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News & Insights on Europe

News and Views on Europe – 19 April 2019

posted by eucentresg

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Brexit cross party compromise to be seen after Easter as UK prepares itself for elections
The House of Commons is on Easter break until April 23. Meanwhile, the UK government continues to engage in talks with the Labour Party to find a compromise on the post-Brexit future relationship with the EU.

The so called “flextension” granted by the EU extends the Brexit deadline to October 31. Theresa May hopes to pass the deal by May 22 in order to avoid taking part in the European elections. However, passing the deal means not only getting a majority in Parliament but completing the entire legislative process of the Withdrawal Agreement Bill (WAB) and EU ratifying the deal.

 This means the outcome of the ongoing cross party talks would need to be approved by a stable majority at the next vote when the House reconvenes. Should thecross party talks fail to produce a proposal; the government and the opposition must pledge to support the option chosen by Parliament.

 This is easier said than done as May still does not have a clear majority for any kind of Brexit. Meanwhile, British parties must submit their list of candidates for the European election by 4p.m. on Thursday April 25.It remains to be seen whether Britain will take part in the elections despite May’s hope that it will not happen.

 In the scenario that the UK does ratify the agreement by May 22, current MEPs will have return to Brussels for an “extraordinary session” to ratify the Brexit withdrawal deal before July 2, when the new parliament will take its seat.

 Donald Tusk has not given up hope that the UK will remain in the EU and urged the bloc not to treat the UK like a second category member, suggesting that elected British MEPs could be there for several months or longer. Jean Claude Juncker on the other hand sees this October extension as the last deadline before the last option of leaving with a no-deal. Of the UK revoking article 50 to remain in the EU, Juncker adds, it is not his “working hypothesis”.

 Some EU leaders like Belgian MEP Guy Verhofstadt expressed scepticism that six month extension will break the impasse as “it is  too near for a substantial rethink of Brexit” and “too far away to prompt any action”.

 Meanwhile UK Brexit party leader Nigel Farage,who formally launched his new party on April 12 wants to defeat May’s Conservative Party at the European Elections. Furthermore, his party aims to fulfil the will of the people who voted for Brexit and lead the British public who has been “betrayed” by its political leaders. While Verhofstadt thinks Farage would “poison the upcoming European elections”, he also believes it would take Farage’s common threat for Theresa May and Labour’s Jeremy Corbyn to find a compromise.

 The Brexit fiasco has been bad for Britain on the world stage. UK Foreign Secretary Jeremy Hunt said countries like Japan “are very, very keen to protect their trading relationship with the UK”. He warned that the UK’s trading partners want Britain to make up their minds and resolve Brexit quickly. House Speaker and Democrat Nancy Pelosi said the US Congress would torpedo a UK trade deal if Brexit led to a hard border in Ireland, adding that “this isn’t for us an issue or an agreement. It’s a value”. After a meeting with Irish foreign minister Simon Coveney, Pelosi said a violation of the Good Friday agreement would be a “non-starter” for a US-UK trade agreement.

 

European Parliamentary Elections Update
A new report by the European Council on Foreign Relations, a think tank, claimed that almost 100 million swing voters are moving “fluidly between parties of the right and left,” and that the elections are still very much up for grabs. By analysing data from 14 countries that will take part in the May elections, the report added that the European electorate is in a “volatile rather than polarised state.” 43 percent of those surveyed will definitely vote and 57 percent are less likely to do so, a result that is consistent with the downward turnout trend since the first election in 1979. Additionally, of those who will vote, “70 percent are swing voters who are not committed to any one party”.  The survey claimed that voters are “not seeking change from the far left or the far right – but they are seeking change. According to the report, migration will remain an important issue in the election. However, domestic issues like “Islamic radicalism, corruption, health, and the economy and living standards” will also be vital issues that will shape voting behaviour and election outcomes.

 Mainstream parties can and should adapt, urgently, to address these concerns, amongst many others. But, to do so successfully, they need to understand what these concerns really are – not what they imagine them to be.” Populist and far-right groups have managed to generate much clout as their strategy is to appeal to the disgruntlements of the people, and offering solutions to social problems that traditional parties have not solved, and appear unwilling to tackle. However, if traditional centre parties can refocus and understand the demands of the people and act upon them, they may still be able to retain their power and tamp down the surge of populism and far-right movements.

 On Sunday (14 April), The Finns Party, a far-right party, strengthened their position in the country’s Parliament under the leadership of hard-line nationalist Jussi Halla-aho. It took 17.5% of the votes, coming just behind the Social Democrats who came in first with 17.7% . The extremely narrow winning margin will make it hard for Social Democrat leader Antti Rinne to form a government that excludes the far-right. Additionally, The Finns Party could become close allies of Europe’s best-known far-right leaders like Matteo Salvini in Italy and Marine Le Pen in France, potentially creating a powerful bloc in the new EU parliament.

