The chaotic trading in cable continues, this time spiking to the upside after Bloomberg reports that the EU and U.K. have reached an agreement on the sensitive issue of the role of the European Court of Justice after Brexit, according to two people familiar with the matter.
The agreement on the court leaves the Irish border as the only obstacle to talks moving on to the future relationship.
As a reminder, EU leaders are due to decide whether talks can move on at a summit on Dec. 14-15.
Authored by Nigel Farage, originally published in the Telegraph
Theresa May is now the EU"s Stepford Wife: subservient and submissive to their every whim
So there we have it. Theresa May does not believe in Brexit. In an interview with Iain Dale on LBC, she completely collapsed, proving incapable of answering the question of how would she vote if there was a referendum now. She simply would not answer if she would support Leave.
Everyone listening to that interview knows that the reality is that May is still a Remainer. I don’t believe it’s possible to carry out this great, historic change against a huge amount of international criticism unless you truly believe in it. Nor, as it happens, does May: in a speech on June 1 she herself said: “To deliver Brexit you have to believe it”. This is the clearest proof yet that the Great Brexit Betrayal is under way.
It is only the latest piece of evidence in a whole procession. On Monday we also found out that Boris Johnson – supposedly Brexit"s loudest cheerleader in the Cabinet – has bottled it. Last month the Foreign Secretary stated in print his demand that the UK must leave the wretched European Court of Justice (ECJ) on Day One of our exit from the EU in March 2019. But then folded like a cheap suit by backing to the hilt Theresa May’s House of Commons Brexit statement – a speech which was itself further confirmation of the great betrayal.
This came to light in her answer to the rapier-like question from Jacob Rees-Mogg MP, in which she said that the UK will still be bound by ECJ rulings during the Brexit transition period, Jacob looked somewhat deflated by this answer. She also would not deny that any new EU laws would be applicable to us, simply trying to ignore the question by saying it was ‘highly unlikely’ this this would occur.
During her parliamentary address, May admitted to MPs that Britain will still be bound by the ECJ’s rulings during the Brexit transition period, currently set to end in 2021. Not only that, but she suggested this country will also have to accept any new EU laws which are dreamt up in Brussels during this time.
In her world, this arrangement represents part of a “smooth and orderly process of withdrawal, with minimum disruption”.
To me, this demonstrates that May has become the Stepford Wife of the EU – conformist, subservient, submissive. It is woeful stuff.
The only good news of the day is that, at last, some contingency plans have been prepared for a no deal outcome. The only trouble is I simply do not believe that May has the courage to opt for this.
Depressingly, another supposed Brexiteer in the Cabinet, Environment Secretary Michael Gove, joined Johnson, hailing May’s “strong statement” in the Commons. To him, it was as though she had just made some important breakthrough for the good of mankind when all she had done was roll over and surrender for even longer our courts and laws to a distant power.
I realise that Johnson and Gove have assumed this new anything-goes position because they want to publicly support their troubled party leader at a difficult time and, by extension, remain in government for as long as possible. Anything to keep Jeremy Corbyn out of Downing Street is the mantra.
But is there not something utterly shameless about their acquiescence? Indeed, does anyone seriously believe either man actually welcomes our remaining under the ECJ for the foreseeable future?
By putting themselves and, let’s face it, their careers first, Johnson and Gove have made clear that they have no serious interest in carrying out the will of the 17.4 million people who last year voted to leave the EU. To them, the lives of the citizens are secondary.
Boris is right https://t.co/UFK4BqGVW0
— Michael Gove (@michaelgove) October 9, 2017
In backing a proposition they don’t even agree with, they have done little more than make themselves look foolish and mocked the notion that we are an independent state.
What their actions show is that this is fast becoming Brexit in name only and, as I’ve written before, it should concern everybody that our politicians are caving in at the very time they should be standing firm.
What sort of message does it send to potential trading partners in the world that Britain is still bowing and scraping to the institution which in June 2016 we very publicly dumped?
Countries outside the EU will regard us as flaky, a shadow of ourselves, perhaps even untrustworthy. At the same time, some within the EU will smell blood, and will use our confused domestic political situation to punish us as they see fit. It is lose-lose.
