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British Prime Minister Theresa May outlined her government’s vision for Brexit in a speech delivered in Florence on September 22. In a bid to breathe new life into ongoing UK-EU negotiations, she presented proposals regarding the rights of EU citizens living in the UK, the length of a “transition period” after 2019, and the sum Britain might pay during that period. Rather than inspiring counterproposals or constructive criticism from EU leaders, May’s speech generated little more than the same refrain repeated from Brussels since negotiations began: that more “clarity” was needed, and that “sufficient progress” would have to be made before talks could advance. This lacklustre, somewhat apathetic EU position does not look like the result of sincere consideration of May’s proposals, or a constructive attitude towards the talks. Rather, it looks a lot more like a deliberate tactic to either prevent Brexit, or punish Britain.
Some might find this approach perplexing. After all, is it not in both parties’ interests to negotiate a mutually-beneficial outcome? Not necessarily…
To better understand Brussels’ foot-dragging in Brexit talks, it helps to understand the incentives driving it. First and foremost, the EU is a political union. Economic, social, or environmental considerations may all have contributed to the appeal of ever-closer union, but they remain secondary to the very political objective of federal statehood. Indeed, from the days of Jean Monnet and Robert Schuman at the dawn of European integration, to more the more recent mandates of José Manuel Barroso, Viviane Reding, or Guy Verhofstadt, the goal of a pan-European nation state is no secret.
Grasping that European statehood is the EU’s ultimate objective is essential for the UK government’s Brexit Secretary David Davis and his team of negotiators as they engage with their counterparts. It means that, no matter how amenable the UK is to facilitating trade or subsidizing the EU’s budget, the bottom line in Brussels remains the preservation of their political project. The win-win economic gains desired by the UK are not necessarily desired by the EU, for whom a successful Britain would signal there is no longer any economic appeal to remaining in the bloc. A strong UK economy poses an existential threat to European integration.
This explains why trade negotiations have not even begun, despite both parties already sharing near-identical norms and regulations. It is also why the EU seems in no rush to maintain access to the UK’s large consumer market, with Britons buying more from the EU than the other way around. In order to preserve the union, the EU’s only options are to ensure the UK remains inside, or fails outside.
We are determined that Brexit, if when it eventually happens in earnest, delivers the change we need. One of these new approaches can be in defending British industry, along with its jobs and innovation from unfair actions. But why wait for Brexit? It can begin now!
Bombardier, a major employer in Britain, a new entrant in the plane market, is being threatened by a trade complaint brought by Boeing designed to keep it out of the US market.[i] Theresa May’s government must show that a post-Brexit Britain will use its new-found independence to stand up for UK jobs. A policy area where we would not have to live with pan-EU rules any more. British taxpayers give Boeing hundreds of millions of pounds in defence deals, while at the same time they’re trying to close British factories. That’s not the action of a trusted partner for this country.
“People have only as much liberty as they have the intelligence to want and the courage to take.”
― Emma Goldman
The name of a quiet medieval town in Hungary – Visegrad – has in recent times become synonymous with the word “rebellion” in Brussels.
Having spent the past 25 years against the European Union, I never thought I would see the day I would agree with Barnier and Junker, that our side has become an embarrassment.
It is no good expecting the EU to be flexible, where their structure is one of rigidity. Even if Barnier wanted to bow to British demands, he can't, the system doesn't allow it.
If glucose or glycogen stores in the liver are low, the body can also produce a hormone called cortisol from the adrenal glands, which lie on top of the kidneys, to remedy the shortfall. However, the body's usual glucose reserves are stored in the liver. If the body is forced to rely on short-term cortisol from the adrenals to release glucose stores from the body’s tissues, this is not the preferred method and long-term use carries its own problems - e.g. high blood pressure, which is associated with an increased cardio-vascular risk, increased risk of stroke, increased risk of diabetes due to cortisol's glucose-raising effects. Cortisol is also associated with obesity because it slows down the body’s rate and generally deteriorates body tissue etc.
