19 July 2017

UK not expected to agree financial settlement figure until the close of Brexit negotiations

Press Association reports that the UK will not agree a final figure on its financial settlement to the EU until near the close of negotiations in March 2019, and will seek to maintain flexibility on the sum until then. However, “sufficient progress” should be made on the method of calculation in order for talks to advance to a future trade deal.

Elsewhere, Politico reports that the UK is not planning to release an estimate of its financial obligations to the EU this week, despite warnings from EU diplomats that talks may “stall” if the UK fails to present proposals on the settlement. Politico’s source, a UK official, says the UK side see this week as a chance to interrogate the EU on their position regarding the exit bill. This is consistent with Brexit Secretary David Davis’ evidence to a House of Lords’ committee last week, where he stated that the “proper approach to get the right outcome in the negotiation” would be to “challenge” the EU’s calculations. Davis told the committee, “The objective in the case of the financial settlement is not to pay more than we need to, it’s fairly obvious. There will be a process of challenge going on here and that will happen and has started already.”

Separately, the Guardian reports that both sides view this round of negotiations as a chance to deepen their understanding of the other’s positions, rather than a moment to strike deals.

Source: Press Association Politico Guardian

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Irish Foreign Minister warns “technical” solutions to Irish border issues are “not going to work”

Irish Minister for Foreign Affairs, Simon Coveney, has said, “We do not want to pretend we can solve the problems of the border on the island of Ireland [following the UK’s withdrawal from the EU Customs Union] through technical solutions like cameras and pre-registration and so on. That is not going to work.” He added, “Any barrier or border on the island of Ireland in my view risks undermining a very hard-won peace process and all of the parties in Northern Ireland, whether they are unionist or nationalist, recognise we want to keep the free movement of people and goods and services and livelihoods.”

Separately, Irish Agriculture Minister, Michael Creek criticised the “lack of any coherence” from the UK government on its plan for Brexit, saying, “Various ministers talk about hard Brexit, soft Brexit, no deal being better than a bad deal…It appears to me that the instability is spilling over, impacting on the kind of Brexit.”

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UK inflation unexpectedly falls

UK inflation unexpectedly fell last month for the first time since October, reducing investors’ expectations of a Bank of England interest rate rise. Consumer prices rose by 2.6% compared to a year earlier, down from 2.9% in May, as economists expected rates to remain largely unchanged. This marks the biggest two-month fall since February 2015, and is driven by a fall in global oil prices.

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Theresa May to launch new business advisory group this week

Prime Minister Theresa May is expected to launch a new business advisory group on Thursday, which aims to ensure the Prime Minister and the senior team in charge of the UK’s Brexit strategy remain accessible to business and trade organisations. The forum will focus both on the UK’s withdrawal from the EU, and broader domestic issues such as the government’s industrial strategy.

Separately, the chair of the Treasury select committee, Nicky Morgan, has said a “pain-free Brexit” is not possible. She added, “Regardless of my personal view on Brexit, it is adding to the mix of great uncertainty for business and for others.” Morgan stressed, “I don’t want to see the City lose its pre-eminence as the best place in the world to do business.”

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House of Lords committee warns a transitional arrangement is needed to prevent barriers to UK-EU data-sharing post-Brexit

A recent report by the House of Lords EU Home Affairs sub-committee has said the government should pursue full regulatory equivalence with the EU with respect to data protection in order to ensure unhindered data-flows between the UK and EU post-Brexit. The report also warns that, without a transitional arrangement, “The lack of tried and tested fall-back options for data-sharing in the area of law enforcement would raise concerns about the UK’s ability to maintain deep police and security cooperation with the EU and its Member States in the immediate aftermath of Brexit.” Chair of the committee, Lord Jay of Ewelme, said, “The maintenance of unhindered data flows is therefore crucial, both for business and for effective police cooperation. The Committee was concerned by the lack of detail on how the government plans to maintain unhindered data flows post-Brexit.”

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German MEP says EU wants to punish UK in Brexit talks

Writing in The Times, German MEP Hans-Olaf Henkel argues that the European Parliament Brexit negotiator, Guy Verhofstadt, and the EU’s chief Brexit negotiator, Michel Barnier, want to “punish” Britain in the Brexit talks. He adds, “The reason is simple. They would seek to make sure that Brexit is such a catastrophe that no country dares to take the step of leaving the EU again.” Henkel stressed that he would like the UK to stay a member of Euratom but warned if it chooses to do so it would “will mean paying in and abiding by the rules, as Britain does now, and accepting the jurisdiction of the European Court of Justice when it comes to overseeing Euratom.”

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May assures Estonian PM of UK commitment to European defence

Following a meeting yesterday with Estonian Prime Minister Jüri Ratas, who currently holds the rotating EU Council presidency, Prime Minister Theresa May said the UK would maintain its commitment to European defence spending after Brexit. She said, “Although we are leaving the EU, we are not leaving Europe and we want to continue to have a good bilateral relationship but also a good relationship with the remaining member states of the EU in future.” She added that the UK-Estonia relationship had become “deeper and stronger, particularly on the defence area,” highlighting that the 800 British troops stationed in Estonia as part of a NATO mission are “playing their role and showing our commitment to the defence of Europe.”

Ratas said on UK military presence in the country, “It is very important for us and also for the whole Baltic region,” adding, “After Brexit we both stay in Europe.” After the meeting, a Downing Street spokesperson added, “Turning to Russia, they agreed on the importance of maintaining the Ukraine sanctions until the Minsk Accord is implemented in full.”

Separately, Open Europe’s Georgia Bachti argues in a blog, “Brexit has made possible a degree of defence cooperation in Europe that was considered taboo under the threat of a veto from the UK… However, despite the ambitious rhetoric surrounding EU defence, a closer look throws into question the credibility of the project and the unity of the Franco-German motor supposedly driving it.”

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France named world’s leading soft power, with UK ranked second

The latest ‘Soft Power 30’ Index, which measures the non-military global influence of a country, finds France has overtaken both the UK and the US to be named the world’s leading soft power. This has been attributed in part to the influence of new French President Emmanuel Macron, as well as to the strength of France’s diplomatic network. The UK is ranked second, with the report finding, “despite the looming [Brexit] negotiations, the UK’s objective soft power assets both state and privately owned remain strong.” The index assesses attributes including governance, foreign policy, and attractiveness to tourists and students.

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