With every week that passes we see May and her government dither and delay over one issue or another, and it is this sense that she is being worn down by her opponents in the EU that I find truly alarming. The fight appears to have gone out of her at the time we need it most. I wrote last month of May’s naivety in thinking that the EU even wants to do a deal with Britain. It is blatantly obvious they don’t, and that she should call their bluff and walk away. The time for appeasing Messrs Juncker, Barnier and Verhofstadt is over.
Yesterday, Theresa May became Theresa Maybe in that she left open the door to further concessions. Once again I find myself wondering whether, 16 months after we voted to do so, we have the leaders to complete the job.
Authored by Raul Ilargi Meijer via The Automatic Earth blog,
European Commission president Jean-Claude Juncker, famous for his imbibition capacity and uttering -not necessarily in that order- the legendary words “when it becomes serious, you have to lie”, presented his State of the Union today. Which is of pretty much limited interest because, as Yanis Varoufakis’ book ‘Adults in the Room’ once again confirmed, Juncker is nothing but ventriloquist Angela Merkel’s sock puppet.
But of course he had lofty words galore, about how great Europe is doing, and how that provides a window for more Europe, in multiple dimensions. Juncker envisions a European Minister of Finance (Dutch PM Rutte immediately scorned the idea), and he wants to enlarge the EU by inviting more countries in, like Albania, Montenegro and Serbia (but not Turkey!).
Juncker had negative things to say about Britain and Brexit, about Poland, Prague and Hungary who don’t want to obey the decree about letting in migrants and refugees, and obviously about Donald Trump: Brussels apparently wants ‘to make our planet great again’.
What the likes of Jean-Claude don’t seem to be willing to contemplate, let alone understand or acknowledge, is that the EU is a union of sovereign countries. The meaning of ‘sovereignty’ fully escapes much of the pro-EU crowd. And if they keep that up, it will break the union into pieces.
The European Court of Justice has ruled that Poland, the Czech Republic and Hungary must accept their migrant ‘quota’, as decided in Brussels, and that, too, constitutes an infringement on these countries’ sovereignty. And don’t forget, sovereignty is not something that can be divided into separate parts, some of which can be upheld while others are discarded. A country is either sovereign or it is not.
The single euro currency is already shirking awfully close to violating sovereignty, if not passing over an invisible line, and a European Finance Minister would certainly constitute such a violation. At some point, the politicians in all these countries will have to tell their voters that they’re about to surrender -more of- their sovereignty and become citizens of Merkel Land. But they don’t want to do that, because as soon as people would realize this, the pitchforks would come out and the union would be history.
The EU will be able to muddle on for a while longer, but Europe is not at all doing great economically (however, to maintain the illusion ECB head Draghi buys €60 billion a month in ‘assets’), and when the next crisis comes people will demand their sovereignty back. It really is that simple. And what will the negotiations look like to make that happen? 27 times Brexit?
* * *
The real Europe is not the one Juncker paints a portrait of. The real Europe is Greece. That’s where you can see the economic reality as well as the political one. Greece has no sovereignty left to speak of, despite the fact that it is guaranteed it in EU law. Europe’s political reality is about raw power. About the rich waterboarding the poor, to the point that they are turned from sovereign citizens of their countries into lost souls in debt prisons.
This week, another chapter has been added to the dismal annals of the Greek adventures in the European Union. It’s like the Odyssee, I kid you not. Like the previous chapters, this one will not solve the Greek crisis, or even alleviate it, but instead it will deepen it further, and not a little bit. This chapter concerns the forced auctioning of -real estate- properties.
Not to Greeks, 90% of whom can’t afford to buy anything at all, let alone property, but to foreigners, often institutional investors. At the same time, bad loans, including mortgage loans, will be offloaded for pennies on the dollar to that same class of ‘investors’. Once the Troika is done with this chapter, Greece will have seen capital destruction the likes of which the world has seldom if ever witnessed.
People in the country have a hard time understanding the impact:
Greece Property Auctions Certain To Drive Market Prices Even Lower
Ilias Ziogas, head of property consultancy company NAI Hellas and one of the founding members of the Chartered Surveyors Association, said that the property market is certain to suffer further as a result of the auctions: “The impact on prices will be clearly negative, not because the price of a property will be far lower at the auction than a nearby property, but because it will diminish demand for the neighboring property.”
