Days from summit, May takes Brexit battle to Brussels

Brussels - Theresa May briefly escaped the Westminster bear pit to bring her Brexit battle to Brussels on yesterday, just four days before the divorce deal is to be signed.

After enduring another parliamentary grilling at prime minister's questions in London, the British leader crossed the Channel and met EU Commission president Jean-Claude Juncker.

The pair shook hands and posed briefly for photographers before heading into talks in the Commission's Berlaymont headquarters for what an EU spokesman had earlier called "afternoon tea".


Having seen off -- at least for now -- a potential leadership challenge by hardline Brexiteers in her own party, she hopes to wring out of Brussels a Brexit arrangement that she can sell to her parliament.

The withdrawal treaty itself is all but final, and preparations are under way for a summit on Sunday to sign it, but there remains the matter of a parallel 20-page political declaration on future EU-UK ties.

European diplomats and EU officials have been in intense talks on the declaration this week. One of them told AFP that they now expect to publish it on Thursday morning, after May's afternoon tea with Juncker.

Neither side has much wiggle room left to polish the text, but May must show that she has left nothing on the table if she is to convince British members of parliament to ratify the deal in the coming weeks.

May and Juncker were expected to cover fishing rights and the movement of goods after Brexit, as well as the duration of the transition period and the British territory of Gibraltar, which lies on an outcrop off Spain.

- Spain, N. Ireland pressure -

May faces pressure from her Northern Irish allies, who oppose a deal they say weakens British sovereignty in their province, and from Spain, which warned it might oppose the accord over Gibraltar.

Madrid wants a veto over applying any agreement on post-transition relations to Gibraltar, but May told MPs on yesterday that Britain "will not exclude Gibraltar from our negotiations on the future relationship".

There is frustration among some EU countries at Spain trying to play hardball so late in the game.

"We are following the latest developments with growing concern and incomprehension -- among the EU27 our Spanish friends are all alone on this," an EU diplomat told AFP.

Two of May's top ministers quit last week, including her Brexit secretary, while MPs from all parties came out against it -- increasing the chances that Britain will crash out of the Union on March 29 without an agreement.

A minister who opposed Brexit and who returned to May's cabinet in a reshuffle triggered by the resignations, tried to rule out this economically disruptive scenario.

"It is my view that the parliament, the House of Commons, will stop no deal ... There isn't a majority in the House of Commons to allow that to take place," Work and Pensions Secretary Amber Rudd told BBC radio.

The withdrawal deal covers Britain's financial settlement, expatriate citizens' rights, contingency plans to keep open the Irish border and the terms of a post-Brexit transition.

Officials are now racing to agree the accompanying outline statement on the future trading and security relationship for after Britain leaves the EU's single market and customs union in March.

- 'Show our displeasure' -

Opposition to the agreement is also building in the pro-Brexit camp.

On Monday, MPs from Northern Ireland's Democratic Unionist Party (DUP) abstained on three budget votes in the Commons and voted against a fourth, despite their deal to back the government on finance matters.

Anti-Europe Conservatives have also savaged the divorce deal, which they say keeps Britain too close to the EU.

Rebels led by MP Jacob Rees-Mogg failed in their attempt to force an immediate confidence vote in May's leadership, but warned they would keep trying.

The withdrawal agreement sets out plans for a 21-month transition after Brexit, in which Britain and the EU want to turn their outline agreement on the future relationship into a full trade deal.

But controversially, it says that if that deal is not agreed in time, Britain will adopt a "backstop" arrangement to keep open its land border with Ireland.

This would keep all of Britain in the EU's customs union, and Northern Ireland also in parts of the single market.

source: philstar.com

Backing off auto tariffs, US and EU agree to more talks

WASHINGTON — President Donald Trump and European leaders pulled back from the brink of a trade war over autos Wednesday and agreed to open talks to tear down trade barriers between the United States and the European Union.

But while politicians and businesses welcomed the deal Thursday, the agreement was vague, the negotiations are sure to be contentious and the United States remains embroiled in major trade disputes with China and other countries.

In a hastily called Rose Garden appearance with Trump, European Commission President Jean-Claude Juncker said the U.S. and the EU had agreed to hold off on new tariffs, suggesting that the United States will suspend plans to start taxing European auto imports — a move that would have marked a major escalation in trade tensions between the allies.


Trump also said the EU had agreed to buy "a lot of soybeans" and increase its imports of liquefied natural gas from the U.S. And the two agreed to resolve a dispute over U.S. tariffs on steel and aluminum.

