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EU seeks compromise with UK to maintain a level playing field

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Addressing the European Parliament (16 December), President of the European Commission Ursula von der Leyen said that the issue of level playing field provisions needed to be resolved. She described the issue as ‘very simple’ for the EU, as it is essential to ensure fair competition and therefore robust mechanisms are needed in any future EU-UK agreement. 

The 'architecture' rests on two pillars, state aid and standards. Progress had been made on state aid. The European Commission’s team has agreed with the UK on common principles, guarantees of domestic enforcement and the possibility to autonomously remedy if and when either party diverges. 

On standards, such as those in the areas of labour and the environment, the EU said difficulties remained on how to future proof fair competition, as these requirements change over time. The EU-side proposed what has been called a ‘ratchet clause’, that would have meant the UK would align in some way with EU requirements. The UK has rejected this on the grounds of sovereignty, however other ways of respecting the same objective are being explored.  

Von de Leyen was pleased that progress has been made on governance, describing the issues a ‘largely' being resolved.

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‘It is not a friendly signal from the UK immediately after leaving the European Union’ Borrell

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The EU’s High Representative on Foreign Affairs, Josep Borrell, was asked about the decision of the UK to refuse full diplomatic status to the EU Ambassador to the UK Joao Vale de Almeida and his team in London. Borrell said that it was not a friendly signal from the UK immediately after leaving the European Union.

Borrell pointed out that the EU’s 143 delegations around the world had all - without exception - granted the delegations a status equivalent to that under the Vienna Convention. He said that the EU would not accept that the UK would be the only country in the world that will not give the EU delegation the recognition equivalent to that of a diplomatic mission. 

“Granting reciprocal treatment based on the Vienna Convention on Diplomatic Relations is standard practice between equal partners and we are confident that we can clear this issue with our friends in London in a satisfactory manner,” said Peter Stano, the commission’s spokesman for foreign affairs.

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Commission proposes to amend the EU's 2021 budget to accommodate the Brexit Adjustment Reserve

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Following the proposal for a Brexit Adjustment Reserve the Commission put forward on 25 December, the Commission has today proposed a €4.24 billion increase (equal to €4bn in 2018 prices) of the EU's 2021 budget. This will ensure sufficient resources are available this year to support EU countries in addressing the immediate effects of Brexit. The total amount for the Brexit Adjustment Reserve is €5bn in 2018 prices, or €5.37bn in current prices for the MFF 2021-27. This would bring the budget to €168.5bn in commitments and €170.3bn in payments.

Commenting on the decision, Commissioner Hahn said: “The EU budget has always been and continues to be a tool to deliver on EU's political commitments. The Brexit Adjustment Reserve is yet another example of European solidarity. The Commission will now work with the European Parliament and the Council to ensure that money becomes available to businesses and companies, regions and local communities as soon as possible.”

Cohesion and Reforms Commissioner Elisa Ferreira (pictured) added: “Our motto in Cohesion policy is to leave no one behind. The Brexit Adjustment Reserve will come in support to those most impacted by Brexit. European unity was key throughout the negotiations and European solidarity will be crucial to deal with the outcome.”

The Brexit Adjustment Reserve will be rapidly available and flexible, and will cover expenditure to counter adverse consequences of Brexit in all member states over a period of 30 months. The vast majority will be allocated through pre-financing already in 2021, calculated on the basis of the expected impact of the end of the transition period on each member state's economy, taking into account the relative degree of economic integration with the UK. This includes trade in goods and services, and the negative implications on the EU fisheries sector.

An initial breakdown per member state is available online here. The remaining €1 billion in 2018 prices will be paid in 2024, after the member states have notified the Commission about the actual expenditures incurred. This will allow to respond to unforeseen events, and ensure that the support from the Brexit Adjustment Reserve is concentrated on the members states and sectors most affected by the withdrawal. For more information on the Brexit Adjustment Reserve, see here and here.

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Scottish government comment on efforts to stay in Erasmus

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Minsters have welcomed the support of around 150 MEPs who have asked the European Commission to explore how Scotland could continue to take part in the popular Erasmus exchange programme. The move comes a week after Further and Higher Education Minister Richard Lochhead held productive talks with Innovation, Research, Culture, Education and Youth Commissioner Mariya Gabriel to explore the idea. Until last year, over 2,000 Scottish students, staff and learners took part in the scheme annually, with Scotland attracting proportionally more Erasmus participants from across Europe - and sending more in the other direction - than any other country in the UK.

Lochhead said: “Losing Erasmus is huge blow for the thousands of Scottish students, community groups and adult learners - from all demographic backgrounds - who can no longer live, study or work in Europe.“It also closes the door for people to come to Scotland on Erasmus to experience our country and culture and it is heartening to see that loss of opportunity recognised by the 145 MEPs from across Europe who want Scotland’s place in Erasmus to continue. I am grateful to Terry Reintke and other MEPs for their efforts and thank them for extending the hand of friendship and solidarity to Scotland’s young people. I sincerely hope we can succeed.

“I have already had a virtual meeting with Commissioner Gabriel. We agreed that withdrawing from Erasmus is highly regrettable and we will continue to explore with the EU how to maximize Scotland’s continued engagement with the programme. I have also spoken with my Welsh Government counterpart and agreed to keep in close contact.”

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