Since becoming PM, Theresa May has persistently fobbed off the media, public, Houses of Parliament as well as European politicians about her intentions over Brexit, with insightful remarks such as Brexit means Brexit, and we're going to make a success of it, and a Red, White and Blue Brexit, her speech on Tuesday 17th January, surprised many with the amount of content and clarity that it contained. In her speech she set out her key objectives and priorities for when she sits at the negotiating table. The PM also confirmed that the UK will be leaving the single market and the customs union, and she would be willing to leave the EU with no deal rather than accept a punitive deal. See more thoughts on her speech and reaction to it, in two of our articles below:
- Michel Barnier, the EU's chief Brexit negotiator responds to May's speech: saying smooth negotiations on Britain's exit from the EU are a prerequisite for a good future relationship between London and the bloc."Agreement on orderly exit is prerequisite for future partnership. My priority is to get the right deal for EU27," Michel Barnier tweeted after Theresa May laid out more detail on plans to leave the 28-state Union. He said he was ready to start negotiations, something May has said she will do by late March by giving Brussels formal notice of Britain's intention to quit: "Ready as soon as UK is," Mr Barnier said. "Only notification can kick off negotiations."
- European Council president Donald Tusk said: Mrs May's speech meant the EU had a "more realistic" view of Britain's hopes and said the remaining 27 states were "united and ready to negotiate". In a message on Twitter, Mr Tusk said: "Sad process, surrealistic times but at least more realistic announcement on Brexit. EU27 united and ready to negotiate after Article 50."
- Jean-Claude Juncker, President of the EU commission has said: talks on Britain’s departure will be “very, very, very difficult” as Europe’s press turned hostile, attacking Theresa May’s Brexit plans as isolationist, unachievable, extremist – and disastrous for the UK.
- Francois Hollande’s office suggested: that the UK should not be allowed to enjoy better conditions outside the single market when it leaves the European Union. The remark implied that tariffs could be imposed on British exports.
- Boris Johnson accuses Francois Hollande of “wanting to administer punishment beatings”: causing outrage in some British and European circles. Downing Street have defended Mr Johnson and said they failed to see how his comments could be considered to imply that France was acting like Nazis Germany.
- Newspaper Reaction: Theresa May's speech receives a rapturous response in the British Press, but a disastrous one from European papers.
- Countries ‘queuing up’ for trade deals with Britain, says Boris Johnson: In his column in The Telegraph Boris said Britain has already proven to be an attractive trading partner. He wrote: “We will no longer be part of the common commercial policy, or bound by the Common External Tariff, and will no longer have our trade policy run by the EU Commission. This means – crucially – that we will be able to do free trade deals with countries around the world. They are already queuing up.”
- UK having informal trade talks with at least 12 countries: Also writing an article in the Telegraph, International trade secretary Liam Fox has said that ‘dozens of countries’ are interested in striking trade agreements with the UK after leaving the European Union. Liam Fox said ministers have visited 55 countries so far to establish Britain as “the champions of free trade”.
- Supreme Court verdict to be delivered on 24th January: It has been announced that the verdict on whether the triggering of Article 50 must go through Parliament will be announced next Tuesday. They will also announce whether the devolved assemblies will also need to agree to the triggering of Article 50.
- Theresa May speaks at World Economic Forum in Davos: telling business leaders and politicians that the UK would be a “world leader” on trade. The Prime Minister was surprisingly blunt in criticising globalisation and the “elite” considering who the audience was made up of. She said globalisation for man means “watching as those who prosper seem to play by a different set of rules, while for many life remains a struggle as they get by, but don’t necessarily get on.”
- Sadiq Khan criticises Theresa May’s speech: During his speech at the World Economic Forum in Davos the Mayor of London, Sadiq Khan, said that Theresa May’s hardline Brexit approach “may keep the Conservative Party together, but it could rip Britain apart.” Mr Khan has undoubtedly been the most critical of Theresa May’s speech out of the senior Labour MPs stating that single market membership was crucial for the prosperity of London.