"It's encouraging that they're talking about freer trade rather than trade barriers and an escalating tariff war," said Rufus Yerxa, president of the National Foreign Trade Council and a former U.S. trade official. But he said reaching a detailed trade agreement with the EU would likely prove difficult.


The tone was friendlier than it has been. During a recent European trip, Trump referred to the EU as a "foe, what they do to us in trade." Juncker, after Trump imposed tariffs on steel and aluminum imports, said in March that "this is basically a stupid process, the fact that we have to do this. But we have to do it. We can also do stupid."

On Wednesday, Trump and Juncker said they have agreed to work toward "zero tariffs" and "zero subsidies" on non-automotive goods.

Trump told reporters it was a "very big day for free and fair trade" and later tweeted a photo of himself and Juncker in an embrace, with Juncker kissing his cheek.

"Obviously the European Union, as represented by @JunckerEU and the United States, as represented by yours truly, love each other!" he wrote.

The agreement was welcomed by political and business leaders in Germany, the EU's biggest economy, though their relief was tempered with caution that details have to be firmed up.

"Very demanding and intensive negotiations lie ahead of us," German Economy Minister Peter Altmaier said, vowing that "we will represent and defend our European interests just as emphatically as the U.S. does with its interests." He said the Trump-Juncker accord was "a good start — it takes away many people's worries that the global economy could suffer serious damage in the coming months from a trade war."

Trump campaigned on a vow to get tough on trading partners he accuses of taking advantage of bad trade deals to run up huge trade surpluses with the U.S.

He has slapped taxes on imported steel and aluminum, saying they pose a threat to U.S. national security. The U.S. and EU are now working to resolve their differences over steel and aluminum — but the tariffs are still in place. And they would continue to hit U.S. trading partners like Canada, Mexico and Japan even if the U.S. and the EU cut a deal.

Whatever progress was achieved Wednesday could provide some relief for U.S. automakers. The escalating trade war and tariffs on steel and aluminum had put pressure on auto companies' earnings. General Motors slashed its outlook, and shares of Ford Motor Co. and auto parts companies have fallen.

"Our biggest exposure, our biggest unmitigated exposure, is really steel and aluminum when you look at all of the commodities," GM CEO Mary Barra said Wednesday.

Trump has also imposed tariffs on $34 billion of Chinese imports — a figure he has threatened to raise to $500 billion — in a dispute over Beijing's aggressive drive to supplant U.S. technological dominance.

China has counterpunched with tariffs on American products, including soybeans and pork — a shot at Trump supporters in the U.S. heartland.

The EU is stepping in to ease some of U.S. farmers' pain. Juncker said the EU "can import more soybeans from the U.S., and it will be done." The EU later said it would not buy more than its market needs but divert some of purchases from other countries in favor of U.S. soybeans, which are now cheaper due to China's tariffs on them.

Mary Lovely, a Syracuse University economist who studies trade, said, "The Chinese are not going to be buying our soybeans, so almost by musical chairs our soybeans are going to Europe." The trouble is, China last year imported $12.3 billion in U.S. soybeans, the EU just $1.6 billion.

Trump's announcement stunned lawmakers who arrived at the White House ready to unload concerns over the administration's trade policies only to be quickly ushered into Rose Garden for what the chairman of the Senate Agriculture Committee called "quite a startling" development.

"I think everybody sort of changed what they were going to say," said Sen. Pat Roberts, R-Kan.

Lawmakers said they still needed to see details of the agreement with the EU as well as progress on the other deals. But they said the breakthrough announcement was a step in the right direction.

"We have more confidence in him now than we did before," said Rep. Mike Conaway, R-Texas, the chairman of the House Agriculture Committee.

The White House announcement came as the Trump administration announced a final rule aimed at speeding up approval of applications for small-scale exports of liquefied natural gas. The Trump administration has made LNG exports a priority, arguing that they help the economy and enhance geopolitical stability in countries that purchase U.S. gas.

Juncker said the two sides also agreed to work together to reform the World Trade Organization, which Trump has vehemently criticized as being unfair to the U.S.

The auto tariffs would have significantly raised the stakes in the dispute. Taxes on EU cars, trucks and auto parts could have hit goods that were worth $335 billion last year. The European Union had warned it would retaliate with tariffs on products worth $20 billion.

Daniel Ikenson, director of trade studies at the libertarian Cato Institute, warned that the fight could flare up again if Trump grows impatient with Europe.

"Auto tariffs are looming unless the EU buys more U.S. stuff and does other things Trump demands," he said.

source: philstar.com

EU leaders tell Britain to exit swiftly, market rout halts

LONDON/BRUSSELS - European leaders told Britain on Tuesday to act quickly to resolve the political and economic chaos unleashed by its vote to leave the European Union, a move the IMF said could put pressure on global growth.

