As a young and avid German Anglophile who is a paid-up member of both the UK Conservatives and the CDU – the German centre-right and dedicated pro-European party of Chancellor Merkel – I have been finding myself in one or two difficult situations since the Brexit vote.

It can be challenging at times trying to explain to German people how I can be in favour of Brexit – which I am without any doubt after the democratic vote held in 2016 – while also supporting the EU and, in particular, German membership of it – which I also do without any reservation.

However, this rather unique situation has also given me the chance to acquire a much more pragmatic view than that of most of my friends in German conservative politics. Most have been arguing that there must be no re-negotiation whatsoever of the Withdrawal Agreement in general and of the backstop in particular. This is a view which I reject without hesitation.

In fact, it is a highly dangerous opinion to hold, given the world’s fragility and, hence, the need for the closest possible co-operation between the United Kingdom and the EU after Brexit. The various and serious challenges concerning terrorism, Europe’s dealings with China and, especially, Russia certainly are sufficient to emphasise this. The EU27 and the UK are more than partners on these and many other issues; they find themselves in a state of double-sided dependency for each other’s mutual benefit. Therefore, that many politicians from Germany – even from the centre-right CDU – have failed to see the need for compromise and a willingness to understand Brits’ justified problems with the backstop has been a source of great anger to me.

Yet one name which we have heard quite a lot of over the last 24 hours gives me some hope that at least some of the problems at hand might be resolved over the coming weeks and months. It is that of Ursula von der Leyen, Angela Merkel’s Defence Minister for the past five and a half years, who has been nominated by the European Council to succeed Jean-Claude Juncker as President of the European Commission.

Whilst the initial reaction of much of the British political Twitterati to Mrs von der Leyen’s nomination has been to regard it as unlikely to break the Brexit impasse, I beg to differ. Yes, it is undoubtedly true that the Brussels-born Merkel ally is undoubtedly in favour of a European army as a long-term goal – something dreaded by many and which arguably played an important role back at the 2016 referendum. Furthermore, her desire to create the so-called – and perhaps equally dreaded – United States of Europe (as expressed in 2011), quite obviously, makes her no less of a Euro-federalist.

So you might ask what exactly it is which gives me reason to hope for that long-awaited progress and it is this: since the Brexit vote, Ursula von der Leyen has proven to be one of the most pragmatic voices in Germany concerning EU negotiations with the UK. Even though her criticism of the Leave campaign is strong, she has been very consistent in her attitude that the decision taken by the British people to leave the EU is irreversible – something that many other prominent figures have disputed by calling for a second referendum.

When she appeared on German TV show Anne Will (Germany’s equivalent of The Andrew Marr Show) back in April alongside Conservative MP Greg Hands and the SNP’s Philippa Whitford, von der Leyen issued a rallying cry for the EU to maintain a willingness to negotiate in order to prevent No Deal at all costs (a scenario which she, rightly, described as the worst possible starting point for UK-EU talks on their future relationship). According to her, it is important for the EU to listen to what the UK – namely the House of Commons – asks for and find a way forward on the basis of it. The so-called Brady Amendment – the only Brexit option that has actually been able to command a majority in the House of Commons – was mentioned during the Anne Will show and could be seen as the basis for such negotiations.

Concerning the future relationship, Mrs von der Leyen referenced the CDU’s manifesto for the European elections (which itself voiced a more pragmatic view on Brexit than previous CDU statements) and her current brief in government: in order to maintain – and improve – European defence, she said on the programme, the EU needed to collaborate intensively with the UK based on shared values. A Joint Vision Statement which she signed with her then-UK counterpart Gavin Williamson paved the way for von der Leyen’s vision of deep co-operation to counter shared threats and answer shared questions. This view is very much in line with the Global Britain agenda of the UK Government, which has consistently argued that Britain will never waver in her efforts for the collective security of the European continent.

Even though she has also described the backstop and its arrangements as a “clever proposition”, the new Prime Minister – whoever it is – can have a pragmatic negotiating partner in Ursula von der Leyen. Unlike some others, she is not driven by an objective to punish the UK, but rather will seek to prevent No Deal from happening by making further talks possible. They, of course, are the stated aim of both candidates battling for the keys to No. 10 and a clear prerequisite for any deal passing the House of Commons.

What distinguishes Ursula von der Leyen from many European politicians is her attention to detail, her willingness to understand others’ points of view and her determination to make Brexit work, yes, for the EU27, but also for its British friends and neighbours as well. Let us all hope that von der Leyen’s Presidency – assuming it is approved by the European Parliament later this month – will allow both sides to overcome the current impasse and, thereby let the UK make a success of Brexit. There is reason for that hope!