- Brexit continues to challenge and split the Labour Party: Jeremy Corbyn is facing a Shadow Cabinet split after imposing a three line whip on his MPs to back the triggering of Article 50. Several shadow ministers have previously committed to voting against Article 50. Will they change their mind, or will Corbyn back down or have to fire them?
- Christine Legarde warns of pain ahead as Britain approaches Brexit: The Head of the International Monetary Fund said that despite the UK economy performing more strongly than the IMF predicted, uncertainty over the terms of the deal “is always a risk”.
- Brexit will damage UK and EU, says Pierre Moscovici: The European Commissioner for Economic and Financial Affairs has said that growth would be lower in the UK as a result of their decision to leave the EU.
- Hard Brexit is ‘wise’, Norway says: Norway’s EU Affairs Minister Frank Bakke-Jenson has said in an interview with Politico that May was “wise” to leave the single market. “As it would be difficult for Britain “to get as good a deal as Norway has today”. The Norwegian minister also said that it was highly unlikely that Scotland will be able to secure a Norway-style deal. “I can’t see that it would be possible for Scotland to be part of the EU or the EEA as long as they are part of Great Britain.”
- Finally, the US may lure more countries out of the EU, Donald Trump envoy said: Theodore Malloch, tipped to be Trump’s ambassador to the EU. In an interview with Radio 4 he said the US would seek bilateral trade deals with the Europe behind the back of “a certain bureaucratic organisation called the EU.” He also said that Trump’s trade deal will always be on a bilateral basis, confirming that Trump will put an end to TTIP or any deal like that happening in the future. Antony Scaramucci, an adviser to Donald Trump has also said that a US-UK trade deal can be ready within six months. More on the new President of the United States in next week's newsletter following his inauguration on Friday 20th January.
Written by RPP Head of London Office, Andrew Brown
Theresa’s Twelve Brexit Commandments
At Lancaster House in the very spot that Margaret Thatcher gave a speech celebrating Britain joining the single market, Theresa May announced that the UK will no longer be a member of the single market and is aiming for a clean break from the European Union.
After seven months of obfuscation on the subject, Theresa May finally revealed her objectives for Britain’s exit from the European Union whilst also announcing some important policy developments. The Prime Minister said she would be entering the negotiating table with four overarching aims: certainty and clarity, a stronger Britain, a fairer Britain and a truly global Britain. Her speech was laid out in a twelve-point plan that represent her priorities and vision for a post-Brexit Britain, these are:
- Provide certainty about the process of leaving the EU
- Leaving the European Court of Justice and end EU jurisdiction in the UK
- Strengthening the union between the four UK nations
- Maintaining the Common Travel Area between the Republic and Northern Ireland
- Regaining control of UK borders
- Rights for EU nationals living in the UK and reciprocal rights for UK nationals living in member states
- Protection of the workers’ rights currently safeguarded by the EU
- A new free trade agreement with the EU
- Striking new trade deals with states outside the EU
- Collaboration with the EU in major science, research and technology initiatives
- Co-operation with the EU in tackling security and terror threats and remaining allies in foreign affairs
- A phased implementation process to ensure a smooth Brexit
Theresa May also answered the central question that has dominated the Brexit debate since 24th June - Britain will be relinquishing their single market membership. This is because the Government’s objectives of ending freedom of movement and leaving the European Court of Justice are not compatible with single market membership. The majority of the public had accepted on 24th June that we were leaving the single market, both campaign sides said it was a certainty if we voted to Leave, it only seems to have been questioned in the chambers of Parliament, and the media. Theresa May’s suggestion to develop a new deal with the EU which seeks maximum access to the single market is what many people have already predicted.
Whilst Theresa May repeated that Britain after Brexit would be truly global and enjoy the ability to strike trade agreements with states across the world she did not explicitly say the UK would leave the customs union. Instead she said she would attempt to build a new customs agreement with the UK which would consist of tariff-free trade between the UK and member states, yet also be free to control bilateral trade agreements across the globe. Whilst this sounds excellent and was received well by the press, it is unrealistic that the EU and member states would agree to such a deal. Although as we can see from Turkey, Andorra and San Marino you can be a partial member of the customs union it requires making concessions which would be ill-fitting with the Prime Minister’s vision of Britain’s future, such as having to impose the EU external tariff when making trade agreements with other nations and having to apply to changes in customs regulations without getting a say in what the changes are.
