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News & Insights on Europe

News and Views on Europe – 3 Aug 2018

posted by eucentresg


The EU’s dismissal of British customs plan stirred up fears of a “no-deal Brexit”
In a recent white paper setting out the UK’s preferred trading relationship with the EU27 post-Brexit, Theresa May put forward an idea of a “facilitated customs arrangement”. According to it, the UK and the EU would form a unique customs union in which “the UK would apply the EU’s tariffs and trade policy for goods intended for the EU [and] apply its own tariffs and trade policy for goods intended for consumption in the UK”. However, this plan was almost immediately rejected by the EU. Michel Barnier, the EU’s chief negotiator, reiterated that “The EU cannot — and the EU will not — delegate the application of its customs policy and rules, VAT and excise duty collection, to a non-member who would not be subject to the EU’s governance structures”.

Barnier’s statement led to accusations that the EU turns the UK down at every turn. For instance, Matteo Salvini, Italy’s (Eurosceptic) interior minister, criticised the EU for not entering Brexit negotiations in “good faith”. Simon Usherwood, an academic based in the UK, also warned that Brexit negotiations is not a zero-sum contest and the two sides (especially the EU) should not try to “win Brexit”.

Despite the criticism, the EU’s hard-line negotiation stance is unlikely to shift dramatically since Barnier enjoys a significant amount of support from the governments of EU member states. Austrian foreign minister Karin Kneissl praised Bariner’s and the EU’s “pragmatic” attitude in Brexit talks. And warning the UK not to underestimate the unity of the EU27 on Brexit, the French EU minister Nathalie Loiseau said “there would be no difference between what Barnier says and what we would say individually”. Interestingly, Loiseau, quoting one of Ms May’s most (in)famous slogan, said for the EU no deal would be “better than a bad deal”.

Loiseau’s recollection of Ms May’s slogan stirred up fears that the EU actually prefers a no-deal Brexit. Feeling this way, Liam Fox, a Brexiteer and the UK’s trade secretary, warned Ms May not to extend Brexit negotiations anymore, claiming that the EU is pushing Britain toward a no-deal scenario for political and ideological gains. That said, the UK itself also seems responsible for the current stalemate. A recent poll — which surveyed a representative sample of 1,466 people — found that 78 percent of respondents think Ms May’s government is “doing a bad job negotiating Brexit”. This was up by 23 percentage points since March.

Since the likelihood of a no-deal Brexit is increasing by the day, the UK is making active preparations for it with the new foreign secretary Jeremy Hunt leading the efforts. On the one hand, he called on France, Germany and Austria to make Brussels strike a “sensible” trade deal as a no deal scenario would be “a tragedy for Europe”. On the other hand, Hunt went on his first major international trip to China on Monday (30 July) to diversify the UK’s global partnership networks. He reportedly discussed the possibility of striking a UK-China free trade agreement post-Brexit with his Chinese counterpart Wang Yi in Beijing.

On the EU side, a letter co-signed on 27 July by the European Commission Secretary General Martin Selmayr and Helga Maria Schmid, Secretary General of the EU External Action Service (EEAS) was sent to all EU diplomats holding a British passport. It stated that senior staff, including ambassadors who represent the EU and who have British nationality only, must return to headquarters by 29 March, 2019 — the day Britain formally leaves the EU. Other, less senior British officials will have to report back to headquarters in Brussels by September 2019 when the 28-country bloc’s diplomatic staff is scheduled to rotate. The letter also assured them that few (permanent staff) would lose their jobs. In fact, the EU not only plans to retain most British diplomats but also urges member countries not to use Brexit as an excuse to cut the number of staff working in the EU institutions.


The twists and turns in Transatlantic ties under Trump and Bannon’s attempt to export ‘Trumpism’ to Europe
Prior to US President Donald Trump’s meeting with European Commission President Jean-Claude Juncker, Trump “pumps up the volume” against the EU and called EU “a foe of the US”. He also praised tariffs as “the greatest” as they allow him to retaliate against countries that are unfairly “[robbing]” the US. Separately, EU Agricultural and Rural Development Commissioner Phil Hogan also said that the EU must respond to Trump’s trade war by “bullying” him back to “[put] him back in his place”.