The post Ursula von der Leyen may be a Euro-federalist, but on Brexit she will be a pragmatist appeared first on BrexitCentral.

From various quarters, whispers or even open calls are growing for an extension to the UK’s Article 50 period which finishes, unless extended, on 29th March 2019. Most of those talking about an Article 50 extension seem to assume that the UK only has to ask for such an extension, and it will be granted unto us.

However, the European Union is not the beneficent Lord mentioned in the gospel according to St Matthew Chapter 7, Verse 7 (the Sermon on the Mount), and confidence that the EU will just grant any extension that the UK asks of them is likely to prove very misplaced.

The so-called “Cooper-Boles amendment”, which was defeated in the House of Commons on 29th January by 321 to 298 votes, seems to be based on such an assumption. This sought to pave the way for a Bill which would impose a legal duty on the Prime Minister to “seek an extension of the period of two years specified in Article 50(3) of the Treaty on European Union to a period ending on 31 December 2019”, or to such other date as the House of Commons might decide on a future motion.

The legalities of an Article 50 extension

But let us look at the legalities both of how an Article 50 extension can be granted, and the legal effects of such an extension. It is important to understand both in order to assess the likely reaction of the European Union and its Member States to an Article 50 extension request from the UK.

The governing provision is the closing words of Article 50(3) of the Treaty on European Union:

“3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2 [i.e. 29 March 2019], unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.”

The effect of an extension, if granted, is to postpone the UK’s date of exit from the European Union, so that the whole panoply of rights and obligations of EU membership would continue to apply to the UK as a Member State during the extended period. So the UK’s obligation to pay into the EU budget would automatically be extended. But most importantly in view of its political repercussions, both the right of the UK to be represented by MEPs in the European Parliament and its obligation to choose them by direct elections would continue to apply to the UK.

On the face of it, this means that if an extension takes us past May, the UK must then hold a fresh round of European Parliament elections. There is a little bit of wriggle room, in that if the extension period terminates before the new European Parliament assembles on 2nd July 2019, such elections could be avoided as pointless. But if the extension is beyond that date, it is very difficult so see how the elections could be avoided.

That would mean that Nigel Farage would be re-elected to the European Parliament, probably in present circumstances as part of an increased phalanx of members of his new Brexit Party. And the EU’s internal legal advice is apparently that once elected, the UK MEPs would be entitled to remain members of the European Parliament for the rest of their five-year terms, regardless of when the UK leaves the EU. This would completely up-end the political agreements which have been reached for the sharing out of the seats which (it had been assumed) would be vacated by the UK in the European Parliament.

This is a huge spanner in the works for any Article 50 extension longer than three months. No doubt the ‘creative law-bending’ departments of the EU would be hard at work to think of ways round this problem, but at the moment it looks like a formidable difficulty.

But another problem arises if an extension is for three months or less – say to 29th June. It is not possible to treat such an extension as a “more of the same” extended negotiating period. This is because the current European Parliament term will end on 18th April 2019 prior to the European Parliament elections. Article 50(2) requires that the European Parliament must consent to any Withdrawal Agreement before the EU can conclude it.

So, at most, an extension to the Article 50 period which stops short of 2nd July would allow merely an extra three weeks for an agreement to be finalised and concluded.

As to how an Article 50 extension is granted, it should be noted that this requires the unanimous consent of each EU27 Member State within the European Council. This is actually a more stringent rule than for an Article 50 agreement to be concluded, which can be done by Qualified Majority Vote (QMV).

The effect of this requirement is to place enormous power in the hands of each individual Member State which may have demands it wants to make. If the UK comes crawling along, begging for an Article 50 extension, what better time to dig in and extract some useful concessions?

What terms will be imposed on an Article 50 extension?

Let us then turn to the question of whether, and on what terms, an Article 50 extension might be agreed if the UK asks for it. As is evident from Article 50(3) quoted above, such an extension is not simply a matter of choice for the UK, but requires the unanimous consent of all EU27 Member States.

First, the EU collectively is unlikely to agree to any Article 50 extension unless there is a clear purpose to it, other than just buying time for yet more turmoil and negotiation. Secondly, as mentioned already, the EU will be very reluctant indeed to agree any extension beyond 2nd July 2019 because of the consequences for the European Parliament elections.

