8 February 2019

Theresa May says UK must secure “legally binding changes” as Brexit talks resume

The Prime Minister, Theresa May, met EU leaders in Brussels yesterday and announced that the UK and EU negotiating teams would shortly resume talks. Speaking afterwards, May said that the UK “must secure legally binding changes to the Withdrawal Agreement to deal with the concerns that Parliament has over the backstop,” adding, “Taking that…together with the other work that we are doing on workers’ rights and other issues will deliver a stable majority in Parliament.” She acknowledged the process “is not going to be easy” but insisted that “I am going to deliver Brexit. I am going to deliver it on time.”

In a joint statement with May, European Commission President Jean-Claude Juncker said he had “underlined that the EU27 will not reopen the Withdrawal Agreement” but added that the political declaration on the future relationship could be “more ambitious in terms of content and speed.” Meanwhile European Council President Donald Tusk said there was “still no breakthrough in sight” and that “talks will continue.”

Elsewhere, the European Parliament’s Brexit coordinator, Guy Verhofstadt, said that May “assured us that there will be a backstop.” He added, “There is no question to remove the backstop because that is absolutely necessary for securing and safeguarding the Good Friday Agreement.” This comes as May visits Dublin today to hold talks with Irish Taoiseach Leo Varadkar, while Attorney General Geoffrey Cox will meet with his Irish counterpart, Séamus Woulfe.

Separately, the Guardian reports that a new version of the Brexit deal could come back to Parliament at the end of March, requiring an extension of Article 50, while EU diplomats are quoted in The Times as saying that final decisions could be taken at the European Council summit on March 22.

Source: The Telegraph BBC Twitter Politico The Times The Guardian

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Labour MPs clash over second referendum

Labour MPs have clashed over whether the party should back a second referendum, following Jeremy Corbyn’s letter to the Prime Minister, in which he outlined the Labour party’s conditions for its support for a Brexit deal. Shadow Brexit Secretary Sir Keir Starmer yesterday said Corbyn’s letter “does not rule out the option of a second referendum… and Jeremy Corbyn is going to be writing to members to reassure them about that.” This comes as the Shadow Brexit minister, Matthew Pennycook, said Labour would have “no other credible options” but to support a public vote if May failed to accept Labour’s proposals. However, senior Labour sources yesterday said that the party would not necessarily support a second referendum if the Government did not accept its Brexit conditions.

Meanwhile, Labour MP Owen Smith, who backs a second referendum, yesterday said that he and “other people who hold [his] views will have to consider” quitting the party. He added, “I haven’t [yet] come to that decision,” but that “at the moment I may be asked by the Labour party to row in behind a policy decision that they know, and the government knows, is going to make the people I represent poorer, and I think more fundamentally, actually, is at odds with the internationalist, social democratic values that I believe in.”

Separately, the Prime Minister’s spokeswoman yesterday said May will respond to Corbyn’s letter, but that she had not changed her position that the UK must not stay in a customs union with the EU after Brexit.

Elsewhere, European Council President Donald Tusk reportedly said yesterday that the plan suggested by Corbyn “might be a promising way out of the impasse.” In addition, the EU Parliament’s Brexit coordinator, Guy Verhofstadt, said, “A cross-party co-operation is the way forward and I think I can say that we welcome also the letter that Jeremy Corbyn has written today to Mrs May to offer such a cross-party exit.” He added, “It’s important now that this leads to a position in the UK that has the broadest possible majority, so that we can conclude these negotiations.”

Source: The Guardian BBC The Guardian Reuters Politico BBC

CBI warns that UK exporters could lose access to some global ports in event of a No Deal Brexit

The Confederation of British Industry (CBI) yesterday warned that, in the event of a No Deal Brexit, British exporters could lose access to a number of global ports. This is because the UK would no longer have access to most existing Free Trade Agreements between the EU and third countries. The chief economist of the manufacturing lobby group EEF, Seamus Nevin, said, “These problems don’t just start on 29 March. It takes several weeks for container ships to travel from the UK to East Asia, Oceania, or South America. Very soon, sea-freight will be leaving the UK with no idea of the trade rules that will be in place when the goods arrive.”

