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Bottom-Line Brexit Part VI

What business needs to know about how Brussels sees the process of the UK leaving the European Union, as related to BCW by senior EU sources.

        April 12 is the new March 29

As we have predicted, The UK will not leave the European Union on March 29. But a high-pressure Brussels summit on Thursday night has pushed the quite strong possibility of a no-deal Brexit out by only a few more weeks. Next week’s third vote in the House of Commons on whether to choose Prime Minister Theresa May’s soft Brexit deal will be key.

EU leaders have concluded May has little chance of winning. Her attempt on Thursday to reassure them backfired. French President Emmanuel Macron, channeling Charles de Gaulle in his increasing impatience for a Brit-free Europe, declared he had cut her odds to 20-1 from 10-1. That was “very optimistic”, summit chair Donald Tusk told him.

The leaders then decided to dodge the bullet of a crisis summit next Thursday at which they would have had the unpleasant choice of either chucking the UK out with 24 hours’ notice or blinking at their own deadline and giving the rebellious Commons more time anyway, In a neat shimmy in the blame game, they set a new deadline of Friday, April 12, for Britain to make its own choice clear to them – either leaving, deal or no deal, before July; or coming up with a new proposal agreed by Parliament and then sticking together or sticking around for a year or so and organizing EU parliamentary elections in the UK on May 23. The trigger deadline corresponds to six weeks before May 23, the last date on which Britain would have to launch the election process under its own electoral laws.

Worries about the legal risk of disruption to the EU institutions of a British failure to take part in the election also explain the deadline of May 22 as the last day on which Britain can remain a member if May succeeds in winning her vote and securing a gentle transition to non-membership. Those extra few weeks beyond March 29 are needed to pass necessary laws.

If she doesn’t win next week – the EU’s assumption – then she and parliament will have until April 12 to make a fateful decision. France is keen that Britain actually leave on April 12 but others are willing to give it a bit more time. In theory, Britain could still sign up to the Withdrawal Agreement and win the transition period that will help business. It could in theory leave as late as June 30. That will be decided by another summit a bit before April 12 to decide exactly what to do. One possibility is that Britain would agree to a hard-Brexit no- deal departure on, say, May 15. It could use the intervening time to strike some mitigating bilateral temporary deals to ease trade and travel disruption or Parliament could attempt to wrest control from a divided government and hammer out a cross-party deal for a softer Brexit. This might mean deciding to stop the clock for a year. Or it could decide to stop the clock for a year or so, hold EU elections and then perhaps a second referendum on whether to push ahead with Brexit. Let’s not even talk about the theoretical possibility that a new leader could pull the plug and unilaterally revoke the Article 50 notification of withdrawal.

No one is claiming that real certainty has been provided this week to the poor trader and ordinary citizens caught up in all this. What the summit has achieved is a political win for Brussels in more clearly shifting the responsibility for pulling the plug on EU membership to London. Eyes on the House of Commons next week.

Bottom-Line Brexit – Part V

What business needs to know about how Brussels sees the process of Britain leaving the European Union, as related to BCW by senior EU sources.

Crunch time; will Godot show up?

There is a serious risk that the UK will lurch out of the European Union a week tomorrow, with no soft-landing transition period and monster legal and logistical headaches for every major business in Europe. That is the bottom line as EU leaders gather for a summit today in Brussels with British Prime Minister Theresa May. For that outcome to be avoided, her 27 EU peers are saying, one of two hard things must happen, and so far neither is looking anything like a safe bet:

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Calibrating the EU’s more assertive approach to China

China’s continuous rise is a confounding phenomenon for the European Union. It is on course to be the world’s biggest economy and some regions have achieved an advanced stage of development, yet China is still in some respects considered a developing country. It is responsible for more carbon emissions than any other country, but is now a leading player in global climate change policy alongside the EU. And it is asserting itself through substantial investments in Europe, yet sets tight conditions for foreign investment in its own market.

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Bottom-Line Brexit Part IV

What business needs to know about how Brussels sees the process of Britain leaving the European Union, as related to BCW by senior EU sources.        

Next week, we’ll know … something

Whichever way the House of Commons leaps tonight in the latest of a series of complex votes, we believe next week can provide a moment of truth – on Brexit hard or soft, now, later or never. Prime Minister Theresa May could spook hard-core Brexiteers into backing, at the third time of asking, the deal she made with the EU in November, even though many of them see it as leaving the UK too closely tied to Brussels’ economic and trade regulations. If she does – and rather few in Brussels think she will – then Britain will shortly leave the EU in formal terms but enter a transition period that could last from two to four years during which little will change for business. It is highly improbable it will leave on schedule on March 29 but more likely either in mid-May, before the May 23-26 EU parliamentary election, or around June 30, before the new European Parliament convenes on July 2. Key timing decisions on extension will, however May fares next week, be taken by EU leaders at their quarterly summit in Brussels next Thursday and Friday.

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How large can NATO get?

 

Last month, Europe finally settled a 27-year family argument and celebrated a new name for an ancient country. The Republic of North Macedonia officially became the new name for the former Yugoslav republic after it resolved a long-running feud with Greece over what to call itself. The agreement should now pave the way for North Macedonia to play its role in the international community, starting with NATO. The government in Skopje has already launched its membership application and symbolically, the first country to ratify its NATO accession protocol was Greece. If others speed up their procedures, North Macedonia could join at the July NATO summit.

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Why Europe wants to change its competition policy

Margrete Vestager has earned plaudits in some circles as EU Competition Commissioner for boldly applying EU competition law to tech giants. But as she prepares to bow out at the end of her term this year, the Commissioner is expected to leave a legacy that will last beyond her time as competition enforcer. Indeed, she is laying the foundation for a sea change in the way the EU intervenes in digital markets.

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Bottom-Line Brexit

 

What business needs to know about how Brussels sees the process of Britain leaving the European Union, as related to BCW by senior diplomatic and EU institutional sources.

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