Financial markets recovered slightly after the result of Thursday's referendum wiped a record $3 trillion off global shares and sterling fell to its lowest level in 31 years, but trading was volatile and policymakers said they would take all necessary measures to protect their economies.

British Finance Minister George Osborne, whose attempt to calm markets had fallen on deaf ears on Monday, said the country would have to cut spending and raise taxes to stabilize the economy after a third credit ratings agency downgraded its debt.

Firms have announced hiring freezes and possible job cuts, despite voters' hopes the economy would thrive outside the EU.

European countries are concerned about the impact of the uncertainty created by Britain's vote to leave on the 27 other EU member states. There is little idea of when, or even if, the country will formally declare it is quitting.

"The process for the United Kingdom to leave the European Union must start as soon as possible," French President Francois Hollande said. "I can't imagine any British government would not respect the choice of its own people."

European Commission President Jean-Claude Juncker sent a similar message as he prepared for talks with British Prime Minister David Cameron before an EU summit in Brussels, although he did not anticipate an immediate move.

"We cannot be embroiled in lasting uncertainty," Juncker said in a speech to the European Parliament, which he interrupted to ask British members of the assembly who campaigned to leave the EU why they were there.

Cameron, who called the referendum and tendered his resignation when it became clear he had failed to persuade Britain to stay in the EU, says he will leave it to his successor to formally declare the country's exit.

Arriving for the EU summit, he said: "I'll be explaining that Britain will be leaving the European Union but I want that process to be as constructive as possible, and I hope the outcome can be as constructive as possible.

Holding out hope of maintaining good relations with other European countries, he said Britain wanted "the closest possible relationship in terms of trade and cooperation and security. Because that is good for us and that is good for them."

His party says it aims to choose a new leader by early September. But those who campaigned for Britain's leave vote have made clear they hope to negotiate a new deal for the country with the EU before triggering the formal exit process. European leaders have said that is not an option.

"No notification, no negotiation," Juncker said.

No cherry-picking

After Cameron has addressed EU leaders on Tuesday evening, they will meet the next day to discuss Brexit without him.

Leave campaigners in Britain including Boris Johnson, a likely contender to replace Cameron, suggest the country can retain access to the European single market and curb immigration -- but those goals are mutually incompatible under EU rules.

German Chancellor Angela Merkel said Britain would not be able to "cherry-pick" parts of the EU, such as access to the single market, without accepting principles such as freedom of movement when it negotiates its exit from the bloc.

"I can only advise our British friends not to fool themselves ... in terms of the necessary decisions that need to be made in Britain," she told German parliament in Berlin.

Cameron will meet other European counterparts one-on-one before addressing them all at what promises to be a frosty dinner to discuss what has become known as Brexit.

EU lawmakers say they want him to trigger the exit process at the dinner, but an EU official said that was unrealistic given the political chaos in London, where both Cameron's party and opposition Labour lawmakers are deeply divided.

The ruling Conservative Party is split into pro- and anti-EU camps and Labour Party leader Jeremy Corbyn was facing a no confidence vote on Tuesday from parliamentarians who accuse him of lukewarm support for the EU.

The European Parliament jeered when Nigel Farage, the leader of Britain's euroskeptic UKIP party, said in a scathing speech that Europe had deceived its population and Britain would be its "best friend" if it agreed to extend a tariff-free trade deal.

But the vote has caused new friction in the EU at a time of crises over a mass influx of refugees, economic weakness and tensions on its borders with Russia.

Poland's foreign minister demanded Juncker and other leaders of the executive European Commission quit for not preserving the Union. The prime minister of Greece, enduring austerity measures in return for aid, said Europe must change direction.

Germany's financial market regulator delivered a double blow to London, saying it could not host the headquarters of a planned European stock exchange giant after Britain leaves the EU, and could not remain a center for trading in euros.

Fitch joined other credit ratings agencies in downgrading its sovereign debt on Monday, and Osborne said Britain faces tax rises and spending cuts.

"We are going to have to show the country and the world that the government can live within its means," Osborne, who campaigned to stay in the EU, told BBC radio.

Mayor seeks more autonomy for London

The 52-48 percent vote to leave has deepened multiple geographical as well as political and social divisions in the United Kingdom.

Sadiq Khan, the mayor of London, where a majority voted to stay and people fear job losses if the city loses its status as a global financial center, said access to Europe's market was key. "On behalf of all Londoners, I am demanding more autonomy for the capital - right now," he said.

