EU Could Scrap "Divisive & Ineffective" Refugee Quota Scheme

The Guardian reports that EU could scrap a divisive scheme that compels member states to accept quotas of refugees, one of the bloc’s most senior leaders will say this week.

The president of the European council, Donald Tusk, will tell EU leaders at a summit on Thursday that mandatory quotas have been divisive and ineffective, in a clear sign that he is ready to abandon the policy that has created bitter splits across the continent.

Jennifer Rankin reports that Tusk will set a six-month deadline for EU leaders to reach unanimous agreement on reforms to the European asylum system, but will propose alternatives if there is no consensus. 

“If there is no solution... including on the issue of mandatory quotas, the president of the European council will present a way forward,” states a draft letter from Tusk to national capitals, seen by the Guardian.

In effect this means scrapping mandatory quotas, because Hungary, Poland and Czech Republic are fiercely opposed to the idea of dispersing refugees around the bloc based on a formula drawn up in Brussels. Tusk is likely to face opposition, however, from other EU bodies, including the European commission.

EU leaders introduced compulsory quotas in 2015 at the height of the migration crisis, as thousands of people arrived daily on Europe’s shores, many of whom were refugees from Syria, Iraq and Eritrea.

Hungary, Slovakia, Romania and the Czech Republic voted against the move, but the policy was forced through by a majority vote.

Hungary and Poland have defied the rest of the EU by not taking a single refugee under the scheme, which aimed to relocate about 120,000 refugees, mainly Syrians. The Czech republic has taken in only 12.

All three countries were referred to the European court of justice last week for failing to implement the policy, the usual procedure for flouting EU rules.

Despite the backlash against the emergency scheme, the European commission proposed making quotas a permanent feature of EU law in 2016. Under its proposal, countries that refuse to take part in a “corrective allocation mechanism” to take the pressure off member states bearing the brunt would have to pay a “solidarity contribution” of €250,000 (£220,000) per asylum seeker.

The idea has been stalled for months, as home affairs ministers who make the law have been unable to agree on it.

Tusk will call on EU governments to take charge, rather than leaving Brussels to set the pace in managing refugee policy.

“Only member states are able to tackle the migration crisis effectively,” Tusk’s letter says. “The EU’s role is to offer its full support in all possible ways to help member states handle the migration crisis. But the EU has neither the capacity nor legal possibilities to replace member states.”

Any move to drop the plan is likely to upset Italy and Greece, countries that have urged the rest of the EU to help them cope with large numbers of refugees and migrants in recent years. Germany and Sweden, backed by the European commission, are also likely to contest any plan deemed to reduce the help offered by other member states.

One EU diplomat said some member states were surprised by Tusk’s letter “because it doesn’t seem to be in sync” with work undertaken by home affairs ministers working on the file.

We suspect we know one other "European" that will not be pleased... George Soros.

Putin Blamed For Poland"s Bust-Up With Brussels

Russia-gate blame-scaping is accelerating across Europe... and now it is being embraced by none other than European Council President Donald Tusk.

In what is an unprecedented attack by an EU leader on a member state’s sitting government, Bloomberg reports that Tusk explicitly suggests the ruling Law & Justice party is merely a "puppet of Putin" and just forwarding Russian interests...

“Strident dispute with Ukraine, isolation in the European Union, walking away from rule of law and judicial independence, attack on non-governmental sector and free media,” Tusk wrote on his personal Twitter account on Sunday. 

 

“Law & Justice strategy or Kremlin plan? Too similar to sleep well.”

This aggresiver tweet comes just days after Poland"s Independence Day parades "triggered" mainstream media everywhere... as tens of thousands of people, waving tens of thousands of white-and-red national flags young and old, of all walks of life, with whole families take to the streets.  

As we detailed previously, to the western media these are Nazis, racists, anti-semites and islamophobes. An abomination for the European Union.

What has positive overtones in Poland (patriotism, faith, family), has negative ones in Western Europe and the other way round. Migrants, LGTBQ and gender mainstreaming is not welcome in the area between the Oder and Bug Rivers. The EU values cannot be farther from Poland’s values and vice versa.

 

The Independence March denigrated by the Western media was favourably covered by the Polish government and other national media, except for those which are far to the left and very much pro-European. The former shored up the positive aspects of the event, the latter only looked for incidents to blow them out of any proportion and join the chorus of their western counterparts in condemning “fascists” and “white supremacists”.

 

A thirty-six million nation in the heart of Europe (i.e. with a population approximately the size of Spain’s) is throwing down the gauntlet to the EU establishment and its view of European unity based on cultural and religious indifference and anti-nationalism.

As Bloomberg notes, Tusk’s tweet is the latest salvo in a war of words between Poland and the EU, as fears mount in Brussels that Warsaw’s government is shifting toward authoritarian rule. It also adds to speculation that the 60-year-old former Polish prime minister plans a comeback to domestic politics when his term as chairman of EU leaders’ meetings expires in 2019, the same year that current parliament and government’s term ends in Poland.

On Friday, Prime Minister Beata Szydlo criticized her fellow leaders and lawmakers from the bloc for weighing sanctions against the nation over anti-democratic actions and suggested they weren’t being honest. The European Parliament said last week it would examine possible sanctions against Poland over democratic backsliding. That opens a second EU front against Warsaw after the European Commission last year initiated a rule-of-law investigation into the right-wing Law & Justice party due to judicial independence concerns.

“I can’t not tell the prime ministers that we should respect each other, that we should strive for our political families to have respect for other countries in the public debate, in the European Parliament and in other European institutions,” Szydlo told reporters in Gothenburg, Sweden, before a meeting with her EU counterparts on Nov. 17.

 

“Debates should be based on the truth.”

As we conclude previously, at the time when the Soviets were establishing the communist political system in Central Europe someone said (someone ascribed these words to Stalin himself) that communism fits the Polish nation like a saddle fits a cow. Is the attempt to Europeanize Poles another attempt at saddling the cow?

EU Uses Sleazy Negotiating Tactics To Extort More Cash In Brexit Talks

As we discussed (see here) when Brexit talks resumed this week, the EU is piling pressure on Theresa’s May’s weakened government to extort more money out of the UK in the divorce settlement – now termed “moment of clarification” in EU parlance. Despite rumours before the latest talks began, that Theresa May was prepared to increase the UK’s offer, if this was the case, the EU wasn’t impressed. In the post-talks press conference. the beleaguered Brexit Secretary, David Davis, stated that there is positive momentum in the negotiations…

There is no doubt that we have made, and continue to make significant progress across a whole range of issues. Across the board we made progress to resolving some really difficult questions. That, of course will continue, at pace, between now and December.

…and the markets seemed to believe him. Sterling caught a bid, although it probably had at least as much to do with stronger-than-expected industrial production and a narrowing in the UK’s trade deficit. Meanwhile, the EU side did its fearmongering best to give the impression that insufficient progress will be made to progress to trade talks when the European Council meets in December. Bloomberg reported on comments from EU chief negotiator, Michael Barnier.

European Union chief negotiator Michel Barnier raised the prospect of Brexit talks failing to reach a breakthrough by year-end, saying the U.K. has two weeks to come up with a better offer on the financial settlement.

 

Barnier called for “real and sincere progress” on the three divorce issues, which include the separation bill, the rights of EU citizens and the Irish border, which has erupted back onto the agenda this week.

 

“I have to present a sincere and real picture on those three subjects to the European Council and the European Parliament. If that is not the case, then we will continue, and that will put back the opening of discussions on the future,” Barnier said at a news conference in Brussels on Friday with Brexit Secretary David Davis. Little progress had been expected in this sixth round of talks, as the focus has been on whether a breakthrough will be possible by December.

Prior to the resumption of talks, Davis had toured of European capitals trying to drum up support for the UK’s position. One person he met was Poland’s European Affairs minister, Konrad Szymanski. Szymanski was the first person this morning (before Barnier) to highlight the prospect that talks to resolve the financial settlement (and the Irish border – see below) could drag on into March next year. From Bloomberg.

