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Vulcan Consulting: Key Events This Week

Vulcan Consulting – 


KEY EVENTS THIS WEEK:

Johnson speech fails to provide clarity as Irish question arises again
 
Britain’s post-Brexit relationship with the EU is set to be spelled out over the next few weeks as a series of speeches are to be delivered by the UK Government.  The six speeches – two to be given by Prime Minister Theresa May, along with ones from David Davis, Liam Fox and David Lidington – kicked off yesterday with the foreign secretary Boris Johnson delivering the first address.
 
However, any hope of gleaning clarity on the UK post Brexit vision was quickly shelved as Mr. Johnson provided a particularly vague 45-minute speech in which he promised Brexit would not be ‘’some great V-sign from the cliffs of Dover’’.  Lambasted in the media and even by the European Commission President Jean Claude Juncker, one minister from the British government described it as having ‘’nothing in it’’, before adding that his foreign secretary colleague was ‘’completely in denial about the complexity of the exit’’.
 
Of all the Brexit issues that Mr. Johnson’s speech touched upon, the question of the Irish border was not mentioned once.  December’s agreement purported to ensure that no hard border would emerge on the island of Ireland after Brexit, although, as we reported in December, this commitment seems entirely incompatible with the UK’s plan to leave the Custom’s Union and Single Market. 
 
London now finds itself in trouble as it has yet to provide any concrete plans that would prevent the re-emergence of a hard border on the island of Ireland in this scenario.  With talks around power-sharing in Northern Ireland collapsing once again, pressure is mounting on the British government to come with a solution to the border issue.
  
EU waters down transition period sanctions
 
A meeting of the European Council’s Brexit working party this week has revised the UK’s Brexit transition period terms, tweaking the controversial mechanism that would have sanctioned the UK if it broke any EU internal rules during the transition phase. The original provisions which would allow Brussels to impose harsh penalties was objected to strongly by the British government, with the Brexit minister David Davis describing it as ‘’discourteous’’ and ‘’in bad faith’’. 
 
The new text will simply provide that if London breaches any internal EU laws during the transition period, then the Commission will just follow its standard operating procedure and start an infringement procedure against the UK under Article 258 of the EU treaty.
 
 
EUROPEAN UNION
 
Commission lays out tough budget choices for member states
 
With the EU’s budget suffering from an enormous €15bn black Brexit hole, the Commission on Wednesday proposed a series of radical choices that might be pursued in order to plug the gap of the UK’s missing budget contribution. Presenting the stark reality that the remaining EU27 would either have agree to pay more into the budget or face having to withdraw funding for current priorities, the Commission argued that the shortfall ‘’should be covered in equal measure by ‘fresh’ money and savings in exiting programs’’.
 
Among the new series of tax-raising proposals that could finance the bloc’s next budget from 2021 to 2027, the most notable proposal includes taking an allocated portion of corporate tax receipts from member states’ national treasuries. Such a plan would be integrated with with the controversial proposal to harmonise how nations calculate companies’ taxable profits (CCCTB).   This is sure to raise objections from several member states, not least Ireland, Sweden and other liberal minded Member States. 
 
Other ideas set out include raising revenue from carbon emission permits that national governments issue to major CO2 polluters such as airlines and energy companies, along with the proposal to utilise the profits generated from the ECBs money printing scheme. Brussels suggests this could raise €56bn over the next seven years while corporate receipts could bring in between €21bn-€140bn and the carbon tax between €7bn-€105bn over the same period. 
 
Brussels proposes plan to merge EU top jobs
 
In a series of proposals unveiled by the European Commission aimed at boosting the EU’s democratic legitimacy ahead of next year’s European Elections, the Commission has floated the idea of merging the Council and Commission presidencies into one job. The idea was raised last year by the current Commission chief Jean Claude-Juncker as a way to provide a ‘’massive boost in efficiency’’ and provide greater clarity to EU citizens of the complex EU institutional landscape.
 
The ‘’Double-Hatted President’’ will be considered by member states and the European Parliament but currently the EU28, whose meetings are chaired by the Council President Donald Tusk, have varying opinions of the proposed merger. Aware of the significant, albeit diminishing, scepticism of the EU institutions by some of the bloc’s citizens, the European Commission hopes that the option could ‘’help overcome a persistent and harmful misconception’’ that there is too often a perceived division between the Commission and Member States .
 
The proposals included a number of other options to be addressed to make the EU’s work more efficient, including a decision on whether to maintain a European Commission with one Commissioner from each of Member States, or to make it smaller. A smaller Commission, the strategy suggests, would in theory be more efficient to operate and manage. In addition, to these proposals, the Commission also gave its backing to the Spitzenkandidaten system, the process by which the top candidate for the most popular party is nominated for the post of President of the Commission.
 
Draft commission proposal pushes online platforms to speed up removal of terrorist content
 
The European Commission looks set to increase the pressure on online platforms, with possible new guidelines that would set a one hour time limit for the removal of online posts that promote terrorist activity.  A draft European Commission document leaked by the NGO European Digital Rights indicates that Brussels wants ‘’online market places and social media companies’’ to take down posts that contain illegal and harmful content quicker.
 
Although the draft has not been formally approved by the Commission, a spokesperson revealed that the recommendation was up for consideration and that an announcement would be made sometime in the ‘’coming weeks’’. Labelled as ‘’measures to effectively tackle illegal content online’’, the document stipulates that platforms should make swifter decisions regarding the removal of illegal content without having to do so as a requirement of a court order.
 
Reports have indicated that Julian King, the Commissioner of the Security of the Union, has been advocating this new hard-line approach to dealing with terrorist content online. The Commission has become increasingly active in recent months and this latest draft proposal highlights that it intends to follow a strict regime with regard to combatting extremism online. Brussels is not alone in adopting this tough approach, with the British, French, German and US administrations following adopting a similar approach in their ongoing battle to fight terrorism.

Compliments of Vulcan Consulting – a member of the EACC in New York