But, thirdly, quite apart from what the EU as a whole may have concerns about, each individual Member State may have demands of its own.

As reported in the Financial Times on 1st February: “The Spanish are gearing up for a Gibraltar fight when there is an extension request,” said one senior EU diplomat. “It could be dangerous.”

And Germany also could have its demands. When my colleague Dr Gunnar Beck and I gave evidence in Berlin to the European Union Committee of the Bundestag, the subject of a possible Article 50 extension was raised by a number of the German legal experts giving evidence to the Committee. First, it was the general view that there would be great difficulties in extending it by more than a couple of months, because that would mean that the May 2019 European Parliament elections would need to be held in the UK. None of the German legal experts could think of a convincing way round this problem, since the election of MEPs in each Member State is mandated by the European treaties.

However, one of the German experts made an important point. He pointed out that the UK Government is using the fact that there is no mechanism to make the UK pay the ‘divorce bill’ unless a Withdrawal Agreement is ratified as a negotiating lever. He advised the Committee that Germany should require, as a precondition of agreeing to any Article 50 extension, that the UK should agree unconditionally to abide by the obligations to pay money into the EU budget which are set out in Part Five of the Withdrawal Agreement, and to submitting to the jurisdiction of the ECJ to set the amount of these payments, regardless of whether or not a Withdrawal Agreement was subsequently ratified.

One does not know whether the German Government will take up this suggestion, but it would be quite logical for it to do so. Germany will end up paying the lion’s share of the shortfall in the EU budget caused by the UK’s departure. Under the draft Withdrawal Agreement, the UK would have to pay a sum which has been widely estimated at £39 billion, but in fact is likely to end up considerably higher, particularly since Theresa May caved in to the EU’s demand that the ECJ should be given jurisdiction to decide the amount instead of a neutral international tribunal.

Under international law, the UK would have some legal obligations, but they would be very much lower (for background on this, see what I and Charlie Elphicke MP wrote here on the EU’s financial claims).

So taking advantage of the UK’s moment of weakness when it supplicates for an Article 50 extension, and taking the chance to lock in the EU’s legal entitlement to this enhanced sum come what may, would be quite the logical thing for Germany to insist on.

This illustrates a wider point about any application to extend Article 50.

By asking for a favour when up against the clock, the UK would once again put itself in a very weak negotiating position, where it would be subject to being blackmailed for further concessions.

It would also let the EU off the hook and remove the negotiation pressure on the EU to revise the terms of the Withdrawal Agreement.

Asking for an Article 50 extension would be a terrible, terrible idea.

The post Why seeking an extension to Article 50 would be a terrible idea appeared first on BrexitCentral.

In becoming a clash of caricatures, the Brexit debate loses sight of the main problem. The liberal intellectuals and Euro-enthusiasts who have fought such a long rearguard action to stop Brexit without admitting it, see Brexiteers as out-of-date jingoistic Blimps keen to go back to the days of empire and neo-liberal fanatics anxious to build a low-tax, de-regulated, free-trade hell in our green and pleasant land.

Remainers see themselves as progressive modernisers defending liberal principles, environmentalism and the good society all springing from a benign EU which they understand, love and are ever ready to explain and justify – even to the extent of justifying its desire to punish us on the grounds that they can’t do anything else without endangering its wonderful future.

I’ve not met any Blimps, though I’ve met a lot of people who’ve been left behind by globalisation and Europeanisation. I’ve also heard a lot of noise from Euro-enthusiasts for whom the EU is a matter of religion. My conclusion is that both sides are happier fighting symbols than looking at Britain’s economic problems and the effect the EU has on them.

Brexiteers regard the EU as an undemocratic imposition. Remainers see it as a great adventure in international idealism, building a federal union. Neither picture is real. The EU is essentially a protective bloc set up to provide powerful German manufacturing and expensive French agriculture with a wider protected market. The question Britain must face is whether that serves the different interests of a nation with a weaker manufacturing base which imports 80% of its food.

This is made worse by the euro acting as a series of guy ropes keeping the German exchange rate down, making its products even more competitive. The result is huge German surpluses at everyone else’s expense, particularly ours. Added to our growing contributions to belong – and the higher food prices necessitated by the Common Agriculture Policy, this means a steady drain of jobs, money and demand from failing Britain.

