0602-UK’s opinion about the EU

Thirty years ago the Daily Telegraph sent me to investigate the underworld of toxic waste disposal around Naples, even then a big enough scandal to have gained attention in London. Brave activists from Amici della Terra took me on tour of dumping zones scattered along the lower slopes of Mount Vesuvius, which were leaking deadly chemicals into the water system. Mafia scouts watched closely and wrote down number plates. The business was controlled by the Camorra, the famously-bloody Neapolitan clan. The even bloodier Ndraghetta controlled waste dumps further south in Calabria. The hazardous loads came in lorries from the industrial centres of North Italy and Europe’s heartland. It was systematic and these networks were operating with near total impunity, and the apparent complicity of regional authorities. Heroic anti-Mafia judges such as my late friend Ferdinando Imposimato tried to resist. He had 24/7 police protection so they assassinated his brother instead as an easier target. Ferdinando was forced into exile. His memoir was released in France because no Italian publisher dared to touch it. Un Juge En Italie is one of the most disturbing books I have ever read. Rome’s political casta is not spared.
What has changed thirty years later? Nothing. Astonishing revelations have confirmed the worst, from the Camorra pentito Carmine Schiavone, from parliamentary hearings, from Roberto Saviano’s journalism in Gomorrah, yet nothing has really changed. The business is still booming, and it is spreading through alliances to the Balkans. A joint Europol operation last year – ‘Green Tuscany’ – shows that Camorra tentacles have stretched North and linked up with Chinese eco-criminals in a global nexus.

I thought of this gaping environment wound when the EU’s Michel Barnier told us this week that Britain cannot be trusted even with the sort of bare bones trade access secured by Korea, Japan, and Canada, unless it accepts level playing-field clauses on the environment, as well as labour standards, competition, tax, and so forth, as an extra safeguard.  The pretence that there is an objective ladder of higher and lower standards – and that Brussels is the arbiter of slippage – is of course diplomatic legerdemain and must be rejected tout court. The EU’s strategic aim is to compel Britain to swallow the Acquis even though much of this legislation is either dysfunctional or incompatible with 21st Century science and technology. It aims to pin down this country as a legal colony with no way out later other than the pariah step of treaty abrogation. Nor does it stop there. Brussels wants ‘dynamic alignment’ on future law, starting with state aid. No matter that the UK has the best record on competition policy among major EU members, as Boris Johnson pointed out in his deliciously-defiant and uplifting Greenwich speech. “The EU has enforced state aid rules against the UK only four times in the last 21 years, compared with 29 actions against France, 45 against Italy – and 67 against Germany,” he said. But what sticks most in my craw is relentless EU humbug on the environment, and I watch with mounting anger as Euro-MPs and a clutch of states try to broaden dynamic alignment to this broad area as the price of any trade deal. We must endure this condescension just weeks after the German state of North-Rhine Westphalia opened Juniper’s Datteln-4 coal power station – and yes, you read that correctly – it authorised a brand new 1 GW plant to begin belching its fumes in January. Germany is ignoring a solemn UN request that no coal plant should ever again be opened anywhere in the world, a decision that will go down in infamy. The green watchdog Sandbag says RWE’s four large plants in NR Westphalia are burning lignite – the dirtiest of coals – and spreading poisonous emissions across a densely-populated area of 46 million people. This quartet is causing an estimated 4,200 premature deaths a year.
For good measure, RWE is clearing fresh forest to extend the open lignite mine in Hambach to feed these monsters. Germany will not phase out coal until 2038. Meanwhile, the UK has largely eliminated coal from the power system thanks to its carbon price floor – tougher than the EU’s regime – and thanks to a cross-party drive for renewable energy. The UK was the first major country to enshrine drastic C02 cuts in national law with the Climate Change Act of 2008, trumped by Theresa May’s Net-Zero plan last year, another global first. Britain’s emissions have fallen by 42pc since 1990, compared to 23pc for the EU. We should not be pious. Several states are grasping the nettle on climate change. But it borders on grotesque to insinuate that this country – with its pioneering tradition of green activism and its world-class centres of climate science – is a wanton ecological abuser. Or for that matter, a wanton violator of labour rights. As the Prime Minister said,  the UK has tougher standards than the EU minima in most areas of social policy. It offers up to 39 weeks paid maternity leave viz 14 weeks in the EU. It has one of the highest minimum wages. Several states have none at all. Etc, etc, “I dispel the absurd caricature of Britain as a nation bent on the slash and burn of workers’ rights and environmental protection, as if we are saved from Dickensian squalor only by enlightened EU regulation, as if it was only thanks to Brussels that we are not preparing to send children back up chimneys,” he said.