Theresa May’s speech was all together not surprising, whilst it was important to hear the objectives from her directly, many of these objectives had already been alluded to by her so-called Brexit ministers, Boris Johnson, David Davis and Liam Fox. However, a big surprise from the usually guarded leader was her words of warning to the EU member states: “No Deal for Britain is better than a bad deal.” Britain will walk away if the member states attempt to leave the UK with a punitive deal, to set an example for other member states that exiting the EU comes with a political and economic price tag. She threatened to retaliate by slashing taxes to bring more investment into the UK. This element of her speech went down poorly in the financial sector: HSBC and USB have confirmed they will both be removing 1,000 jobs from London and relocate to either Dublin, Paris or Frankfurt. JP Morgan’s Chief Executive Malcolm Barr said the UK has a lot more to lose from walking away with no deal and Theresa May is taking a dangerous line. Domestically, the speech was a resounding success. The tabloids heralded the Prime Minister, the Daily Mail’s front page was a cartoon of the Prime Minister stomping on the EU flag followed by the headline ‘We’ll walk away from a bad deal – and make EU pay, steel of the new Iron Lady.’ Even Brexit sceptics such as The Guardian had flattering things to stating it “was a huge success” as a “political manoeuvre”. The success was down to Theresa May covering the concerns of both Leavers and Remainers. For those that voted to leave the European Union, Theresa May made clear that we will have a clean break with Europe and mentioned taking back control from Brussels, a central motive for people voting Leave. For businesses who were concerned of a cliff edge, the Prime Minister mentioned that a transitional deal will be made to give companies the chance to adjust to the changes. Douglas Carswell the only UKIP MP said he would not have changed a word of Theresa May’s speech. Cleverly, Theresa May managed to be attractive to those that voted Remain by confirming that her vision of post-Brexit Britain does not align with the politics of Donald Trump and Nigel Farage. The UK will not abandon liberalism and build walls and we will continue to be a close ally and partner with the European Union. Mrs May priorities include that maintaining a soft border between the Republic and Northern Ireland (although this will be a herculean task considering there simultaneously will need to be immigration and customs controls, as well as at a time of political instability in Stormont), and securing rights for EU nationals living in the UK and reciprocal rights for UK nationals living in member states.
Theresa May has set out an ambitious plan and whether she is misguided on how easy it will be to negotiate, only time will tell. However, in terms of her performance, domestically, it was a resounding success, delivered with a punch and certainty that we have not previously seen in her political career.
Written by RPP Policy Researcher, Lucy Kerr
Theresa May’s Brexit Speech: the German Perspective
A more detailed explanation of the future plan for the British withdrawal from the European Union by Prime Minister Theresa May was highly anticipated by her European colleagues. In the wake of May’s speech German political and economic leaders responded with demonstrative composure, releasing data on the expected minimal or even positive effects of Brexit for the German economy. Immediately after May’s speech the German Minister of Foreign Affairs, Frank Walter Steinmeier, expressed muted enthusiasm and welcomed “some clarity” of UK perceptions on the withdrawal from the EU adding that the cabinet’s Brexit committee will meet Wednesday to determine Germany’s position in the upcoming negotiations. Generally, Germany supports Britain’s wish for constructive and positive negotiations however, in German, and equally European, interest is to strengthen the cohesion of the EU 27 members as well as to protect the unity of the European single market.
