Brexit News, Member News

The weekly Vulcan View for the 8th to the 12th of October featuring analysis of the latest EU developments



High hopes for Brexit breakthrough next week 
On Thursday evening Theresa May held a rare meeting with her inner cabinet to discuss the outline of an EU withdrawal agreement that will form the basis of negotiations with the EU next week, and on which the survival of her government evidently rests. Cabinet ministers who were briefed on the upcoming talks have suggested that the main issue of the Irish border is close to being resolved, as Mrs. May has indicated that she can accept demands by Brussels that Northern Ireland remain part of the single market during a backstop period in order to avoid a hard border in Ireland.
The backstop arrangement will also include the whole UK remaining in the customs union, in order to avoid a customs border in the Irish sea. Mrs May has agreed there will be no fixed end date to the backstop deal, but language will reflect that it is a temporary “pathway” to a final trade deal, intended to be frictionless, which will be reached after the withdrawal. EU chief negotiator Michel Barnier is set to agree to these terms.
However, Eurosceptics within her government are vehemently against the deal, as they argue the indefinite customs union solution could become permanent. Likewise, the Northern Ireland unionist party, the DUP, who make up Theresa May’s majority in government, have insisted they will vote down this proposal. The coming days will prove crucial for Brexit negotiations as both sides hope to thrash out and agree upon a complete draft treaty before a Monday meeting between so-called ‘’Sherpas’’ who are preparing for a summit of the EU 27 the following Wednesday.
With the stakes running high and time running out, a deal between the EU and the UK would be heartening, but will require enormous effort to be passed both in Mrs. May’s divided government and from European capitals. However, even if the Prime Minister gets an agreement on the deal in Brussels and within her own government, she will struggle to have it approved in Westminster where the DUP and roughly 30 Brexiteer MPs will vote against it. Such a scenario would leave her in an extremely vulnerable position and reliant on Labour MPs to get the deal across the line which would be a very tall order.

Frans Timmermans enters race to be left’s Spitzenkandidat for Commission presidency 
The European Commission vice-president, Frans Timmermans, this week announced his candidacy to replace Jean-Claude Juncker as European Commission president. The former Dutch foreign minister is positioning himself as the campion of the left and of the EU in the face of growing nationalism and Euroscepticism across the bloc. He is also looking to counter reckless banking, and protect against US isolationism and Chinese protectionism.  
The Dutchman said he made the decision to run as he wants to tell his children he “tried his best” for Europe. He suggested that this election will define Europe’s future, saying: “This is the first European election that’s not about a bit more to the left or a bit more to the right, but about are we going to have a European Union in the future?” The next commission president will undoubtedly have to preside over a more divided parliament, where up to a third of MEPs could be hostile to further EU integration.
Mr Timmermans will first have to secure the Party of European Socialists’ support to be their Spitzenkandidat, or lead candidate, who will be named at the PES congress in December. So far he has only one opponent – Slovakia’s EU commissioner, Maros Sefcovic. Mr Timmermans has already received backing from national delegations in Germany, Spain, Italy and across the Nordic states, and is expected to easily win the nomination.
However, his moderate left party looks likely to face significant losses overall as voters move to more extreme alternatives, and some argue the vice president is a weak candidate as his Dutch Labour party is not in power and made significant losses in the last national election.

Bavaria CSU looks certain to lose majority for the first time in living memory 
Parliamentary elections to take place in the German region of Bavaria this Sunday may see the Christian Social Union, sister party to Angela Merkel’s Christian Democrats, fall below the 40% threshold for a majority government. Recent polls place the party, which has held an absolute majority for all but one term since the 1960s, at 33%, down from 48% in the last election in 2013.
The losses arguably stem back to the controversial issue of migration over which CSU Chairman, Horst Seehofer, came into conflict with Chancellor Merkel this summer, almost precipitating the collapse of their coalition government. Opposition to Ms Merkel’s immigration policy has seen many swing to the far-right Alternative for Germany (AfD). On the other hand, opposition to the CDU’s harsher stance has also meant gains the centre-left Green party, which, it appears, will be the biggest benefactor of the CSU’s losses, and with whom the CSU may be forced into coalition.
Such historic losses would likely see Mr Seehofer come under pressure to resign, both as party chairman and as interior minister in Ms Merkel’s cabinet. A weakened CSU will also have greater implications for the larger coalition in Berlin, as well as for the party’s vice chairman, Manfred Weber, who is in the running to become the next president of the European Commission.

