9 October 2017

Theresa May: The ball is in the EU’s court

In a speech to the House of Commons today, Prime Minister Theresa May will say, “Achieving [a deep and special] partnership [with the EU] will require leadership and flexibility, not just from us but from our friends, the 27 nations of the EU…And as we look forward to the next stage, the ball is in their court. But I am optimistic we will receive a positive response.” She is expected to say the UK has “offered what we were going to offer”, and call for both sides to “prove the doomsayers wrong”. This comes as the fifth round of negotiations begin in Brussels today. These will be the final talks before the European Council summit on 19 and 20 October where EU leaders will decide whether or not “sufficient progress” has been achieved on the withdrawal agreement.

Elsewhere, Danish Finance Minister, Kristian Jensen, said this weekend, “We are now on the same page… In my view it is rather important we get into a more close and more speedy process on concluding some of the issues”. He also said, “The UK is a great trading partner of EU27, a strong ally in defence and security, so we need to find out how we can have a good and close relationship post-Brexit”.

Separately, at a meeting of EU ambassadors last week, representatives from France and Germany opposed a suggestion that the EU should open talks on a transition at the Council summit next week, even if sufficient progress has not been made. France’s Europe Minister, Nathalie Loiseau, has told Politico that although Prime Minister Theresa May’s tone in her Florence speech showed a “desire to move [Brexit negotiations] forward and to propose advancements” sufficient progress has not been made in order to open discussions on the future UK-EU relationship after the European Council meeting on 19-20 October.

Source: Financial Times The Times The Guardian Politico Europe

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DExEU and Europe Unit in conflict over staff and responsibility

The creation of a new “Europe Unit” in Downing Street has led to conflict over personnel and responsibility according to the Financial Times, as the unit’s head, Olly Robbins, is accused of trying to poach staff from the Department for Exiting the EU (DExEU). Robbins was formerly permanent secretary in DExEU. This tensions is reportedly aggravated by a broader concern in DExEU that the department is increasingly becoming sidelined. In an internal email, Robbins said his unit was in charge of “developing the overarching substance of, and approach to, the UK’s withdrawal, and the negotiation of our new partnership with the EU”. Senior civil servants commented Brexit Secretary David Davis was “deeply unhappy that [Prime Minister Theresa] May is marginalising him”, adding that the new division between both camps would allow EU negotiators to “endlessly chisel away at the gaps between the two, of which there will be plenty.”

Meanwhile, cabinet members fear Robbins may use his new positions to push May towards granting bigger concessions, including potentially on the UK’s end state, in the upcoming round of Brexit negotiations. One unnamed minister warned that too many concessions could lead the European Research Group to “pull the plug” on May, bringing her government in renewed danger.

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The Telegraph: EU negotiators stepped up back-room talks with Labour

The Telegraph reports that EU negotiators have “stepped up back-room talks with Labour” over fears that Prime Minister Theresa May’s government “will collapse before Brexit is complete”. High-ranking EU officials have held meetings with Jeremy Corbyn and Labour Shadow Brexit Secretary Sir Keir Starmer, seeking assurances that they “will honour agreements reached with the Conservatives if [they come] to power”.

Open Europe’s Aarti Shankar appeared on BBC Radio 5 Live this morning, discussing the opening of the fifth round of Brexit negotiations.

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Irish Revenue Commissioners’ report sceptical on open border in Ireland

An internal report by the Irish Revenue Commissioners, seen by RTÉ News, reveals doubts over the possibility of an open border between Northern Ireland and the Republic of Ireland after Brexit. “Once negotiations are completed … the U.K. will become a third country for customs purposes and the associated formalities will become unavoidable”, the report states, rendering the idea of a completely open border impossible. While “At some point a similar arrangement between the EU and UK is conceivable”, agreeing on such a model during the remaining time of divorce talks was “extremely challenging”, the report concludes.

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May indicates cabinet reshuffle as coup attempt is defused

Prime Minister Theresa May is preparing for a cabinet reshuffle after the European Council meeting on 19 and 20 October, The Sunday Times reports. In an interview with LBC this weekend, May said, “I’m the [Prime Minister], and part of my job is to make sure I always have the best people in my cabinet, to make the most of the wealth of talent available to me in the party”. This comes after multiple senior Tories put pressure on May to instigate a shake-up and grant the new intake of MPs “some exposure to the public on who they are”.

The Times also reports that, rather than being sacked, Foreign Secretary Boris Johnson might be moved to another post in the cabinet. “There is not a binary choice between keeping Boris and sacking Boris”, a senior figure close to May is cited. It is speculated that Johnson will take over the business department from Greg Clark.

Meanwhile, the coup attempt led by former party chairman Grant Shapps and other backbench MPs to replace May has apparently been defeated. In a piece in the The Telegraph yesterday, Boris Johnson called those who want a new leadership contest “nutters”, adding that “to get on and deliver Brexit […] we need Theresa [May]”.

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Michael Gove calls for UK to leave EU fisheries policy in 2019

Environment Secretary Michael Gove is insisting that the UK should pull out of the EU’s Common Fisheries Policy (CFP) immediately after Brexit, and not after a transition period. Gove said that it would be untenable for the EU to continue to set fishing quotas while the UK no longer had a say. He is expected to favour a system in which the government grants licences for vessels registered in member states to fish in UK territorial waters, and negotiate overall quotas for fishing in European waters trilaterally with Norway and the EU.

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Deutsche Börse ready to seize opportunity on clearing houses after Brexit

Clearing done at the London Stock Exchange is under increasing pressure from continental Europe. The Financial Times reports that Deutsche Börse would be taking steps to change the way it runs Eurex Clearing in an attempt to attract clearing houses activities away from London. The plan would consist in adopting the LSE model, which involves sharing part of the profits coming from interest rates swaps clearing with user-members. Clearing has become one of the most politicised issues following the UK decision to leave the EU and there is much uncertainty as to London’s ability to keep dominating the clearing houses business after its departure from the bloc.

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Tories suspend two MEPs

The Conservative Party yesterday suspended two of its MEPs for voting in favour of a resolution demanding European leaders postpone discussions over whether sufficient progress had been reached in Brexit negotiations. Ashley Fox, leader of the EP’s Conservative Party, said the both MEPs in questions, Julie Girling and Richard Ashworth, “left the party no choice but to act”. The decision was taken after consultation with Downing Street.

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Angela Merkel backs European Monetary Fund

Talking at a conference of the CDU’s youth wing, German Chancellor Angela Merkel voiced support for plans to transform the European Stability Mechanism into a European Monetary Fund. She warned of a debate dominated by buzzwords however, saying that the needs of Europe’s financial policy would need to be assessed carefully before decisions over a European finance minister could be taken.

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Tension remains high in Spain over Catalan referendum

Tension remains high in Catalonia, as people took to the streets on Saturday and Sunday in both Madrid and Barcelona to demand Spanish unity. “This is a European battle,” said the Spanish prime minister Mariano Rajoy. “It’s a battle in which the values of Europe are at stake. I am convinced that all the governments will carry on supporting the constitution and obedience to the law,” he continued, among voices that he would be ready to revoke Catalonia’s special regional status. Meanwhile, after the Spanish constitutional court banned a session of the Catalan parliament scheduled for Monday, the Catalan president Carles Puigdemont will appear in front on the regional parliament on Tuesday, when he is expected to brief the MPs on the result of the referendum. While a unilateral declaration of independence is unlikely, he is expected to symbolically recognise the results of the referendum. Due to the uncertainty on the future of Catalonia, some major financial player including Caixa bank, have moved their legal premises away from the Catalan capital.

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