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News & Insights on Europe

News and Views on Europe – 6 Oct 2017

posted by eucentresg

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Violence marred voting in Catalonia – the unfolding of the crisis in Spain
On 1 October, unfortunate scenes of Spanish riot police beating up Catalonian citizens trying to cast their votes in the independence referendum led many to wonder how did Spain, a member of the European Union (EU) ended up with such high handed measures in dealing with the separatist demands by the Catalonian regional government. The regional government claimed that close to 800 people were injured in the process. Politico carried a report “How did we get here” detailing the complexities and intricacies of the issue with regards to Catalonia’s demand for more autonomy from Spain to now a call for full independence. Another Politico report also documented what Spain has to lose if Catalonia secedes from Spain.

The Spanish government’s attempts to stop the vote on Sunday had been seen as within the constitutional right by the European Commission. Hence, prior to the voting day, the Commission has been relatively silent on the issue. However, that physical violence was used on voting day itself had led the Commission to release a statement on Monday (2 Oct) that “violence can never be an instrument in politics”. Still, the Catalonia’s top envoy to the EU was disappointed with the lack of a stronger statement from the EU adding that the EU’s credibility has been eroded. An op-ed written by a Dutch parliamentarian condemned what has happened in Spain. While acknowledging that the “bone of contention between Catalonia and Madrid is a longstanding, highly complex and highly emotional one”, she was dismayed by the violence used by the Rajoy government on voting day and the lack of condemnation from her European colleagues.

Despite the chaos on voting day, Catalan separatists claim victory announcing that over 90% of those who voted said “Yes” to independence. The voters’ turnout was at 42%, some 700,000 was prevented from voting. Catalan regional president Carles Puigdemont said that he would use the voting results to argue for a unilateral declaration of independence. This led to a rare rebuke by Spain’s King Felipe accusing pro-independence Catalan leaders of being disloyal. King Felipe in his TV address said he would strive to keep the country united and would not allow the separatists in Catalan to violate rules and “break our national sovereignty”.

As a sign that the “stand-off” between Catalonia and Madrid would not end anytime soon, the Catalan regional government supported strikes by trade unions, students and activists in Barcelona to demonstrate against the Spanish government. Carles Puigdemont, however, also gave no concrete indication of his independence intentions after his threat to declare Catalonia’s independence from Spain met with strong opposition in Europe. Both the European Commission and members of the European Parliament have called for dialogue between Spanish and Catalan authorities in order to break the political deadlock.

The Catalan government called for mediation to help break the impasse. The Catalan Permanent Representative to the EU Amadeu Altafaj told EURACTIV that “Catalonia is looking for an international mediator who would help build a minimum of mutual trust between Madrid and Barcelona” and also to assist in securing the release of “Catalonian officials arrested for their involvement in the referendum and in restoring the money transfers to the regional government”. However, so far, the Spanish central government has refused mediation “unless Puigdemont backs down”. The Spanish Constitutional Court also took action on Thursday (5 Oct) ordering the Catalan regional parliament to suspend a session scheduled for next Monday, when lawmakers were expected to vote on a declaration of independence from Spain.

The crisis in Catalonia has turned the spotlight on Spanish prime minister Mariano Rajoy for his lack of strategy and his “wait and see approach” which unfortunately has not done anything to stop the escalation of the crisis.

 

EU and UK assess negotiation progress ahead of fifth round of Brexit talks
With the fifth round of Brexit negotiations due to kick off next week, the EU and the UK this week separately took stock of the latest development. There had not yet been “sufficient progress” in the negotiations, European Commission President Jean-Claude Juncker declared on Tuesday (3 Oct). Juncker made this judgment in his opening remarks to the European Parliament’s plenary debate on Brexit in Strasbourg, where he also issued a stern warning to the UK’s Prime Minister Theresa May that she should not attempt to go over the head of the EU’s chief negotiator by opening direct discussions with member state leaders like Angela Merkel and Emmanuel Macron. (May met Merkel in Tallinn on sidelines of the EU Digital summit last week, saying that the German chancellor hailed “good progress” in Brexit talks.) The Parliament then passed a resolution – with a vote of 557 to 92 (with 29 abstentions) – reaffirming the EU’s view that “sufficient progress has not yet been made” on major divorce issues, including the rights of EU citizens in the UK post-Brexit (and vice versa), the Northern Irish border and the so-called Brexit bill. “Unless there is a major breakthrough” next week, the resolution called on EU leaders to postpone their assessment of progress in the talks, scheduled at a European Council summit later this month. EU leaders’ (positive) progress assessment is critical for the negotiations to move to the next stage focusing on future relations between the EU and the UK.