EU environment ministers agree on new carbon dioxide emissions reduction for cars
A 35 percent reduction in the level of carbon dioxide being emitted from cars by 2030 was finally agreed upon by environmental ministers this week after an intensive 14 hour debate. The meeting in Luxembourg saw a clash of two groups with the likes of Germany, Hungary and Bulgaria all pushing for a 30 percent target reduction while the Nordic countries eyed a more ambitious level of 40 percent.
In the end, a compromise level of 35 percent was reached but that did not stop the Nordic countries who plan on releasing a joint declaration outlining their disappointment with the result. The decision comes only days after the International Panel on Climate Change (IPCC) issued its starkest warning on worsening climate conditions and the need for drastic changes. Aware of this, the EU ministers in Luxembourg issued a joint statement after the agreement was reached expressing deep concern over the heeded warnings.
Given the enormous size of Germany’s auto sector, it was no surprise that it led the charge for a lower reduction target and it will be interesting to gauge the reaction of the country’s large and powerful trade unions to the agreed upon 35 percent. Three way talks now begin as the rules will be debated upon between the ministers, the European Parliament and the Council.  Divisions lie ahead however as the Council back a maximum 35 percent reduction while MEPs are pushing for a more ambitious 40 percent reduction.

Populist alliance launch European Parliament campaign 
Right-wing populists gathered in Rome at the beginning of this week to officially launch their European parliamentary election campaign ahead of next year’s EU-wide vote. Marine Le Pen, leader of the French Rassemblement National (RN known formerly as Le Front National) and Matteo Salvini, the Italian interior minister and leader of Lega Nord, are targeting the 2019 elections and aiming to secure enough votes that ensure that a coalition of Eurosceptical parties obtain a blocking minority of 30 per cent in parliament.
The kick-off saw Mr. Salvini vent against Brussels and in particular European Commission president Jean-Claude Juncker and Commissioner for economic affairs Pierre Moscovici as both had recently levelled heavy criticism against Rome for its upcoming planned budget. Lambasting them for bringing ‘’economic precariousness and fear to Europe’’, the Italian said that the populist coalition would be campaigning on a pro-Europe but anti-EU platform. Both leaders share similar ideology and been in close contact for years, after they met in 2004 when they were first elected to the European Parliament.
The media launch of the populist alliance took a surprising turn when both Madame Le Pen and Mr. Salvini distanced themselves from Steven Bannon, the former strategic adviser to US President Donald Trump who wants to foster closer cooperation between European populists ahead of next year’s European parliamentary elections. While they may be in favour Mr. Bannon’s agenda, Madame Le Pen made it clear that ‘’we alone will structure the political force born of elections in Europe’’. Despite not availing of Mr. Bannon’s support, populist parties across Europe are experiencing surging growth and next year’s European elections will be a crucial indication of what direction Europe will take in the next several years.  

Dates Ahead:

Monday 15th  – Sunday 21st October

Mon 15th & Thurs 18th: European Parliament Committee meetings (Brussels)
Wednesday 17th: European Council Summit (EU27 Article 50)
Thursday 18th: European Council Summit
Mon 22nd – Thurs 25th: European Parliament Plenary Session (Strasbourg)
Tuesday 23rd: EBA Meeting
Thursday 25th: ECB Monetary Policy Committee meeting

Compliments of Vulcan Consulting, a member of the EACCNY