This can’t go on. Our annual deficit is around 4% of GDP – one of the biggest in the world. Because we can’t pay our way, we must borrow or sell our companies, property, farms and businesses. This creates a series of vested interests like the German firms BMW and Airbus threatening to withdraw, the car-makers demanding subsidies to stay, the big multinationals lured in by soft deals and low taxes sending their profits abroad, and the importers all tied to the protective bloc. The question now is whether this process of absorption has gone so far that the EU is better able to throw out our government and change it policies than our Parliament and people.

The EU is the problem. It should require Germany to redistribute its surpluses and end the enforced deflation of weaker economies in order to boost the stagnant EU economy. We need the ability to trade with expanding markets, buy food from developing countries and a reduction of contributions – giving us a return and no longer contributing to subsidies given by other members like the £130 million handed by Slovakia to Land Rover. It also requires equalisation of business taxes so countries like Ireland, Luxembourg and Holland can’t syphon off tax due in this country by low tax competition.

Remainers should (but don’t) show their concern by persuading the EU to accept it rather than devoting their efforts to undermining Britain’s case. It will be hard enough to get reform in an EU which prefers hypocrisy and puts its own interests first, yet if nothing is done, it’s surely better to leave the sinking ship.

The post The EU remains a protective bloc for German manufacturing and French agriculture that doesn’t serve UK interests appeared first on BrexitCentral.

This is a momentous year in the history of the United Kingdom. The voices of 17.4 million voters who took part in the biggest act of democracy in our history will finally have been heard and in the decades to come, history books will pronounce 2019 as the year that the UK once again became a proud, independent nation.

And it won’t be forgotten that it was the Conservative Party that gave people a chance to give their verdict on the EU in the 2016 referendum, and which entrusted the people with such a momentous decision about our constitution and destiny.

Of course, as we approach the pivotal moment of 29th March when we leave the EU, we are once again being force-fed a diet of doom, gloom and despondency from those who wish the result had turned out differently.

But we must remember that these people have a democratic right to propel these arguments, just as 17.4 million voters had a right to rubbish their claims during the referendum – which they did, resoundingly.

And it turns out that they were absolutely right to do so. This really is a time for hope and optimism, not despair and fear. Since 2016, in spite of dire predictions made during the campaign, we’ve seen a tax windfall, the fastest growth in wages in almost a decade, record employment levels and steady economic growth. Our future has never looked brighter.

If we had have chosen to leave some sort of Utopia, I would understand people’s concerns. But the EU is no Utopia and if it were, voters would have had the wisdom to recognise this during the referendum.

In Italy, months of uncertainty and inconclusive elections have resulted in two populist parties – the anti-establishment Five Star Movement and right-wing League – forming a coalition.

Germany’s far-right Alternative for Germany (AfD) entered the federal parliament for the first time last year. As with Italy’s League, it is an anti-euro party and it has strong anti-immigration policies. In 2017, next door in Austria, the Freedom Party (FPÖ) become a junior partner in coalition with the Conservatives and talk of banning headscarves for girls under 10 in schools and seizing migrants’ phones is now a part of mainstream Austrian politics.

In April last year, Viktor Orban secured a third term in office in Hungary with a landslide victory in an election dominated by debates about immigration. Orban once warned of the threat of “a Europe with a mixed population and no sense of identity” – comments unheard of in the UK political context.

The Slovenian Democratic Party (SDS) was the largest party in last year’s general election in Slovenia. Its party leader, Janez Jansa, formed an alliance with Mr Orban in opposing migrant quotas, Poland has also condemned the EU’s handling of the migrant crisis and in Denmark, the police are now allowed to seize migrants’ property to pay for their upkeep and has pledged to boost contraception aid to developing countries to “limit the migration pressure”.

And of course we’ve seen the distressing scenes in France. Weeks of street protests have erupted into a full-on anti-government movement leading to the worst violence in central Paris in a decade.

The EU is not the land of milk and honey many would have you believe. The tide is turning against the EU and the way it does business in scores of EU countries and our friends on the continent are being forced to make their voices heard through the prism of extreme political parties.

Turning to the economy, around 90 per cent of global economic growth will come from outside the EU over the coming years and the EU now accounts for less than half of our overall trade.

The EU’s economic clout is also falling, with its share of the global economy almost halving over the last 30 years. That’s why people voted to Leave so that we could take back control of our trade and regulatory policy and strike trade deals with the emerging powerhouses of the world economy.

And for every unemployed Brit, there are two people unemployed in the euro area. Unemployment is five times higher in Greece, almost four times higher in Spain, double in France and between 17-19 per cent in much of the south of Italy.

