Daily UK Updates

Brexit talks see progress on state aid, EU’s Von der Leyen says – MLex

  • Brexit negotiators have made “progress” on the fraught issue of state aid, Ursula von der Leyen has said, raising hopes of a deal between the EU and the UK before the transition period expires at the end of the year.
  • “Progress has, for example, been made on the question of state aid,” she said. Nevertheless, she reiterated that “nothing is agreed until everything is agreed.”
  • The last summit of the European Council in 2020 is scheduled for Dec. 10-11, with some speculation that the European Parliament could even vote on the deal at an extraordinary seating on Dec. 28 — just three days before the end of the transition period.

Ursula von der Leyen signals ‘better progress’ in Brexit talks – FT

  • Ursula von der Leyen, the European Commission president, said on Friday that “after difficult weeks with very, very slow progress, now we have seen in the last days better progress, more movement on important files”.
  • She specifically cited headway made by the EU and UK teams in settling rules on state subsidies for companies — a crucial part of the broader issue of creating a “level playing field” for business, one of the main remaining open points in the talks. 
  • On the question of fishing, the UK this week proposed a fixed-term, transitional arrangement that would temporarily limit the reduction in EU quota rights.
  • Brussels has yet to confirm when it will take emergency measures after Britain’s transition period expires. EU officials said Brussels was wary of doing anything that might disrupt the trade talks, including giving the impression that the bloc was ready to cushion the blow of a no-deal exit.

See similar articles from BBC, Independent and Guardian.

Scottish shipyards are set for a massive financial boost after Boris Johnson vowed to use a £16.5bn defence spending spree to strengthen the union – Telegraph

  • In what analysts see as a blueprint for government procurement after Brexit, the Prime Minister – who started the week with a high-profile gaffe over devolution – pledged to use the money to create 40,000 jobs, stimulate growth and support the UK’s nations.
  • Trevor Taylor, director of industry at the Royal United Services Institute, said: “Coronavirus and Brexit are damaging wider industry but defence has been a pillar of stability. Investment in the military will absolutely boost innovation, with knowledge transfer from defence companies as they discover new technology and manufacturing processes.”
  • Mr Johnson called for a “renaissance in British shipbuilding across the UK”, name-checking shipyards in England, Northern Ireland and Scotland. He said shipbuilding “illuminates the benefits of the union; if there is one policy which strengthens the UK in every possible sense it is building more ships for the Royal Navy”. Earlier in the week, the Prime Minister sparked fury north of the border when it emerged that he had called Scottish devolution a “disaster”.
  • The Navy’s warships are currently built in Scotland, with Type 26 frigates constructed at BAE Systems’ Glasgow yards, after the company closed its Portsmouth yard in 2013. Work is soon to start on Type 31 frigates at Babcock’s Rosyth docks, where the new aircraft carriers were built. The Navy’s submarines are built in Cumbria by BAE.

Weekly European Update

Belgium

  • Johnson will make UK green and strong De Standaard (19 November 2020)
    • Boris Johnson has announced that he will invest significantly in strengthening the army, after he already pledged EUR 12 billion of investments in green technology.
    • The announcement is not a surprise as Boris Johnson has always said that the UK would not lose influence after Brexit and a strong army (in particular – the navy) is a crucial part of that strategy.
    • This is also welcome news for those in the North working in the steel industry that helped Boris Johnson win the election.
    • Questions remain as to how the UK will fund all of these investment plans.
  • Brexit – Monday will be deadline day to translate the text on time RTBF (18 November 2020)
    • In order to have the text of the agreement translated in all official languages before 31 December 2020, a deal needs to be reached by Monday 23 November.
    • Negotiations could continue if EU Member States agree to provisionally ratify the English version of the agreement alone.
    • However, there is not yet an agreement on the main blocking points: Fishery, dispute resolution and an economic level playing field.
  • Brexit: a possible deal next week Le Soir(17 November 2020)
    • Sources within the EU said to Bloomberg that they expect a deal to be reached next week.
    • Irish Prime Minister said Boris Johnson realizes that a deal is the most logical solution.
    • Negotiations continue this week in Brussels.

