12 October 2017

Philip Hammond warns EU of the “need for speed” in moving to transition talks

Giving evidence to the Treasury Select Committee yesterday, Chancellor Philip Hammond said, “Our European partners need to think very carefully about the need for speed in order to protect the potential value to all of us of having an interim period that protects our businesses and citizens and allows investment and normal business activity.” Suggesting that a transition period was a “wasting asset,” whose value in terms of certainty would diminish the longer it takes to agree, he urged the EU to “engage with us, look at our proposals,” adding there was a “high degree of consensus it’s a sensible thing to do.” He also warned, “[The UK has] to consider the possibility of a bad-tempered breakdown in negotiations,” adding, “We are prepared to spend when we need to spend against the contingency of a ‘no deal’ outcome.” But he also said, “What I am not prepared to do is allocate funds to departments in advance of the need to spend…We will be ready, we will not spend it earlier than necessary just to make some demonstration point.”

Separately, speaking at PMQs yesterday, Prime Minister Theresa May said, “We are preparing for every eventuality, we are committing money to prepare for Brexit, including a no-deal scenario…  The Treasury has committed over £250 million of new money to departments like DEFRA [Department for Environment, Food and Rural Agencies], the Home Office, HMRC and DfT [Department for Transport] in this financial year for Brexit preparations…Where money needs to be spent, it will be spent.” The Prime Minister also said that there had been progress in the Brexit talks, telling Parliament that “We are very close to an agreement on citizens’ rights.”

However, the Financial Times reports that the current round of Brexit negotiations is at a standstill. It reports one official closely involved with the process as saying that “there was nothing, zero, no progress.” It quotes another negotiator as saying that “Nobody is ready to move yet.”

Source: Press Association Bloomberg BBC

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European Court of Justice “can veto Brexit deal”

The European Court of Justice will have the power to strike down any Brexit deal, MPs were warned yesterday. Sir Konrad Schiemann, Britain’s representative on the court until 2012, told the Commons Brexit Committee that any agreement would be open to legal challenge at the ECJ – even if both sides agreed the deal.

He warned that if the ECJ ruled the agreement to be illegal under European law both sides would have to renegotiate, and that the court may also insist on a continuing role in policing any future agreement between the EU and the UK. Such a move would undoubtedly anger Eurosceptic Conservative MPs and Cabinet Ministers.

“Any agreement that is made between the EU and parliament is subject to challenge in the European Court of Justice on the subject of powers of the parties who have made that agreement,” Sir Konrad said. “So the Commission and the people negotiating on behalf of the EU are faced with this problem: they can’t just do what they think is good. They have got to remain within their powers.”

Asked if he was suggesting that the withdrawal terms could be challenged in the ECJ, he replied: “Certainly in so far as they touch on the role of the ECJ. If you exclude the ECJ altogether and for example try and set up a different tribunal — this has been done in various other draft treaties — sometimes the ECJ has said yes that will work and other times it has said it won’t.”

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German economy minister: Europe will be winner from Brexit

German Economics Minister Brigitte Zypries said yesterday that Europe will “be the winner” from Brexit. Speaking at a press conference in Berlin, Zypries commented that “I expect [Germany] will, of course, have problems with trade… but it will not be so hard for Europe as for Britain.” She added, “Many companies are moving their headquarters from the UK to Germany… Germany is doing well and the next government must ensure that it continues to do so.”

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The UK could obtain “associated status” after leaving Euratom

Commenting on the UK’s planned exit from the European Atomic Energy Community (Euratom) and on the technical problems this might create, Berta Picamal, an executive office member of Europe’s nuclear trade body Foratom, stated that the body is “now analysing nuclear cooperation agreements that we have with third countries to see to which extent we can replicate what we have with the US or Japan with the UK.” She did “not foresee [no agreement], it’s not an option.” Welcoming the hypothesis of a cooperation agreement, Tom Greatrex, chief executive of the British Nuclear Industry Association (NIA) stated that this would allow the UK to leave Euratom and “effectively enable [it] to be part of the Euratom framework as now.” Meanwhile, the UK Government yesterday published a Nuclear Safeguards Bill to protect the nuclear industry during the process of Brexit.

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MPs urge Davis to publish Brexit impact report

A letter coordinated by Labour MPs David Lammy and Seema Malhotra urges Brexit Secretary David Davis to publish secret advice his department is gathering on the potential impact of Brexit on jobs and living standards. The letter says, “Leaving the European Union will have a huge impact on our economy for generations to come” and that, “We believe it is important that there is a full and frank debate about the impact of Brexit on our economy, jobs, trade and living standards and what can be done to mitigate the risks.” It also warns, “That is only possible if analysis of the impact of Brexit is published.” So far it has been signed by over 120 Labour, Liberal Democrat and SNP MPs, who accuse Davis of keeping “not only parliament but the public in the dark.”

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CBI: UK is playing “human poker” with EU workers' rights

Yesterday the Director-General of the Confederation of British Industry (CBI), Carolyn Fairbairn, urged the Government to give an “unconditional guarantee” to EU workers that they can stay in the UK after Brexit.

“After 15 months of human poker, the uncertainty facing [EU workers in the UK] has become intolerable. It is ablight on the values of our nation” said Fairbairn. “One week after the EU referendum we called for an unconditional guarantee from the UK government that EU citizens can stay. And today I say it again.” She emphasized the importance of EU nationals to the UK economy, stating that, “If even some decide to leave, both our health and wealth will suffer.”

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Germany favours UK banks gaining transitional EU access

Germany wants the European Union to be prepared to grant U.K. financial companies transitional access to the EU if the Brexit process drags on, according to a government strategy document seen by Bloomberg.

The proposal by the Finance Ministry in Berlin says the EU should let member states offer market access to British banks on a reciprocity basis for a transitional time. No mention is made of requiring U.K. banks to be domiciled in Europe, potentially removing a key obstacle to such a process. Without specifying a transition period, it says legal issues arising from Brexit that need to be addressed include “national transition arrangements in the area of market access for British institutions to the EU/Germany.”

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EU softens plan on deposits as it aims for banking union by the end of 2018

The European Commission has urged EU member states to complete the banking union first proposed in 2012 by the end of next year. Commission vice-president Valdis Dombrovskis said, “As long as financial ties between banks and their sovereigns remain as close as they are today, there is still unfinished business.” After two years of unproductive talks, the Commission yesterday proposed watered-down proposals to strengthen the EU banking sector against future crises.

The new plan does not include proposals for full EU-sharing of savers’ protection in cases of bank failure, leaving the financial burden largely with individual Member States. However, the German Banking Industry Committee (DK) said that the plan was “only a marginal advance.”

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