Brexit News, Member News

The weekly Vulcan View for the 16th to the 20th of April featuring analysis of the latest EU developments


Commission hands judges extra powers to seize e-evidence from other countries 
Judges and prosecutors across the EU are expected to be granted new powers that would it make it easier for them to obtain emails, text messages and other electronic evidence from other jurisdictions within the bloc. The plan would see the creation of a warrant known as the European Production Order and is intended to force powerful tech companies to hand over sensitive information without delay in cases of serious crime.
The extraterritorial powers are intended to be used for investigation into terror offences and other serious crime. Critics often point to the difficulty in obtaining such evidence under the current system as it relies upon a request for assistance and close contact between authorities. Under these plans, the new system would become a common judicial area and companies would have to hand over information within ten days of receiving the warrant, or even within six hours ‘’in emergency cases’’.
Tech companies themselves have often voiced complaints as the current system makes it unclear what exactly their obligations are when judges demand evidence. Although these companies will not be able to outright refuse to hand over information if it is stored outside of the EU, they will have procedures to challenge them. The proposals are set to be debated and voted on by the parliament and national governments over the next few months.
Germany fears planned digital tax could provoke transatlantic tensions
Concern is beginning to mount in Germany amongst its political and business leaders that the proposed EU digital tax could damage an already deteriorating EU-US relationship and lead to a backlash from Washington. The EU digital tax is high on the agenda of the European Commission despite stiff opposition from some member states, including Ireland. Paris and Berlin have been leading champions of the tax but anxiety has begun to grow in Germany about the damage it may cause to transatlantic ties.    
Germany’s BDI industry association this week announced that it was opposed to new rules proposed by Brussels to make digital companies pay more tax, stating that the tax would only lead to extra burdens and hamper strained ties with the US. Joachim Lang of the BDI made clear that ‘’with this proposal, the European Commission risk exacerbating the trade conflict with the USA’’.
Under the proposed plans, the European Commission intends to introduce an interim 3% levy on internet giants such as Google and Facebook which it estimates could bring in up to €5bn a year in revenues. The tax would only be a temporary measure as Brussels awaits longer-terms digital tax solutions from international bodies such as the OECD. However, if resistance within Germany continues to grow, the planned digital tax may never see the light of day. 
UK Government setback after House of Lords backs new customs unions 
The House of Lords inflicted a major defeat of Prime Minister Theresa May’s government on Wednesday after it backed the inclusion of an amendment to the EU withdrawal bill, obliging ministers to set out steps to ensure that Britain can remain in a customs union post-Brexit. Peers of the house largely approved the amendment, with 348 backing the vote while 225 voted against it.
Although it does not explicitly demand that Britain remain in the customs union once it leaves the EU, it mandates the government to make a statement to parliament outlining how it intends to negotiate a customs unions with the EU as part of its future relationship. Calling it ‘’an important step forward’’, the Labour Party’s Brexit spokesperson Keir Starmer said it indicated that there was now a ‘’growing chorus of voices’’ calling for an ongoing customs union with the EU.
However the UK’s Department for Exiting the EU stated that the government remains committed to leaving the customs union and the single market when it leaves the bloc. It was not the only blow inflicted on the government however, as the House of Lords voted in favour of limiting ministers’ ability to change employment, consumer and environmental rules after Brexit without primary legislation.
Cross-party group launch ‘people’s vote’ campaign 
Politicians from across the British political spectrum have come together to form a cross-party campaign for a ‘’people’s vote’’ on the final Brexit deal. The group, which includes the Conservatives’ Anna Soubry, the Greens’ Caroline Lucas, Liberal Democats Layla Moran and Labour’s  Chuka Umunna, held their official launch in London last Sunday but were careful not to voice the term ‘’second referendum’’ at the launch. 
Mr. Umunna urged his Labour party to be ‘’true to its values and support this’’ and claimed that they had a majority in the House of Commons that backed the proposition sought by the people’s vote. Even with cross party support in Parliament, the group will inevitably face criticism from opponents who suggest they wish to stymie the ‘’will of the people’’. 
The campaign for a ‘people’s vote’ came the same week as  yet another analysis, this time by the think-tank Global Future, which found that each of the British government’s four Brexit scenarios, including a bespoke deal with the EU, would leave the UK poorer and cost the taxpayer hundreds of millions of pounds each week. The study showed that Downing Street’s preferred option of a bespoke deal would have a negative fiscal impact of about £40bn each year.
President Erdogan calls snap June Elections 
Turkish President Recep Erdoğan caught opposition parties off guard on Wednesday as he called a snap general election to be held in June. The move comes after he repeatedly dismissed any prospect of early elections, maintaining that the planned November elections would occur as ascheduled. However, he justified his U-turn on the issue with claims that uncertainty in Syria and Iraq meant an early election was required.
Critics claim that the true logic behind the announcement is connected to the continued economic uncertainty in Turkey. The country experienced a boom year of growth in 2017 but analysts put this down to government incentives that have led to massive imbalances in the economy, including an expanding current account deficit and double-digit inflation.
The general election comes very soon after last year’s controversial referendum which handed Mr. Erdoğan much greater power, as it switched the country’s parliamentary system to a presidential one.  Although the referendum only passed with a small majority, it is widely expected that President Erdoğan will secure another term in office. With the media largely controlled by allies of the president and the country still under a state of emergency after the 2016 attempted coup, the election almost certain to deliver President Erdogan five more years in power.   

Dates ahead: Monday 23rd April – Sunday 29th April
Mon 23rd – Thurs 26th April: European Parliament Committee meetings
Tuesday 24th April: EU General Affairs Council Meeting
Thursday 26th April: ECB Monetary Policy Committee meetings

And Beyond 
Mon 1st & Tues 2nd May: US Federal Reserve Open Market Committee meeting
Tues 2nd May: ECB non-monetary policy committee meeting
Tues 2nd – Wed 3rd May: European Parliament Plenary Session


Compliments of Vulcan Consulting, a member of the EACCNY