“I think a satisfactory deal will be reached at the very last minute,” Polish European Minister Konrad Szymanski, who met Davis this week in Warsaw, told reporters on Friday in Brussels. “It could be March but it would be better in December.”

If agreement was delayed to March 2018, Szymanski noted that it would be difficult to negotiate a trade deal before Britain is due to exit the EU in March 2019. While Davis referred to “a few outstanding, albeit important, issues”, thanks to the EU, this is no longer just about money. A new “spanner” was thrown into the works by the EU on Thursday night. This is the border agreement between the Republic and Northern Ireland after Brexit. Perhaps not fully appreciating the EU’s negotiating tactics, we sighed when we saw a Bloomberg headline (with our emphasis) “Irish Border Throws Unexpected Hurdle Into Brexit Talks”. From the article.

The future of the Irish border erupted unexpectedly into Brexit talks this week, as the European Union made new demands on Britain that risk distracting from efforts to reach a breakthrough by year-end. The EU circulated a document to diplomats that called for Northern Ireland to maintain the rules of the customs union and single market after Brexit. It says there must be no hard border on the island, meaning regulations have to be the same on each side of the line that will become the U.K.’s land frontier with the EU after Brexit.

 

The Irish issue, while one of the three divorce issues that need to be settled in the first phase of talks, had taken a back seat in recent months as the U.K. argued that it would be easier to find an agreement on the gnarly border issue once the future trading relationship was clear. Its re-emergence as an obstacle late Thursday distracted attention from what appeared to be some carefully choreographed efforts by the U.K. government to get euroskeptic critics onside as it prepares the ground for the concessions it may have to make to Europe in the next few weeks.

Late last week, Theresa May had set out the specific hour which the UK will leave the EU – 11pm GMT on 29 March 2019 – in an amendment to the EU Withdrawal Bill to please those “critics”. “There in black and white” she said, warning that she would not tolerate any attempts to block Brexit in parliament.

However, May’s attempts at “choreography” were overwhelmed by the EU’s machinations and, coincidentally (or not), comments from Lord Kerr hitting the media this morning. Lord Kerr, if you weren’t aware, is a cross-bench peer in the House of Lords who drafted Article 50, the formal procedure for leaving the EU. Kerr gave a speech in London today, leaked beforehand in the media, in which he stated that the UK electorate had been misled and the Brexit process could still be reversed. According to the BBC.

(Lord Kerr) will give a speech in London later in which he will say: "We can change our minds at any stage of the process. We are not required to withdraw just because Mrs May sent her letter (to Brussels). Actually, the country still has a free choice about whether to proceed. As new facts emerge, people are entitled to take a different view. And there"s nothing in Article 50 to stop them."

Lord Kerr, it happens, is a "big time" globalist, having been a former member of the Bilderberg Steering Committee, Executive Committee member of the Trilateral Commission and Ambassador and UK Permanent Representative to the European Union.

As Bloomberg noted, it’s virtually impossible for the UK to meet the EU’s latest demands on the Irish border, which was almost certainly the point.

The EU’s demands on Ireland in the memo are all but impossible for Britain, unless the whole U.K. stays in the customs union, which Prime Minister Theresa May has ruled out. Allowing Northern Ireland to stay in the customs union could mean putting a border between it and mainland Britain. That’s unthinkable for the U.K., and more so at a time when the Conservative government is propped up by the pro-U.K. Democratic Unionist Party from Northern Ireland. The DUP would quit before accepting a border in the Irish Sea.

 

“We recognize the solutions to the unique circumstances in Northern Ireland must respect the integrity of the EU single market and customs union,” Davis’s department said in response. “But they must also respect the integrity of the United Kingdom.”

 

…Ireland has consistently argued that the U.K. remaining in the customs union would be the easiest way to avoid a new border. But May insists Britain will leave as it can’t strike trade deals around the world otherwise -- a key part of the pro-Brexit narrative.

We assume that Theresa May, David Davis and their colleagues have grown wise to the EU’s sleazy negotiating tactics and leaks to German newspapers (after Juncker has dinner with May – twice so far). Nonetheless, the ministerial resignations, party infighting and complaints from banks and the business community about the lack of clarification on the details and a transitional period are making it increasingly difficult for the UK side. However, we suspect that if the UK offers something approaching 60 billion euros, rather than the 40 billion euros it wanted to pay, the Irish border issue and others will magically melt away. May and Davis might see this as a price worth paying to stop having to be nice to the likes of Juncker and Barnier. And...the UK won’t have to cough up when a large German, French or Italian bank requires bailing out.

Meotti: The Migrant Crisis Upended Europe

Authored by Giulio Meoti via The Gatestone Institute,

• "The migrant crisis is the 9/11 of the European Union... That day in 2001, everything changed in the US. In a minute, America discovered its vulnerability. Migrants had the same effect in Europe... The migration crisis profoundly undermines the ideas of democracy, tolerance and... the liberal principles that constitute our ideological landscape." — Ivan Kratsev, Chairman of the Center for Liberal Strategies in Sofia and a member of the Institute of Humanities in Vienna, Le Figaro.


• The European public now looks at EU institutions with contempt. They perceive them -- under multiculturalism and immigration -- not only as indifferent to their own problems, but as adding to them.


• "We are a cultural community, which doesn"t mean that we are better or worse -- we are simply different from the outside world... our openness and tolerance cannot mean walking away from protecting our heritage". — Donald Tusk, President of the European Council.

A few weeks after Germany opened its borders to over a million refugees from the Middle East, Africa and Asia, Hungarian Prime Minister Viktor Orbán said that the migration crisis would "destabilize democracies". He was labelled a demagogue and a xenophobe.

Two years later, Orbán has been vindicated. As Politico now explains, "[M]ost EU leaders echo the Hungarian prime minister" and the Hungarian PM can now claim that "our position is slowly becoming the majority position".

Many in Europe seem to have understood what Ivan Krastev, the Chairman of the Center for Liberal Strategies in Sofia and a member of the Institute of Humanities in Vienna, recently explained to Le Figaro:

"The migrant crisis is the 9/11 of the European Union... That day in 2001, everything changed in the US. In a minute, America discovered its vulnerability. Migrants had the same effect in Europe. It is not their number that destabilizes the continent... The migration crisis profoundly undermines the ideas of democracy, tolerance and progress as well as the liberal principles that constitute our ideological landscape. It is a turning point in the political dynamics of the European project".

Thousands of migrants arrive on foot at a railway station in Tovarnik, Croatia, September 17, 2015. (Photo by Jeff J Mitchell/Getty Images)

Migration is having a significant impact, for instance, on Europe"s public finances. Take the two countries most affected by it. Germany"s federal government spent 21.7 billion euros in 2016 to deal with it. Also reported was that Germany"s budget for security this year will grow by at least a third, from 6.1 billion to 8.3 billion euros.

In Italy, the Minister of Economy and Finance recently announced that the country will spend 4.2 billion in 2017 on migrants (one-seventh of Italy"s entire budget for 2016). Spain recently announced that in North Africa, the fence around its enclaves of Ceuta and Melilla, which keeps migrants out of the Spanish territory, will be funded through a further infusion of 12 million euros. Everywhere in Europe, states are allocating extra resources to deal with the migrant crisis, which has also changed Europe"s political landscape.

The recent election victories of Sebastian Kurz in Austria and Andrej Babis in the Czech Republic have potentially enlarged the group of Central and Eastern European countries that oppose Brussels -- countries that do not want to accept the number of migrants that the EU is demanding. The topic of immigration is fracturing Europe along ideological lines. Not only fences, but rivalry, mistrust and hate now divide the European project more deeply than ever before. The European public now looks at EU institutions with contempt. They perceive them -- under multiculturalism and immigration -- not only as indifferent to their own problems, but as adding to them.