 Halla-aho had played up the importance of Finland’s national identity, rallied against immigration and decried “climate hysteria”, arguing that the pressure to halt global warming was “destroying the economy and Finnish industry.” These messages drew parallel with another far-right party, Alternative for Germany (AfD), who has repeatedly denounces the price of halting global warming. AfD has alsocapitalised on anti-immigrant sentiments through their campaign materials denouncing criminal migrants. AfD lead candidate Joerg Meuthen posits it simply: “Germany can no longer take in migrants.” However, AfD appeal appears to be waning as according to EURACTIV, latest polls predict the party scoring between 10 and 11% in the European Parliament elections, well below the 15% support it enjoyed last autumn.

 On Monday (15 April), people who are in need of full-time care due to severe disabilities are allowed to vote for the first time in Germany. In a decision made 6 weeks before the EU elections, the Federal Constitutional Court ruled that disabled people under full-time care and those with a mental disorder were granted the right to vote in EU elections. Previously, the two groups had been excluded from federal or European elections as they were deemed mentally unfit to be politically actively. The Federal Constitutional Court ruled in February that this contravened the UN Convention on the Rights of Persons with Disabilities as well as German Basic Law, which dictates that no one may be discriminated against because of their disability. Following the ruling, the German government decided to change the electoral law in July after the May elections. According to EURACTIV Germany, “German MPs of the Left, Greens and FDP then submitted an urgent motion to the Federal Constitutional Court to decide whether such a delay was permitted.”

 French president Emmanuel Macron’s European election campaign has been suspended until further notice, after a fire destroyed parts of Notre Dame cathedral on Monday (15 April). Several French politicians also said they would suspend their campaign “to transcend the new ordeal facing our nation”.  Macron also sought to rally a country still devastated by the fire and use the moment of solidarity to his advantage. He suggested that politics be put aside in the aftermath of the fire and directed attention to his promise of rebuilding the grand cathedral in 5 years.

 Marine Le Pen’s party Rassemblement National has reversed its stance on the EU. Previously a staunch defender of Frexit and largely in favour of exiting the eurozone, Le Pen’s party is now rushing into the European election campaign with a different objective – to work with other far right parties to “constitute a very large sovereigntist group in the EU parliament”.

 At a Strasbourg press conference on Monday evening (15 April), the far-right party presented the “Manifesto for a Europe of Nations” that redefined the doctrine of the Rassemblement National. The Rassemblement National is now placing its focus on the implementation of economic patriotism aimed at defending “local, ecological and socially responsible production.” This is done with the aims of defending ‘localism’ and countering the globalisation and free trade narratives that the EU subscribes to. The party also proposes the implementation of an ecological customs barrier at EU borders to defend against competing products that are less environmentally friendly.

 According to polls, Le Pen’s Rassemblement National is neck and neck with Macron’s la Republique en March (LREM).

 Le Pen also said that she would welcome Nigel Farage’s new Brexit party into a larger eurosceptic group in the European Parliament (EP), if the UK were to participate in the EP elections in May. “He is welcome if he wants to join. Even if it might be just for a moment”.  Farage who was formerly from the United Kingdom Independent Party (UKIP), dominating it for nearly two decades, launched a new Brexit party to run for the European elections because of UK’s extension of Article 50 till October 2019.

Italy’s center-left Democratic Party (PD) pledged on Tuesday (16 March) to build ties with other pro-EU forces in the next European Parliament, including French President Emmanuel Macron’s La République en Marche. Nicola Zingaretti, the new leader of PD, has been in talks with Macron’s party, but maintains that the PD would remain in the main center-left bloc in the Parliament, the Socialists & Democrats. Nonetheless, Zingaretti agrees that pro-EU forces should cooperate closely and form alliances to thwart nationalists and Euroskeptics, who are expected to make gains in the election.

 

5G technology still contentious after Belgian agency announces no security threat found
A senior Huawei official in Brussels, Sophie Batas, has acknowledged that Chinese State Security Law “sets out an obligation on organisations and individuals to provide assistance with work relating to State Security”. However, answering increasing pressure from the US and heavy criticism from the EU, she added that these rules  “cannot violate the laws of other countries” and that companies are not allowed to implement backdoors in products.

This statement is seemingly supported by findings from Belgian Cybersecurity agency, which had been tasked with analyzing the possible threat posed by Huawei products. The agency reports that “we have not found technical indications that point in the direction of a spying threat”. Despite this, the US continues to push for its EU allies to adopt tighter security standards against Chinese telecommunications firms while citing national security concerns.

Cybersecurity concerns in the EU has already led to the slowdown of 5G products roll out in the EU, which would have impact on “internet-connected products” from self-driving cars to artificial intelligence.