So, why would the body choose to use the cortisol hormone instead of the glucagon one?
Simply because it feels that it has to, to maintain blood glucose balance. Either the alpha cells of the pancreas, which produce glucagon, have become impaired, or the liver's reading of and sensitivity to them has become impaired. The body is then moved into emergency mode and cortisol is forced to take over and aid the release of glucose into the bloodstream where glucagon left off. So, we need to ask ourselves whether the liver cells or even the pancreas cells are being caked up with a resinous substance that hinders its ability to detect blood glucose levels and whether this irritating substance is present in sugar beet.
By S Davies
Every civilization that has settled in Gibraltar has thrived, be it the Phoenicians, the Romans, the Ottomans, the Spanish and most recently, the British. Its strategic location and deep water harbour have been the reasons behind this, and enabled them to make it a vital trading hub.
Brexit represents a huge challenge to the future of Gibraltar as an economic centre, since it means losing membership of the biggest trading bloc in the world once the UK leaves in 2019. Gibraltar has experienced similar issues before in the various sieges mounted against it in the War of the Spanish Succession, and most recently during Franco’s blockade. There is certainly plenty to be cautious about, since the territory has become more dependent than ever on the land frontier remaining open to facilitate the movement of tourists, labour and imports.
However, the thriving financial services sector, which is closely aligned with that of the UK, means that the economic outlook is not as bleak as businesses and politicians initially feared, especially since the TiSA negotiations are proceeding well. The symbolic relationship Gibraltar shares with the neighbouring Spanish province of Andalucia means that they cannot function without the other.
Sense between the negotiating parties will prevail, especially since Madrid will not wish to sacrifice the economic well being of 10,000 Spaniards and forego the purchasing power of 30,000 comparatively wealthy Gibraltarians through causing difficulties at the border. If all sides can tone down the sometimes fiery rhetoric, there is every hope for creative solutions to keep the border with Spain open and flowing to the benefit of all.
Brexit could hit UK travellers like a summer storm. But don’t fret – it’s not all bad. Although it is deemed likely that travellers will needs a visa to travel around Europe, mobile roaming data charges are set to be scrapped entirely across the board. If you plan on travelling around Europe this summer, make sure you apply for an E111 card or renew it if you haven’t already to ensure you are eligible to receive medical treatment away.
With the UK scheduled to begin with the process to depart from the European Union under Article 50 at the end of March, it’s time to consider how it could affect your holiday:
Duty-free
Rules regarding duty and tax-free product are likely to make a comeback. Since 1999, travelling within Europe meant that people held no rights against duty or tax-free purchases. But, the separation of Britain and the European Union could mean that the rule is bought back into practice. So if you rely on buying cheap alcohol or tobacco, you will have to revert to buying products in limited quantities just like all non-EU countries.
The EHIC scheme
With the Brexit negotiations in full flow, Britain is looking for a way to make the transition away from the European Union run as smoothly as possible while ensuring that Brexit happens unimpeded. There are two possible exits. The first is a clean cut that will come into effect on 29th March 2019. The second option is to negotiate a transition deal that will allow Britain to disengage with the EU over a designated period of time. Here on The Bruges Group we have examined how trade can successfully continue outside of the Single Market. It is just a case of how we get there. In this article we look at the advantages and disadvantages of a transitional deal.
For a Transitional Deal
A big concern amongst some leave voters is that Britain is heading towards a cliff edge scenario where no agreement or deal is reached. Many political and business commentators believe that this would leave Britain in a precarious position as all EU laws and regulations would suddenly cease. It is estimated that over 700 treaties have to be renegotiated, ranging from the airline industry to Britain’s nuclear agreement (Euratom), with the EU. With less than two years till the Article 50 deadline there is a strong argument that it isn’t feasible to negotiate every deal in time. This could leave many UK businesses in difficult positions, as they have to suddenly change from one set of regulations to another.
