6 November 2018

Varadkar: Backstop could have a “review mechanism,” but cannot be ended “unilaterally”

In a phone call yesterday, UK Prime Minister Theresa May and Irish Taoiseach Leo Varadkar discussed the possibility of a “review mechanism” for any temporary Irish backstop arrangement. According to a statement provided by Varadkar’s office, “The Prime Minister raised the possibility of a review mechanism for the backstop. The Taoiseach indicated an openness to consider proposals for a review, provided that it was clear that the outcome of any such review could not involve a unilateral decision to end the backstop. He recalled the prior commitments made that the backstop must apply ‘unless and until’ alternative arrangements are agreed.” Fianna Fail, Ireland’s largest opposition party, has criticised Varadkar’s “significant and potentially hazardous change in direction,” with the party’s Brexit spokesperson Lisa Chambers saying she is “very worried the backstop is not as watertight as has been previously indicated.”

A Downing Street source said, “[The leaders] agreed that the intention was that the backstop should only be a temporary arrangement and that the best solution to the Northern Ireland border would be found by agreeing a future relationship between the UK and the EU. In order to ensure that the backstop, if ever needed, would be temporary, the Prime Minister said that there would need to be a mechanism through which the backstop could be brought to an end.”

Separately, an EU source told the Times, “The essence of a backstop is that it is not time-limited. But if the idea was a review mechanism, then that would imply mutual decision-making on the future. In that case it is a revision clause, not a termination clause.”

Meanwhile, RTE reports that considerable differences remain between the UK and EU over the nature of the backstop. A source briefed on the negotiations told RTE, “It’s not clear if there will be two separate constructions [of the backstop] and they overlap, or if it will be a single construction and it just has a part that goes deeper for Northern Ireland.” Another source suggested that the UK’s push for a “termination clause” to the all-UK customs backstop has reinforced the importance the EU places on the Northern Ireland-only backstop remaining in place. This comes amid reports that there could be an extraordinary EU summit in late November if there is a breakthrough in negotiations this week.

Earlier, Varadkar had told journalists that “a backstop with a three-month limit or an expiry date of that nature isn’t worth the paper that it’s written on.” This comes after reports that UK Brexit Secretary Dominic Raab had suggested a three-month review mechanism.

Source: Politico RTE

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Downing Street downplays talk of imminent deal

Reports this weekend of a forthcoming Brexit deal after a compromise on the Irish border question have been described as “speculation” by Downing Street. Elsewhere, backbench Conservative MPs have raised concerns that the Cabinet, which meets today, could be “bounced” into agreeing the terms of a Withdrawal Agreement that would keep the UK in a customs union indefinitely. In an article for The Sun, former Foreign Secretary Boris Johnson suggested the UK could be “trapped” under the terms of the UK-EU agreement. The former Brexit Minister Steve Baker meanwhile urged Ministers not to offer “part-informed support for an untenable policy”.

Meanwhile, a poll by Survation for Channel 4 has suggested that 54% of British voters would elect to remain in the EU if another referendum was held.

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President of Hauts-de-France region says “flexibility” needed to cope with No Deal Brexit

President of the French Hauts-de-France region, Xavier Bertrand, yesterday warned, “It is not only the north of France that would be impacted by a no-deal but rather all of France and all of Europe…The trucks, companies and factories that will be blocked will be those of the north of France, the whole of France and Germany.”  He also said that given the uncertainty in Brexit negotiations, “We therefore need as much flexibility as possible at all levels to cope with the difficulties. For example, we could ask for exemptions from the European Commission to reduce customs and regulatory controls based on risk analysis,” while adding that sanitary controls must be maintained, as “we cannot compromise with food security.”

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Hammond: Not “plausible or credible” for the UK to pay no financial settlement in the event of No Deal

Chancellor of the Exchequer Philip Hammond yesterday warned “it would not be plausible or credible for the UK to assert that in the case of No Deal, then no money at all was payable in respect of [the financial] obligations that were entered into during our period of [EU] membership.” Speaking before the House of Commons Treasury Committee, Hammond added, “If we were to do so, we would effectively rule ourselves out as being regarded as reliable partners in future international deals of any kind, including trade deals.” However, he noted that the UK would not necessarily agree the same “formula” for calculating the UK’s outstanding obligations in the event of No Deal.

 

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UK services sector hits seven-month low

The UK’s services sector grew at its slowest pace since March, according to figures from the IHS Markit/CIPS purchasing managers’ index. CIPS group director Duncan Brock said, “Many of the respondents attributed this poor performance and the biggest softening in new order growth since July 2016 to continuing ambiguity around the Brexit negotiations.” He added, “Clarity around Brexit may turn this around,” but also warned, “Time is running out and this downward slide should be a wake-up call that progress must be made now.”

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Eurogroup urges Italy to produce new budget in line with fiscal rules

In a short statement published after a meeting of the Eurogroup yesterday, Eurozone finance ministers called on Italy “to cooperate closely with the [European] Commission in the preparation of a revised budgetary plan which is in line with the [Stability and Growth Pact].” Eurogroup President Mario Centeno said he expects Italy to produce a budget that “complies with European fiscal rules.” French Finance Minister Bruno Le Maire reportedly said that “anything else would mean the end of the Eurozone.”

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Metropolitan police creates No Deal Brexit "safety net" police unit

A No Deal Brexit “safety net” police unit is being created by Scotland Yard at a cost of £2.4m, the Guardian reports. According to an internal document seen by the paper, the unit will be hosted by the Metropolitan Police, will work under the National Police Chiefs’ Council and should be implemented “in readiness for exit day” in March 2019. The document also states that in a No Deal scenario, “The UK will lose access to European measures, tools and mechanisms… [which] are used on a daily basis in operational policing,” adding, “The loss of one or more of these measures will have significant implications for policing,” and warning that UK police forces need to “mitigate the impact” of losing access to EU law enforcement measures.

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UK hauliers to receive permits through "weighted random selection" in No Deal Brexit

The Department for Transport (DfT) yesterday said that in case of a No Deal Brexit scenario, a system of “weighted random selection” could be used to give out operator permits for UK hauliers to operate lorries in the EU. The system would be run by the European Conference of Ministers of Transport (ECMT) with 984 annual permits and 2,832 one-month permits available for UK hauliers in 2019. Part of the permits would be allocated to priority sectors such as the food industry, while random selection could ensure SMEs have a chance of receiving permits. The DfT stated, “Including a weighted random element to the scoring of applications will give the highest scoring operators many, but not all, of the permits applied for. Instead, those permits are allocated to a larger number of operators who have also scored highly on the other criteria.”

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Anna Nadibaidze: What should we expect of the UK’s post-Brexit sanctions approach?

Writing for the LSE Brexit blog, Open Europe’s Anna Nadibaidze examines the UK’s post-Brexit sanctions policy, and argues that “In the short term, divergence from the EU on sanctions seems unlikely. Politically, the UK maintains it will be unconditionally committed to European security, and sanctions are more effective when coordinated. There will also be pressure from businesses that operate both in the EU and the UK, which would find it difficult to comply with different sanctions regimes.” She argues, “At the same time, future UK governments could feel inclined to diverge on sanctions, particularly in response to specific crisis situations,” adding, “In future crises like the Salisbury attack… the UK will have to make strategic choices about how it uses the tool of sanctions for its own foreign policy goals.”