Brussels

  • Brexit: EU and UK are ‘in overtime’, Belgian PM De Croo warns TheBrusselsTimes (18 November 2020)
    • The private sector is well-prepared, but politically there is still work to be done,” De Croo said. “We will do everything to protect our companies, but then we will have to be able to force something politically in the coming days.”
    • Additional chaos on top of the Covid crisis” is the last thing our companies need, De Croo said.
    • Meanwhile, negotiations between the UK and the EU continue in Brussels in what appears to be the last possible stretch towards an agreement, with both sides reiterating that they are working towards a deal.
  • Belgium’s businesses fear Brexit crisis on top of Covid-19 TheBrusselsTimes (17 November 2020)
    • Belgium cannot afford a “Brexit crisis” as it faces the coronavirus crisis and its economic consequences, the Federation of Enterprises in Belgium (FEB) warned on Tuesday.
    • The employers’ organisation hopes that negotiations for a trade agreement between the United Kingdom and the European Union will be concluded in the coming days to allow sufficient time for the formal adoption of the texts.
    • While many Belgian companies are suffering from legal uncertainty because of Brexit, the federation said it is counting on the broadest and deepest possible agreement that will ensure the proper functioning of the European internal market and fair competition.
    • The United Kingdom is Belgium’s fourth largest trading partner, the FEB pointed out. “For our export economy, it is vital that trade between the UK and Belgium remains as smooth as possible after the New Year.”
    • The FEB also used the example of the CETA, the trade agreement between the European Union and Canada, to highlight the benefits of such agreements. “Belgian exports have increased and our trade balance has turned positive,” the federation wrote.
  • Brexit negotiations between EU and UK continue in BrusselsTheBrusselsTimes (16 November 2020)
    • Despite the fact that all deadlines previously envisaged have been missed, the European Commission has said it continues to believe in a deal.
    • If there is no agreement ratified on time, trade between London and Brussels will be based on WTO rules from the beginning of January, with customs controls and taxes.
    • This would be an additional economic blow on both sides, in the midst of the economic slump caused by the Covid-19 pandemic.

France

  • Brexit: “Progress” towards an agreement but “still a lot of work” to be done BFM Business (20 November 2020)
    • Welcoming “progress” on “important issues”, the President of the European Commission, Ursula von der Leyen, said that there was still “a lot of work” to reach an agreement with the United Kingdom, in particular on fisheries, fair competition conditions and governance.
  • Discussions between Michel Barnier and David Frost suspended because of a Covid case Ouest France (19 November 2020)
    • Post-Brexit talks have been suspended between EU negotiator Michel Barnier and David Frost due to a case of COVID-19 in the European team.
    • The British government is discussing with the EU “the implications for the negotiations“, explained one of its spokespersons. This suspension risks further slowing down discussions which have already fallen far behind the initial ambitions.
    • There are less than 50 days until December 31, when the post-Brexit transition period will end during which the United Kingdom – which officially left the EU on January 31 – will stop applying European standards. Without a trade treaty to govern their relationship, London and Brussels run the risk of a new economic shock, which would be added to the coronavirus pandemic.
    • The talks stumble on three subjects: the guarantees demanded in London in terms of competition, the access of Europeans to fish-rich British waters, and the way of settling disputes in the future agreement.
  • Growth halved in the United Kingdom in the event of a “no deal” (KPMG) La Tribune (19 November 2020)
    • In the event of a “no deal”, the gross domestic product (GDP) will increase by 4.4% in 2021, estimates the audit and consulting firm KPMG, compared to 10.1% if the United Kingdom remained in the single market.
    • For Yael Selfin, chief economist at KPMG UK, “Brexit will put the UK on the sidelines of advanced economies next year” . She encourages the UK government to increase investment in infrastructure and training to “mitigate the long-term impact that (Brexit) could have on productivity and growth” 

Germany

  • With his back to the grey wallSüddeutsche Zeitung (18 November 2020)
    • Boris Johnson, who is in quarantine, had to answer Prime Minister’s Questions, the question time in the House of Commons, via Zoom.
    • There are many hot topics right now: The consequences of the withdrawal of Johnson’s controversial chief adviser Dominic Cummings, the Brexit negotiations, or the 50,000 corona death mark, which Britain was the first country in Europe to exceed.
    • However, opposition leader Keir Starmer decided to start with an entirely different topic: Scotland. He wanted to know why Johnson had called the Scottish devolution, i.e. the transfer of political powers from Westminster to Edinburgh, a “disaster”.
    • The prime minister explained that it was not devolution itself but its consequences that were a “disaster” – and that these consequences have the shape of the Scottish National Party (SNP), that intends break-up the United Kingdom.
    • Labour leader Starmer, for his part, described rather the government’s policies as a threat to the country. Ian Blackford, the SNP leader in the House of Commons, was even clearer than that: “The real disaster is this Prime Minister. He is the one who is breaking the unity of the United Kingdom“.
    • As an example he cited the Brexit that was being carried out against Scotland’s will.
    • The negotiations on a trade agreement with the EU did not play a major role in Question Time. The situation is quite different in Johnson’s Conservative Party. After the departure of Brexiteer Cummings, the Prime Minister is under enormous pressure, because the Brexit hardliners in his own party fear that he might now give in to Brussels.
  • Johnson must remain in quarantine n-tv (17 November 2020)
    • After meeting with a corona-positive MP, Johnson must remain in quarantine – despite a negative corona test.
    • The prime minister’s quarantine comes at the same time as the final leg of London’s negotiations on a trade deal with the EU. Within the next one to two weeks, it is expected that the talks will eventually lead to an agreement or be abandoned.
    • Despite Johnson’s quarantine, the Irish Prime Minister still regards a rapid breakthrough as possible. Although Chancellor Angela Merkel did not express the same confidence as the Irish Prime Minister, she too still believes that an agreement is possible.
    • However, according to information from participants in the meeting of the Christian Democratic Union (Merkel’s party) in the Bundestag, she also said that the negotiations had not progressed too quickly and that there were still some problems to be solved.
  • British banks must employ enough staff in EU countries Wirtschaftswoche (13 November 2020)
    • The ECB’s banking regulator has called on UK financial institutions to employ sufficient local staff for their operations in the EU after the Brexit transition period.
    • British banks wishing to continue doing business on the continent are expected by the regulator not to operate in the EU as empty shells but to have built up adequate local capacity.
    • While the ECB also stated that the pandemic must always be taken into consideration in any planned relocation of staff to the continent, it also held that there should only be minimal delays due to the pandemic.
    • Home office arrangements do not change the requirement to have sufficient local staff within the EU.

