Vulcan Insight Analysis of the latest EU Developments 9-13 September 2019

New College of European Commissioners announced
On 10 September European Commission President-elect Ursula Von der Leyen presented her new team of Commissioners-designate, as well as a revamped structure for the institution. The key issues the Von der Leyen Commission will seek to address include changes in climate, technology and demographics.

Von der Leyen was keen to address equality in the distribution of portfolios and executive Vice Presidencies – between East and West, North and South, and men and women. She has achieved what many thought was an impossible task: 13 Commissioners are women, 14 are men.

Juncker called his Commission a ‘political Commission’ and Von der Leyen is calling hers ‘a geopolitical Commission’. She wants the EU to be the guardian of multilateralism and the frontrunner in the global fight against climate change.

Phil Hogan, previously Agriculture Commissioner, has been designated the trade portfolio at an immensely important time. As well as being responsible for overseeing the perturbed trade negotiations between the EU and the United States, Hogan will also lead future trade talks between the EU and UK, once the current Brexit impasse moves on to the future trading relationship. He will be accompanied by the formidable Director General of Trade Sabine Weyand, who was previously deputy Brexit negotiator under Michel Barnier.

The structure of the Commission has also changed: the new College will have eight Vice Presidents, and three Executive Vice Presidents in Timmermans, Vestager and Dombrovskis who will be responsible for the three core topics of the agenda, namely the European Green Deal, a Europe fit for the Digital Age and an Economy that Works for People.

The five other Vice-Presidents are:

Josep Borrell (Spain, current Spanish Foreign Minister): HR/VP-designate, A Stronger Europe in the World;

Věra Jourová (Czechia, Commissioner in the Juncker Commission): Values and Transparency;

Margaritis Schinas (Greece, former Member of the European Parliament, long-serving official of the European Commission): Protecting our European Way of Life;

Maroš Šefčovič (Slovakia, Vice-President in the Juncker Commission): Interinstitutional Relations and Foresight;

Dubravka Šuica (Croatia, Member of the European Parliament): Democracy and Demography.

Von der Leyen announced that all members of the College will visit every member state in the first half of their mandate, both the regions and capitals. College meetings will be paperless and digital.  Perhaps her most ambitious policy, there will be a ‘one-in, one-out’ principle when creating new laws and regulations, to cut red tape.

The European Parliament will have hearings with the Commissioners-designate and then has to give its consent to the College.  The new team will take up their roles on 1 November. On Brexit, Von der Leyen said the next steps are “completely in the hands” of the UK. Brexit chief negotiator Michel Barnier is expected to stay on in his role.

You can see the full list of Commissioners and their portfolios here

A(nother) Wobbly Week in Westminster
The Court of Session in Edinburgh ruled on Wednesday 11 September that Boris Johnson’s prorogation of parliament is unlawful. The case will move to the UK Supreme Court next Tuesday. The justification given by Johnson in suspending parliament was to allow sufficient time for the Government to prepare a new legislative agenda for the Queen’s speech. However, this leaves very little time to debate Brexit before the key EU summit on October 17th, just two weeks before the October 31stdeadline.

While the High Court in England last week ruled that the prorogation was ‘not unlawful’, the decision from the Scottish court states that the advice given by PM Johnson to the Queen was misleading. Some opposition MPs have taken to their seats in Parliament and are calling for Parliament to be immediately recalled. A group of largely pro-Remain MPs and peers were behind the legal challenge which was led by Scottish National Party MP Joanna Cherry. Liberal Democrat leader Jo Swinson was also involved in the case. The Belfast High Court meanwhile dismissed a legal challenge that argues a No-Deal Brexit would be unlawful and breach the Good Friday Agreement.

The Operation Yellowhammer document, the name given to the UK government’s contingency planning for Brexit, have been published, after MPs voted to force its release. It details the ‘reasonable worst case assumptions’ for the impact of No-Deal Brexit on 31 October. The six-page document which was drafted in August warns of disruption at Dover port for at least three months. Significantly, it also outlines an increased risk of public disorder and some fresh food shortages. The document specifies that low-income groups will be disproportionately affected.

PM Johnson also held talks with the DUP’s Arlene Foster with the unionist leader noting it would be ‘unheard of’ for Northern Ireland to be in a different customs union to the rest of the UK. Johnson has been proposing a separate sanitary and phytosanitary zone for the island of Ireland. However, this would not be sufficient to solve the problems which the current ‘backstop’ is designed to do.

Irish Government Announces Plans for No Deal Budget
The Irish cabinet this week approved a recommendation from Minister of Finance, Paschal Donohoe, to base October’s budget on a No Deal Brexit outcome. Dublin has grown increasingly alarmed over the political turbulence since Boris Johnson was elected Prime Minister.