Additionally, negotiations on Brexit are only possible once Britain officially declared their exit by triggering Article 50 of the Lisbon Treaty. Political party leaders (e.g. Sigmar Gabriel) and European politicians (Elmar Brok) particularly stressed the importance of a unified single market thus deny the prospect of cherry-picking for the British. Germany’s chancellor, Angela Merkel, refused to comment on the May’s Brexit plan at this time, however supported Steinmeiers emphasis on the importance of solidarity between the 27 European member states in opposition to Great Britain, after a visit from Italy’s Prime Minister, Paolo Gentiloni. Highlighting the trust in European solidarity, she supports intensive contacts between the remaining member states equally building on the demonstrated support of the industry for Brexit negotiations. Yet, finally, she demands to shift the attention away from Brexit towards future issues concerning the EU27.
German media presented its opinion on May’s Brexit plan less politely ranging from doubts on the feasibility of the ’12-point plan’ (Frankfurter Allgemeine Zeitung) towards calling it a “Wunschkonzert” (request show) (Spiegel Online) and allege Theresa May is not thinking realistically. However, primarily the EU were happy go gain some form of clarity of Britain’s plans for the upcoming Brexit negotiations.
May’s articulated interest in a good relationship with the future European partners and to continue to co-operate as “friends and neighbours” was appreciated. However, underlying those superficial niceties, is her threat of punishment if the EU is not willing to follow Great Britain’s catalogue of demands. Included is the wish to leave the internal market as well as the judiciary of the European Court of Justice. Equally it wants to be partially included in the customs union without saying how this might be possible and realistic. May’s prospect of a new, global, liberal and open Great Britain however bypasses the global political reality, that Brexit plans rather contribute the weakening of both sides.
Interestingly, May is ready to put everything Britain can offer on the negotiating table stressing the importance of British contributions – intelligence services, nuclear weapons, cooperation on terrorist defence - on the European Security network. Without saying it directly she threatens the EU – pushing us to the brink would be uncomfortable for everyone. In an extreme case, May rather risks a cold, dirty Brexit as a painful compromise – No deal is better than a bad deal. But after all, the British governments remains dependent on the goodwill of two partners – the EU and Donald Trump. Besides being unpredictable and chaotic, Trumps “America first” world is more interested in destabilizing the EU as a competitive great power rather than securing a safe deal for the UK. Even Trump’s announcements of a quick bilateral trade-agreement is dependent on the EU’s good will. As long as Britain is member of the EU it is not possible to sign a trade agreement with the US and once the UK submits its formal exit request from the EU, time is running against the country to strike new trading agreements. Moreover, the rest of Europe has little interest in being too attentive during the negotiation and thereby risking other countries to follow. Yet, both sides should aim for a cooperative and close relationship when Britain has formally left the EU. Until then, May has to offer her allies more than the grace to continue to export products duty-free to the island.
Written by RPP Policy Researcher, Anna Rößing
Les jeux sont faits! Midterm: the European Parliament has elected a new Bureau.
Italian MEP Antonio Tajani is the new President of the European Parliament. He won Parliament’s presidential election in a final face-off with Gianni Pittella (Group Leader of the Socialist Group) who secured 282 votes in the final fourth ballot: valid and votes cast: 633 and 80 abstentions. The last time when an EP President had been elected in the fourth ballot was in 1982.
No candidate won the required majority of valid votes cast in the first three rounds. Seven candidates were nominated by their respective political groups, in addition to Tajani and Pittella, Guy Verhoftstadt, Group Leader of the Liberal ALDE Group, Belgian MEP Helga Stevens from the ECR (Conservatives) Group, British Green MEP Jean Lambert, Eleonora Forenza from the Left GUE Group and Romanian Laurentiu Rebega from the extreme right ENF.
The election which was run by outgoing EP President, Martin Schulz, was kicked off by the withdrawal of Guy Verhofstadt from list of the candidates. It turned out that the EPP and the ALDE Group had reached an agreement in order to merge forces by supporting each other in the elections. For agreeing to mutual support, the ALDE group was supposed to keep the leading posts which they already had: 2 EP Vice-Presidents, 1 Quaestor, the current chair of the Petitions Committee (PETI), Cecilia Wikström could replace Industry Committee chair Jerzy Buzek, in his function as chair of the Conference of Committee Chairs, “CCC” as that body is referred to in Brussels. Interestingly, ALDE has obviously obtained EPP support for getting an upgrade in the Commission: which means that a second Liberal Commissioner should be nominated by Commission President Juncker as Vice-President of the Commission. Danish competition Commissioner Vestaeger and Swedish Trade Commissioner Cecilia Malmström would be the candidates for that position, with slightly better chances for Vestaeger.