British trade minister and prominent leave advocate Liam Fox has pushed for a transitional deal. The Irish Times reported that Fox told Andrew Marr that a deal of around two years was necessary to give businesses the chance to adapt. He is quoted as saying: “I want to leave the European Union at the end of March 2019. Now once we have done that, once we have fulfilled our promise to the British people, we can look to see what we are going to do in terms of making that a smooth transition… whether that’s 23 [months], whether that’s 25 [months]." The trade minister reassured leave voters by stating that the transition period would have a limited time scale.
Barely one year after the Brexit referendum, and under four months since the triggering of Article 50, the Financial Times has published a “democratic case for stopping Brexit”, adding to a crescendo in overt calls to upend the exit process. How did we get here? The whole point of the EU referendum, just like the Scottish referendum before it, was to bury a longstanding and contentious political issue. In both cases, this has not been so.
In the case of Scotland, it is clear that the opportunism of the nationalists was to blame for reviving the independence issue. Similarly, in the case of Brexit, it is tempting to point the finger at the “Remoaners” who never really accepted the result of the referendum, protesting against the democratic outcome from the get-go. Their scheming has not been particularly covert, with the entire frame of the “hard” vs. “soft” Brexit debate geared towards eventually thwarting the outcome of the vote.
With Article 50 triggered and Brexit negotiations well underway, the UK government looks like it’s carrying out the instructions it received from 17.4 million voters last summer. At best, Britain and the continent will establish a mutually advantageous trade relationship; at worst, the UK and EU will revert to World Trade Organization (WTO) rules, including minor tariffs on the exchange of goods and services. In either case, it seems, the UK will regain control over its finances, its borders, and its laws –all of which are necessary to fulfill the mandate given by voters.
Nevertheless, a growing threat hangs over Brexit Britain.
In hopes of consolidating power, Prime Minister Theresa May called an election in June. Rather than expand her mandate with a comfortable majority in Parliament, May’s Conservatives lost their majority, necessitating the support of Northern Ireland’s Democratic Unionist MPs to govern.
Emboldened by the election result, opposition parties have redoubled efforts to undermine the government’s position in Brexit negotiations. By seeking guarantees that single market access is maintained at all costs, or that, if by March 2019 (the date by which the UK has notified the EU it will leave) negotiations have not born fruit Britain’s current relationship with the EU should be maintained, MPs from Labour, the Liberal Democrats, the SNP and even some Conservatives are undermining the primary objective of last year’s referendum: to leave the EU.
Beyond Westminster, a growing number of voices have added themselves to the anti-Brexit bandwagon.
[pb_row ][pb_column span="span12"][pb_heading el_title="Article Sub Title" tag="h4" text_align="inherit" font="inherit" border_bottom_style="solid" border_bottom_color="#000000" appearing_animation="0" ]Unlocking the benefits of leaving the EU[/pb_heading][pb_heading el_title="Article Sub Title 3" tag="h4" text_align="inherit" font="inherit" border_bottom_style="solid" border_bottom_color="#000000" appearing_animation="0" ]By Bob Lyddon[/pb_heading][pb_text el_title="Article Text" width_unit="%" enable_dropcap="no" appearing_animation="0" ]
The current Government led by Theresa May has noticeably failed to bake any “Brexit dividend” into its policies for the coming 5-year Parliament. This is concerning because it may indicate either that they have not yet figured out the sources and extent of the financial benefits from Brexit, or that they are not going to pursue the negotiations with the EU in order to garner them, or both.
The possibility of a Brexit-driven reconfiguration of the UK’s food and agricultural sector suggests that a period of significant transformation and structural adjustment lies ahead. Set against an industry already in the midst of rapid technological displacement, value-chain disruption and regulatory change, a transformative event such as Brexit appears to add to existing uncertainty.
However, while the potential institutional, financial and operating frameworks that will arise from Brexit suggest a wide range of possible outcomes, the process, if mapped successfully, can be a positive one. The UK’s current position is not unique. In the 1980s, the government of New Zealand instigated a reform programme to transform the country’s food and agriculture sector, the results of which were immediate and painful as well as long-term and beneficial.
