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News & Insights on Europe

News and Views on Europe – 2 Aug 2019

posted by eucentresg

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Brexit: EU rebuffs Boris Johnson’s call to rework Brexit deal; Johnson’s internal struggle with Ireland and Scotland on ‘no-deal Brexit’
Last Thursday (25 July), Britain’s new Prime Minister Boris Johnson urged the EU to reconsider their stance against renegotiating the Brexit deal during his parliamentary debut. A statement that was steadfastly and swiftly rejected by the EU. Johnson warned that if they were to refuse to make changes to the Withdrawal Agreement agreed by the EU and former-Prime Minister Theresa May, the UK “will of course have to leave the EU without an agreement”. EU chief Brexit negotiator Michel Barnier branded Johnson’s comments “unacceptable”, asserting that Johnson’s demand to remove the Irish backstop was “not within the mandate of the European Council”. Johnson has indicated a willingness to sit down with EU leaders for further Brexit talks if they indicated a readiness to shift their stance on the Irish backstop.

In his first phone call to Irish Taoiseach Leo Varadkar on Tuesday (30 July), Johnson reiterated his plan to take the UK out of the EU by 31 October “no matter what”, reasserting his readiness for a ‘no-deal Brexit’. A statement from the Irish government said that Varadkar refused Johnson’s call to reopen the draft deal struck. Varadkar noted that “the Brexit negotiations take place between the U.K. and the EU” and added that the EU was united in its view that the Withdrawal Agreement could not be reopened”. The backstop is intended to prevent a hard border between Ireland and Northern Ireland.

Given the intractability of the issue, it comes as no surprise that the UK has stepped up preparations for a no-deal Brexit scenario. Michael Gove, in a Sunday Times piece, indicated a hope that the EU would reconsider, but highlighted that the UK “must operate on the assumption that they will not … No deal is now a very real prospect and (the UK) must make sure that (they) are ready.” He went on to add that the priority of the government was to ensure there were sufficient funds in the relevant areas in time for the UK’s departure on 31 October. Johnson has set up a ‘war cabinet’ to prepare for Brexit come end October.

In spite of the uncertainties surrounding Brexit, two UK chairs of parliamentary committees stressed the need for British MEPs to be engaged with the European Parliament for as long as they hold the position, according to a EURACTIV interview.

In his new role as Prime Minister, Boris Johnson made his first official visit to Scotland, Northern Ireland and Wales this week. Johnson received a less-than-warm welcome in Edinburgh, where he was booed by an angry crowd as he met with Scottish First Minister Nicola Sturgeon on Monday (29 July). The Scottish National Party (SNP) leader has vowed to work with Johnson where possible, in spite of her open dislike of him and his stance on Brexit. Sturgeon has argued against a no-deal Brexit, and Johnson’s insistence on pursuing it may lead to a second Scottish independence referendum. Scotland had previously voted overwhelmingly against Brexit.

Continuing on his UK tour, Johnson made his first visit to Wales as PM on Tuesday (30 July), in a bid to seek support from farmers for his Brexit plans. Contradicting Gove’s earlier comments, Johnson told Welsh First Minister Mark Drakeford that they were not “aiming for a no-deal Brexit, (they) don’t think that’s where (the UK would) end up.” The president of the Farmer’s Union of Wales warned of “civil unrest” in the rural areas if a no-deal Brexit were to occur. Drakeford stated that he felt there was a distressing “lack of detail” from the new PM.

Wrapping up his UK tour, Johnson met with political leaders of the five main Northern Irish parties on Wednesday (31 July). Northern Ireland (NI) is at the heart of the ongoing Brexit battle, given the contentious proposed Irish backstop. Ireland shares a land border with NI that both sides want to keep “free-flowing” post Brexit, for both economic and political reasons. Removing border checks was considered pivotal to reducing tensions between Irish nationalists and British loyalists. During his visit, Johnson urged the parties to “step up efforts to restore (the) devolved government”, as NI had gone without government since 2017, when the DUP/Sinn Fein coalition collapsed. Johnson reiterated his promise to leave the EU by 31 October “come what may”. However, a spokesperson for the PM emphasised that the government would remain committed to the Good Friday Agreement and not institute physical checks or infrastructure at the border, regardless of the Brexit outcome. Johnson also held a private meeting with the DUP on Tuesday (30 July), a party whose support he relies on in parliament.

The UK’s stubborn stance on Brexit also had economic effects. The pound sank to a two-year low against the euro, falling by more than “1 percent to €1.10 and $1.22 – its lowest level against the dollar for 28 months”, as investors are increasingly anxious at the prospect of a no-deal Brexit.

 

EU’s External Relations in flux
EURACTIV carried a report released by the European Commission last Thursday (25 July), taking stock of transatlantic relations between the EU and US. The report was released a year after the EU-US declaration on trade. While the report acknowledged the progress made, in terms of advancing “regulatory cooperation on medical devices, cybersecurity and pharmaceuticals” and increasing LNG and soybean imports, it also highlighted challenges to EU-US ties. Of note were the stalemate on reducing trade barriers on industrial goods, the difficulty in introducing WTO reform and tariffs on Europe’s steel and aluminium exports. These challenges have soured transatlantic relations in recent times.

