The Weekly Vulcan View | Analysis of Latest EU Developments May 6th – May 10th

Key Events This Week

UK to contest EU elections on May 23rd
This week Cabinet Office minister and de facto deputy prime minister David Lidington formally announced what we already knew – that the UK would go to the polls on May 23rd to elect Members of the European Parliament. Britain’s new MEPs will keep their seats until such time as Westminster ratifies a Withdrawal Agreement.

The Labour Party, SNP and Liberal Democrats on Thursday launched their respective campaigns for the forthcoming EU elections. Labour leader Jeremy Corbyn reaffirmed his party’s official position that unless a ‘sensible’ Brexit plan is agreed along the lines proposed by his party, he would campaign for a public vote.

Meanwhile the government has resumed talks with Labour in an attempt to break the ongoing deadlock in Parliament over the terms of withdrawing from the EU. Downing Street has indicated that if no compromise is reached it will offer indicative votes as a potential next step to break the impasse.

However, No. 10 may soon find it has lost all remaining control of the process as tensions within senior ranks of the Conservative party boiled over this week with a number of front runners lining into position ahead of an expected leadership contest. Former Cabinet minister Esther McVey, who resigned as Secretary of State for Work and Pensions in November, announced she had sufficient support to put her hat in to the ring. Meanwhile, her successor Amber Rudd this week used a speech in London to set out her vision to turn the Conservatives into the party of the 21st century worker.

Pressure on the Prime Minister to set out a clear timeline for her departure is likely to increase in the lead up to the European elections where Nigel Farage’s newly formed Brexit Party is expected to inflict significant damage on the Conservatives.

Ireland and The Netherlands stand firm on tax
Ahead of an informal summit meeting of EU leaders in Sibiu, An Taoiseach Leo Varadkar visited Dutch Prime Minister Mark Rutte on Wednesday, where the two leaders discussed tax policy. Both leaders represent member states that have attracted particular criticism from their EU partners over their taxation policies.

In a joint press conference both Prime Ministers reaffirmed their unwavering view that the issue of tax is a sovereign issue which individual member states should have autonomy in shaping. The Irish leader also expressed support for what he said was ‘good progress’ being made at OECD level in developing proposals that will attempt to bring a global response to the taxation of major multinationals. His comments come against the backdrop of recent efforts by the EU to agree a unified position on digital taxation which were ultimately shelved due to concerns from Ireland and a number of other smaller member states, now known as the “Hansa” group. .

On Thursday EU leaders gathered for an informal summit in Romania where they discussed the bloc’s priorities over the next five years. The Heads of State and Prime Ministers issued a ten-point declaration reaffirming European unity. They also produced the outline of a strategic agenda for the incoming European Commission, the leadership of which will be heavily influenced by this month’s European elections.

Erdoğan takes election gamble
Turkey’s Supreme Election Council this week took a momentous decision by annulling the outcome of Istanbul’s mayoral election held in March. The decision comes after weeks of government pressure on the Council to overturn the election result which seen opposition candidate Ekrem İmamoğlu narrowly defeat Mr. Erdoğan’s governing AK Party. Voters in Istanbul will return to the polls on June 23rd in an election which will be seen as a critical test for President Erdoğan’s grip on power.

Next month’s mayoral election is a monumental gamble for Turkey’s long-term leader. Should Erdoğan’s AK party be successful in regaining control of Europe’s largest city, he will tighten his grasp on the levers of power which has witnessed a shift in Turkey’s trajectory in the area of foreign affairs policy including relations with the EU. The Turkish President has taken a tough stance with the EU in recent years and this week accused the bloc of double standards in accession negotiations. His government’s economic, political and legal reforms have delayed accession talks with the EU and a victory for the AK party is likely to cause further confrontation. In a sign of the increasing tensions between Ankara and Brussels, the Leader of the ALDE political group in the European Parliament, Guy Verhofstadt, was swift to condemn the decision to rerun the vote and noted that “Turkey is drifting towards a dictatorship.”

On the other hand, Erdoğan’s election gamble also risks handing momentum to Turkey’s opposition as well to supporters of his own party who are against the decision to rerun the election.

Furthermore, the uncertainty caused by the decision to rerun the vote has put further pressure on Turkey’s economy which entered into recession in March for the first time in a decade. Amid the growing political turbulence in Turkey, one thing is certain, the outcome of Istanbul’s mayoral election will have significant repercussions for the country’s trajectory.