Following the election of the President, MEPs also elected 14 Vice Presidents in two ballots this week. In order to be elected candidates needed to win an absolute majority of valid votes cast. 10 Vice-Presidents were elected in the first round, with Mairead McGuninnes coming in first with 466 votes. In the first round of the vice-presidential elections, to be elected by absolute majority, 310 votes were needed, out of the 618 valid votes cast. The other Vice-Presidents elected in the first round were: Boguslaw Liberadzki S&D, David Sassoli S&D, Rainer Wieland EPP, Sylvie Guillaume S&D, Ryszard Czernecki ECR, Ramon L. Vaalcarcel EPP, Evelyne Gebhardt S&D, Pavel Telicka ALDE, Ildiko Gall-Pelcz EPP. Green MEP Indrek Tarand had not been elected.
Green Ulrike Lunacek, Dimitrios Papadimoulis GUE, Ioan Pascu S&D and Alexander Graft Lambsdorff ALDE had passed only in the second round. The order of precedence of Vice-Presidents reflects the scores achieved by the 14 best-scoring candidates. The order has an impact when it comes to distributing the responsibilities which fall in the remit of the EP President, meaning that the higher the Vice-President is in that internal order, the more “interesting” his portfolio gets.
The five Quaestors (which oversee administrative EP issue as the political body in charge) had been elected by acclamation: Elisabeth Morin-Chartier EPP, Andrey Kovatchev EPP, Vladimir Manka S&D, Catherine Bearder ALDE and Karol Karski ECR. In this case a precedence order had to be established by electronic vote.
What does this mean for the political landscape?
Firstly, Martin Schulz has left quite big shoes to fill and of course the new EP President will be compared to his predecessor. Antonio Tajani is a former Industry Commissioner and former Spokesperson of Berlusconi’s movement Forza Italia, this is certainly a profound political experience he can build on. It is said that as a former Senior Commissioner, he will work well with Jean-Claude Juncker.
The question remains, if Tajani will drive his agenda with the same vigilance as Martin Schulz did and leave a strong EP foot-print behind.
Various Foreign Policy experts in Berlin have underlined already that it will be very beneficial for the EP to have with Schulz, a former strong leader, as the next German Foreign Minister as he will be an advocate for Europe.
To that end, we can be sure that there will be various challenges between the German Chancellery and the Foreign Ministry regarding “Applied European Policy”.
Secondly, nearly everybody in Strasbourg this week has been mentioning that the “Grand Coalition” between EPP and Socialist is now over, but will that really be the case? Of course, in view of the current traditional midterm re-shuffle and the elections one might have that impression. But let us not forget, that this occurred at the end of last year when Martin Schulz announced he considered to go for a prolongation as EP President, although there has been the agreement with the Socialists and the Liberals, that midterm an EPP candidate should take over. The agreement had been made public by EPP Group Leader Manfred Weber just two weeks ago and during the weeks full of talks and tension ahead of the EP presidential elections, looking at the final results, Weber emerged as the winner. He has acknowledged that the agreement is not valid anymore (the Socialists were claiming that it is not acceptable that now all leading EU positions are held by EPP representatives, a fact which was known when Schulz had been elected in 2014). Weber kept his group very unified and he could even be generous in offering additional gifts to the Liberal ALDE group (see above).
Guy Verhofstadt, was criticised when he tried to bring in the Italian 5 Star movement of Beppe Grillo into his group and his own group rejected this suggestion, which would give ALDE 17 more MEPs, but he was clever enough to opt for a last minute “coalition” deal with the EPP. S&D Group leader Pittella also received “small political injuries”: he had also been reaching out for allies and was offering even a second Vice-President post to the conservative ECR group, but this did not work out in the end. So, S&D has started claiming during this week, that they have been pursuing the road of opposition, and by doing so Pittella has lead the way out of the “Grand Coalition” which has brought them more independence. Various EP staff have been mentioning that they eagerly wait for the next Conference of (Group) Presidents in the EP, in order to see which deals are still and will be valid in the future.