[..]Giorgos Litsas, head of the GLP Values chartered surveyor company, which cooperates with PQH [..] told Kathimerini that the only way is down for market rates. “I believe that unless there is an unlikely coordination among the parties involved – i.e. the state (tax authorities, social security funds etc.), the banks and the clearing firms – in order to prevent too many properties coming onto the market at the same time, rates will go down by at least 10%.”
He noted that “we estimate the stock of unsold properties of all types comes to 270,000-280,000, in a market with no more than 15,000 transactions per year. Therefore the rise in supply will send prices tumbling.” Yiannis Xylas, founder of Geoaxis surveyors, added, “I fear the auctions will create an oversupply of properties without the corresponding demand, which translates into an immediate drop in rates that may be rapid if one adds the portfolios of bad loans secured on properties that will be sold to foreign funds at a fraction of their price.”
A 10% drop? Excuse me? Even in the center of Athens, rental prices for apartments that are not yet absorbed by Airbnb have plummeted. With so many people making just a few hundred euro a month that is inevitable. You can rent a decent place for €200 a month, and if you keep looking I’m sure you can find one for €100. An 80% drop?! But property prices would only go down by 10% in a market that has 20 times more unsold properties than it sells in a year?
The Troika creditors found they had to deal with attempts to prevent the wholesale fire sale of Greek properties. They now think they’ve found the solution. First, they will force the government to lower official valuations concerning the so-called “primary residence protection”, which protected homes valued at below €300,000 from foreclosure. Second, they will bypass the associations of notaries who refused to cooperate in ‘physical’ auctions, as well as protesters, by doing the fire sale electronically:
E-Auctions Of Foreclosed Property For First Time This Month In Greece
Environment and Energy Minister Giorgos Stathakis confirmed the development in statements to a local television station, announcing the relevant justice ministry is ready to begin electronic auctions in the middle of next week.At the same time, Stathakis noted that a law protecting a debtor’s primary residence from creditors will be expanded until the end of 2018. According to reports, the e-auctions will take place every Wednesday, Thursday and Friday over a four-hour period, i.e. from 10 a.m. to 2 p.m. or 2 p.m. to 6 p.m. Some 5,000 foreclosed commercial properties will be up for sale by the end of the year, which translates into 1,250 properties per month, on average.
Currently, the primary residence protection against foreclosure extends to properties valued (by the State tax bureau) at under €300,000, a very high threshold that shields the “lion’s share” of mortgaged residential real estate in the country, if judged by current commercial property values in Greece. Creditors and local lenders have called for a decrease in the protection threshold, a prospect that is very likely.
The development is also expected to generate another round of acrimonious political skirmishing, given that both leftist SYRIZA, and its junior coalition partner, the rightist-populist Independent Greeks party, rode to power in January 2015 on a election campaign platform that included an almost universal protection of residential property from bank foreclosures and auctions.
Associations representing notaries – professionals who in Greece are law school graduates specializing in drawing up contracts and maintaining registries of deeds, property transactions, wills etc. – had also blocked old-style auctions from taking place in district courts by ordering their members not to take part. The e-auction process aims to bypass this opposition, as well as disruptions and occupations of courtrooms by anti-austerity protesters.
The claim is that Greek banks must be made healthy again by removing bad loans from their books. The question is if selling both properties and bad loans to foreign institutional investors for pennies on the buck is a healthy way to achieve that. But yeah, if 50% of your outstanding loans are bad, you have a problem. Still, at the same time, the problem with that is that many if not most of those loans have turned sour because of the neverending carrousel of austerity measures unleashed upon the country. It’s a proverbial chicken and egg issue.
If Brussels were serious about Greek sovereignty, it would make sure that Greek homes were to remain in Greek hands. You can’t be sovereign if foreigners own most of your real estate. By bleeding the country dry, and forcing the sale of Greek property to Germans, Americans, Russians and Arabs, the Troika infringes upon Greek sovereignty in ways that will scare the heebees out of other EU nations.
It’s not for nothing that the entire Italian opposition is talking about a parallel currency next to the euro. That is about sovereignty.
