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'Don’t start #Brexit talks with a clash on cash'

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brexit-eu-boxing-1024x298The eyes of the world will soon be on the Brexit negotiations, amid widespread fears that they may end in a ‘train crash’, not least because of a cash clash. Here’s a suggestion for averting that – or at least making it much less likely, writes Giles Merritt.

The pressures and constraints affecting both sides are well-known, but aggressive positions across the English Channel have inflamed tempers and risk putting the talks in peril. On the continent, the UK’s espousal of a ‘hard Brexit’ is baffling, because it limits London’s room for manoeuvre. For the British, the idea of their government’s democratic mandate being ‘punished’ by Brussels is intolerable.

Seasoned negotiators say that the best way to approach hard bargaining is to deal first with the easiest elements. Creating an emollient atmosphere is always helpful. Yet the Brexit talks are due to open with tough demands for the UK to pay tens of billions of euros into the European Union’s coffers.

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There is a better way. Begin instead with defence and security cooperation. Military outreach and intelligence-gathering are areas where the UK has much to offer, and the EU much to gain.

London’s line has been that Britain’s NATO membership guarantees Europe’s security. But in political terms there’s far more to be won for all concerned by binding the UK into the EU’s burgeoning ‘defence union.'

Britain is militarily the strongest country in Western Europe. Although France and Germany are intent on forging themselves into a unified spearhead of EU defence, it will take at least a decade before that happens. Meanwhile, security threats from resurgent Russia and the turmoils of the Middle East are on the rise.

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These threats are common to all Europeans, and at a time when the Trump administration has called into question the United States’ support for NATO, the case for underpinning Europe’s own defence capabilities is obvious. It’s an area where Britain can exert leadership while safeguarding its sizeable exports of defence equipment.

But the idea of starting the marathon two-year Brexit process with a win-win topic like defence and counter-terrorism cooperation has gained little traction. For reasons that have more to do with political grandstanding than finding mutually satisfactory solutions, negotiators on both sides prefer to open with the thorny question of the exit bill to be presented to London.

The subject is guaranteed to inflame passions. The EU-27 faces a gaping hole of at least ten per cent in the 2021-27 EU budget, the multiannual financial framework, and are desperate for funds. Britain’s largely Eurosceptic mass media, meanwhile, will howl with rage when it learns what Brexit will cost the UK Exchequer in cold cash. British ministers may even find themselves having to walk out before the talks can get down to business.

How large the amount due to the EU will be seems anyone’s guess. Estimates of pension obligations and commitments to various EU projects vary quite wildly, from a low of €40bn up to €60bn. If the UK’s share in EU assets is deducted that could whittle down the final figure a bit, but it will still compare starkly with the €8bn net annual cost to British taxpayers of EU membership.

The irony is that no definitive figure can be reached until the end of the Brexit negotiations, so it seems perverse to place it at the head of the agenda. Nobody can yet say whether the UK will decide to remain part of key EU programmes on research and development or industrial cooperation – something that the worlds of business and science are crying out for.

It’s possible that the die-hards in Theresa May’s government who demand a hard Brexit will win the day, causing a degree of havoc in the UK economy that some analysts put at £100bn in costs and lost growth. But perhaps cooler heads will prevail, with their warnings that by value half of all Britain’s exports go to the EU, and that leaving the single market threatens the UK’s position as the leading recipient of foreign direct investment in Europe.

Much hangs on the mood created during the early days of the Brexit talks. With Article 50 still to be invoked, there has been sabre-rattling and name-calling on both sides, so it’s time to lower the temperature. Pushing the cost-accounting of Brexit to one side and replacing it with security and defence cooperation would be a good way to start.

Brexit

Britain delays implementation of post-Brexit trade controls

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Britain said on Tuesday (14 Sseptember) it was delaying the implementation of some post-Brexit import controls, the second time they have been pushed back, citing pressures on businesses from the pandemic and global supply chain strain.

Britain left the European Union's single market at the end of last year but unlike Brussels which introduced border controls immediately, it staggered the introduction of import checks on goods such as food to give businesses time to adapt.

Having already delayed the introduction of checks by six months from April 1, the government has now pushed the need for full customs declarations and controls back to Jan. 1, 2022. Safety and security declarations will be required from July 1 next year.

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"We want businesses to focus on their recovery from the pandemic rather than have to deal with new requirements at the border, which is why we've set out a pragmatic new timetable for introducing full border controls," Brexit minister David Frost said.

