17 May 2016

Osborne, Cable and Balls unite to warn against Brexit

Chancellor George Osborne, former Shadow Chancellor Ed Balls, and former Business Secretary Vince Cable all shared a stage yesterday calling for Britain to remain in the EU. Ed Balls said that “There are times to put party politics aside. This is one of those moments. If we, as a country, make the wrong decision in a few weeks’ time and we end up — on the Treasury analysis — being poorer and excluded for years to come, that will hit families really hard, it will hit businesses really hard.” Osborne accused the Leave campaign of treating the warnings against Brexit as “a massive conspiracy”, adding , “We can have a debate about whether that is a price worth paying for some other things that people claim you might achieve if we leave the EU, but let’s stop pretending that this is any more an economic debate.”

The Vote Leave campaign has accused David Cameron of being “knee deep” in a conspiracy to keep Britain in the EU, as letters emerged indicating the Prime Minister discussed the role big business could play in the Remain campaign before he had completed his renegotiation deal with EU leaders. Meanwhile, Boris Johnson yesterday claimed that the UK is less able to crack down on tax avoidance due to EU rules. Separately, a report by Migration Watch has claimed that in the financial year 2014/15, EEA migrants cost the Exchequer £1.2bn or over £3m a day.

Open Europe’s Nina Schick appeared on Nieuwsuur, the flagship programme on Dutch Public Broadcaster NOS, arguing that both sides of the campaign are resorting to “fear mongering,” and that, whatever the result of the referendum, the UK-EU issue is likely to be right back on the table.

Source: The Financial Times The Times The Independent The Daily Mail Migration Watch Nieuwsuur: Schick

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ORB poll puts Remain ahead, but ICM polling shows big gap between online and phone results

The latest ORB poll for The Daily Telegraph has Remain ahead by 15 points, with 55% (+4) wanting to remain in the EU and 40% (-3) backing the campaign to leave. However, when considering only those who said they would definitely vote, Remain slips to 51% while Leave are at 45%. When asked which result they believe will expose the UK to a greater risk of terrorism, 29% said staying in the EU would, 43% said leaving would, while 22% said they thought both or neither would. When asked which result they thought would do the more damage to the NHS, 31% said staying in, 39% said leaving, with 24% said they thought both or neither.

A separate ICM poll for The Guardian done over the phone had a ten point lead for Remain when undecided weren’t included, with those backing staying in the EU on 55% to 45% who said they wanted to leave. However, another ICM poll carried out online had Leave ahead by four points when undecided voters were excluded, with 52% backing Brexit, to 48% saying they wanted to remain in the EU.

A new poll by TNS released today puts the Leave campaign ahead with 41% (+5%) whilst Remain trails on 38% (-1%).

Meanwhile, in an interview with the Daily Mirror, Nigel Farage said, “In a 52-48 referendum this would be unfinished business by a long way. If the remain campaign win two-thirds to one-third that ends it.”

Source: The Guardian BBC The Daily Telegraph

Europe will face ‘populist uprising’ if it cannot address migration crisis- says ex MI6 Chief

A former head of MI6, Sir Richard Dearlove, has warned of a “sea change” in European politics if the EU fails to effectively address the migration crisis. He said, “If Europe cannot act together to persuade a significant majority of its citizens that it can gain control of its migratory crisis, then the EU will find itself at the mercy of a populist uprising, which is already stirring.” He was also strongly critical of the proposal to offer Turkey visa free travel to the Schengen area (of which the UK is not a member) saying “For the EU, however, to offer visa-free access to 75 million Turks, to stem the flow of migrants across the Aegean, seems perverse. Like storing gasoline next to the fire we are trying to extinguish.”

The warning comes as a new report by the European Commission cautioned that allowing Turkey visa-free travel to the Schengen area could increase the likelihood of terrorist attacks in Europe saying, “It can be expected that, as soon as Turkish citizens will obtain visa-free entry to the EU, foreign nationals will start trying to obtain Turkish passports in order to pretend to be Turkish citizens and enter the EU visa free… This possibility may attract not only irregular migrants, but also criminals or terrorists.” The report added that “the proposed visa liberalisation for Turkish citizens travelling to the EU could potentially have an impact on the terrorist risk in the EU in as far as the movement of terrorists of Turkish citizenship to and from the Schengen area is concerned”.