5,000 Greek Properties Under the Electronic Auction System by End of 2017
Auctions of foreclosed properties to settle bad debts are seen as key to returning Greek banks to health by helping reduce the burden of non-performing loans. These currently stand at roughly €110 billion, or 50% of the banks’ total loans. Under pressure from its lenders, in the summer of 2016 the Greek government passed measures allowing the sale of delinquent mortgages and small business loans to international funds, a move seen by many as yet another betrayal by the SYRIZA-led government.
Greek banks won’t return to health, they’ll simply shrink the same way the people do who can’t afford to rent a home or eat decent food. Austerity kills entire societies, including banks. If Mario Draghi would decide tomorrow morning to include Greece in his €60 billion a month QE bond-buying program, and Greece could use that money to stop squeezing pensions and wages, and no longer raise taxes and unemployment, both the people AND the banks could return to health. It would take a number of years, but still.
Attica! Attica!
Whatever you call what happens to Greece, and what’s been happening for nearly 10 years now, whether you call it fiscal waterboarding or Shock Doctrine, it is definitely not something that has a place in a union of sovereign nations bound together in mutual respect and dignity. And that will ensure the demise of that union.
* * *
Another aspect of the fire sale is the valuation of the properties austerity has caused to crumble (so many buildings in Athens are empty and falling apart, it’s deeply tragic, at times it feels like the entire city is dying). The press calls it a hard task, but that doesn’t quite cover it.
It’s not just about mortgages, many Greeks simply give up their properties because they can’t afford the taxes on them. People that inherit property refuse to accept their inheritance, even if it’s been in their families for generations, and it’s where they grew up. In that sense, it may be good to lower valuations to more realistic levels. But tax revenues will plunge along with the valuations, and the government is already stretched silly. Add a new tax, then?
Greece Property Value Review A Hard Task
The government is facing a daunting task in adjusting the so-called objective values (the property rates used for tax purposes) to market levels by the end of the year, as its bailout agreement dictates. The huge slump in transactions and the forced sales of properties due to their owners’ debts do not lead to any safe conclusions for the values per area. One in four sales are conducted with prices that lag the objective value by 60-70%, and the prices of 2008 by 70-80%. The Finance Ministry must overcome all the obstacles to bring to Parliament all the necessary adjustments and regulations.
Moreover, once the objective values are brought in line with market rates, the government will have to maintain the same amount of revenues from the Single Property Tax (ENFIA) either by raising the tax’s rates or by introducing a new tax in the form of the old Large Property Tax.
Furthermore, once the objective values are reduced by 40-50% to match the going prices, banks may see problems with their capital adequacy, as lenders will incur losses by having to revise the collateral they get. Mortgage loans in Greece amount to €59.44 billion, of which 42%, or €25.4 billion are nonperforming.
Yeah, there’s the health of the banks again. And the government. And the people. A wholesale fire sale is the worst possible thing that could happen at this point in time. Greece needs help, stimulus, hope, not more austerity and fire sales. Juncker and his Berlin ventriloquist have this all upside down and backwards, squared. The one thing the EU cannot afford itself to do, is the one thing it engages in.
They may as well pack in the whole thing today, and go home. Actually, that would be by far the best option, because more of this will inevitably lead to the very thing Europe prides itself in preventing for the past 70 years: battle, struggle, war, fighting in the streets, and worse. If the EU cannot show it exists for the good and benefit of its people, it no longer has a reason to exist.
Saving the banks in the richer countries by waterboarding an entire other country is not just the worst thing they could have thought of, it’s entirely unnecessary too. The EU and ECB could easily have saved Greece from 90% of what it has gone through, and will go through going forward, at virtually no cost at all. But yes, German, French, Dutch banks would likely have had to cut the bonuses of their bankers, and their vulture funds couldn’t have snapped up the real estate quite that cheaply.
Summarized: the EU is a disgrace, morally, politically, economically. I know that French President Macron on the one side, and Yanis Varoufakis’ DiEM25 movement on the other, talk about reforming the EU. But the EU is the mob, and you don’t reform the mob. You dismantle their organization and then you lock them up.
Authored by Thorstein Polleit via The Mises Institute,
On 23 August 2017, the president of the European Central Bank (ECB) gave a speech titled “Connecting research and policy making” at the annual assembly of the winners of the Nobel Price for Economics in Lindau, Germany. What Mr Draghi talked about on this occasion — and especially what he didn’t talk about — was quite revealing.