The transatlantic meeting between Juncker and Trump which took place on 26 July, was however much more subdued, and marks a détente in the bilateral relationship. The EU struck a deal with the US to suspend new tariffs while they worked towards “zero tariffs” and reducing barriers and subsidies. Both Presidents also agreed to expand European imports of US liquified natural gas and soybeans. Juncker subsequently hailed these achievements as a “major concession” from the US. It was later revealed that Juncker privately consulted German Chancellor Angela Merkel, French President Emmanuel Macron, Austrian Chancellor Sebastian Kurz and Dutch Prime Minister Mark Rutte prior to his visit to Washington.

Another notable meeting which took place last week at the White House was between Trump and newly appointed Italian Prime Minister Giuseppe Conte. During the joint press conference, Conte praised Trump profusely, thanking Trump for providing “

positions and stances” and proclaimed Italy as America’s new “privileged interlocutor” in Europe. Trump highlighted the similar struggles both countries face, especially in illegal immigration and terrorism, and praised Conte’s tough stance on migration. With both leaders sharing similar views on trade and immigration, Conte is becoming Trump’s “main ally in Europe”. On 30 July, Conte also called for a quick start to the bilateral discussions on US-EU trade that both parties agreed to during the Trump-Juncker meeting. US Agriculture Secretary Sonny Perdue noted that agriculture would be part of the negotiations, regardless of the EU’s preference to discuss it or not.

Amidst the appointment of Conte, and against the backdrop of resurging right-wing populism across Europe, former Trump chief strategist Steve Bannon has been touring Europe, evangelising the merits of the “national populist revolt”. Bannon has visited Switzerland, France, the Czech Republic, Hungary and Italy, and is looking to unite the European far-right in time for the European Parliamentary elections in 2019. Bannon envisions a far-right “supergroup” within the European Parliament, that could comprise up to a third of all MEPs, where he can bring his brand of Trumpism to Europe.


With Italy taking tough measures against migrants, Spain has become the preferred entry point for migrants to the EU
While US President Trump praised Italy for taking tough measures against migrants and refugees, the UN High Commissioner for Refugees (UNHCR) tweeted that Italy may have violated international law as Libya is not a safe destination. International law disallows states from sending migrants back to their home country if the UN and the EU consider it unsafe. Italy previously accused European NGO vessels which rescued migrants off the Libyan coast that they were collaborating with human traffickers to obstruct the work of the Libyan coastguard. In defence, Italy argued that it cannot be held responsible for Libyan search-and-rescue operations in its own territorial waters.

On 30 Jul, it was reported that the European Commission was considering a request from Spain for emergency EU funds due to the rise in migrant arrivals at Spain’s southern coast. Since 2016, Spain has become the main entry point from the Mediterranean as illegal migrants have increasingly preferred entering the EU by Morocco and the Strait of Gibraltar. As of 30 July, 23993 migrants have arrived in Europe through this route, compared to 18298 via Italy. Spanish Prime Minister Pedro Sánchez reportedly requested €35 million in emergency funds to develop an “appropriate and effective response” to the rising migratory pressure along the Western Mediterranean route. In addition, Sánchez included a Moroccan demand of resources to facilitate boarder management.

Separately, the European Commission announced that the upcoming Multiannual Financial Framework (MFF) – the EU’s long-term budget for 2021 to 2027 – would see funds allocated for migration and border management rising to €30.83 billion, in 2018 prices. €18.8 billion would be allocated to border management, representing almost a 200% rise in budget compared to the €5.6 billion allocated in the previous budget. €10.58 billion would be allocated to decentralised agencies, especially the European Border and Coast Guard Agency (EBCGA), the plan to increase the number of EBCGA personnel to 10000 border guards and officials.

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