Member News

The weekly Vulcan View for the 26th to the 30th of March featuring analysis of the latest EU developments

KEY EVENTS THIS WEEK:


BREXIT
 
UK eyes alignment with subset of EU single market in effort to solve Irish border question
As Brexit negotiations set to resume next week in Brussels, British officials are planning to present a plan to their EU counterparts that would propose an entirely new EU-UK customs agreement which would keep the whole of the UK remaining aligned with a subset of the EU’s single market rules. Leaked reports from Downing Street suggest that the plan is intended to resolve the issue of the Irish border.
 
Brussels has remained committed to avoiding the re-emergence of a hard border on the island of Ireland and pushed for a ‘’backstop’’ plan in last week’s agreed transition agreement. According to UK officials, London will propose UK-wide ‘’full alignment’’  with single market rules and regulations for trade in goods, in addition to a new customs arrangement between the UK and EU.
 
While London believes that the Irish government will back the proposal, they are concerned that there could be pushback from the Commission and some of the larger member states such as France who could argue that it is merely Britain again attempting to ‘’cherry-pick’’ aspects of the EU that suits them.  British officials are keen to secure an agreement on the Irish border before the next European Council summit in June so that negotiations can progress on a future trading relationship.
 
 
FACEBOOK DATA SCANDAL
 
Facebook faces further scrutiny as Zuckerberg set to give testimony on Capitol Hill
The hugely-popular social media platform is coming under increased pressure from regulators across the globe in the aftermath of the Cambridge Analytica data breach.  Following numerous calls for the Facebook chief executive Mark Zuckerberg to provide an explanation to lawmakers as to how data of up to 50 million Facebook users had been obtained, the CEO eventually agreed to testify before the United States Congress.
 
Mr. Zuckerberg has accepted an invitation to appear before the House energy and commerce committee on t 12th of April. However, he was lambasted by the chair of the UK parliamentary committee investigating fake news for declining to appear before them for a third time. The chair, Damian Collins, said the decision was ‘’absolutely astonishing’’ and his committee may have to accept another executive from Facebook rather than the head of the company.
 
British MPs on the select committee for digital, culture, media and sport did have the opportunity this week to speak with Christopher Wyle, the former Cambridge Analytica employee turned whiste-blower. His testimony caused further fallout when he revealed that data of Facebook users had been obtained and used by Aggregate IQ, a ‘’franchise’’ of Cambridge Analytica that received millions of pounds of funding from the Vote Leave campaign in advance of the Brexit referendum.
 
According to Mr. Wyle, Aggregate IQ had been drawing information from Cambridge’s databases in order to target swing voters. He added that the Vote Leave and pro-Brexit groups had a ‘’common plan’’ to get around spending rules which he believes heavily influenced the outcome of the vote. While Vote Leave denied the accusations, the Commons held an emergency two hour debate on the ‘’alleged breaches of electoral law’’. The continued fallout of the Facebook scandal dominated headlines all this week and led to the large US tech companies suffer significant losses on the stock market as investors grow more and more concerned.
 
 
RUSSIA
 
Western allies unite in expulsion of scores of Russia diplomats  
There has been a collective act of solidarity from allies across the Western world as they took a defiant stance against Moscow following its alleged poisoning of former the Russian spy Sergei Skripal in the UK earlier this month. A mass wave of coordinated diplomatic expulsions took place all this week in response against the Salisbury attack. While the majority of EU nations chose to expel Russian officials, it was the US that took the lead after it ordered over 100 diplomats to leave the country.
 
It has been the strongest united act against Moscow seen from the West since it first moved to impose sanctions on the Russian Federation after its annexation of Crimea in 2014. The collective response has been a hugely significant diplomatic coup for the British Prime Minister Theresa May, particularly at this time of divisive Brexit negotiations. She will be buoyed by the international condemnation of Russia, boosted by the rallying support from both Nato and non-Nato members.
 
Although Moscow has yet to respond to the West, both the UK and the US have been warning their allies to expect retaliatory measures. Washington in particular is bracing itself for a possible reactive attack on its intelligence network in Russia. Further actions were being considered back in London, a city the houses enormous amounts of Russian capital. The government has ordered the review of the basis by which over 700 wealthy Russians were allowed to settle in the UK.
 
Back in Brussels, sources suggest that the EU will hold the line on Russian sanctions for now. The bloc’s foreign ministers are planned to discuss actions against Moscow in mid-April, a meeting that was scheduled long before these latest allegations. While there have some populist voices across the Union criticizing the expulsions, concern that there may be some softening of the EU’s tough stance on Russia has dissipated after the latest attack.
 
 
EUROPEAN UNION
 
Commission seeks new revenue-raising sources from ECB and plastics tax 
Brussels this week set out a number of new tax-raising initiatives to fill the budget black hole that the UK’s departure from the union will bring. In an effort to mitigate the damage that Brexit will cause, the European Commission has proposed a plan to draw from the profits generated by the Eurozone’s national central banks by printing banknotes directly. The quick-fire cash raid could generate an estimated €56bn during the seven year-span of the next EU budget.
 
The technique of acquiring profits from the issuing of currency by government is known as seigniorage and more than 90% of these proceeds are normally distributed by the ECB to the central banks of the 19-member eurozone. According to senior officials from one member state, the Commission has already begun discussions about this proposal with national governments.
 
The second Commission initiative is the so-called ‘’plastics contribution’’ which had been touted before in January by Brussels. With China refusing to import any more of the EU’s plastic waste, the bloc is keen to act and further details of the tax will be brought forward in early May. Budget negotiations are often a contentious matter between member states and as the EU’s second biggest contributor is close to exit door, Brussels will hope to get these latest measures over the line without delay.  
 

 
Dates ahead: Monday 2nd April – Sunday 8th April
 
Monday 2nd April: Easter Monday
Mon 2nd – Fri 6th April: European Parliament Green week
Thursday 5th April: US Golf Masters begins
 
And Beyond 
 
Mon 9th & Thurs 12th April: European Parliament Committee Meetings
Wednesday 11th April: ECB Non-MPC Meeting
Saturday 14th April: Horse Racing Grand National