Any analysis of the causes of the latest financial and economic crisis is conspicuously absent from Mr Draghi’s remarks. One gets the impression that the crisis came basically unexpected, out of the blue. There is no mention of the role of central banks, the monopoly producers of unbacked paper (or: fiat) money, played for the crisis.
No word that central banks had for many years manipulated downwards interest rates — accompanied by an excessive increase in credit and money supply — causing an unsustainable “boom.” When the bust set in — triggered by the spreading of the US subprime crisis across the globe — the ugly consequences of this central bank monetary policy came to the surface.
In the bust, many governments, banks and consumers in the euro area found themselves financially overstretched. The economies of Southern Europe especially do not only suffer from malinvestment on a grand scale, they also found themselves in a situation in which they have lost their competitiveness.
Mr Draghi, however, doesn’t deal with such unpleasant details. Instead, he lets his audience know how well the ECB pursued a policy of "crisis solution." His narrative is straightforward: Without the ECB’s bold actions, the euro area would have fallen into recession-depression, perhaps the euro area would have broken apart.
The analogy to such a line of argumentation would be praising a drug dealer, who provides the drug addict (who became a drug addict because of him) with just another shot. Repeated consumption of drugs does not heal but damages drug addict. Who would applaud what the drug dealer does? Likewise: would it be appropriate to praise the ECB’s action?
Mr Draghi presents himself as a fairly modest, intellectually ‘undogmatic’ central bank president stressing the importance of the insights produced by economic research for real life monetary policy making (thereby dutifully applauding the output of the economics profession). But the policy maker’s approach is far from being scientifically impartial.
Today’s economics research - as it is pursued, and taught, by leading mainstream economists - rests on a scientific method that is borrowed from natural science and builds on positivism-empiricism-falsificationism. This approach, used in economics, does not only suffer from logical inconsistencies, its embedded skepticism and relativism has, in fact, has let economics astray.
Under the influence of positivism-empiricism-falsificationism, economic theory – in particular monetary theory and financial market theory – has become the intellectual stirrup-holder of central banking, legitimizing the issuance of fiat money, the policy of manipulating the interest rate, the idea of making the financial system ‘safer’ through regulation.
In this vein, Mr Draghi praises especially the independence of central banks — for it would shield central bankers from destabilizing political outside influence. One really wonders how this argument — one-sided as it is — could find acceptance, especially in view of the fact that independent central banks have caused the great crisis in the first place.
Why is there hardly any public opposition to Mr Draghi’s narrative? Well, a great deal of experts on monetary policy — coming mostly from government sponsored universities and research institutes — tends to be die-hard supporters of central banking. The majority of them would not find any fundamental, that is economic or ethic, flaw with it.
These so-called “monetary policy experts,” devoting so much time and energy for becoming and remaining an expert on monetary policy, unhesitatingly favor and accept without reservation the very principles on which central banking rests: the state’s coercive money production monopoly and all the measures to assert and defend it.
The upshot of such a mindset is this: “Once the apparatus is established, its future development will be shaped by what those who have chosen to serve it regard as its needs,” as F.A. Hayek explained the irrepressible expansionary nature of a monopolistic government agency – like a central bank.
Experts, keenly catering to the needs of the state and the banks, will make monetary policy increasingly complex and incomprehensible to the general public. Just think about the confusing abbreviations the ECB uses such as, say, APP, QE, CBPP, OMT, LTRO, TLTRO, ELA etc. In this way central bankers effectively sneak themselves out from public and parliamentary control.
It comes therefore as no surprise Mr Draghi hails “non-standard policy measures” such as quantitative easing through which the central bank subsidizes financially ailing governments and banks in particular. Mr Draghi, however, does not leave it at that. He also suggests that monetary policy should shake off remaining restrictions that hamper policy maker’s discretion:
[W]hen the world changes as it did ten years ago, policies, especially monetary policy, need to be adjusted. Such an adjustment, never easy, requires unprejudiced, honest assessment of the new realities with clear eyes, unencumbered by the defence of previously held paradigms that have lost any explanatory power.
These remarks come presumably because the German Constitutional Court has found indications that the ECB’s government bond purchases may violate EU law and has asked the European Court of Justice to make a ruling. The German judges say that ECB bond buys may go beyond the central bank"s mandate and inhibit euro zone members" activities.