Another political earthquake linked with the migration crisis is "the decline of social democracy in the West", as Josef Joffe, Editor and Publisher of Die Zeit, recently called it. Everywhere in Europe, the migration crisis has all but killed the social-democratic parties, long perceived as unable to cope with it. Twenty years ago, these left-liberal parties governed everywhere -- Spain, Britain, Germany, for instance -- but now they are in the opposition everywhere except Italy. From Norway to Austria, Europe is now led by conservative governments.

More than half the terror plots in Germany since the onset of the migrant crisis in 2014 have involved migrants, according to headlines as well as a study by the Heritage Foundation. In addition, ever since the Islamic State -- now defeated in Raqqa -- took advantage of the destabilization caused by Syria"s civil war to become a major driver of the migrant crisis, migration has been a major concern for Europe"s security. From the territory it conquered, ISIS launched major terror attacks on Europe.

The migration crisis has also led to the strategic strengthening in Europe of Turkish President Recep Tayyip Erdogan. He has been blackmailing European countries by threatening that if billions of euros and certain political concessions are not given to him, he will open Turkey"s borders to let millions more migrants flood into Europe. Erdogan has not only demanded that Europe jail writers and journalists; he has also tried to influence elections in the Netherlands and Germany by appealing to his Turkish constituencies there.

A Pew Research report shows how migration is reshaping European countries. In 2016 alone, Sweden"s population grew by more than 1%. The increase is ascribed to mass migration, the second-highest in the EU. The number of immigrants rose from 16.8% to 18.3% of Sweden"s population between 2015 and 2016.

Austria and Norway, two other countries with large immigrant populations (at least 15% percent in 2016), saw a 1% rise from 2015. The newspaper Die Welt recently reported that 18.6 million German residents -- one-fifth of Germany"s total population -- now come from migrant backgrounds.

The Machiavelli Center in Italy reported in a study, "How immigration is changing Italian demographics", that an "unprecedented" shift in Italy"s demography has been taking place due to the migration crisis.

The Pandora"s box of a demographic revolution has been opened.

Two years ago, Hungarian Prime Minister Viktor Orbán was the only voice in Europe speaking of the need to keep Europe "Christian". Now one of his most vocal opponents, Donald Tusk, President of the European Council, has said:

"We are a cultural community, which doesn"t mean that we are better or worse -- we are simply different from the outside world... our openness and tolerance cannot mean walking away from protecting our heritage".

In 2015, any talk about "culture" was condemned as "racism". Now it is becoming part of the mainstream.

In trying to cope with the Islamists" war on Western politics, culture and religion, and the cultural clash they created, Europe has been upended.

Greece Plans 30 Billion Euro Debt Swap As It Prepares For The End Of Bailouts

Greece is planning a 30 billion euros debt swap which will convert 20 existing bonds into 5 (or less) new issues in the next few weeks (although the exact timing remains uncertain). The bonds are expected to have similar maturities to the existing notes from 2023-2042.

According to Bloomberg, the Greek government is planning an unprecedented debt swap worth 29.7 billion euros ($34.5 billion) aimed at boosting the liquidity of its paper and easing the sale of new bonds in the future. Under a project that could be launched in mid-November, the government plans to swap 20 bonds issued after a restructuring of Greek debt held by private investors in 2012 with as many as five new fixed-coupon bonds, according to two senior bankers with knowledge of the swap plan. The bank officials requested anonymity as the plan has yet to be made public.

Markets have responded well to the news as Bloomberg reported.

• Greek 10-Year Yield Drops to Lowest Since July on Debt-Swap Plan

• Greek 5-yr bond yield drops by 10bps to 4.345%, its lowest level since the nation issued the new note in July.


• Demand spurred by optimism that the third bailout review will be completed in time; news that government is planning a debt-swap plan is also boosting sentiment

While we struggle to believe that the Greek debt crisis is anywhere near close to being solved, at least the country seems to have been touched by Europe’s recovery.

Furthermore, the European Council announced on 25 September 2017 that Greece’s finances have stabilised and it was closing the excessive debt procedure. It sounded good anyway...

"After many years of severe difficulties, Greece"s finances are in much better shape. Today"s decision is therefore welcome", said Toomas Tõniste, minister for finance of Estonia, which currently holds the Council presidency.

 

"We are now in the last year of the financial support programme, and progress is being made to enable Greece to again raise money on the financial markets at sustainable rates." 

 

From a deficit of 15.1% of GDP reached in 2009, Greece"s fiscal balance has steadily improved, turning into a 0.7% of GDP surplus in 2016. Although a small deficit is projected for 2017, the fiscal outlook is expected to improve again thereafter…In the light of this, the Council found that Greece fulfils the conditions for closing the excessive deficit procedure. Greece will now be subject to the preventive arm of the EU"s fiscal rulebook, the Stability and Growth Pact. Monitoring will continue until August 2018 under its macroeconomic adjustment programme.

Meanwhile, the planned debt swap is a step in the Greek government’s preparations for August 2018 when, excuse our cynicism, Greece will essentially look to borrow more money to buffer its debt mountain. Bloomberg comments. 

“The move aims to address the current illiquidity of the Greek bond market,” according to analysts at Pantelakis Securities SA in Athens.

 

It will also “establish a decent yield curve, thus facilitating the country’s return to public debt markets.”

 

The move comes as Greece prepares for life after the end of its current bailout program in August 2018. The debt swap is a step toward the country’s full return to markets required to avoid a new bailout program. The government plans to tap the bond market in 2018 to raise at least 6 billion euros to create an adequate buffer to honor debt obligations, according to a government official…

 

Finance Minister Euclid Tsakalotos said in October that tapping markets soon wouldn’t be aimed at getting fresh money so much as to better manage the country’s debt and make its bonds more attractive. The new bonds, following the swap, are expected to have the same value as the old ones and will have a fixed coupon, one of the people with knowledge of the matter said.

Talking of cynicism, Goldman Sachs role in this transaction remains uncertain.

The challenge for Greece is to be in a sufficiently strong financial position to refinance more than 17 billion euros of debt in 2019 as Bloomberg explains, Greece returned to markets in July for the first time since 2014, raising 3 billion euros through new 5-year bonds. Now, with the swap plan, the government wants to ensure it can tap the market for enough funds to refinance its debt obligations in 2019, which originally amounted to 19 billion euros. The government managed to reduce this number by 1.6 billion euros with the July bond issuance.

While the timing of the debt swap transaction is uncertain, the government is aiming to complete it in time for the return of representatives of the country’s creditors in the last week of this month. No doubt they will be overjoyed by what they find.

There"s just one thing...

Carney Reveals Europe's Potential Achilles Heel in Brexit Talks

This morning, BoE Governor Mark Carney discussed the risks of a hard Brexit during his testimony to the UK Parliamentary Treasury Committee. There was renewed weakness in Sterling during his testimony.

Ironically, given the fall in Sterling, Carney explained why Europe’s financial sector is more at risk than the UK from a “hard” or “no-deal” Brexit. We wonder whether Juncker and Barnier appreciate the threat that a “no-deal” Brexit poses for the EU’s already fragile financial system?

When asked does the European Council “get it” in terms of potential shocks to financial stability, Carney diplomatically commented that “a learning process is underway.” Having sounded alarm bells about clearing in his last Mansion House speech, he noted “These costs of fragmenting clearing, particularly clearing of interest rate swaps, would be born principally by the European real economy and they are considerable.”

Calling into question the continuity of tens of thousands of derivative contracts, he stated that it was “pretty clear they will no longer be valid”, that this “could only be solved by both sides” and has been “underappreciated” by Europe. Moving on to the possibility that there might not be a transition period, Carney had a snipe at Europe for its lack of preparation “We are prepared as we should be for the possibility of a hard exit without any transition…there has been much less of that done in the European Union.”