On Friday (27 July), President Donald Trump threatened to levy taxes on French wine, a key export for France. The threat was in response to France’s proposal to tax major US technological companies. According to the EURACTIV report, the US is the largest single export market for French wine and spirits and accounted for 3.2 billion euros’ ($3.6 billion) worth of exports in 2018.

France hit back at his comments, with farming Minister Didier Guillaume labelling the threat “completely moronic”. French Economy Minister Bruno Le Maire urged the Trump administration to work closely with them, as both the EU and US faced the same “challenge” on tackling the taxation of digital revenues. Trump had previously insisted that digital taxation issues should be decided by the home countries of the companies, rather than the host countries. Despite the threats levelled at France, industry experts suggest that the demand for premier French wines, often bought for prestige as much as taste, may be less sensitive to US tariffs. However, exporters in France’s wine regions are still concerned tariffs would adversely affect business for cheaper vintages.

Despite the tense transatlantic relations, the UK is looking to the US as a potential partner post-Brexit. EURACTIV reported that PM Boris Johnson has tried to revive discussions over Genetically Modified Organisms (GMOs) in a bid to establish a trade deal with the US. However, it was noted that the general opposition to GMOs amongst the EU public was “well-rooted” and “hard to overturn”.

On Tuesday (30 July), the US formally requested that Germany participate in its mission to secure the Strait of Hormuz, following the detention of a British-flagged tanker by Iran. Germany refused to take part in the mission. German Foreign Minister Heiko Maas stating that Germany wanted to “prevent military escalation and therefore rejected Washington’s request because it (considered) the U.S. strategy of “maximum pressure” on Iran to be wrong”. Germany’s refusal was met with anger by the US.

Separately, the EU denounced the “disproportionate use of force against peaceful protesters” on Saturday (27 July), following arrests of nearly 1,400 protesters by Russian police. EU spokesperson Maja Kociajancic stated the detentions and disproportionate use of force against protesters “(undermined) the fundamental freedoms of expression, association and assembly”. The crackdown has drawn international criticism. An estimated 3,500 people participated in the unauthorised protest after Russian authorities blocked prominent opposition candidates from taking part in municipal elections.

 

EU gets tough on environmental issues and acts on migration
The European Court of Justice (ECJ) ruled on Monday (29 July) that Belgium was in breach of EU law for failing to carry out the necessary environmental impact studies before prolonging the operational life of two nuclear reactors, Doel 1 and Doel 2. Belgium would now have to conduct environmental assessments and “demonstrate that there is a “genuine and serious threat” of power cuts if the plants are closed”. In 2003, the Belgian parliament decided to phase out nuclear energy and retire existing reactors. Doel 1 and 2 were supposed to be shut down in 2015 but lawmakers extended their life by ten years to prevent power shortages. However, they failed to conduct the necessary environmental impact assessment, which led Green campaigners to bring the case to the ECJ.

The European Commission also referred Spain and Bulgaria to the ECJ of the EU for failing to protect citizens from air pollution. Court referrals are the final step the commission can take in the infringement procedure to compel EU member states to do what they promised. “Spain failed to keep the concentration of nitrogen dioxide (NO2) in the air below the EU limits which have been legally binding since 2010.” Meanwhile, Bulgaria failed to keep Sulphur dioxide levels below the stipulated limits, which were part of EU law.

The Commission has also criticised Germany for having excess nitrate levels in groundwater. In a warning letter (25 July), the Commission called on Germany’s environment ministry to step up efforts to reduce nitrate levels. This would be in compliance with a 2018 ECJ ruling. Failure to bring forth the requisite proposals within eight weeks may result in steep fines. EURACTIV reports that “In the event of another ECJ judgment, Germany would face fines as high as €850,000 per day”.

Meanwhile, EURACTIV Germany reported that the EU continues to fund coal and steel research projects. One project being funded examines the “gasification of lignite and recyclable materials to make the process “more efficient and cost-effective””, with the Commission allocating over €1.75 million to the project. The EU Commission’s Research Fund for Coal and Steel has continued to allocate money to fund projects year-to-year.

On migration, the Italian coastguard vessel Bruno Gregoretti with over 130 migrants rescued from the Mediterranean was allowed to dock in the Sicilian port of Augusta. However they were not allowed to disembark till a deal was struck with the EU. The ship’s crew were also blocked from disembarking. Interior Minister Matteo Salvini emphasised that the remaining migrants (not evacuated for medical attention) were to remain aboard till other European countries agreed to take them in. The European Commission stated that it was in the midst of reaching out to member states to take in the stranded migrants. Earlier, Germany had informed the Commission that it was “available to take in migrants”.

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