The issue is no doubt delicate: If the ECB is prohibited from buying government bonds (let alone reverse its purchases), all hell may break loose in the euro area: Many government and banks would find it increasingly difficult to roll-over their maturing debt and take on new loans at affordable interest rates. The euro project would immediately find itself in hot water.
Without a monetary policy of ultra-low interest rates and bailing out struggling borrowers by printing up new money (or promising to do so, if needed) the euro project would already have gone belly up. So far the ECB has indeed successfully concealed that the pipe dream of successfully creating and running a single fiat currency has failed.
The crucial question in this context is, however: What has changed in economics in the last ten years?
Unfortunately, economists that follow the doctrine of positivism-empiricism-falsificationism feel encouraged to question, even reject, the idea that there are immutable economic laws, preferring the notion that ‘things change’ that ‘everything is possible’.
However, sound economics tells us that there are iron laws of human action. For instance, a rise in the quantity of money does not make an economy richer, it merely reduces the marginal utility of the money unit, thus reducing its purchasing power; or: suppressing the interest rate through the central bank must result in malinvestments and boom and bust.
In other words: Sound economics tells us that central bankers do not pursue the greater good. They debase the currency; slyly redistribute income and wealth; benefit some groups at the expense of others; help the state to expand, to become a deep state at the expense of individual freedom; make people run into ever greater indebtedness.
What central bankers really do is cause a "planned chaos." Unfortunately, the damages they create — such as, say, inflation, speculation, recession, mass unemployment etc. — are regularly and falsely attributed to the workings of the free market, thereby discouraging and eroding peoples’ confidence in private initiative and free enterprise.
The failure of such interventionism — of which central bank monetary policy is an example par excellence — does not deter its supporters. On the contrary: They feel emboldened to pursue their interventionist course ever more boldly and aggressively to achieve their desired objectives. Mr Draghi made a case in point when he said in July 2012:
“[W]e think the euro is irreversible” and “the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.” Hayek’s warning in his book Fatal Conceit (1988) goes unheard: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."
Mr Draghi’s speech should not convince us that monetary policy rests on sound economics, or that the ECB works for the greater good. If anything, it shows that economics has been twisted and deformed to service the needs of the state and its central bank – which increasingly erodes what little is left of the free market to keep the fiat money system going.
Holding up the fiat euro will result in a coercive redistribution of income and wealth among people, within and across national borders, to an extent historically unprecedented in times of piece. As a tool of an effectively anti-democratic policy, the single European currency will remain a source of interminable conflict, injustice, and it will be a drag on peoples’ prosperity.
Europe must "wake up," urges Poland initerior minister Mariusz Blaszczak, telling state TV that "we are dealing with a clash of civilazations," where Muslim enclaves form “support bases” for terrorists.
The official, a member of the ruling rightwing Law and Justice Party (PiS), said he asked his country’s security services what they were doing to prevent similar incidents and noted that Poland is safe because “we do not have Muslim communities which are enclaves, which are a natural support base for Islamic terrorists.”
A “possibility” to prevent terrorism is closing in Europe, according to the minister. As RT reports, Blaszczak also lashed out at the refugee resettling scheme in the EU, claiming it"s “encouraging millions of people to come to Europe,” and that would effectively have tragic consequences.
The blunt outburst comes a day after the deadly attack on a tourist area in Barcelona which left 13 people dead and more than 100 others injured.
The politician voiced his anti-immigration stance earlier this year when he suggested that Muslim settlements in Western Europe started from small numbers with Brussels now trying to shift responsibility.
Warsaw has been vehemently opposed to resettling migrants under a scheme advocated by Brussels and approved by the majority of European countries.
Jaroslaw Kaczynski, the Law and Justice leader, accused migrants in October 2015 of bringing cholera and dysentery as well as “all sorts of parasites and protozoa, which… while not dangerous in the organisms of these people, could be dangerous here.”
The xenophobic remarks caused controversy inside the government. Marek Sawicki, agriculture minister with the Polish People’s Party, the junior member of the ruling coalition, said this was “a reference to old, dangerous and dishonest sentiments from the time of the [Second World] war,”according to Politico.