Maybe it’s Europe, not the UK, that needs the transition period most.

In Carneys view “It’s in the interest of the EU 27 to have a transition agreement. Also, in my judgement given the scale of the issues as they affect the EU 27, that there will ultimately be a transition agreement. There is a very limited amount of time between now and the end of March 2019 to transition large, complex institutions and activities…If one thinks about the implementation of Basel III, we are alone in the current members of the EU in having extensive experience of managing the transition for individual firms of various derivative and risk activities from one jurisdiction back into the UK. That tends to take 2-4 years. Depending on the agreement, we are talking about a substantial amount of activity.”

Returning to the theme of financial stability, he stated “As a general thing, in an uncooperative outcome, at least initially, the UK will be long financial services. We will have more capacity, capital, individuals, collateral in the UK. The EU will be short of financial services because not all of that capacity will be able to go across. The entire economic impacts are greater for the UK but, from a financial stability perspective, they are greater for the EU.”

On further questioning, Carney outlined the other two major issues, along with derivatives and wholesale banking, which would be affected, i.e. cross-border provision of insurance (UK domiciled entities would be unable to pay out) and data protection and transfer (there is more data in the UK which is relevant to the EU than vice versa).

Summing up, Carney stated “These issues are bigger for Europe than they are for us, but they’re material for us.” That comment prompted the following question “In which case we have much more leverage in order to get a deal?” The diplomatic reply was “I wouldn’t want to use financial stability issues as leverage. I wouldn’t want them to be addressed in a bloodless technocratic way in the interests of all the citizens.” Didn’t he just describe Juncker’s modus operandi.

European Commission Responds To Theresa May Speech

As promised, the European Commission responded promptly to Theresa May"s speech with remarks from Michel Barnier hitting the tape, in which he says that "Prime Minister Theresa May has expressed a constructive spirit which is also the spirit of the European Union during this unique negotiation" and notes that "Today, for the first time, the United Kingdom government has requested to continue to benefit from access to the Single Market, on current terms, and to continue to benefit from existing cooperation in security. This is for a limited period of up to two years, beyond its withdrawal date, and therefore beyond its departure from the EU institutions."

Commenting further, Barnier said that "if the European Union so wishes, this new request could be taken into account by the EU and examined in light of the European Council stated in its guidelines of 29 April 2017: "Should a time-limited prolongation of Union acquis be considered, this would require existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures to apply."

While the remarks are hardly surprising, the one section that appears to be grabbing attention is the following: "The fact that the government of the United Kingdom recognises that leaving the European Union means that it cannot keep all the benefits of membership with fewer obligations than the other Member States is welcome. In any case, the future relationship will need to be based on a balance of rights and obligations. It will need to respect the integrity of the Union"s legal order and the autonomy of its decision-making."

He also said that "Prime Minister May"s statements are a step forward but they must now be translated into a precise negotiating position of the UK government" and adds that "The EU will continue to insist on sufficient progress in the key areas of the orderly withdrawal of the United Kingdom before opening discussions on the future relationship. Agreeing on the essential principles in these areas will create the trust that is needed for us to build a future relationship together."

Indeed, this is what will be the focus of the Brexit process as it moves on to the next phase of the "divorce" proceedings.

Full Barnier statement below (link).

European Commission - Statement

Statement by Michel Barnier

Brussels, 22 September 2017

In her speech in Florence, Prime Minister Theresa May has expressed a constructive spirit which is also the spirit of the European Union during this unique negotiation.

The speech shows a willingness to move forward, as time is of the essence. We need to reach an agreement by autumn 2018 on the conditions of the United Kingdom"s orderly withdrawal from the European Union. The UK will become a third country on 30 March 2019.

Our priority is to protect the rights of citizens. EU27 citizens in the United Kingdom must have the same rights as British citizens today in the European Union. These rights must be implemented effectively and safeguarded in the same way in the United Kingdom as in the European Union, as recalled by the European Council and European Parliament. Prime Minister May"s statements are a step forward but they must now be translated into a precise negotiating position of the UK government.

With regard to Ireland, the United Kingdom is the co-guarantor of the Good Friday Agreement. Today"s speech does not clarify how the UK intends to honour its special responsibility for the consequences of its withdrawal for Ireland. Our objective is to preserve the Good Friday Agreement in all its dimensions, as well as the integrity of the Single Market and the Customs Union.

The United Kingdom recognises that no Member State will have to pay more or receive less because of Brexit. We stand ready to discuss the concrete implications of this pledge. We shall assess, on the basis of the commitments taken by the 28 Member States, whether this assurance covers all commitments made by the United Kingdom as a Member State of the European Union.

Today, for the first time, the United Kingdom government has requested to continue to benefit from access to the Single Market, on current terms, and to continue to benefit from existing cooperation in security. This is for a limited period of up to two years, beyond its withdrawal date, and therefore beyond its departure from the EU institutions.

If the European Union so wishes, this new request could be taken into account by the EU and examined in light of the European Council stated in its guidelines of 29 April 2017: "Should a time-limited prolongation of Union acquis be considered, this would require existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures to apply."

The sooner we reach an agreement on the principles of the orderly withdrawal in the different areas – and on the conditions of a possible transition period requested by the United Kingdom – the sooner we will be ready to engage in a constructive discussion on our future relationship.

The EU shares the goal of establishing an ambitious partnership for the future. The fact that the government of the United Kingdom recognises that leaving the European Union means that it cannot keep all the benefits of membership with fewer obligations than the other Member States is welcome. In any case, the future relationship will need to be based on a balance of rights and obligations. It will need to respect the integrity of the Union"s legal order and the autonomy of its decision-making.

The EU will continue to insist on sufficient progress in the key areas of the orderly withdrawal of the United Kingdom before opening discussions on the future relationship. Agreeing on the essential principles in these areas will create the trust that is needed for us to build a future relationship together.

David Davis and I will meet in Brussels next Monday to begin the fourth round of the negotiations. As always, we are preparing the upcoming round with the 27 Member States and the European Parliament. On Monday I will have a discussion with the European Parliament in its Brexit Steering Group, as well as with all Member States in the General Affairs Council.

We look forward to the United Kingdom"s negotiators explaining the concrete implications of Prime Minister Theresa May"s speech. Our ambition is to find a rapid agreement on the conditions of the United Kingdom"s orderly withdrawal, as well as on a possible transition period.

Juncker Unveils Grand Vision For A United States Of Europe

European Commission chief Jean-Claude Juncker delivered his annual state of the union address on Wednesday, in which he laid out his grand vision for federalist Europe, and urged European Union governments to use economic recovery (i.e., Mario Draghi"s nationalization of the bond market), the political weakness in the US and Brexit as "springboards" toward a closer union, built on an expanded euro zone and a pivotal role in world trade. The allegedly unintoxicated Juncker sketched out a vision of a post-2019 EU where 30 countries would be using the euro, with an EU finance minister running key budgets to help states in trouble.

Among the key proposals put forward by the EU Commission president were compulsory Euro membership for the remaining eight European states outside the bloc, for new countries to join the Schengen zone, plans for closer defensive cooperation leading to the creation of a European army in the next decade and easier ratification of EU-wide trade treaties with foreign powers. Tax and welfare standards would converge and Europe, not the United States, would be the hub of a free-trading world.

In short, a blueprint for a United States of Europe.

Let"s throw off the bowlines. Sail away from the harbour. Catch the trade winds in our sails.
My 2017 #SOTEU speech: https://t.co/pHb10Uhng0 pic.twitter.com/k3IUnU0d8I

— Jean-Claude Juncker (@JunckerEU) September 13, 2017

“The wind is back in Europe’s sails,” Junker told the European Parliament quoted by Reuters, citing economic growth and the easing of a succession of crises -- Greek debt, refugee inflows, the rise of eurokcepticism reflected in Brexit - that seemed to threaten the EU’s survival.