At the core of the transformation that shook New Zealand’s agriculture sector in the 1980s and 1990s was a pressing need to access new markets in the face of external economic shocks and structural adjustments, such as the UK’s decision to join the then European Economic Community (EEC) in 1973. While there are obvious direct parallels between the New Zealand case study and Brexit, both situations remain distinct and unique. The first section of this report “The past is another country” considers the New Zealand experience and argues that an agenda focused on long-term goals can deliver significant economic and social benefits, but may come with considerable short-term costs. The battle about to commence is set to be as brutal, complex and ideological as that which determined the direction of the British economy in the late-1970s and early 1980s.
Security is the new defining issue of both British and European politics. Even the United States is concerned that Europe’s problem is a danger for us all. It will also form the key issue in the Article 50 Brexit negotiations, or at least so the Government hopes. According to The Daily Telegraph, the Cabinet meeting of 7th March 2017, which approved the strategy for PM Theresa May’s opening gambit in her soon to be sent Article 50 letter mentioned security no less than 11 times.
Introduction
Here we answer your questions on the Article 50 UK/EU Withdrawal Agreement.
Introduction
One unavoidable fact about the modern world is that criminal gangs and terrorist groups work across national borders.
In our report What it will look like: How leaving the EU and the Single Market can be made to work for Britain[1] we explained that it should be relatively easy for the UK to maintain interim tariff-free trade with the countries who have signed deals with the EU, after Brexit.
As reported in the Memo Chris Anderson, Founder of the renowned TED talks series of lectures has criticized Brexit and poured cold water on the possibility of Brexiteers speaking at his events. Stating that TED are pro-globalisation. Clearly he has jumped to the wrong conclusions about Britain’s EU exit and perhaps has globalisation very wrong.
Some cannot distinguish between internationalism, working with others, and the brand of globalization being pushed by supra-national institutions. Organisations like the EU are, in the words of Dr Anthony Coughlan in Tackling the EU Empire, ‘imperial arrangements like the Austro-Hungarian Empire, once known as a “prison-house of nations”, where different countries are ruled by a centralized bureaucracy in a far-away imperial capital.’ That model failed then and will fail again.
Supranationalism, what Chris Anderson must be confusing with Globalisation, is according to Dr Coughlan ‘the opposite of internationalism, which is a benign and progressive concept. Internationalism – from Latin inter, “between” – implies the pre-existence of sovereign Nation States. It refers to relations of co-operation between the States that constitute the international community, but with each controlling and deciding its own domestic and external affairs in accordance with the wishes of its people. Recognition of States based on the right to self-determination of nations and peoples is a basic principle of modern democracy and international law.
‘Supranationalism, in contrast to internationalism, implies a hierarchy, with the supranational level on top. Internationalism implies legal and political equality between the parties. Properly understood, internationalism is opposed to all forms of chauvinism and xenophobia. It implies coexistence among progressive “nationalisms” – that is, broad nationalisms rather than narrow, using the positive rather than the negative sense of that word in English. It implies patriotism and love of country, combined with respect for the many national communities into which humanity is divided and admiration for their varied cultural and other achievements.
The Single Market
Lord Lamont, the former UK Chancellor of the Exchequer wrote in The Telegraph:
‘The single market is open to all advanced economies, in exchange for paying a relatively modest tariff of 3 to 4 per cent, something that evidently does not stop non-EU countries from selling within it.
‘Every developed country has access to the single market. The EU has a relatively low external tariff with the exception of certain goods such as agriculture.’[i]
A new Dutch poll commissioned by the Bruges Group, carried out by www.peil.nl, shows that more Dutch people prefer the alternatives to the European Union than they do EU membership. As the alternatives are already gathering more support than EU membership a concerted campaign in the Netherlands, which could force a referendum[1], will mean Holland voting to leave the EU.
The Dutch general election will take place on 15th March and the question of the EU is becoming increasingly important. The Netherlands’ terms of EU membership are already being questioned by an increasing amount of political parties; namely the Centre Democrats (Netherlands), ChristianUnion, Party for Freedom, Party for the Animals, Libertarian party, Reformed Political Party, and Socialist Party (Netherlands). Which can make gains. The issues are immigration, who makes law, and size of the Dutch financial contribution.
