24 May 2017

Moscovici: Blueprint on future of Eurozone will be an “offer you cannot refuse”

Pierre Moscovici, European Commissioner for Economic and Financial Affairs, Taxation and Customs, told the media that he will announce plans next week for “completing the Economic and Monetary Union by 2025.” Discussing the plans, which aim to make adoption of the Euro more attractive to the EU members currently outside the single currency, he said, “We will try to make a framework that is attractive enough, that is like, as they say in the movies, an offer you cannot refuse.” However, he highlighted that the Commission could not force EU member states to adopt the single currency by a particular deadline.

Elsewhere, in a letter to a member of the European Parliament, European Central Bank President Mario Draghi warned that post-Brexit the EU could see a “reduction in the level of supervision and oversight of UK central counterparties by the EU authorities, including the ECB as central bank of issue of the euro.” Meanwhile, German Finance Minister, Wolfgang Schäuble has said that a “major part” of euro-denominated clearing should be inside the EU post-Brexit.

Separately, in an interview, Bundesbank board member Andreas Dombret has said, “It doesn’t look like a soft Brexit to me at all. It looks like either a hard Brexit or a very hard Brexit.” He stressed, “Now is the time for the banks and the market participants to prepare,” adding, “Brexit is manageable for banks. I truly believe so, but I think we need a very thorough preparation and we have to do this in a very efficient manner.”

Source: Reuters Bloomberg Brexit Bulletin Bloomberg Reuters

Daily Shakeup RSS Feed

UK threat level raised to ‘critical’

After chairing a meeting of the government’s emergency committee, COBRA, last night, Prime Minister Theresa May said, “It is now concluded on the basis of today’s investigations that the threat level should be increased for the time being from severe to critical. This means that their assessment is not only that an attack remains highly likely but that a further attack may be imminent.” She also activated Operation Temperer, which will see military personnel deployed on streets to support police resources. The Prime Minister will chair another COBRA meeting this morning. Election campaigning remains suspended today.

Source: Sky News ITV News

EU sets out criteria to determine relocation of London-based regulatory agencies

The European Council President, Donald Tusk, and the President of the European Commission, Jean-Claude Juncker, have outlined the EU’s criteria for determining the new locations of the European Banking Authority (EBA) and the European Medicines Agency (EMA). Both regulatory agencies are currently based in London, but are expected to relocate in light of the UK’s decision to leave the EU. The Presidents’ key “objective criteria” for relocation include the need for “business continuity” after Brexit, the ability to “maintain and attract highly qualified staff,” the “desirability of geographical spread of agencies seats,” and the provision of adequate education and staff facilities in the new location. The document also proposes a multi-stage vote that prevents one country hosting both agencies. Member states must submit their bids by 31 July, with the Commission expected to assess applications by mid-September, and inform EU ministers of their decision in October. The EU expects the UK to pay the necessary relocation costs.

Open Europe’s Vincenzo Scarpetta is quoted in the Financial Times Brexit Briefing as saying, “To attract either of these agencies on to home territory would give huge prestige to any EU member state. That is especially the case when it comes to those EU nations that have no agencies on their territory at the moment.”

Source: Financial Times Politico

Turkey is vetoing NATO’s partnership activities with Austria

BBC News reports that Turkey has vetoed NATO’s cooperation with Austria over the past year. Austria is a close partner of the military alliance, although not a member. This is reportedly in response to Austria’s effort to prevent Turkey from joining the EU. Austrian Defence Minister Hans Peter Doskozil said, “I strongly condemn Turkey’s course of action in NATO. It is irresponsible behaviour against Austria and strengthens my position that Turkey is very far from being part of the EU…In this, Turkey is endangering the security interests of Europe. The blockade has a long-term impact on the peace missions in the Western Balkans.” A NATO official said it was “not ending its co-operation with Austria,” adding, “We greatly appreciate its valuable contributions to our shared security. We hope the bilateral issues between Austria and Turkey will be solved as quickly as possible.”

Source: BBC News

Merkel's CDU widens lead in polls

According to a poll published in the German magazine Stern, Chancellor Angela Merkel’s Christian Democratic Party (CDU) currently polls at 49%, which puts it 14% ahead of Martin Schulz’s Social Democrats (SPD). The same poll shows the Free Democrats (FDP) moving to third place with 9%. For the first time, it seems possible that the CDU and the FDP could form a coalition without the participation of a third party. According to the same poll, Merkel is also consolidating her lead over Schulz as preferred Chancellor, with 51% of eligible voters choosing her over her rival, who currently stands at 22%.

Source: Frankfurter Allgemeine Zeitung

Ted Malloch: US will offer UK a trade deal post-Brexit

Speaking at an Open Europe event in Brussels, which was cited by EUobserver, Daily Express and Politico’s Brussels Playbook, Ted Malloch, who has been tipped by various news outlets to become the US Ambassador to the EU, said, “US President Trump will back [Prime Minister] Theresa May in whatever kind of Brexit she chooses,” adding, “The US will offer a trade deal to the UK after Brexit.” He stressed, “It’s in the interest of both the UK and the EU to get along after Brexit.”

On the future of the EU, he said, “The EU has changed. It has become more undemocratic, bureaucratic and anti-American…Looking at Brexit, other European countries have similar movements. This democratic impulse can be healthy.” However, he stressed that “we should avoid a failing EU. That’s not in the American interest.” He also said, “The EU should get more credit for what it has achieved in terms of achieving a stable Eastern Europe after the fall of the USSR.”

Malloch argued, “The cure to the EU’s calamity is to empower national democracy…Economic integration doesn’t mean having a unified European government…Trump’s view of the EU is that he’d never want the US to join such a supranational organisation. We still want the EU to succeed, but it should stop going in a protectionist direction.”

Hosuk Lee-Makiyama, the Director of free market think tank ECIPE, who was also speaking at the event, said, “Much political capital was spent on EU – US trade deal (TTIP). The US was however never interested. The EU is the ‘demander’ here but it didn’t offer something.”