Juncker has also resurrected the idea of merging his own post with that of the President of the European Council, who currently represents the interests of its member state governments, saying it would be easier if “one captain was steering the ship.” Such as president would be chosen in an EU-wide vote. A powerful new EU-wide economy minister has also been touted, one which would have power to whip dissenters in line with a common EU vision.

In his best infomercial salesman immitation, Juncker urged Europeans to hurry, or else the generous offer may not last: “Now we have a window of opportunity, but it will not stay open for ever,” he said, emphasizing a need to move on from and even profit from the British vote to leave the bloc in 2019 according to Reuters.

Some promptly backed Juncker"s blueprint: German Finance Minister Wolfgang Schaeuble said that Juncker’s plan to build a closer European Union based on an expanded euro zone was largely in line with Germany’s vision for the bloc. The German also said that Juncker had discussed with Chancellor Angela Merkel his annual State of the EU speech in which he spoke of a vision of a post-2019 EU where some 30 countries would be using the euro.

“It is good that he is putting pressure (to expand the euro zone) but the preconditions (for joining the euro zone) must be fulfilled,” Schaeuble told the ARD broadcaster in an interview. “It is in fact so that EU countries who fulfill the preconditions become members of the euro under the Lisbon Treaty”. However, the German who in the summer of 2015 nearly kicked Greece out of the Eurozone, added that EU countries wishing to adopt the single currency should not do so before their public finances and economies are sound enough as they could face the fate of Greece, which had to be bailed out by the EU and IMF in 2010.

* * *

Desperate to put the Brexit humiliation in the rearview mirror, Juncker said that “we will keep moving on because Brexit isn’t everything, it is not the future of Europe," Brexit supporters promptly said his speech showed they were right to take Britain out of a bloc set on creating more powerful, central institutions. The most predictable opponent of the hour-long speech, met with stirring applause by a mostly zombified audience, was UK MEP Nigel Farage.

"The message is very clear: Brexit has happened, new steam ahead… More Europe in every single direction and all to be done without the consent of the people,” Farage told the floor.

“The way you’re treating Hungary and Poland already must remind them of living under the Soviet communists. All I can say is thank God we’re leaving because you’ve learned nothing from Brexit.

It wasn"t just the Farage: Juncker"s core proposal for countering what is known as a “multispeed Europe” by encouraging all states to join the euro and other EU structures was met resistance in both non-euro zone countries and potentially in Paris and Berlin, where the newly elected President Emmanuel Macron and about-to-be-re-elected Chancellor Angela Merkel are readying their own plans.

Poland’s Eurosceptic ruling PiS party, which is embroiled in a bitter legal fight  suggested the plan is optimistic in view of the ongoing crisis with migration, unemployment, stagnation and terrorism. “We need to get the EU’s house in order before there can even be a discussion on centralizing even further,” said Ryszard Legutko, a PiS MEP.

Opposition also came from members of the European parliament’s left-wing coalitions.

“When I listen to [Juncker’s speech] with the ears of many people who feel left behind by the current macroeconomic policies that we have, then I have my doubts because he still pushes for free trade deals that basically are tailor-made for multinationals,” Philippe Lamberts, of the Greens-European Free Alliance group told the Daily Express.

However, the most focused and principled attack on Juncker’s plans came from Harald Vilimsky, of Austria’s Freedom Party, which prompted Juncker to leave mid-speech, and once again demonstrated the deep splinters within the core of the Union, splinters which make the integration Juncker is seeking impossible.

“What Mr Junker wants de facto is to force the European union into a single state, and we know that the euro is not a success story. The second thing Mr Junker wants is de facto to actually get rid of all the internal borders, we see 10,000, 100,000, millions of African and Arabs are going to be coming to our continent,” said Vilimsky, who serves as the vice-chair of the Europe of Nations and Freedom party within the European Parliament.

“They talk about having a defense union, but no we don’t want that. What we want is Austrians, we’re a neutral country in Austria, we do not want to participate in the defense union. The right road for Europe can only be the road where there is more democracy left to the people, more democracy left to the citizens where people can vote whether or not they want to have Schengen maintained or not, whether they want their borders or not. The vote has to be left to the citizen.”

Aside from his traditional adversaries whose opposition was expected, what was more troubling is that Juncker"s "grand vision" also appeared to get the cold shoulder from leaders of nominally pro-EU nations. “Juncker is a romantic. We all have our own style, but I am more pragmatic,” said Netherlands PM Mark Rutte in response to the speech, adding that those “too concerned with vision should visit an eye doctor.”

Danish Prime Minister Lars Lokke Rasmussen said he was against creating an EU-super-president, tweeting “Let’s not mix roles and competences. Need European Council President as voice of member states."

Meanwhile, Germany and France, the two foundational powers in the union, are preparing to submit their own plans for EU reform by the end of 2017, and while their current leaders remain in favor of the EU, it is unlikely that either will endorse Juncker’s federalism without a mandate from their respective electorates.

In short, Juncker"s speech like virtually everything else out of Brussels in recent years, was just more hot air.

Merkel, Schulz Agree: "It's Clear, Turkey Should Not Become An EU Member"

Having blasted Germany for "abetting terrorists," Turkish president Edrogan was on the receiving end of some ire this weekend as the refugee crisis and the EU deal with Turkey dominated the TV debate between Chancellor Angela Merkel and her coalition ally SPD challenger Martin Schulz on Sunday.

The rivals agreed, however, that Turkey can’t be part of the EU.

"If I become German chancellor, if the people of this country give me a mandate, then I will propose to the European Council that we end the membership talks with Turkey. Now all red lines are crossed, so this country can no longer become a member of the EU,”said Schulz during the debate, forcing the CDU leader to clarify her position on the issue.

“The fact is clear that Turkey should not become a member of the EU,”said Merkel, agreeing with Schulz.

“I’ll speak to my [EU] colleagues to see if we can reach a joint position on this so that we can end these accession talks,” added Merkel, who is hoping to get re-elected for a fourth term.

As RT notes, the government in Ankara is moving away from democratic principles at a “breathtaking” speed, Merkel said, adding that at the moment “the accession negotiations are non-existent.”

However, she refused to completely freeze the relationship with Turkey.

Additionally, Reuters reports that the actions of the Turkish authorities are making it “impossible” for the country to join the European Union, an EU executive said on Monday after German Chancellor Angela Merkel called for ending accession talks.

Quoting European Commission President Jean-Claude Juncker from last week, before Merkel’s election campaign comment, the Commission’s chief spokesman told a regular news briefing:

“Turkey is taking giant strides away from Europe and that is making it impossible for Turkey to join the European Union.”

He stressed, however, that any decision on whether to formally halt the long-stalled membership process would be up to the 28 member states of the bloc, not the Brussels executive.

Turkey has been receiving funding from the EU, which will reach €6 billion by 2018, as part of the deal to halt the migrant flow into Europe, signed in March 2016. Turkey was also promised visa free travel and expedited talks on joining the EU, but the discussion of those issues remains stalled due to Ankara’s refusal to relax its harsh anti-terrorism laws. As EU-Turkish ties hang in the balance, President Recep Tayyip Erdogan has been actively reiterating his threats to withdraw from the deal and again allow migrants to pour into the EU.

The Creepiest EU Initiative Yet: Registering Dissent As "Russian Propaganda" Under Soros' Direction

Via GEFIRA,

Russia is the favourite scapegoat for the Western establishment when it comes to its own failures. Ever since Brexit and Trump’s victory, the Western elite has regularly tried to link citizen discontent to “Russian disinformation“, “hackers” or “trolls“, instead of looking at its own policies. While in the US this took the form of a witch hunt against the Trump administration, in the EU it has taken the form of a “proscription list” of the media that are not enthusiastic enough with the idea of a conflict with the Eastern neighbour. Under the official purpose of countering “disinformation coming from Russia”, the EU External Action has created a “disinformation review“with weekly updates on “fake news” and the websites that post them.