Rt Hon. Peter Lilley MP, Former Secretary of State for Trade and Industry, and Social Security.
Peter Lilley talks to Paulina about the single market.
For forty years from 1973 the Republic was a major recipient of EU money through the Common Agricultural Policy. Since 2014 the Republic has become a net contributor to the EU Budget. In future money from Brussels will be Irish taxpayers’ money recycled. This removes the principal basis of Irish europhilia, official and unofficial.
If Dublin seeks to remain in the EU when the UK leaves it will have to pay more to the EU budget to help compensate for the loss of Britain’s net contribution. A bonus of leaving along with the UK on the other hand is that it would enable the Republic to get its sea-fisheries back - the value of annual fish-catches by foreign boats in Irish waters being a several-times multiple of whatever money Ireland got from the EU over the years.
As regards trade and investment, the Republic sends 61% by value of its goods exports and 66% of its services exports to countries that are outside the continental EU26, mostly English-speaking. The USA is the most important market for its foreign-owned firms and the UK for its indigenous ones. Economically and psychologically it is closer to Boston than Berlin and to Britain than Germany.
The UK has the ability to leverage current networks, continue to fund its current research programmes, and expand funding for scientific innovations. Going forward, the country will have to restructure its funding and knowledge-transfer programmes with its EU allies, and maintain an open environment with visas for people working on high-impact research projects. Furthermore, and almost simultaneously, the UK will need to look to partners in the US and the rest of the world for new programmes as well. Thus, a three-pronged approached is necessary for the UK for the future:
1. Encourage study at UK universities for both EU and non-EU countries
2. Promote international collaboration and innovative research ideas
3. Provide funding and financial aid to programs covered in #1 and #2
One must now wonder whether in his memoirs Lord Neuberger, President of the Supreme Court will say, of the unintended consequences of the Court’s Brexit decision, “Of course, the People had made a valid decision to leave the EU but at the time it seemed the right thing to send it back to Parliament.”
Scottish First Minister Nicola Sturgeon has commented on several occasions in recent weeks on the subject of a second Scottish independence referendum. She first warned that she was not “bluffing” about calling another referendum, should the United Kingdom also leave the European single market. She then ruled out holding such a vote in 2017, effectively holding the threat of it over the British government as it moves ahead with Brexit.
There’s nothing wrong with many in Scotland, as in other European regions like Catalonia, wishing for independence. Indeed, notions of sovereignty, identity, and more representative democracy were all integral to Britain’s vote to leave the European Union (EU). Where such movements lose coherence, however, is in their insistence on remaining in the EU.
Why?
Many, many laws pertaining to the UK, including Scotland, originate in Brussels. Though the exact proportion of British laws stemming from the EU is hotly contested, it is likely quite large, with some estimates ranging up to 62%. What is more important, however, is how significant some of the EU’s competencies are. An “independent” Scotland within the EU would face the same quotas on its fisheries, abide by the same agricultural policy, honour the same trade deals signed devised in Brussels, and have absolutely no control over its borders. Its government also intends to continue using the British pound as its currency. In this sense, the stated intention of being “in the driving seat of [Scotland’s] own destiny and to shape [its] own future” loses its meaning. Without full control over essential areas like borders and monetary policy, a nation is not independent.
Moreover, the EU has always made clear that to secede from a member state is to secede from the Union. As such, Scotland deciding to leave the UK in order to retain its EU membership is not only impossible, but dangerously misleading to Scots.
The Bruges Group report What it Will Look Like: How leaving the EU and the Single Market can be made to work for Britain details the potential challenges the UK faces when it leaves the EU. The report also explains how these problems can be addressed by Her Majesty's Government, ahead of Theresa May's planned Brexit speech on Tuesday 17th January 2017.
Only by knowing the potential pitfalls can the Prime Minister hope to mitigate and eliminate the EU’s burdensome trade rules and bureaucracy. The UK can then take advantage of the global opportunities that await us.
