In a piece for ConservativeHome, Open Europe’s Director Henry Newman writes, “The row over the Government’s customs policy is really a proxy for a bigger concern – the nature of Brexit. Supporters of the Customs Partnership seek a mechanism to lock the UK into a close orbit with the EU… Those backing the alternative technology-based Maximum Facilitation plan prefer it as it leaves the UK freer to forge its own path.” But Newman warns, “For sure, customs policy is an important aspect of Brexit. But overall, we are arguing over a relatively small slice of our economy,” adding, “The never-ending circular discussion in the UK political class is certainly dull, but it’s also profoundly damaging. The more we seek to re-take decisions which have been previously addressed, the less time and energy we have to focus on the real choices facing the country in the future. We are also in danger of not seeing the wood for the trees – of missing the bigger picture: for example, the EU’s protectionist moves to exclude the UK from the Galileo satellite system.”