5 June 2018

Withdrawal Bill to return to House of Commons on 12 June

In a letter to Conservative MPs, Government Chief Whip Julian Smith yesterday confirmed that the European Union (Withdrawal) Bill will return to the House of Commons on 12 June. Smith wrote, “I look forward to working with you to deliver back to the House of Lords the European Union (Withdrawal) Bill in a way that reflects both the referendum result and the Conservative Party manifesto we all stood on last year.” The Lords amendments are 15 in total, and include commitments to make seeking a customs union with the EU and remaining within the European Economic Area official negotiating objectives, as well as removing the precise date of Brexit (29 March 2019) from the Bill. The session will last about 12 hours, starting at 12:30pm. According to Sky, MPs are expecting a “marathon session”, with the vote going into the early hours of the day to ensure the bill can go back to the Lords by the end of next week. A Government minister said: “It’s going to be tough but we are working hard to get it right.” However, an unnamed Conservative MP reportedly told ITV’s Robert Peston that the government is “almost resigned to losing the customs union vote”.

Separately, the Financial Times reports that Theresa May has postponed plans to publish her government’s White Paper on the future EU-UK relationship until after the European Council meeting on June 28-29, in spite of earlier claims that it would help to shape debate ahead of the summit. A Downing Street spokesman would not say when Mrs May planned to unveil the detailed proposal for the post-Brexit relationship, saying only that “it will be published when it is ready”.

Source: BBC Reuters Facebook FT Sky

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Bloomberg - UK to propose remaining in customs union for time-limited period

Sources have told Bloomberg that the UK government will this week present a proposal to keep the UK in a Customs Union with the EU beyond the end of the transition period, but for a time-limited period, in an attempt to find a solution to the Irish border issue. This comes as discussions between the UK and the EU negotiators on the Irish border begin again tomorrow.

Separately, two cabinet ministers have reportedly told the BBC’s Laura Kuenssberg that they expect the PM to opt for a revised version of the ‘max-fac’ proposal, but to admit this won’t be ready for years. One of them reportedly suggested that the ‘Customs Partnership’ model could be implemented as an interim option while the technology is developed to implement ‘max-fac’ in the future.

Elsewhere, EU diplomats involved in Brexit are today visiting the port of Antwerp in Belgium, in order to check how different Brexit scenarios might work in practice.

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Business leaders “starting to disengage” with government Brexit planning

After a meeting between Prime Minister Theresa May and key British business leaders yesterday, one executive said the mood had “decayed considerably” given the lack of decision-making shown by the government. Another said that businesses were “starting to disengage,” adding, “We have repeatedly raised the same issues, such as the need for frictionless trade after Brexit, but it is now a Gordian knot that we can’t help untie.”

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Home Secretary: “Wrong and reckless” to reduce security cooperation post-Brexit

Speaking on post-Brexit security relations yesterday, Home Secretary Sajid Javid said it would be “wrong and reckless” for the UK or the EU to reduce bilateral security and anti-terror cooperation after the UK’s withdrawal. Javid said the EU “is not speaking with one voice” on the future security partnership, describing the European Commission’s position as “hardline,” while adding, “I’ve met with a number of European interior ministers…and every single one that I’ve met, they absolutely agree – they not only want the cooperation to continue as it is, but they are also open to how we can make it even deeper.”

On immigration, he said the government is “monitoring the situation” on monthly visa caps for skilled foreign workers, adding that there was a review under way.

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UK and IAEA conclude draft deal for post-Brexit nuclear fuel safeguard

The UK has yesterday concluded a draft safeguards deal with the International Atomic Energy Agency (IAEA) which will allow the import and export of fuel used in nuclear power plants to continue after Brexit. The new agreement is meant to “replace existing agreements between the United Kingdom, the European Atomic Energy Community [Euratom] and the [IAEA] as a result of the anticipated withdrawal of the United Kingdom from the Treaty establishing [Euratom].”

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Theresa May: US tariffs on European steel and aluminium “deeply disappointing”

Prime Minister Theresa May yesterday told US President Donald Trump that the new punitive US tariffs introduced on European steel and aluminium exports were “unjustified and deeply disappointing.” This comes as Trade Secretary Liam Fox called for a “measured and proportionate” response to the US tariffs, adding, “It is right to seek to defend our domestic industries from both the direct and indirect impacts of these US tariffs … it’s important that the United Kingdom and the EU work within the boundaries of the rules-based international trading system.”

Meanwhile, European Trade Commissioner Cecilia Malmstrom yesterday said  the EU could “take pre-measures [to safeguard its steel and aluminium industries against the new US tariffs] in July already… We want to see the preliminary outcomes of the [WTO] investigation. It is possible.”

Separately, Open Europe’s Pieter Cleppe was interviewed by Al Jazeera and CGTN to discuss EU-US tensions on trade, saying, “A rift between France and Germany can already be observed here, with Germany being more keen to avoid tit-for-tat protectionism.”