Greece

  • EU leaders suggest now is the time to prepare for a no-deal Brexit – Huffington Post Greece(19 November 2020)
    • EU leaders are asking the Commission to unveil what plans are in place for the end of the transitional period.
    • A senior EU diplomat said to the Times that the EU needs “a safety net”, since January 1, 2021 is fast approaching.

Cyprus

  • Efforts to avoid a no-deal Brexit may be too little, too late Sigma (16 November 2020)
    • It may be too late to reach an agreement at this point, top EU diplomats say.
    • Ireland suggests that the EU and the UK are far from reaching a deal, despite the efforts being put forth.

Ireland

  • Brexit deal 95% ready, gaps on key stumbling blocks RTE (20 November 2020)
    • It is understood that 95% of the EU-UK future relationship treaty has been completed, but there remain large gaps on key stumbling blocks including fisheries and how disputes will be solved.
    • On the one hand, some member states say emergency no-deal contingency plans must now be published. On the other, officials are looking at ways to get around the time problem.
    • One idea is for any agreement to be provisionally applied from 1 January, with the legal and ratification procedures happening later, perhaps by the end of January.
    • The UK would have to give its consent.
  • Brexit creating ‘tremendous uncertainty’ in Northern Ireland – Clinton RTE (17 November 2020)
    • Former US president Bill Clinton has said that Brexit has created “tremendous uncertainty” in Northern Ireland.
    • He was delivering remarks at a virtual conference on Irish-US relations entitled ‘Bridging the Atlantic’.
    • The Minister for Foreign Affairs, Simon Coveney, addressed the same conference and welcomed the strong support voiced for the Good Friday Agreement by the US president-elect, Joe Biden.
    • He said it was no accident that the Taoiseach, Micheál Martin, was among the first world leaders to speak to Mr Biden following his election and that he was hopeful it was a signal of things to come.
  • The Great Brexit Bake Off: Why food is central to the NI Protocol RTE (14 November 2020)
    • Stormont officials have described preparations for the Northern Ireland Protocol as a “major emergency response plan”.
    • Central to that emergency is food. Even if an EU-UK free trade agreement (FTA) is concluded in the coming days, the UK will be liable for ensuring that Northern Ireland applies EU food safety and animal health rules from 1 January.
    • We will not be able to deliver the frictionless movement we all hoped for between Great Britain and Northern Ireland on day one,” Northern Ireland’s chief vet Robert Huey told the Stormont Assembly agriculture committee on 5 November. “But what we will be able to do is to ensure that physical checks are carried out to a level which allows product to enter Northern Ireland, albeit, on some occasions, with delays.”
    • Last week, Sainsburys’ chief executive Simon Roberts told the Guardian: “If we don’t get greater clarity on the Northern Irish situation then we will see a restriction on the ranges of products we can sell. This is not one or two products in stores I am talking about, it is a substantial number of products and quite key, everyday products too.”

Italy

  • The British Minister for Immigration: “Italians, nobody wants to expel you after Brexit. But make sure you have all your papers in order”Repubblica (19 November 2020)
  • In an interview, Kevin Foster commented that “there will be day-to-day problems for European citizens not regularly in the UK, such as opening a bank account or finding a job. For this reason it is important to apply to the EU Settlement Scheme“.
  • Brexit: “the last week” of negotiations begins. But will it really be the last one? Repubblica (16 November 2020)
  • A new round of negotiations between the United Kingdom and the EU begins in Brussels.
  • Three issues remain unresolved: fishing rights, state aid and the arbitrator of any future disputes. These are complicated problems, but the ultimate goal is far more important: to ensure that trade between the UK and the EU continues without import and export duties.
Author

Jessica's practice focuses on international trade and anti-bribery work, encompassing customs, export control and sanctions matters. Jessica's trade work includes advising international clients on fast-moving and evolving EU and UN sanctions, notably in respect of Iran and Russia, and on compliance with UK and EU export controls. Her trade experience also includes advising on tariff classification and customs valuations. Jessica's anti-bribery experience includes assisting with investigations, and advising clients on compliance with anti-bribery laws. Jessica has also taken a lead role in monitoring Brexit-related developments; analysing how they will affect the UK's trading position generally, and clients' businesses specifically. She has helped clients begin to conduct risk assessments of how Brexit will impact their businesses, and has assisted them in developing tailored Brexit strategies. Jessica also presents at various seminars, webinars, and conferences on the complexities of Brexit. Jessica advises global clients on complex issues arising from international transactions and works with clients across a number of sectors including pharmaceuticals, defence, finance, aviation, energy, and telecommunications. Jessica has also worked previously in Paris, and is fluent in French.

Write A Comment