Member News

The weekly Vulcan View for the 23rd to the 27th of April featuring analysis of the latest EU developments

KEY EVENTS THIS WEEK:

BREXIT
 
Downing street comes under renewed pressure over customs union
 
British MPs yesterday approved a non-binding motion recommending that the UK should remain in the customs union after Brexit, a move that heaps further pressure on Prime Minister Theresa May and her cabinet ahead of a crucial binding vote that will come back into the House of Commons in the next few weeks. Although a planned non-binding vote scheduled for today did not go ahead as expected, the motion that was approved will act as further spur to pro-EU MPs who hope to derail Ms. May’s Brexit plans.
 
The government had ordered its MPs to abstain from the motion but that did not prevent ten Tory MPs from adding their names to an amendment to the Trade Bill on the ‘’implementation of a customs union with the EU’’. Opposition parties and rebel Tory’s who favour maintaining a close relationship with the EU post-Brexit are eyeing a binding vote on the customs union next month when the trade bill and the customs bill come back in to the Commons.  The government could be defeated if around a dozen Conservative MPs vote with opposition benches.
 
The non-binding motion was an just another blow suffered by Ms. May’s government this week as the House of Lords voted to firstly retain the European Charter of Fundamental Rights after the UK leaves, and secondly blocked an attempt to give sweeping powers to ministers in legislative areas which were once controlled by Brussels. Both votes signalled to the UK government that it will not be able to carve out its Brexit path unopposed and adds to the prospect of a Government defeat in the Commons when the EU withdrawal bill returns in May.
 

EUROPEAN UNION
 
Macron leans on Trump to remain in Iran deal 
 
There were plenty of warm words and hand-holding in Washington this week during French President Emmanuel Macron’s three-day state visit to the US capital as he and US President Donald Trump continued to develop their blossoming relationship. However, the dialogue took a noticeable sharp turn as the conversation switched to the Iran Nuclear Deal.
 
Signed in 2015, the Joint Comprehensive Plan of Action (JCPOA) or better known as the Iran Nuclear deal, was an international agreement between Iran and the five permanent members of the UN Security Council – China, France, the UK, Russia and the US. Under the terms of the deal, some of the economic sanctions imposed on Iran were lifted in exchange for Tehran’s commitment to limit its country’s controversial nuclear energy programme.
 
Ever since he entered office, President Trump has threatened to renege on the agreement. A deadline of the 12th of May now looms and he must decide whether to sign a waiver lifting US sanctions on Iran or pull out completely.
 
Mr. Macron has been at the forefront of the EU campaign to keep the US in the JCPOA and used his state visit this week to float ‘’new’’ solutions to the deal that might persuade the Trump administration to maintain support for it.   This new framework would have to respond to Washington’s concerns on Iran’s ballistic missile programmes, the sunset clauses that expire in 2025 and Tehran’s growing role in the middle east. Western envoys from the UK, Britain, Germany and France were hopeful on Wednesday that they were nearing a package to put to Trump to try and persuade him.
 
It remains to be seen whether this last minute diplomacy from the EU and President Macron can salvage the deal. Signals from Washington at the end of the Macron visit were not encouraging. 
 
Pan-EU whistle-blower protection to be brought in 
 
The European Commission has announced plans to introduce legal protection for whistle-blowers across the bloc in both public and private sectors. The current system of whistle-blower protection is highly sporadic, with some EU member states having no specific regulation at all while others have laws that cover only certain sectors. Recent scandals such as the Cambridge Analytica revelations, Diesel-gate and the Panama Papers hasve highlighted the lack of protection.
 
First vice-president of the Commission, Frans Timmermans, and Justice Commissioner, Věra Jourová, are leading the political response and have been working on a proposal to establish common minimum standards since last year. Addressing reporters at the start of this week on the matter, Mr Timmermans noted that ‘’many recent scandals may never have come to light if insiders hadn’t had the courage to speak out’’, before adding that ‘’if we better protect whistle-blowers, we can better detect and prevent harm to the public interest’’.
 
The scheme would see new measures being introduced that would establish safe channels for reporting both within an organisation and to public authorities. The directive will oblige companies with more than 50 employees or with an annual turnover of more than €10 million to set up internal procedures, while additionally covering other employees, self-employed people, freelancers, consultants, contractors, suppliers, volunteers, unpaid trainees and job applicants.
 
EU and Mexico reach agreement on modernised trade deal
 
Negotiators from the EU and Mexico formally reached an ‘’agreement in principle’’ last weekend to modernise and upgrade the existing trade deal between the two. After repeated attempts to update the terms of the original deal from 2000 continued to falter, both sides finally struck a deal that will see a series of new sectors and industries added to the trade agreement.
 
Disputes over the liberalisation of trade in agricultural goods had been the major barrier to progress but this agreement in principle will add farm products, more services, investment and government procurement to the deal, as well as provisions to simplify customs proceedings, tackle corruption and enhance the Paris Agreement on climate change.
 
The agreement will deliver a significant boost to both economies, particularly Mexico’s .  It may also be seen as a defiant move against the increasingly protectionist US administration. President Donald Trump’s push to renegotiate the North American Free Trade Agreement was the incentive that pushed Mexico to seek alternative trading partners.  Although the accord still has some ‘’technical issues’’ left to be ironed out, Brussels believes that the full legal text of the agreement should be finalised by the end of this year.
 
 
ITALY
 
5-Star Movement eye coalition deal with PDs after talks with Northern League falter
 
The poll-topping anti-establishment 5-Star Movement have opened up the prospect of engaging with the centre-left Democratic Party (PD) to form a possible government coalition. Italy still remains in political limbo ever since the general election in early March produced no clear winner and after talks broke down between 5-Star and the right-wing Northern League, it appears that this stalemate will persist for several more weeks.
 
Former Prime Minister and previous leader of the PDs, Matteo Renzi, has opposed any deal between 5 Star and the PDs, but despite the strong influence he still holds over the party, many within his group have begun to break ranks and express willingness to enter talks.
 
This interest was evident this week when PD’s acting leader Maurizo Martina said he would consider discussions with the 5-Star if ‘’there is no longer any possibility of an agreement between 5-Star, League and the centre-right’’. A 5 Star/PD coalition deal would be the most favourable outcome for Brussels and other EU capitals but many within the PD are openly opposed to any such deal. Even the 5-Star leader Luigi De Maio acknowledged that there would be dissent within his own party but also warned that ‘’if this path (with the PD) were to fail….then in our opinion there should be another election’’.

Dates ahead: Monday 30th April – Sunday 6th May
 
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

And Beyond 
 
Mon 7th – Fri 11th May: European Parliament Green week
Thursday 10th May: Bank of England Monetary Policy committee meeting

Compliments of Vulcan Consulting, a member of the EACCNY