Scotland, where people voted strongly to remain in Europe, is weighing a possible second referendum on leaving the United Kingdom given the vote to leave the EU.

Scottish leader Nicola Sturgeon denounced what she called a vacuum of leadership in London and said three months of political drift until a successor to Cameron is in place would further damage Britain's economy. She said she would meet EU leaders on Wednesday to discuss how Scotland could remain.

The impact looked likely to spread far beyond Britain's borders although European shares rose after a heavy sell-off, partly due to hopes of a more co-ordinated central bank response to financial market losses. Sterling also rose and Wall Street opened higher as investors hunted for bargains.

European Central Bank President Mario Draghi said central banks around the world should aim to align monetary policies to mitigate "destabilizing spillovers" between economies.

Shares in European banks have come under particular pressure, especially those based in Britain, over doubts about future market access, and Italy, with high levels of bad loans.

Brexit creates huge political uncertainty and will put pressure on global growth, the International Monetary Fund (IMF)'s Deputy Managing Director Zhu Min said on Tuesday at the World Economic Forum in Tianjin in northern China.

Asian stocks rose and Chinese stocks, protected by capital controls, hit a three-week closing high. Chinese Premier Li Keqiang sought to reassure investors by saying the country would not allow "roller-coaster" rides in capital markets.

Dutch Prime Minister Mark Rutte said England had collapsed "politically, monetarily, constitutionally and economically".

US President Barack Obama told National Public Radio there had been some hysteria "as if somehow NATO's gone, the trans-Atlantic alliance is dissolving, and every country is rushing off to its own corner. That's not what's happening."

In view of the disarray in Britain, some people questioned whether Brexit would happen at all. Nordea bank analysts gave it a likelihood of 70 percent and a senior EU official involved in the process said he thought the country may find a way never to announce its formal departure to the bloc. (Additional reporting by Alastair Macdonald, Paul Taylor, Gabriela Baczynska, Phil Blenkinsop and Jan-Robert Bartunek in Brussels; Sudip Kar-Gupta and Guy Faulconbridge in London and Alistair Scrutton in Stockholm)

source: interaksyon.com

ANALYSIS | Can the EU survive Brexit?

BRUSSELS, Belgium -- Britain's vote to become the first country to leave the EU, as projected by national media, is a shattering blow that threatens the survival of the post-war European project, officials and analysts said.

The loss of one of its biggest members will at the very least force major changes on an embattled bloc already struggling to deal with growing populism, a migration crisis and economic woes.

In the long-run, "Brexit" may lead to other countries holding referendums, a far looser union, and possibly even the disintegration of a grouping set up 60 years ago to bring security and prosperity after World War II.

EU President Donald Tusk warned in the run-up to the vote that Brexit could lead to the "destruction of not only the EU but also of Western political civilization."

With Europe facing a resurgent Russia and the threat of terrorism, Tusk said "our enemies ... will open a bottle of champagne if the result of referendum is negative for us."

In a less doom-laden assessment, European Commission Chief Jean-Claude Juncker said last week that the EU was not "in danger of death" from a Brexit but that it would have to learn lessons.

'Very serious blow'

Chris Bickerton, a lecturer at Britain's Cambridge University and author of "The European Union: A Citizen's Guide," said it was a "very serious blow" but not terminal, given the "core role" of the EU in much of European political life.

But he added that it would probably drift towards a "looser, ad hoc" union.

"I don't think it would suddenly disappear but over the longer term, we might see it slowly decline and become something different," he told AFP.

The next steps for the EU would be difficult, he added.

"We are very much in uncharted territory," he said. "I don't think anyone really thought Brexit was really likely, certainly not when they were negotiating with Cameron, otherwise they would have done a very different deal."

In the immediate aftermath of the British vote, seven years of potentially bitter divorce negotiations between Brussels and London loom.

The remaining EU countries will likely be keen to move ahead. France and Germany, the main EU heavyweights, have already been working on a joint plan for the future.

But with Berlin and Paris at loggerheads over future integration of the eurozone, any plan is likely to be a modest affair that deals only with issues such as security and defense.

Even without Britain in the club, the drift away from "ever closer union" and federalism is likely to increase, with growing talk of a "two-speed Europe" that allows states opt-outs from key rules.

One major step could be making membership of the euro non-compulsory, which would help Poland, which appears to have no intention of joining the single currency but is officially meant to.

Domino effect?
The main fear in many European capitals is that either way, the result could trigger a domino effect of referendums in other countries.

French far-right leader Marine Le Pen on Tuesday urged all EU states to follow Britain's example, and eurosxeptics in the Netherlands, Denmark and Sweden have made similar calls for referendums.