The EUAS officially branded researchers and journalists as fraudulent, unpatriotic and dishonest without any notification. There is a small disclaimer on the list that states that ”disinformation review cannot be considered an official EU position”. Yet it was created by the European Council, is part of the ”diplomatic service” of the EU, hence funded by it, uses its symbols and institutional addresses. So, it is part of the EU and yet does not represent its official position? The statement seems to have been made for the express purpose of dishonestly dismissing concerns raised by citizens.

By organising the naming and shaming list, the EUAS behaves like an authoritarian regime that operates out of the rule of law. Since freedom of the press is the basis for a reliable democracy, the EUAS is working against the values of the European Union:

• There is no juridical framework within which the texts are judged, and there are no objective standards. The EUAS arbitrarily branded articles they do not like as fraudulent.


• Groups put on the list by the EUAS as fraudsters are not notified and do not have any fair chance or due process to defend themselves. Researchers and journalists are deemed guilty without proof, they have no right to file a complaint or appeal.


• Organisations which have a political objective and are financed from outside the European Union are among the list of the so-called 400 experts.
  We were recently notified that our analysis on NGOs activities in the Mediterranean was classified as the “Russian disinformation” news reported in December 2016.

We won’t spend too much time addressing that. Since December the case has become a national and then international case, and recent events have seen the ship Iuventa of the NGO Jugend Rettet seized as evidence for contacts with smugglers and, as the meeting in the open sea did not happen in a situation of peril for migrants, it can’t be classified as rescue, but simply smuggling. Our analysis was correct.

So why were we reported? The piece is hardly about Russia to begin with. The connection is elsewhere. We found out that the report was written by an organization called “Kremlin Watch“, which is a part of the think-thank European Values. We looked at who funds them: George Soros and his Open Society the one who’s heavily involved in the migrant crisis with a vast international network of NGOs and locked in a personal war against Russia. Conspiracy? Not really. Open Society Foundation is listed as one of the top donors of the “European Values” Think-Thank. Among the others is the European Commission itself.

It isn’t even the first time we were personally attacked by George Soros’ agent. Constanza Hermanin, Open Society’s former senior officer and blogger for the Huffington Post, also previously tried to cover up the NGOs smuggling and classify the exposure of it as “filo-Russian fake news”.

Back to the list. There are three regular contributors. East Stratcom Network, part of EUAS, the already mentioned Kremlin Watch and finally a Ukrainian website called “StopFake“, supported again, it’s unclear how, by Open Society Foundations.

The reports normally focus on the Russian media like TASS, Sputnik, RT. The same issue no. 52 also lists ZeroHedge for reblogging Ron Paul’s criticism of the “fake news” crusade, and Paul Craig Roberts’s one. In the Soros version of European values, criticism and democratic debate are fake news! Past issues include the conservative outlet Breitbart, and even The Guardian. 

It’s also rather interesting to note how Mr. Soros interprets European “liberal values”. Free press is normally listed as a key one, and yet Soros wants proscription lists of anyone who disagrees, something for instance adopted by Turkish President Erdo?an following the last year’s failed coup and widely criticized by the EU itself. Another key liberal value is fair trial. Yet Soros’ own Kremlin Watch is judge, jury and executioner in one. Who does the EU belong to and serve, anyway? Its people or its financial oligarch? Perhaps Israel and Hungary are right: Mr. Soros is a threat to democracy.

Will Europe Rebel Against U.S. Sanctions?

Authored by Curt Mills via National Interest,

In comprehensively punishing Moscow, Washington risks further cleaving itself from senior European leadership.

The United States finalized new sanctions against Moscow last week, roping it in with perennial bad actors Iran and North Korea. Despite complaints from Donald Trump and Rex Tillerson—the pair of ex-CEOs that now lead U.S. foreign policy—the administration assented to the “flawed” package on Wednesday. While Trump is sometimes accused of abandoning the trans-Atlantic alliance and scuttling the post-war order, the president now risks further damage to relations with many in Europe by targeting Russia with fresh sanctions.

Hawks in Washington are clearly taking notice of the European position. “Europe’s opposition to the sanctions is troubling. You can’t on one hand ask for a bigger U.S. military commitment to the continent while on the other hand oppose nonmilitary coercive measures,” Boris Zilberman, a Russia analyst at the Foundation for the Defense of Democracies, told me. A central plank in Europe’s concern is energy—the continent is quite reliant on Russian energy (something Ronald Reagan famously warned the Europeans against during the Cold War). “It is déjà vu all over again. Back in the 1980s the Reagan administration targeted Soviet energy exports, specifically pipeline projects. Europeans saw it as a double whammy for them, undercutting their energy security and—given potential secondary sanctions on many firms involved—penalizing their companies,” says Clay Clemens, an expert on German politics at the College of William & Mary.

In particular, a project called Nord Stream 2 between Europe’s central player, Germany, and Russia’s controversial energy company Gazprom could be affected by the sanctions. In addition to Gazprom, the deal has investments from European companies; its signatories aim to carry natural gas under the Baltic Sea. “Some Germans quietly hope that [Nord Stream 2] could transform their country into a European energy hub,” The Economist noted in June. The Ukrainian crisis is also at play here: the project would allow Russia “to bypass existing pipelines in Ukraine, depriving the Ukrainians of lucrative transit fees,” the outlet noted.

But the United States and the EU are not united, and Europe is feuding internally over how to handle this, as well. In contrast to Germany, the Brits haven’t stood in Washington’s way. “We agree that it is important to send a message to Moscow that Russian actions in Ukraine and Syria, interference in the domestic affairs of other countries, and undermining of the rule of law, will be met with a strong response,” a United Kingdom official told me, indicating London didn’t find the legislation abrasive and praising the sanctions for emphasizing “the importance of transatlantic unity.” The Baltic states and Poland, Russia-weary and opposed to Nord Stream 2, have gone along with the sanctions, and would potentially block more radical retaliation by the EU. European Council president Donald Tusk, the former Polish prime minister, has also criticized Nord Stream 2. Vice President Pence was in Estonia earlier this week, and Poland hosted Trump ahead of the G20 summit last month, where he seemingly received a hero’s welcome in a country that has moved dramatically rightward in recent years.

But elsewhere in Europe, including in the EU leadership, there is great concern. In startling language Wednesday, European Commission president Jean-Claude Juncker, of Luxembourg, appeared to treat the U.S.-Europe alliance as a potentially open question. “The U.S. Congress has now also committed to only apply sanctions after the country’s allies are consulted. And I do believe we are still allies,” he said in a statement, with his office noting that “if the US sanctions specifically disadvantage EU companies trading with Russia in the energy sector the EU is prepared to take appropriate steps in response within days.” “We are prepared,” Juncker told a Brussels radio station Wednesday. “We must defend our economic interests vis-à-vis the United States. And we will do that.”

The German establishment is apoplectic, directly accusing the United States of trying to enrich itself economically—the sanctions are paired with provisions encouraging Europe to buy U.S. natural gas. In the era of President “take the oil” Trump and an Exxon Secretary of State, some are suspicious of American motives like never before. “One is left with the sense that the United States is looking to its own economic interests,” Volker Trier, the head of the German Chamber of Industry and Commerce, said last week. In the 1980s, “there was also a sense that the US sanctions were designed to reduce competition for American energy exports,” Clemens noted to me.

Wary of bucking Germany, France has also expressed reservations about the sanctions. “Any conflict in the Paris-Berlin axis is potentially suicidal for Europe at this point,” Vincent Michelot of Sciences Po Lyon tells me. The French foreign ministry said last month the language passed out of the House looked illegal. This Parisian dismissal comes at a time when Trump seems to be cultivating a relationship with the new French president, Emmanuel Macron, who Michelot says is trying to set himself up as an “indispensable mediator” in European and international affairs.