As much as my opponents like to whip up a fevered frenzy about Armageddon scenarios, cliff edges and crash outs, the truth is that we are doing well in the UK. We are also lucky to have had a chance to register our discontent in a referendum, and fortunate to be having such a thorough, engaging and relatively peaceful debate about what our post-Brexit future should look like.

We haven’t seen a rise of extremist parties in the UK, nor have we seen riots on our streets. We have simply concluded that the EU is not capable of change and that it doesn’t have our best interests at heart and we’ve done all this without making extreme political choices.

But we must be careful to ensure that we keep our debate within the political mainstream. Many people who voted in 2016 did so for the first time in their lives and there would be disastrous, political consequences if we decided to ignore or reverse the result.

The British people have boldly trodden where no other EU country has yet dared to tread and we are leading in Europe, as we always have done.

Let’s hold our heads up high and show how you can be a proud European nation without belonging to the institutions of the European Union. And let’s lead our friends and allies into the 2020s as we forge a strong, peaceful and prosperous path together.

The post The EU is no land of milk and honey – let’s be optimistic about our future as an independent nation appeared first on BrexitCentral.

If you ask any cabbie who’s running the EU they are bound to mention Angela Merkel – at least for now. But if you asked anyone in the Foreign Office, it’s likely they would go through unheard of names like Antonio Tajani or Mário Centeno before they’d get to the German Chancellor. Even then, squeamish officials are likely to mention her as part of the wider group of EU leaders, without singling her out.

Germany’s formal position under the European treaties might be no different to other member states – in theory the European Commission makes proposals and the Council and EU Parliament make the decisions – but as the UK’s former ambassador to Germany, Sir Paul Lever, mentions in his recent book, it’s Germany’s view which is sought by the Commission before it acts, and other governments make sure they know what Berlin wants before they decide on a course of action.

The extent to which German decisions dominate is well-known by the left-wing firebrand and former Greek finance Minister, Yanis Varoufakis. Before Eurozone meetings he would receive support for his ideas in private discussions with his EU counterparts, who were keen and willing to sort out the crisis. However, once seated round the table, the very same Ministers would defer to one man: Germany’s Wolfgang Schäuble. Representatives of ostensibly sovereign nations would flip their position completely if it became clear that the Germans had made their minds up on a proposal.

In Britain, former Cabinet Minister Iain Duncan Smith watched in frustrated amazement as Angela Merkel sabotaged Britain’s attempts to control immigration during David Cameron’s failed renegotiation attempts before the referendum. Later, Duncan Smith described it as if they were “sitting in a room even though they weren’t there. There was a chair for them, a German chair. They had a veto over everything.”

All this matters because if the UK plans to sign up to a ‘Common rulebook’ with the EU it will be Germany calling the shots. Recently Dyson attracted criticism for deciding to build a new electric car plant in Singapore. According to the firm, the decision was made “based on supply chains, access to markets and the availability of expertise, which offset the cost factor”. UKIP founder Alan Sked pointed out it might have also had something to do with the regulatory framework Britain is planning to sign up to. Why would a company trying to join a new market want an EU common rulebook written by their competitors? Kept inside the EU’s regulatory framework, the German government, under pressure from Audi and Volkswagen, could conceivably out-regulate their plucky British challenger.

As a recent paper by Roland Vaubel explained, if a qualified majority of member states within the EU which favour a high level of regulation gang up, they can impose higher regulations on the rest: “Thus, while regulatory collusion presupposes unanimity, the strategy of raising rivals’ costs merely requires a qualified majority.”  Vaubel says the anti-regulation coalition includes Ireland, the Scandinavian countries and the Netherlands but that various indices show that the UK has the least regulated labour market of all. If we stay tied to the EU, Britain is most at risk from damaging rule-changes.

We need to recognise that the ‘Common rulebook’ isn’t a neutral body of legal text. Like the EU itself, it is a mechanism which can – and will – be used to bend the rules to favour some nations over others. Few dare to admit this and credit is due to Sir Paul Lever who devastatingly exposes Berlin’s influence in his book Berlin Rules. Sir Bill Cash is another notable example who over the years has highlighted the hidden hand of Germany. But it’s time our negotiators recognised that the EU is not a federation of equals. Angela Merkel may be on the way out but Germany has consistently been the determiner of EU policy decisions and that won’t change after she is replaced. We must accept that if we decide to remain it will be Berlin, not Brussels, who will decide our fate.

The post Merkel might be going, but the common rulebook would still mean Berlin writing our rules appeared first on BrexitCentral.

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