POLITICS

Brexit Briefing: French Disconnection

Macron is coming for your bankers

27/04/2017 17:01

All you need to know from the world of Brexit this week.

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1) If You Thought The Gibraltar Row Was Bad, Wait Until Theresa May Sees What The EU Wants To Do To The City Of London

The EU27 will meet in Brussels this weekend to agree their guidelines for the Brexit negotiations.

On Monday, delegates from each country got together to iron out any potential problems ahead of the summit.

It all seemed to be going relatively smoothly, with the draft proposals set out by European Council President Donald Tusk last month – divorce bill payment before trade talks, giving Spain a veto over a deal for Gibraltar – getting signed off.

Then the French got involved.

Representatives from France put forward a condition that the City of London must remain under EU jurisdication after Brexit if it wants the same market access as it currently enjoys.

The demand was not circulated before the meeting, causing consternation among the sherpas (civil servants who help get their bosses to the summit), but the clause did get into the guidelines.

Such a move would put pay to attempts to merely line-up UK financial regulation with that in the EU – known as equivalence.

As is well known, the UK’s financial service industry is the golden donut in the Brexit negotiation, and Paris, Frankfurt, Dublin and Madrid are all keen for a piece of the sugar-coated treat.

However, France might not be playing the smartest game in town when it comes to strengthening’s its financial sector. With relatively high businesses taxes and strong worker protections, financial companies forced to flee London might not be tempted to relocate to the banks of the Seine – those companies tend to favour keeping lots of the money they make and sacking people who make mistakes quite easily.

Indeed, it might actually be in France’s interest to keep Europe’s financial powerhouse in London rather than seeing rival cities get an industry boost.

2) Emmanuel Macron Is Going To Want The UK To Suffer

French Presidential candidate Emmanuel Macron gave hope to pro-EU, pro-Globalisation progressives at the weekend when he finished ahead of Marine Le Pen in the French Presidential Election.

He is the favourite to win the run-off vote on May 7, meaning he will be front and centre of the EU/UK negotiations when they start up later in the summer.

What would his election mean for Brexit? There is nothing to suggest he would change the position put forward by those French sherpas on Monday.

Macron has already described the UK leaving the EU as a “crime” and believes Britain is now in a position of “servitude”.

He met with Theresa May in Downing Street in February and made it clear to reporters afterwards that he wanted to attract “banks, talents, researchers, academics” to France.

As a pro-EU politician, he needs to show his people that it is much better to be in the club than out of it, and so you can expect the anti-Brexit rhetoric to only continue if he secures the presidency.

His position is little different from Angela Merkel, who today told Germany’s parliament the UK could not get the “same or even more rights” as a full EU member in any post-Brexit deal.

“You may think that all this is self-evident. But I have to put this so clearly because I get the impression that some in Great Britain still have illusions about this, and that is a waste of time,” she said.

“Rights” from being in the Single Market is of course different from tariff-free access to the Single Market – which is what the UK Government has repeatedly stated is its goal.

3) Turns Out Barack Obama Was Speaking The Truth About Our Place In The Queue 

At the time it was heralded as a master stroke by the Remain campaign, but looking back now, President Obama’s claim the UK would be at the “back of the queue” when the US negotiates trade deals smacks of Project Fear at its most blatant.

Or, it was actually the truth.

Despite several pro-Brexit campaigners seeing Donald Trump as the anti-Obama – and therefore willing to put the UK at the front of the queue – it might not have turned out that way.

The Times reported earlier this week that following Trump’s meeting with Angela Merkel last month, he now favours a deal with the EU ahead of talks with the UK.

According to a senior Berlin official, Merkel had to explain to Trump eleven times that the US could not do a trade deal just with Germany, and had to negotiate with the EU instead.

This could see the resurrection of the Transatlantic Trade and Investment Partnership (TTIP) deal, which Trump had vowed to pull out of when he took office.

While it is no doubt politically embarrassing that the US now clearly favours striking a deal with the EU ahead of the UK, it technically could help Britain.

The UK can’t enter any trade negotiations until it officially leaves the EU in 2019, and if Washington and Brussels manage to strike a deal before then, London could piggy-back on the agreement until it leaves the European club.

Alternatively, if the US/EU deal is seen as a political disaster, it will strengthen the claim from Brexiteers that it is better for the UK to be free from the bloc.

4) The Saboteurs Are Crushing Themselves

The Tories are desperate for the General Election to be all about Brexit, especially as Labour’s position is still not clear.

Shadow Brexit Secretary Sir Keir Starmer tried to provide clarity in a speech on Tuesday, but yet again immigration proved the party’s Achilles’ Heel.

After claiming “free movement must go”, Sir Keir argued that “free movement of labour” should remain as “we must have immigration” for the economy to flourish.

Sir Keir ruled out the prospect of a second referendum on EU membership, but later the same day another member of Labour’s Shadow Brexit team - Paul Blomfield – suggested another vote could take place.

On Sky News Blomfield was pressed on if there were any circumstances under which Labour could change its view that the UK had to leave the EU.

He replied: “Obviously if there were significant reforms that came out of these negotiations which addressed the concerns that led people to vote in the way they did last year, that’s a whole new ball game, isn’t it?

“But in the scenario we’re facing, we’re respecting the outcome of the referendum.”

Brexit didn’t just cause problems for Labour this week, it also sparked a split in a cross-party group opposed to, erm, Brexit.

Open Britain released a list of 20 MPs that should be targeted by anti-Brexit voters in the election - 18 of which were Tories. That proved too much for Conservative MPs Anna Soubry, Nicky Morgan and Dominic Grieve, who quit the group saying they couldn’t support an organisation seeking to oust fellow party MPs.

Don’t Get Angry, Get Blogging…

At Huffington Post we love a good blog, and here are the finest Brexit-penned entries from this week. Have a read, and if any of them provoke an urge in you to speak your brain, send us a blog and you could find yourself in this very newsletter.

IPPR’s Phoebe Griffith analyses what the Tories might pledge on immigration

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