Poland, along with Hungary, the Czech Republic, Romania, and Slovakia have firmly rejected the so-called refugee quotas, deepening East-West cracks in the 28-member bloc.
With every new terrorist attack carried out by non-EU nationals, the European public and politicians are showing growing discontent and unease.
Brussels has threatened legal action against the dissenting countries, filing a formal “infringement procedure” in June which could result in financial penalties imposed by the European Court of Justice.
Authored by Mike Shedlock via MishTalk.com,
Brexit without a signed agreement looks increasingly likely as I suggested all along.
EU documents reveal “Painstaking Brexit Detail” down to the smallest item demanded by every nation.
The document also demands arbitration by the European Court of Justice (ECJ). These are both non-starters from the UK side.
Just 10 days before the general election, the EU published two documents that will affect every person living in Britain for years to come. Despite being dropped into the maelstrom of an election caused by Brexit, there was hardly a murmur.
The documents were the most detailed positions yet from the EU’s chief negotiator, Michel Barnier, on the upcoming divorce talks with the UK.
In two policy papers, the bloc has elaborated its stance on the Brexit bill and citizens’ rights.
The 10-page paper on the bill does not put a price on the divorce, but sets out in painstaking detail all EU bodies with a vested interest in the spoils – 40 agencies, eight joint projects on new technologies and a panoply of funds agreed by all countries, from aid for refugees in Turkey to supporting peace in Colombia.
No detail is too small. Britain is even on the hook for funding teachers at the elite European schools that educate EU civil servants’ children.
On citizens’ rights, the EU spells out in greater detail the protections it wants to secure for nearly 5 million people on the wrong side of Brexit – 3.5 million EU nationals in the UK and 1.2 million Britons on the continent.
In a red rag to hardline Brexiters, the document stresses the European court of justice (ECJ) must have full jurisdiction for ruling on disputes about citizens’ rights, while the European commission ought to have full powers for monitoring whether the UK is upholding the bargain.
“On the side of the 27, people are a little cross and they have hardened their positions,” said Jean De Ruyt, a former EU ambassador. “It is a dangerous situation when you harden positions and you cannot do anything [because formal talks have not begun].”
The divide is stark on the Brexit bill. The European commission president, Jean-Claude Juncker, was shocked after May told him the UK had no obligation to pay anything on leaving the bloc.
Diplomats on the EU side say they cannot contemplate scaling back demands on the divorce. EU civil service pensions will not be bartered away to secure the UK’s post-Brexit contribution to the union’s seven-year budget, known as the multiannual financial framework (MFF), the EU diplomat said.
“I think our priority is that the UK will pay for everything,” they said. “Everything is a priority – we cannot trade pensions for the MFF.”
Ridiculous Demands
Britain’s Brexit Secretary David Davis has mocked the European Union over divorce talks after Brussels published its position papers for talks with the UK on crucial issues.
PressTV reports UK describes EU Brexit demands as ‘ridiculous’.
Davis said on Tuesday that the EU’s demands to protect its citizens’ rights in the UK were “ridiculously high”, giving its citizens greater rights in the UK than Britons have.
“Art of the Deal”
“Art of the Deal” tactics by the EU are not going to work.
The EU exports more to the UK than vice versa. Fishing rights in UK waters are in play. The lower British Pound will temper cost of any tariffs the EU places on UK exports. EU imports to UK will collapse.
It’s hard to imagine a worse negotiating stance than that taken by the EU.
By insisting the UK pay for everything with the ECJ as arbitrator, the EU will instead receive nothing.https://t.co/6ejQ9OnUUB pic.twitter.com/5O93kbjzXJ
— Mike Mish Shedlock (@MishGEA) May 31, 2017
Once again I repeat: Brexit Negotiations: Why Bother?
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.
While the track record of the Sunday Times over the past 24 hours is somewhat spotty, following a report that as his foreign trip abroad once officially president, Trump is planning a summit with Putin in Reykjavik, which in turn was promptly denied by Trump staffers who called the story "fantasy", overnight the paper also reported that UK Prime Minister Theresa May will announce that Britain is "seeking a clean and hard Brexit" in a speech this week that will promise to create a “strong new partnership” with the European Union.