By Mr Barnier’s logic the UK might equally exclude EU goods from our market unless it complies with higher British standards on covert export subsidies, or social protection, or CO2 cheating. “Will we stop Italian cars or German wine from entering this country tariff free, or quota free, unless the EU matches our UK laws on plastic coffee stirrers? Will we accuse them of dumping? Of course not,” said Mr Johnson. Britain will not do so because it is the nation of Smith, Ricardo, and the trade philosophy of comparative advantage, and because that is not how global commerce works. Yes, safeguard clauses on the broad principles of civilised conduct are normal in trade deals, but that is radically different from what the EU wants. Mr Barnier has put forward an extraordinary doctrine, that the UK cannot have a sovereign trade relationship because it is too big and because it sits on the EU doorstep. What this really means is that Britain will be subject to special punitive terms as an ex- EU member if it opts to be a self-governing state under its own laws. We are getting to the nub of the matter. Downing Street’s negotiator, David Frost, told a Brussels audience this week, that to accede to these demands not only defeats the purpose of Brexit but is also unworkable and would surely end in a final volcanic rupture. Indeed. How could such a disenfranchised relationship possibly end otherwise? For three years Brussels told us that we had to stop fantasising, stop cherry picking, and face the hard choices before us. Now this government has done exactly that. It has chosen the Canada/Korea/Japan route with no bells and whistles. It seeks nothing special. “We only want what other independent countries have,” said Mr Frost. It is the EU that is suddenly caught flat-footed, sputtering incoherently, unable to take a Canadian yes for an answer, and frantically moving the goal posts.

Had this UK-EU spat occurred last year, the pound would have dived against the euro, courtesy of the Pavlovian political risk trade. This time sterling has held firm. Clearly, something has changed in the way global markets view a pugnacious Borisian Brexit and how they view the unravelling credibility of the EU position. Europe runs big risks in pursuing Barnier hegemonism, leaving aside the delicate subject of its military impotence in a dangerous neighbourhood, and the UK’s anchoring role in NATO. It is already offering so little in trade talks that the differential cost of the WTO option is trivial. Were the UK to say Auf Wiedershen and shift into the American orbit for the next half century, the consequences for Europe would be shattering on several fronts. Brussels has already made an unwelcome discovery over the last eighteen months. The EU was not immune to the Brexit confidence shock after all. Germany was if anything hit harder than the UK itself, and this has combined with a deeper industrial and technological crisis eating at the German business model. My view all along has been that the EU was never strong as it looked to those in the Brussels/Westiminster bubble with no Fingerspitzengefühl for the world economy, and it is particularly vulnerable right now. One can be mislead by mechanical arguments on relative size: 445m against 66m. The EU’s £95bn bilateral trade surplus (half German) and its sunk supply chains create asymmetric points of weakness. It will pay a higher price than the EU political class realizes if it treats the City as an enemy and loses its global banker. The leaked contingency plan from Nissan suggesting that the carmaker may shut plants in Europe and instead double down on the UK in a clean Brexit confirms what I suspected, that Brussels underestimates the import-substitution impact in the UK. These effects would cushion some of the blow for British industry. The EU would face a pure trade loss, and it would have to compete toe-to-toe with cheaper world products in the UK market. Above all, euroland remains trapped in a deflationary quagmire, with interest rates already at minus 0.5pc and bond yields deeply negative, and with a paralysed fiscal machinery fixed by EU treaty law. As Mr Frost said, the EU has “extreme difficulty in correcting wrong decisions.” And the most calamitous wrong decision – my words, not his – was to launch a monetary union without a matching fiscal union, and to do so governed by German contractionary ideology.
In short, the eurozone is chronically incapable of generating endogenous growth and has an excruciatingly-low economic pain threshold. The next serious global downturn will reveal – again – that its political pain threshold is just as low. My personal reaction to the Barnier demarche – and to predictable news that Brussels is adding unrelated political grievances to the terms of any trade accord, starting with the Elgin Marbles –  is that you cannot negotiate with these people. Britain should forget about a trade deal with Europe and look to the world. It should pursue a fast-track accord with the US, given that Washington wants the same thing and is lavishing us with affection. It should throw itself into talks with the Anglo-sphere, India, and the fifteen Asia-Pacific countries of the RCEP pact. As Mr Johnson said, Britain must rediscover the Greenwich trading spirit of 1707 and seek to become laureate nation of open global commerce. If Mr Barnier comes off his doctrinal high horse and returns with a genuine offer on sovereign terms, excellent, but this country should never again prostrate itself for crumbs from Brussels. That horrible chapter of our national life must end.