If Ukraine is one nonobvious tripwire in this dispute, Syria is another. Macron has tacitly backed a future for Syrian president Bashar al-Assad, in a major change in French policy. “It is a radical departure from Hollande’s strong stance that there could not be any political resolution of the Syrian conflict with Assad around the negotiation table,” Cecile Alduy of the France-Stanford Center told me. “More importantly, Macron is contradicting himself on this . . . In early April, he was in favor of a military intervention against Assad.” Prolonged, public disputes between Berlin, Paris and Washington could imperil efforts at even unrelated negotiations, however.

In the end, Europe, especially with Germany in the lead, might take a pass on a full-scale feud. Europe “cannot allow the relationship with Russia to sink to the level of the U.S.-Russia confrontation,” Michelot says. “The preference [in most of Europe] is still for some kind of constructive engagement policy, despite EU sanctions after Ukraine,” Clemens says, but cautions: “Of course, overall, it is a tough balance for Merkel in particular to strike, since she has been the leader most skeptical of Putin.”

First Post-Brexit Tremors: Theresa May "Would Go To War" To Protect Gibraltar

The ink has yet to dry on Theresa May"s Article 50 signature from last week which officially started the UK"s 2-year long divorce from the EU, and already Europe has been traumatized by comments from former Conservative leader Michael Howard, who suggested that Theresa May is be prepared to go to war to protect Gibraltar as Margaret Thatcher once did for the Falklands, comments which according to the Guardian were "immediately criticized as inflammatory."

Howard told Sky News on Sunday that: "There is no question whatever that our Government will stand by Gibraltar... 35 years ago this week another woman Prime Minister sent a task force half way across the World to defend the freedom of another small group of British people against another Spanish-speaking country.... I am absolutely certain our current Prime Minister will show the same resolve in standing by the people of Gibraltar."

As The Telegraph adds, Howard said the British Government will stand by Gibraltar during Brexit talks amid claims of an EU “land grab” for the territory by Spain. It came as Spain confirmed that it would not initially block an independent Scotland"s attempts to join the European Union (EU). Alfonso Dastis, Madrid"s foreign minister, reportedly said Spain would not veto an independent Scotland"s EU hopes - while stressing he does not want to see the country leave the United Kingdom.

Aerial view of Gibraltar

A European Council document on Friday suggested that Spain will be given an effective veto on whether the Brexit deal applies to Gibraltar. Downing Street said May had called Fabian Picardo, the chief minister of Gibraltar, on Sunday morning to say the UK remained “steadfastly committed to our support for Gibraltar, its people and its economy”.

Taking British officials by surprise, the draft guidelines drawn up by EU leaders state that the Brexit deal will not apply to Gibraltar without an "agreement between the kingdom of Spain and the UK".  One official told The Telegraph it is "absolutely unacceptable" and gives Spain too much power over the future of Gibraltar.

In response, on Sunday the Prime Minister told Gibraltar"s chief minister that Britain will never allow Spain to take over the peninsula against its will. Sir Michael Fallon, the Defence Secretary,  has also pledged to "protect" Gibraltar "all the way". Speaking to the BBC"s Andrew Marr show, Fallon said: "The people of Gibraltar have made it clear that they don"t want to live under the sovereignty of Spain. Gibraltar is going to be protected all the way."

"The Rock", a British Overseas Territory since 1713 with 30,000 residents, remains a major source of diplomatic tensions. Gibraltar"s chief minister has warned the territory should not be used by Spain as a bargaining chip for Britain’s Brexit negotiations.

Fabian Picardo told the BBC this morning  that sharing sovereignty with Spain would be "absolutely awful" and  comparable to "living in somebody else’s land."

He said he was "working closely with the British Government" and he would support the British Prime Minister in the upcoming negotiations to get the best deal.

"I am sure the UK will be batting for Gibraltar," he said. "Gibraltar is not on the table as a chip".

On Sunday, May told Mr Picardo that the UK is  "absolutely dedicated to working with Gibraltar for the best possible outcome  on Brexit", Downing Street said. Quoted by The Telegraph, a May spokeswoman said Mrs May "reiterated our long-standing position that the UK remains steadfastly committed to our support for Gibraltar, its people and its economy".

"The Prime Minister said we will never enter into arrangements under which the people of Gibraltar would pass under the sovereignty of another state against their freely and democratically expressed wishes, nor will we ever enter into a process of sovereignty negotiations with which Gibraltar is not content."

"The Prime Minister said we remain absolutely dedicated to working with Gibraltar for the best possible outcome on Brexit and will continue to involve them fully in the process."

Last night Boris Johnson, the Foreign Secretary, said that the UK’s support for Gibraltar will remain “implacable and rock-like”.

Elsehwere, when asked about the controversy surrounding May’s apparent threat to weaken security cooperation if Brexit talks turn sour, Defense Secretary Fallon said the negotiations had to cover both a trade deal and issues such as counter-terrorism and police cooperation. “It is very important to link trade and security because what we are now looking for is a deep and special relationship that covers both economic and security cooperation. Those two things go together,” he said.

“It is very important that we go on committed to the security of the continent.”

Fallon then talked about sending 800 troops to Estonia, others to Poland, and RAF Typhoons to Romania, which are all under Britain’s Nato commitments not linked to EU membership. “We are stepping up security because it remains our continent and this is a very uncertain time for Europe and right we should be playing our time on that. We’d all be worse off if there wasn’t a deal – we are expecting to have a deal.”

The defence secretary admitted some issues were inside the European treaties, and others (including Nato) not. “The letter refers to our ambition to have a completely new partnership on the economic side but also on security side,” he said, arguing that stating a fact about defence capabilities wasn’t a threat.

Meanwhile, the reaction in Gibraltar to the latest territorial posturing was quick. According to the UK"s Express.co.uk, the newspaper spoke to a host of Gibraltarians who are all adamant about one thing: there is nothing anyone could do to undermine their sovereignty as a proud nation: "one thing is very clear - people in Gibraltar are happy for Britain’s support, but said they can handle this on their own."

Justine Rovegno said: “I think Gibraltar would be more prepared to relocate its entire population before we would let Spain take-over, we are an extremely stubborn community!”

Manuel Gracia added: “If Spain takes military action we"d stand our ground and I’m sure we’ll be helped by the UK."  “If the EU cuts Gibraltar out of any deals and trade like I said Gib will stand it"s ground and look to other opportunities. "

“As far as I"m aware there"s always been talk of Spain ‘taking Gib back’ with force, politics and pretty much every way you can think of.  None of it has worked so far and I find it doubtful that it"ll come to that. There will be tensions. There will be arguments but that"s what it"s always been like.”

Danielle Barclay took a more blunt stance, referring to the actions of Spain and Donald Tusk as being: “F****** disgusting and inhumane.”

As Express adds, "the population of Gibraltar seems relatively unfazed by the prospect of a Spanish invasion, EU strong arming and political scheming and are confident they have seen it all before and will come out of this stronger - as they always have."

But there is an ominous sense of dread about what is to come, as Justine said: “I think the Gibraltarian community has survived very dark times because of Spain, I think most of them believe they have gone through the worst, and Spain going about this in such an intimidating way is just fuelling a fire that was lit many years ago.

“I felt that the younger community was learning that there was not a giant brick wall between Gibraltar and the Spanish, but I think the angst they are creating is slowly putting those thoughts back into everyone"s minds which is extremely sad.”

Not even one full week into Brexit, and nationalistic tensions - the continent"s soft spot - across Europe are once again rising, this time not the direct result of Europe"s refugee troubles. The good news: for now it is being handled diplomatically. The bad news: as the following chart from Goldman shows, the Brexit process is just beginning, and the potential for political and economic complications will only eventually be fully appreciated.