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Slovenian President gives anti-immigration party chance to form government after election victory

The President of Slovenia, Borut Pahor, said yesterday that he will offer a mandate to form a government to the anti-immigration Slovenian Democratic Party (SDS), after the latter won the most votes and seats in Sunday’s parliamentary elections. Pahor told the Delo newspaper, “I am not obliged to award the mandate to the relative winner of the election, but I will do so because I strongly believe in democracy.” The SDS won 25% of the vote, giving it 25 seats in the 90-seat parliament. It would have to come to an agreement with at least two other parties to reach a majority. Many parties have ruled out working with the SDS, including the LMS, a populist centre-left party which finished second with 13 seats. LMS leader Marjan Sarec told reporters, “If everyone sticks to what they said before the election [with regards to not working with the SDS], we expect to get a chance to form a government.”

A spokesman for European Commission President Jean-Claude Juncker said yesterday that he hoped that “the future government [of Slovenia] will make a valid contribution” to “building a democratic, successful and stronger European Union.”

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Italian Lega party denies having received Russian funding

Leader of Italian right-wing party Lega, Matteo Salvini, yesterday said his party had “never received a lira, a euro or a rouble from Russia.” This comes as Hungarian billionaire philanthropist George Soros the same day had speculated at a conference in Italy, “I don’t know if Putin finances the party [Lega], but this is a question that Italian public opinion has the right to know,” adding he was worried that Putin tried to “dominate” Western Europe by influencing political actors.

This comes as the European Central Bank (ECB) reduced the share of Italian debts purchased as part of its long-running economic stimulus programme, while increasing the share of German bonds at the same time. While the ECB insisted that this had no connection to latest political events, the far-right Italian Lega party attacked the investments, with their economic advisor Claudio Borghi calling it “no surprise” and accusing the ECB of trying to “fix the price” for Italian bonds.

Elsewhere, ahead of a visit to Austria and a meeting with Chancellor Sebastian Kurz today, Russian President Vladimir Putin yesterday told Austrian broadcaster ORF that Russia does not aim to “divide the EU.” Putin added, “On the contrary, we want to see a united and prosperous European Union, because the EU is [Russia’s] biggest trade and economic partner.The more problems there are in the EU, the greater the risks and uncertainties for [Russia].”

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Reduce number of EU Commissioners, demands Austrian Chancellor

Austrian Chancellor Sebastian Kurz yesterday proposed to reduce the number of European Commissioners, saying, “If we in Europe want to save money, then Brussels should go ahead with a good example and reduce its administrative costs… if the number of commissioners is reduced from 28 to 18, based on a fair rotation system, this would not only save money but also make the European Commission more efficient and focused.” Kurz also advocated moving the European Parliament fully to Brussels, saying, “Having two seats for the very same parliament, Brussels and Strasbourg, is of course utter nonsense.”

This comes as German Chancellor Angela Merkel in an interview this weekend also proposed to reduce the number of European Commissioners.

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Simon Wolfson: It is common sense for the UK to be a broad EU rule-taker on goods. But we must resist it for services.

Open Europe yesterday released a new report, “Striking a Balance: A blueprint for the future UK-EU economic partnership.” To mark the release, Open Europe’s chairman Simon Wolfson wrote an op-ed in the Financial Times, arguing that after Brexit, Britain should be a “rule-taker” from the EU on goods regulations, but not for services. He writes, “The debate over the UK’s future relations with the EU is dominated by two fringes… Hard-line Leavers must drop their ideological intransigence and recognise that every trade deal requires some transfer of sovereignty… On the other hand, I have listened closely to my dieheard Remainer colleagues in the House of Lords. They seem to believe that only complete adherence to all EU rules, rights and institutions will save us from ruin… This is not what people voted for.” He adds, “From a business perspective, continued alignment on goods would come at little cost,” arguing that there is “no point in diverging for divergence sake” although this policy “does not require us to be in a customs unions.” On services, however, Wolfson argues, “There are fewer reasons to remain highly integrated with the EU… the single market for services is largely incomplete. The UK is also less dependent on the EU in this sector.” He concludes, “It is common sense for the UK to be a broad EU rule-taker on goods outside a customs union. But we must resist it for services. This is how a sensible Brexit can be struck. It will not please everyone, but the seeds of a solution for businesses lie in compromise.”

Elsewhere, Open Europe’s director Henry Newman appeared on the BBC’s Daily Politics and on LBC Radio yesterday to discuss the report, calling it “a pragmatic path in the centre” between the two “extreme” approaches to Brexit. Newman argued that “it makes sense to align with [EU] rules and regulations” on goods, on terms “roughly similar to Switzerland or the Ukraine”, but that on services, “We’re too big  and too important a country to be a rule-taker.”