EU business leaders like BMW CEO Harald Krueger and Telekom’s Tim Hoettges have warned that a slow down in rolling out 5G mobile networks would leave Europe lagging behind China in the future of mobility. The alternative based on Wi-Fi technology, “will cause significant delay to the European roll out of car-to-car and car-to-infrastructure communication” according to the German bosses. The two technologies are satellite vehicle-to-vehicle communication, known as V2V, based on short-range WiFi signals and longer range system called C-V2X, which uses 5G networks.

The debate between WiFi and 5G technologies has split legislators too with the EU Commission pressuring MEPs to accept their draft proposal on which technology to implement. The Commission prefers the WiFi alternative for how cars should be connected in the future, and has proposed the Delegated Act on Cooperative Intelligent Transport Systems (C-ITS). While it does not rule out deploying 5G networks in the future, the Commission wants to rely on commercially available, time tested technologies such as satellite and WiFi. BMW prefers the 5G backed C-V2X systems whereas Volkswagen and Renault would benefit from the already existing V2V system.

In the European Parliament’s vote on the two technologies, on Wednesday, the European Parliament voted to support the Commission’s proposal of connecting vehicles using WiFi technologies. This vote reverses the Parliament’s Transport Committee decision last week to reject the Commission’s Delegated Act.

 

EU agreed to start trade talks with US amidst tensions over tariffs and WTO reforms
European Union countries approved plans for trade talks with the United States on Monday (15 April). The decision by EU ministers gives the European Commission authorisation to conduct formal talks.

US President Donald Trump and the head of the Commission, Jean-Claude Juncker, agreed last year that they wanted to reduce trade barriers, although they disagreed over the inclusion of agriculture. EU negotiating directives maintained that agriculture must be excluded from planned negotiations. “Let me be clear: we will not speak about agriculture or public procurement,” Ștefan-Radu Oprea, Minister for Business Environment, Trade and Entrepreneurship of Romania and President of the Council said in the statement. According to the statement, the mandate also ensures that the EU will not conclude negotiations with the US as long as the current tariffs on EU exports of steel and aluminium remain in place, and that it would be able to suspend negotiations unilaterally if the US were to impose further trade restrictions against European products.

Trump reiterated his threat that trade talks with the EU must open up markets to farmers or he would impose tariffs on European car imports. “They barely take our agricultural products, and yet they can sell Mercedes Benz and they can sell anything they want in our country including their farm products, and it’s not fair, he said at an event in Minnesota. In response, Brussels has said it would immediately suspend trade talks should Trump impose auto tariffs.

The retaliation threats do not end there. The European Commission on Wednesday (17 April) said that it wants to hit around €20 billion of U.S. exports with tariffs in retaliation for unlawful subsidies given by the U.S to American aircraft manufacturer Boeing. A list of products that are being considered for additional tariffs has been released. Amongst these products are tractors, suitcases, frozen fish, fruits, wine, liquors and ketchup. The publication of the list marks the next step in the long dispute between the US and EU over subsidies for Boeing and Airbus. Both the EU’s and the U.S.’s retaliation claims must be approved by a WTO arbitrator. Trade officials in Brussels and Geneva said they expect the WTO to determine lower retaliation amounts since both sides have probably inflated their claims.

The two concurrent developments may put a dent in transatlantic relations. According to CNN, the trading relationship between the two sides is worth more than $1 trillion annually, but Europe exports significantly more goods to the United States than the other way around. It has proven to be a sore point for Trump, who has previously said that Europe is “possibly just as bad as China” when it comes to trade and called it a “brutal” trading partner.

The troubled transatlantic ties have also spilled over to Japan. Tokyo has been pressured by Washington to reject European proposals to reform the World Trade Organisation (WTO). According to EURACTIV, fears of upsetting the US President have led Japanese negotiators to reject any reference to a proposed reform of the WTO’s appellate body in the draft conclusions of the upcoming EU-Japan summit that will be held on 25 April in Brussels. The EU, with the support from a dozen countries, proposed last autumn to reform the appellate body. The appellate body is a key pillar of the WTO, which upholds, modifies or reverses the legal findings and conclusions of a WTO panel.

The proposed reform was aimed at convincing the US to lift its opposition to the appointment of new judges for the appellate body, which comprises seven persons in total. Washington has criticised the appellate body partly for exceeding its mandate. If the US administration continues to block the nomination of new judges, the body will not have enough members to take cases by the end of this year. The WTO reform is the centrepiece of the European strategy to channel the ongoing US-China trade war through a multilateral system. According to EURACTIV, this would “help correct China’s unfair trade and economic practices that triggered the dispute, and to convince US President Donald Trump to end his tariff war.” Nonetheless, Japanese negotiators sought to eliminate the motion, so as to align with Trump.

Despite Tokyo’s reticence, the Commission is prepared to fight to keep the reform of the appellate body in the draft summit statement.

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