Vivien Pertusot, Brussels-based analyst with the French Institute of International Relations, said the EU was likely to survive but be weakened.

"Institutions rarely die," he told AFP. "Maybe there will not be disintegration, but a loss of relevance. The EU will lose, bit by bit, its centrality for all the most political projects."

The danger for the EU is that even after it makes changes following the British referendum, it will still not be able to quell the forces of history tearing it apart.

"The EU is in a negative spiral," Janis Emmanouilidis, director of studies at Brussels-based think tank European Policy Centre, told AFP.

The question of what could replace the EU if it does collapse is even more vexed.

"It might sound as if yes, this story has ended, a new one has begun, but that's not easy. Especially after the experience of failure," said Emmanouilidis.

source: interaksyon.com

Greece submits fresh plan on eve of EU emergency summit

ATHENS, Greece - Greek Prime Minister Alexis Tsipras presented new proposals to European leaders Sunday aimed at ending his country's debt crisis, on the eve of a summit that could determine whether Greece crashes out of the eurozone.

In a telephone call with German Chancellor Angela Merkel, French President Francois Hollande and European Commission President Jean-Claude Juncker, Tsipras detailed a "mutually beneficial deal", the Greek premier's office said in a statement.

Italian Prime Minister Matteo Renzi urged the two sides to seize a "window of opportunity", saying all conditions were in place for them to reach a "win-win accord".

Athens said its new proposals were aimed at reaching a "definitive solution" to the five-month standoff between Athens and its creditors -- the European Commission, International Monetary Fund and European Central Bank -- as fears deepened over a potential "Grexit" from the eurozone.

The heads of the 19 eurozone countries will hold an emergency summit on the crisis in Brussels on Monday under pressure to prevent Greece from defaulting on its debt with a June 30 payment deadline fast approaching.

Sanity will prevail

The head of Greece's biggest bank said she thought "sanity will prevail" on Monday.

"To enter into such uncharted waters and take up all the risk both for the eurozone and for Greece for two or three billion (euro) difference, I think it's insane," National Bank of Greece chief Louka Katseli told BBC radio.

Greece's anti-austerity government met Sunday to refine its proposals, while a European source said Tsipras and Juncker "held talks Saturday and will again speak Sunday", adding that there were many exchanges and "informal work under way to find a solution".

Failing a deal, Greece is likely to default on an IMF debt payment of around 1.5 billion euros ($1.7 billion) due on June 30, setting up a potentially chaotic exit from the eurozone.

Last Wednesday the Greek central bank put the risk in stark terms saying: "Failure to reach an agreement would... mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country's exit from the euro area and -– most likely -– from the European Union."

The IMF was called in to help rescue Greece at the end of 2009 when the debt-plagued country could no longer borrow on international markets.

The EU's involvement in the huge bailout, which was to provide 240 billion euros ($270 billion) in loans in exchange for drastic austerity measures and reforms, runs out at the end of this month, but IMF support was supposed to continue to March 2016.

Talks between Greece's radical-left government and its lenders have been deadlocked for five months over the payment of the final 7.2 billion euro tranche of the bailout, with talk also turning to an extension of the European help.

For the Greek government any extension of the bailout should be about kickstarting the country's devastated economy and not further austerity.

They also want an easing of the country's crippling debt burden, which officially stood at 312.7 billion euros, or 174.7 percent of gross domestic product, in March.

The international lenders have rejected a series of proposals from Athens, insisting on their own mixture of cuts and reforms.

Minister of state Nikos Pappas, who is close to Tsipras, said the counter-proposals would be "unacceptable to whichever Greek political party" was in power.

Bridging the gap

Alekos Flambouraris, another Tsipras minister, said Saturday that Athens would propose reworked measures that "bridge the gap", while also predicting that Greece's creditors would not be satisfied with the gestures, Greek media reported.

"You'll see they won't accept loosening budget (restrictions), or our proposal on the debt," he said of two main sticking points in the talks.

But the country's Finance Minister Yanis Varoufakis, whose flamboyant style has irked many of his European counterparts, turned the tables by putting the onus on the leader of paymaster Germany to do a deal.

"The German chancellor has a clear decision to make on Monday," he wrote in an op-ed for the Frankfurter Allgemeine Zeitung.

"On our side, we will come with determination to Brussels to agree to further compromises as long as we are not asked to do what the previous (Greek) governments have done: accept new debt under conditions that offer little hope for Greece to repay its debts," he wrote, without specifying the compromises.

Demonstrators around Europe on Saturday took to the streets to protest against spending cuts and austerity measures taken by their governments, and expressing solidarity with Greece.

source: interaksyon.com