The paper further notes that in the speech, scheduled for Tuesday, the PM will "finally lay her cards on the table", making clear that the UK is set to pull out of the single market and the European customs union in return for the ability to curb immigration, strike commercial deals with other countries, and escape the jurisdiction of the European Court of Justice, the Sunday Times said without saying how it obtained the information.
In a separate interview with German newspaper Welt am Sonntag, May"s finance chief, Philip Hammond, said Britain would be willing to abandon “mainstream economic and social thinking” if it is unable to craft a favorable post-Brexit EU deal. Hammond said he hoped the U.K. could remain in the mainstream, but was prepared for the consequences for a hard Brexit.
“If we have no access to the European market, if we are closed off, if Britain were to leave the European Union without an agreement on market access, then we could suffer from economic damage at least in the short-term. In this case, we could be forced to change our economic model and we will have to change our model to regain competitiveness. And you can be sure we will do whatever we have to do.”
To avoid fallout from the breakup and grant businesses some certainty over the outlook, May will seek a transitional phase between splitting from the EU and the beginning of a new trading relationship, the Sunday Times said, citing Brexit Secretary David Davis. “We don’t want the EU to fail, we want it to prosper politically and economically, and we need to persuade our allies that a strong new partnership with the U.K. will help the EU to do that,’’ Davis wrote in the newspaper. “If it proves necessary, we have said we will consider time for implementation of new arrangements.’’
The market is likely to have an adverse reaction to the leaked (if unconfirmed speech): as Bloomberg points out, "May’s blueprint for Brexit risks alarming investors, bankers and company executives who will fret that May is prioritizing social issues over economic growth." A Downing Street source said that May had “gone for the full works”, although the prime minister’s staff admitted her words were likely to cause a “market correction” that could lead to a fresh fall in the pound.
Of course, that may be inaccurate, because as the recent record streak of 14-winning days in the British FTSE100 index to daily record highs has shown, the one thing that UK stocks like more than anything, is a crashing currency and the uncertainty that comes from a "hard Brexit."
Perhaps this time will be different.
The PM"s office refused to comment on the report when contacted by Bloomberg, while in separate statement it said that May will declare in her speech that having divided over Brexit, voters are now uniting behind making it a success. “The overwhelming majority of people - however they voted - say we need to get on and make Brexit happen,” May will say. “So the country is coming together.”
Separately, Bank of England Governor Mark Carney, who has come under fire in
recent months for being too involved in the Brexit debate, is also due
to deliver a speech on Monday evening in London although the has declined to
comment on what he will discuss. More from Bloomberg:
Speaking on the BBC’s “Andrew Marr Show” on Sunday, U.K. opposition Labour Party leader Jeremy Corbyn said May “appears to be heading us in the direction of a sort of bargain-basement economy on the shores of Europe.” “We will lose access to half of our export markets -- it seems to me an extremely risk strategy,” he said.
The Sunday Telegraph reported that the opposition Labour Party will introduce an amendment in the House of Commons demanding that members get to vote on a final Brexit deal, and if defeated they will speak out in the House of Lords to urge the government to make the guarantee of a vote.
In many ways May is motivated to finally engage the Article 50 process, as staying in the customs union would prevent the U.K. from lining up free-trade pacts with non-EU countries such as the U.S. and China. Foreign Secretary Boris Johnson returned from a trip to the U.S. last week saying he’d been told President-elect Donald Trump’s administration will want a fast trade pact with Britain.
Meanwhile, European leaders including Angela Merkel have held steadfast to the line that they won’t allow May to “cherry pick’’ the best parts of membership without accepting the responsibilities, including allowing free movement of labor. That requirement has become a pressure point in the U.K. with net migration to the U.K. from the EU reaching 189,000 in the year ended June. May has repeatedly indicated she views June’s referendum as a call from voters to slash that number.
As Bloomberg concludes, "Tuesday’s speech is likely to be closely watched by the financial markets, with currency traders increasingly seeing May’s pronouncements on Brexit as a trigger to sell the pound. Sterling fell following her speech at the Conservative Party conference in October, which fanned speculation she was eyeing a clean break with the EU, and dropped again following her first television interview of 2017."
It remains to be seen if May"s hard line speech will lead to a spike in sterling volatility, which coming in an illiquid session due to the US MLK holiday on Monday, may result in yet another flash crash in the British currency, and if it will also lead to another all time high in the FTSE100 index.