As rumour has it, that ECR and S&D are intending to take away the role of Brexit EP co-ordinator from Verhofstadt, Martin Schulz had been supporting Verhoftstadt when he was appointed for that role.
Thirdly, when looking at the numbers, EPP/ALDE does not have a majority and it is obvious that regarding certain policy areas, we will see a co-operation between the bigger forces in the EP. The EP Committees will have the (re)constituent meeting during the upcoming weeks and we will see the elements of a “Grand Coalition” building. (It has to be noted, that in terms of the overall figures, it has been agreed that only the Foreign Affairs and the Women’s Committee will get bigger and will get two seats more each in total.)
As the European Parliament does not know the classical dualism between “government” and “opposition”, “coalition-building” is part of the nature of that institution.
Written by RPP Senior Director of Policy and Advocacy, Thomas Krings
EU “Prevailed on Freedom of Movement”
Among other issues, Brexit had been considered as one of the key political challenges for 2017, and was debated by MEPs, Commission Vice-President Jyrki Katainen and Council President Tusk in Strasbourg this week.
Theresa May’s decision to take Britain out of the Single Market shows that Brussels has prevailed on the issue of freedom of movement, according to European Council President Donald Tusk. He said that progress was being made on curbing migration, but also called on Parliament to support close collaboration on internal and external security issues and on higher defence spending. On Brexit: “Mrs May’s speech yesterday proves that our unified position on the single market and four freedoms has finally been understood by London. They should also understand there will be no pick-and-choose”, said Mr Tusk. “We took note of the Prime Minister’s warm words on EU integration”, he added.
European Commission Vice-President Jyrki Katainen urged that “Unity is more important than ever before” as “we have been challenged from outside but also from within.” He stressed the importance of EU institutions and of the art of compromise in the “post-truth era”, confirming that Commission chief negotiator on Brexit Michel Barnier will cooperate closely with the European Parliament. Mr Katainen also advocated deepening the single market in the field of defence, increasing the number of joint military purchases, helping third countries to fight migrant smugglers, and making EU societies more socially resilient. Manfred Weber (EPP, DE) underlined the UK’s contradictory stance on Brexit - leaving the single market while at the same time demanding a free trade deal - and deplored UK threats. “Who will pay for the tax deficits that will result from the dumping plans of the UK government? In the end, ordinary people.” As for the recent statements by US President-elect Donald Trump, Mr Weber insisted that “We also have powerful tools, like state aid rules. If in the US they say ‘America first’, then we have every right to say ‘Europe first’”. Guy Verhofstadt (ALDE, BE) said “We are looking for a fair agreement with the UK not one where being outside the EU is more interesting than being inside.”
Meanwhile the Prime Minister of Malta, Joseph Muscat, which holds the six-month rotating Presidency of the Council, has warned that any Brexit deal granted to the UK will be “inferior” to the terms it enjoys as an EU member. Muscat also warned that negotiations under Article 50 of the EU treaties will be “arduous” and said there was “unity” among the 27 remaining members that the principles of free movement of people, goods services and capital must be maintained. The four freedoms are “one package”, he said. “We want a fair deal for the UK, but the deal necessarily needs to be inferior to membership”, Muscat continued, having addressed MEPs in the EP in Strasbourg. The Prime Minister also said: “This should not come as surprise to anyone. Indeed, thinking it can be otherwise would indicate detachment from reality.”
Commission President Juncker said that he would do everything he could to ensure that the talks “yield good results”, neither the Commission, nor its Chief negotiator Michel Barnier were approaching the talks “in a hostile mood.” Juncker could also not help launching a broadside against “extremists” who think they can solve their countries’ problems over migration by breaking up the EU.
Written by RPP Senior Director of Policy and Advocacy, Thomas Krings