The government’s economic statement delivered this summer had already pre-committed €2.1 billion to fund budgetary measures which include cost over runs in the National Broadband Plan and the National Children’s Hospital. The government has also allocated an additional €700 million specifically for measures as part of next month’s budget, bringing the total to €2.8 billion. A No Deal Brexit is expected to turn the government’s budget surplus into a deficit in 2020.

Minister Donohoe also announced that in the event of a No Deal, further reserves beyond the €2.8 billion would be required to support an expected rise in social welfare payments as a result of an increase in unemployment. Furthermore, additional funding would need to assist sectors of the economy most exposed to a No Deal Brexit. Ireland will require a relaxation of EU State aid rules in order to assist businesses in such a scenario.

The government, unlike in recent years, has followed the advice of the Irish Fiscal Council, the independent budgetary watchdog, who strongly recommended a prudent approach in light of ongoing concerns with developments in Westminster.

The government will now begin negotiations with Fianna Fáil, the main opposition party, as part of its confidence and supply agreement regarding specific policy measures to be announced on Budget day which is scheduled for October 8th.

PM Johnson meets Varadkar in Dublin
Prime Minister Boris Johnson and Taoiseach Leo Varadkar held their first meeting as heads of government this morning in Dublin. A chilly morning set the scene for what was, at times, a tense meeting which comes at a critical period in Anglo-Irish relations.

Building on a speech delivered last Thursday at a meeting of the British-Irish Chamber of Commerce, Varadkar was clear that in the event of a No Deal outcome, there would be no discussions on a future UK-EU trade deal without first addressing the familiar issues of citizens’ rights, the financial settlement and the Irish border. In short, there would be no escape for the UK in facing up to the core obligations inherent in the current Withdrawal Agreement.

Varadkar, who was careful not to depart from his prepared script throughout, also warned Johnson that should both sides reach agreement, a negotiated trade deal with the EU and US would be no overnight feat;

“It’s going to be tough dealing with issues ranging from tariffs, to fishing rights, product standards and state aid.  It will then have to be ratified by 31 parliaments. Prime Minister, negotiating FTAs with the EU and US and securing their ratification in less than three years is going to be a Herculean task for you.  We want to be your friend and ally, your Athena, in doing so. The manner in which you leave the EU will determine if that’s possible. “

The Taoiseach reiterated comments from the Tánaiste (Deputy Prime Minister) last week that no new UK proposals on alternative arrangements to the backstop had been received by the government or, at EU level. Despite multiple questions on this point from the assembled press corps, Johnson was ambiguous about the true existence or detail of such proposals.

With Varadkar’s glaze firmly on the new Prime Minister throughout his remarks, Johnson sought to deliver an upbeat statement in which he sought to allude fears that his government was not prioritizing getting a deal. Johnson went as far as noting that “it would be a failure of statecraft” should both parties fail to reach agreement. The PM, referencing a trip he made to the border some decades ago, sought to assure his hosts that the UK can leave the EU while maintaining its commitments to the Good Friday Agreement and also ensuring Ireland’s relationship with the single market would go unhindered. However, in the absence of legal workable alternative arrangements, Johnson’s promises will have fallen on deaf ears in Dublin.

In what was no doubt anticipated by officials in Dublin, Johnson, albeit recognizing that talks were necessary at EU level, expressed his desire for bilateral discussions with his Irish counterparts on breaking the impasse.

Both leaders will have felt they achieved what they had set out to do. For Varadkar, there was a need to be firm with his British counterpart on the approach to Brexit while also recognizing that the UK remained Ireland’s most important ally. For Johnson, today’s bilateral perhaps has more weight in symbolism than substance. The resignation of Amber Rudd on Saturday has piled pressure on the British PM to convince opponents – and members of his own government – that his priority is to get a deal. Today’s whistle stop tour in Dublin will no doubt be used by No. 10 to give such assurances.

It was the final minutes of the choreographed press conference that perhaps portrayed most effectively the seismic differences in the position of both governments. For Johnson, a step up in focus and a commitment to compromise on the backstop could deliver a deal in time for next month’s EU summit. For Varadkar’s part the message was stark:  no backstop is No Deal.

While the joint statement between both leaders spoke of a commitment to finding an agreement, the substance needed to break the ongoing deadlock remains firmly absent. As Johnson’s plane made the short trip home across the Irish Sea, attention turns to Westminster once again in what will no doubt be another ‘extraordinary week.’

Key Dates
Friday 13 September – Eurogroup (Helsinki)
Friday 13 – Saturday 14 September – Informal meeting of Economic and Financial Affairs Ministers (Helsinki)
Monday 16 September – General Affairs Council (Brussels)
Friday 20 September – Transport Council (Brussels)
Sunday 22 – Tuesday 24 September – Informal meeting of Agriculture Ministers (Helsinki)
Monday 23 September – UN General Assembly (New York)
Monday 30 September – Tuesday 8 October – European Parliament hearings with proposed Commissioners

Compliments of Vulcan Consulting, a member of the EACCNY