Drawing upon decades of research and analysis, this report clearly explains how:
This report deals with the top ten issues of withdrawal from the EU. It explains that specific, easily reached agreements on the mechanics of trade in both goods and services will not only resolve any problems that may arise when exporting to the EU but such arrangements will also protect and enhance our trade with the EU.
1. The euro prevents EU countries with weak economies using currency exchange rates to adjust their competitiveness within and external to the EU. The EU therefore has a policy of ‘rebalancing’, or ‘internal devaluation’. Rebalancing relies on the failure of uncompetitive industries. The result is unemployment, lower wages and lower prices together with austerity justified by high levels of sovereign debt. These pressures on the population are intended to force the creation of competitive trading industries and reduce non-trading activities.
The EU's single currency, the Euro, is being unbalanced by the strength of the German economy. The undervalued Euro is used by Germany in a beggar-thy-neighbour policy to expand its exports; hurting not just the other members of the Eurozone but also countries further afield, including the United States. If the USA forces Germany to abandon this policy, it will mean Germany leaving the Euro. This will either be the end of the single currency experiment, or its salvation.
During the election campaign Donald Trump highlighted a structural flaw in the US economy, namely, the country’s huge structural trade deficit, which he claimed is hurting many Americans. Trump’s message was very simple: if instead of importing products the US exported them there would be more highly paid jobs in the US. Trump claimed that not all of the US’s trading partners are trading fairly with the US. The implication being that some countries are taking US jobs unfairly. Angela Merkel was clearly worried about this rhetoric. Although Trump did not name Germany, she is clearly concerned that Germany will be exposed as having an unfair trading advantage with the US because it is benefitting from an under-valued Euro.
Although no one would claim that Germany abandoned the Deutschemark in favour of the Euro in 1999 to gain an unfair trading advantage, this is undeniably what has happened. As can be seen from the following table this has increased Germany’s current account surplus with the rest of the world.
Germany’s exports are now 30-35% cheaper in US dollars than they would have been if the country had retained the Deutschmark. This calculation is based on the assumption that the Deutschmark would have maintained its value against the Swiss franc. And, it ignores the fact that Switzerland has intervened in the foreign exchange markets from time to time to depress the value of the Swiss franc against the US dollar and other currencies. The Euro has become a disguised form of protectionism for the German economy, by making its exports cheaper and imports more expensive. Moreover, this is not a problem that is likely to disappear. The longer the Euro exists, at least in its current form, the greater the problem will become. The question is what, if anything, will the new Trump Administration do about Germany’s unfair trading advantage and its ever growing current account surplus with the US.
The deal need not be an official treaty but could take the form of what is called a Memorandum of understanding or MoU.
As the UK government website states:
“An MoU records international "commitments", but in a form and with wording which expresses an intention that it is not to be binding as a matter of international law. An MoU is used where it is considered preferable to avoid the formalities of a treaty – for example, where there are detailed provisions which change frequently or the matters dealt with are essentially of a technical or administrative character; in matters of defence or technology where there is a need for such documents to be classified; or where a treaty requires subsidiary documents to fill out the details. Like a treaty, an MoU can have a variety of names and can also be either in the form of an exchange of notes or a single document. However, the formalities which surround treatymaking do not apply to it and it is not usually published. Confusingly some treaties are called memoranda of understanding. Although an MoU is not legally binding it should be no less carefully drafted than if it were a treaty, given that it is always the intention to perform all HMG's commitments, whether legally binding or not.”[1]
An MoU is an established device In public international law; less official that a treaty but more than a gentleman’s agreement. MoU’s can take various forms and can serve wildly different purposes. They can be short and cover one specific issue or be lengthy, covering a range of topics.
Summary
The EU is a dysfunctional organisation in the area of corporate taxes because:
1. the EU Commission is not able to prevent EU countries such as Ireland, Belgium and Luxembourg operating as tax havens (this is because member states have not conferred legislative competence on the EU over direct taxation), and