 

EU's Highest Court Upholds Sanctions Against Russia's Rosneft

Authored by Tsvetana Paraskova via OilPrice.com,

The European Court of Justice, Europe’s top court, on Tuesday ruled that sanctions imposed by the UK and the EU on Russia’s oil giant Rosneft are valid, in a ruling that also asserts the court’s jurisdiction over the common policy of the European Union (EU).

The EU imposed sanctions on Russia in 2014 over Moscow’s annexation of Crimea, with economic sanctions slapped in July 2014 and reinforced in September 2014, including against certain Russian companies that include Rosneft.

Rosneft had challenged before the High Court of Justice (England & Wales) the validity, in the light of EU law, of the restrictive measures imposed by the European Council on it and the implementing measures adopted by the United Kingdom that are based on the Council acts. The European Court of Justice was asked to rule, in essence, if the acts of the Council and the United Kingdom are valid.

In its ruling published today, the court said that “The restrictive measures adopted by the Council in response to the crisis in Ukraine against certain Russian undertakings, including Rosneft, are valid.”

“The Court holds that the importance of the objectives pursued by the contested acts is such as to justify certain operators being adversely affected. Having regard to the fact that the restrictive measures adopted by the Council in reaction to the crisis in Ukraine have become progressively more severe, interference with Rosneft’s freedom to conduct a business and its right to property cannot be considered to be disproportionate,” the court said.

Following the court ruling, Rosneft issued a statement in which it said it was disappointed by the ruling, and that it considers the court decision “illegal, groundless and politicized”.

The Court refused to admit that the EU sanctions were imposed, in particular, to achieve hidden purposes and are, in fact, an instrument of competitive struggle. Nevertheless, the Court could not explain why the limitations, applied under the pretext of Crimea"s accession to Russia, involve access of oil companies to international financial markets, oil production at the Arctic shelf, development of tight reserves, deep-water and shale fields. The Company considers that the sanctions imposed against it by the EU states are primarily aimed at increasing risks of busines operations, obstructing implementation of Rosneft"s important projects and thus creating preferences for other oil market players.

The Court ignored its own existing precedents when the decision on EU sanctions was revised by the same court due to lack of substantial evidence. For instance Iranian banks included in the EU sanctions list successfully appealed the EU regulation. The Court stated that they are not related to the nuclear program of the IRI that was the object of sanctions and the existence of the close ties to the government is not a satisfactory argument for including them in the list.

The Court refused to acknowledge that unilateral economic sanctions restrict trade by definition and contradict existing provisions of the Partnership and Cooperation Agreement (PCA) between Russia and the EU, signed in 1994. The EU’s decision to impose the sanctions is, in fact, a legitimated refusal to fulfill its obligations under international law.

“This decision proves that in Europe the rule of law is being substituted with the rule of politics,” said Rosneft, whose chief executive Igor Sechin is a close ally of Vladimir Putin.

EU Celebrates 60th Birthday As European Leaders Scramble To Hold "Fraying" Union Together

Today in Rome, the EU celebrates its 60th anniversary. Leaders hailed the visionary "war generation" of leaders from old foes France and Germany who signed the Treaty of Rome in the same room on March 25, 1957, along with Italy, Belgium, Luxembourg and the Netherlands; some offered personal memories of their own generation"s debts to the expanding European Union.

The celebration comes at a strange time: just four days earlier, UK Prime Minister Theresa May, absent from the ceremony in the Italian capital, delivered an unprecedented blow to the bloc"s growth by filing Britain"s formal exit papers, an event which underscores the biggest problem facing the EU: as Reuters puts it, it is "fraying", as former Greek finmin Varoufakis said yesterday, it is "disintegrating." The truth is somewhere inbetween.

Another irony not lost on cynical observers: today"s celebrations take place in the one European country which boasts the greatest number of EU skeptics.

Meanwhile, fellow leaders hailed 60 years of peace and prosperity and pledged to deepen a unity damage - perhaps irreparably - by regional and global crises.

The farce of "unity" on display was underscored by the days of wrangling about the wording of a 1,000-word Rome Declaration, As Reuters adds, May"s impending Brexit confirmation and tens of thousands of protesters gathering beyond the tight police cordon around the Campidoglio palace offered a more sober reminder of the challenges of holding the 27 nations to a common course.

"We have stopped in our tracks and this has caused a crisis of rejection by public opinion," said their host, Italian Prime Minister Paolo Gentiloni, noting Britons" repudiation of the EU. He said the failure to push the project forward during a decade of economic slump had fueled a re-emergence of "blinkered nationalism".

While Rome tries to offer a fresh start, with Gentiloni saying "The Union is starting up again ... and has a vision for the next 10 years" others, however, are wary of such enthusiasm for giving up more national sovereignty - and also of others in the Union moving faster with integration. Poland"s nationalist government has led protests against a "multispeed Europe", which it fears would consign the poor ex-communist east to second-class status.

* * *

Many members of the establishment refuse to accept the new, far more troubling reality, chief among them Jean-Claude Juncker, the EU chief executive, who recalled how his father in Luxembourg was forced into the German army in World War Two; Donald Tusk, the summit chair born in Gdansk a month after the Treaty was signed, remembered growing up in the ruins of war and yearning for freedom behind the Iron Curtain. "That really was a two-speed Europe," he said in a pointed dig at his domestic foes now ruling in Warsaw, who have tried to block a push by the western powers to deepen their integration.

German Chancellor Angela Merkel, the bloc"s dominant leader who faces a re-election test in September, stressed the Union must also address the complaints of generations for whom war is fading into history. "We will in the future have to concern ourselves above all with the issue of jobs," she told reporters.

Malta"s PM Joseph Muscat, European Council President Donald Tusk, German
Chancellor Angela Merkel and Italy"s Prime Minister Paolo Gentiloni pose for a
picture outside the city hall "Campidoglio."

Still, while doing their best projection of an optimistic facade, the participants in today"s Rome festivities are worried. Fearing that the departure of its second-biggest economy and major global power could prompt the unraveling of the bloc, many leaders argue that only forward motion can revive popular support for the EU by generating economic and security benefits. 

"Today we renew our vows and reaffirm our commitment to an undivided and indivisible Union," Juncker said, urging the bloc not to get bogged down in details that alienated voters. Tusk, too, warned against the impression the EU was about petty regulations: "Why should we lose our trust in the purpose of unity today? Is it only because it has become our reality? Or because we have become bored or tired of it?" he asked.

Merkel, whose bid for another Chancellorship is risk from the suddenly resurgent SPD under its new head Martin Schulz, said leaders wanted to respond to people"s concerns, about the economy, welfare, migration and defense with "a protective Europe" that offered assurances on their wellbeing.

All 27 national leaders, along with the heads of Brussels institutions, signed a declaration which concluded: "We have united for the better. Europe is our common future." They promised to listen to citizens.

Spain PM Mariano Rajoy prepares to sign document

But, as Reuters sarcastically writes, "locked away behind rings of armed police, the leaders may hear little of what thousands of protesters have to say on Saturday."

Greece"s former Finance Minister Yanis Varoufakis (C) takes part in a pro-EU demonstration.

Addressing right-wing supporters of the Fratelli d"Italia movement, its leader Giorgia Meloni denounced a "great EU deception".

"The real enemies of Europe," she said, "Are the bankers, usurers and technocrats." The Union, she added, must be replaced by a new alliance of "free and sovereign countries".

But for Maximilien De-Wyse, 26, from the northern French city of Lille, that was the wrong answer. Taking part in a pro-EU march in Rome, he recalled his Polish immigrant grandparents and said: "It is only united that we can save peace."

Meanwhile, the leaders are hopeful that putting their names on a piece of paper endorsing a vision for a union which has succeeded alienated million of its constituents, will somehow reset years of bad decisions and flawed poicy. It won"t.

European Parliament President Antonio Tajani holds up a document signed by EU leaders.