Source: The Guardian The Times The Daily Telegraph

British Land warns that referendum uncertainty is hitting investment

Large businesses are delaying investment in properties and office spaces until the results of the EU referendum are known, according to British Land – the second largest listed property company in the UK. “there is evidence that some large occupiers are delaying decisions to take space until after the upcoming EU referendum,” the company said, warning that Brexit could have an “adverse affect.”
Separately, a report by the Chartered Institute of Personnel and Development (CIPD) concludes that British salaries are likely to remain stagnant until at least 2020, with the number of vacancies falling by 12% this year. The CIPD attributes the trends to Chancellor George Osborne’s living wage and EU Referendum uncertainty.

Meanwhile, Belgium, the Netherlands, Luxembourg as well as Ireland, Malta and Cyprus are among the countries that will be hit the hardest if the UK leaves the EU, according to Fitch Ratings. In an analysis released on Monday, Fitch noted that exports of goods and services to the UK by these countries amount to at least 8% of their GDP – and they would be “most exposed,” in the event of a Brexit.

Source: The Times The Financial Times The Daily Mail Market Watch

Sarkozy: France must initiate EU Treaty change from summer 2017

Former French President Nicolas Sarkozy, who hopes to be selected as centre-right frontrunner for the 2017 presidential election, told Le Monde in an interview, “I’m totally opposed to the UK’s exit from the EU. The worst [scenario] would be Brexit and Turkey’s [EU] entry. We would complete the Grand Slam of mistakes!” He goes on to argue that “the debate over Brexit is an opportunity to re-found Europe” through “a [new] Treaty that France must initiate from the summer of 2017…I propose creating a ‘euro-Schengen’ – that is, a government of [the passport-free travel area] Schengen comprised of the interior ministers of member states, with a stable president, who would have authority over [EU border agency] Frontex.” However, Sarkozy opposes holding an EU referendum in France, arguing that “it is not the best way to respond to complex issues about the re-foundation of Europe.”

Source: Le Monde France TV Info

Bundesbank President: Helicopter money “is not an issue”

Bundesbank President Jens Weidmann said in an interview with La Repubblica and other European newspapers, “For me, the discussion about helicopter money [the ECB handing out cash directly to Eurozone citizens] doesn’t exist. It only creates uncertainty among citizens. It is not an issue for the ECB Board.” He adds, “I agree with [German Finance Minister] Wolfgang Schäuble that it would be advisable to set up an independent body in charge of objectively assessing compliance with [Eurozone fiscal] rules. This would relieve the European Commission from this task, and would separate economic analysis from political decisions.”

Source: La Repubblica

Austria’s far-right Presidential candidate rules out leaving Schengen, Eurozone and EU Referendum

Norbert Hofer, the far-right candidate for President in Austria has softened his views on the EU, telling Die Presse in an interview today, that he has no plans to hold an EU Referendum, nor leave the Eurozone or Schengen. “Austria pronounced itself for [EU] accession. We have adapted our whole system to the EU. Therefore I am not for an EU exit,” he said, adding that he “didn’t stand” for French far-right leader Marine Le Pen’s view that the EU must be “destroyed.” Hofer came top in the first round of the Presidential election on 24 April with 36%, and is seen as the favourite to win the run-off on Sunday 22 May.

Source: Die Presse EUobserver

IMF calls for interest and debt payments on Greek bailout loans to be postponed until 2040

The Wall Street Journal reports that the IMF wants any Greek interest or principal payments on its bailout loans delayed until at least 2040 and wants the maturity of the loans extended to as late as 2080. Furthermore, the Fund believes that the interest rates on the loans should be fixed for 30 to 40 years at its current average rate of 1.5%. The proposal is thought to be some way from what Eurozone countries are willing to accept in terms of debt relief for Greece. Separately, the Greek parliament is expected to pass the remaining measures to conclude the current bailout review at the end of this week.

Source: The Wall Street Journal

ECB holds back on purchases of Irish and Portuguese debt to avoid hitting issuer cap

Data released yesterday showed that the ECB limited its purchases of Irish and Portuguese debt due to concerns over hitting the ‘issuer limit’ which means it cannot own more that 33% of any single country’s debt market. The ECB still holds debt of these states from a previous bond buying programme. This became an issue last month as the total amount of ECB bond purchases was increased from €60bn to €80bn per month.

Source: Reuters

EU needs less regulations and more decentralisation, says Secretary General of the German Confederation of Skilled Crafts

The Secretary General of the German Confederation of Skilled Crafts Holger Schwannecke told Frankfurter Allgemeine Zeitung that the EU needs more decentralisation and a phase of consolidation. The EU keeps producing “new regulations which are not always necessary and coordinated” leading to annoyance about the EU and increased nationalism within Europe, says Schwannecke. He is calling on the European Commission to “review the current practice [of EU law making] and to propose no additional regulations until this process is completed.”

Source: Frankfurter Allgemeine Zeitung