Elsewhere, the Financial Times reports on a leaked contingency plan by the UK Government to boost the British economy in the event of a No Deal Brexit. The plan is said to include measures such as lowering import tariffs and providing specialist support to UK exporters. One Whitehall source described it as “a Doomsday list of economic levers we could pull if the economy is about to tank.”

Meanwhile, the German Finance Minister Olaf Scholz said yesterday that the financial industry needs to ensure that “even in the case of a hard Brexit, there is no danger for the stability of individual firms and the financial system as a whole.”

This comes as members of the US Congress have reiterated concerns that any return to a hard border in Ireland could jeopardise talks on a post-Brexit UK-US trade deal.

Source: The Guardian Financial Times Bloomberg RTÉ

Bank of England forecasts weakest UK economic growth in a decade

The Bank of England has said that Britain is facing its weakest economic growth in a decade amidst Brexit uncertainty and a slowdown of the global economy. Bank of England Governor Mark Carney said that “the fog of Brexit” was causing tensions in the UK and that the risk of No Deal Brexit is growing. Although the Bank decided not to raise interest rates, it believes that they will rise if a Brexit deal is agreed.

Elsewhere, the European Commission has said that the economies of all EU countries will continue to grow in 2019, but that the pace of growth will be slower than in previous years. The Commission blamed this slowdown on a number of uncertainties, including a reduction in China’s economic growth and the possibility of a “disruptive Brexit.”

Source: Reuters Financial Times European Commission

France recalls its ambassador to Italy following “unprecedented” and “baseless attacks” by the Italian government

France has recalled its ambassador to Italy for consultations following what it described as a series of “outrageous statements” and “baseless attacks” from the Italian government. A spokesperson for the French Foreign Ministry said, “This is unprecedented since the end of the [Second World] War,” adding that the recent meeting between Italy’s Deputy Prime Minister, Luigi Di Maio, and a group of French ‘yellow vest’ protestors “constitutes a further and unacceptable provocation.” The spokesperson said, “All these actions create a serious situation which calls into question the intentions of the Italian government towards its relationship with France.”

Italy’s Interior Minister and joint Deputy Prime Minister, Matteo Salvini, has offered to meet French President Emmanuel Macron, and identified “three fundamental questions” to resolve with Paris. This includes ending the push back of migrants at the border, ending lengthy border checks, and the return of around fifteen Italian terrorists in France.

Source: Le Figaro

Dominic Walsh and Aarti Shankar: Assessing Labour’s new “five tests”

In a new blog, Open Europe’s Dominic Walsh and Aarti Shankar assess Jeremy Corbyn’s recent letter to the Prime Minister, in which he laid out five demands for changes to the Political Declaration which could secure Labour’s support for the Brexit deal. They observe that the letter “is a notable shift from Labour previous ‘six tests’ policy, which called for the government’s deal to deliver ‘the exact same benefits’ as EU membership – something that has widely been recognised as impossible to achieve.” They add, “Labour’s new strategy offers a credible path to supporting a ‘softer’ version of the government’s deal, and could have an important impact on what both MPs and the EU decide to do next.” However, they argue that aspects of Labour’s plan raise questions, particularly the demand for a ‘say’ in EU trade deals as part of a new customs union. They also point out that “[Labour’s] demand for ‘access to the European Arrest Warrant [EAW]’ is impossible, as there is no ‘access’ to the EAW for non-EU countries… Indeed, the Government has already tried to secure access to the EAW, but the EU refused.” Walsh and Shankar argue, “For the EU, this [letter] is likely to increase their incentive to delay offering the Prime Minister any concessions [on the backstop] at this stage. It reinforces their position that a deal could get through parliament without any changes to the text of the Withdrawal Agreement.”