On the other hand, at the Conservatives’ annual conference in Manchester this week, key British politicians in their respective speeches offered their views on various aspects of Brexit negotiations. Foreign Secretary Boris Johnson in a highly-anticipated speech, called for Brexit to be a moment of national renewal, insisting that the UK can win the future as a “quintessential European nation” outside the EU. Likewise, Liam Fox, the UK’s international trade secretary, hit out at “negative” attitudes in certain quarters and urged people to be more upbeat about the UK’s prospects. The other hard Brexiteer, David Davis, who is in charge of Brexit negotiations for the UK, also rallied against Brexit pessimism, encouraging Tory activists to “keep their eyes on the prize” on offer following the UK’s exit from the EU. Despite the overall positive note he struck at the conference, Davis outlined the British government’s preparations for a “no-deal” Brexit scenario, stirring memories of May’s famous slogan “No deal is better than a bad deal”. Other cabinet members who favour a softer Brexit expressed differing views. For example, British Chancellor Philip Hammond told BBC that the UK’s proposed transition period may last longer than two years as the country adapts to post-Brexit life.

A report in Politico noted the challenges faced by British Prime Minister Theresa May in trying to steer a course through competing demands of hard line Brexiters led by Boris Johnson and soft Brexiters like Philip Hammond who sought a deal that maintains close regulatory alignment with the EU. The report added that “UK officials who spoke to Politico on condition of anonymity” believe May is leaning towards Hammond’s position.

However, after what was deemed as a “disastrous conference speech” at Manchester, another Politico report noted that this has emboldened her opponents, and May might be forced to resign.

 

EU tightens control over online content and tax, targeting tech giants
Noting that the spread of terrorist material and content that incites violence and hatred online is a serious threat to the security and safety of EU citizen, the European Commission on Monday (2 Oct) presented guidelines for online platforms such as Facebook, Twitter, Google and Microsoft to step up efforts to proactively prevent, detect and remove illegal content. While proposing a self-regulatory approach, the Commission also warned that “if the tech companies don’t deliver, we will do it.” The proposal came after Germany’s new online hate speech code – known locally as NetzDG- took effect on Sunday (1 Oct), putting in place potential fines of up to €50 million if these social media platforms consistently fail to remove illegal content from their digital platforms within 24 hours.

Apart from illegal content, transatlantic data transfer is yet another thorny issue. Following a five-week hearing, the High Court in Ireland on Tuesday (3 Oct) issued a 152-page judgment on the case about Facebook’s EU-US data transfers, suggesting that the US may be violating the fundamental rights of Europeans. The Irish court in its judgment said that “it is clear that there is mass indiscriminate processing of data by the United States government agencies, whether this is described as mass or targeted surveillance.” It further noted that the “case raises issues of very major, indeed fundamental, concern to millions of people within the European Union and beyond”.

Data transfer is particularly controversial for Facebook; its Dublin-based international headquarter has to send personal data back to its parent company in the US for processing, making it vulnerable to demand from the US National Security Agency (NSA) for access to its global database. (Facebook’s recent decision to hand over copies of some 3,000 Russia-linked ads to congressional investigators who are looking into alleged Russian involvement in the US presidential election may have further fueled European suspicion against US tech giants about how protected their personal data are at Facebook.)

Besides the thorny issues of illegal content, protection of data, the EU is also proposing far-reaching changes to tax plan that would eliminate money-saving workarounds for multinationals. According to the newly unveiled tax plan, value-added tax (VAT) in a cross-border trade within the EU would be charged at the rate set by the country where the buyer is located, rather than in the seller’s home as now. The change is also likely to eliminate the incentive for exporting firms to base themselves in countries with low VAT rates. (Luxembourg and Malta currently apply the lowest VAT rates in the EU on most products.) The new VAT rule may reduce the need for a harmonised VAT rate policy across the Union because there would be less incentive for countries to competitively set tax rates low to attract business.

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