"Businesses will now have more time to prepare for these controls which will be phased in throughout 2022."

Industry sources in the logistics and customs sector have also said the government's infrastructure was not ready to impose full checks.

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How the EU will help mitigate the impact of Brexit

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A €5 billion EU fund will support people, companies and countries affected by the UK's withdrawal from the Union, EU affairs.

The end of the Brexit transition period, on 31 December 2020, marked the end of the free movement of people, goods, services and capital between the EU and the UK, with adverse social and economic consequences for people, businesses and public administrations on both sides.

To help Europeans adapt to the changes, in July 2020 EU leaders agreed to create the Brexit Adjustment Reserve, a €5bn fund (in 2018 prices) to be paid until 2025. EU countries will start receiving the resources by December, following Parliament’s approval. MEPs are expected to vote on the fund during the September plenary session.

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How much will go to my country?

The fund will help all EU countries, but the plan is for the countries and sectors worst affected by Brexit to receive the most support. Ireland tops the list, followed by the Netherlands, France, Germany and Belgium.

Three factors are taken into account to determine the amount for each country: the importance of trade with the UK, the value of fish caught in the UK exclusive economic zone and the size of population living in EU maritime regions closest to the UK.

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Infographic explaining the Brexit Adjustment Reserve
Infographic showing how much support individual EU countries will receive from the Brexit Adjustment Reserve  

What can be financed by the fund?

Only measures specifically set up to counter the negative consequences of the UK’s departure from the EU will be eligible for funding. These may include:

  • Investment in job creation, including short-term work programmes, re-skilling and training
  • Reintegration of EU citizens who have left the UK as a result of Brexit
  • Support for businesses (especially SMEs), self-employed people and local communities
  • Building customs facilities and ensuring the functioning of border, phytosanitary and security controls
  • Certification and licensing schemes

The fund will cover expenditure incurred between 1 January 2020 and 31 December 2023.

Fisheries and banking sectors

National governments are free to decide how much money goes to each area. However, countries that depend significantly on fisheries in the UK exclusive economic zone must commit a minimum amount of their national allocation to small-scale coastal fisheries, as well as local and regional communities dependent on fishing activities.

The financial and banking sectors, which may benefit from Brexit, are excluded.

Find out more 

Continue Reading

Brexit

How the EU will help mitigate the impact of Brexit

Published

on

A €5 billion EU fund will support people, companies and countries affected by the UK's withdrawal from the Union, EU affairs.

The end of the Brexit transition period, on 30 December 2020, marked the end of the free movement of people, goods, services and capital between the EU and the UK, with adverse social and economic consequences for people, businesses and public administrations on both sides.

To help Europeans adapt to the changes, in July 2020 EU leaders agreed to create the Brexit Adjustment Reserve, a €5 billion fund (in 2018 prices) to be paid until 2025. EU countries will start receiving the resources by December, following Parliament’s approval. MEPs are expected to vote on the fund during the September plenary session.

Advertisement

How much will go to my country?

The fund will help all EU countries, but the plan is for the countries and sectors worst affected by Brexit to receive the most support. Ireland tops the list, followed by the Netherlands, France, Germany and Belgium.

Three factors are taken into account to determine the amount for each country: the importance of trade with the UK, the value of fish caught in the UK exclusive economic zone and the size of population living in EU maritime regions closest to the UK.

Advertisement
Infographic explaining the Brexit Adjustment Reserve
Infographic showing how much support individual EU countries will receive from the Brexit Adjustment Reserve  

What can be financed by the fund?

Only measures specifically set up to counter the negative consequences of the UK’s departure from the EU will be eligible for funding. These may include:

  • Investment in job creation, including short-term work programmes, re-skilling and training
  • Reintegration of EU citizens who have left the UK as a result of Brexit
  • Support for businesses (especially SMEs), self-employed people and local communities
  • Building customs facilities and ensuring the functioning of border, phytosanitary and security controls
  • Certification and licensing schemes


The fund will cover expenditure incurred between 1 January 2020 and 31 December 2023.

Fisheries and banking sectors

National governments are free to decide how much money goes to each area. However, countries that depend significantly on fisheries in the UK exclusive economic zone must commit a minimum amount of their national allocation to small-scale coastal fisheries, as well as local and regional communities dependent on fishing activities.

The financial and banking sectors, which may benefit from Brexit, are excluded.

Find out more 

Continue Reading
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