Mass demonstration in London against brexit: ‘best deal is not a brexit’

Hundreds of thousands of people are on the move in central London to demand a new referendum on the Brexit. They carry banners with texts such as “The best deal is not a Brexit” and “Let the people speak.” The demonstrators walk from Park Lane to the parliament building. There are speeches by, among others, Scottish Prime Minister Sturgeon, Deputy Labor leader Watson and London Mayor Khan. According to the organizers, there are around one million demonstrators. It is unknown whether that is true, but it is clear that resistance to the Brexit is growing. An online petition for the withdrawal of the Brexit has been signed more than 4 million times. “We are here today because we feel we are being robbed of our future,” an 18-year-old demonstrator told Reuters news agency. “Our generation has to live with the consequences of this disaster. It will be harder to find a job.” The demonstration comes a few days after the European Union has given the United Kingdom a few weeks’ delay to arrange the Brexit. According to the campaigners, it is therefore now the right time to launch a referendum and reverse the brexit. If the lower house next week agrees with the draft agreement May has concluded with the EU, the United Kingdom will get until May 22 before it leaves the union. If the House of Commons says ‘no’ again and there is no other plan, the British will leave the EU on 12 April.


Leaked memo reveals ministers warned of Brexit plot to keep UK in permanent customs union with EU

Ministers have been warned that MPs supporting an amendment to delay Brexit could “politicise the monarchy” and lead to a “full blown constitutional crisis” causing the Government to “lose its ability to govern” according to leaked documents seen by the Telegraph. The explosive memo advising the cabinet as Theresa May battles to win Tuesday’s second meaningful vote – warns that supporting any amendment re-tabled by Labour’s Yvette Cooper and Tories Oliver Letwin and Nick Boles could pave the way for a bill to change the day of our EU exit and bind the Government into a permanent customs union. It comes as at least five Cabinet ministers are poised to vote to block no deal next week if Mrs May’s withdrawal agreement is rejected, prompting the Prime Minister to consider offering Tory MPs a free vote on the matter to avoid a mass resignation. Philip Hammond, Amber Rudd, David Gauke, Greg Clark and Matt Hancock are all expected to rebel against the Government. If Mrs May’s deal is voted down and there is no support for leaving the EU without a deal in parliament, MPs will then given the option to vote to delay Brexit. Warning that a passed amendment on a vote to delay Brexit would be turned into a bill that would be “fast tracked” into both Houses, the memo states: “Once passed, the Government would have no option but to advise the Queen to give Royal Assent. The Government would have no control of the Chamber. It would have lost its ability to govern. A cross-party majority in the House would effectively have seized control of Brexit policy and would be directing legally binding outcomes.” The advice comes after sources are understood to have told Number 10 that those rewording the amendment are now seeking to not only delay Brexit but “direct” it by imposing requirements on the Government in relation how to use the extension period. The advice predicts that the amendment will call for a legally binding Commons vote on any new negotiating mandate, which it predicts will “likely lead to a Commons majority being expressed for a permanent customs union, which Government would have no choice but to then implement.” The memo warns: “We can expect a legally binding imposition by the House on Government to ensure at the very least: Extension of Article 50, a cross-party negotiating mandate (which we assume will lead to a permanent customs union) and possibly a requirement to legislate for a second referendum”. It suggests the largely remain-backing Lords would expedite any legislation to ensure its passage in the next fortnight, potentially giving rise to the Queen having to give royal assent to a “soft” Brexit bill days before March 29. It adds: “The monarchy categorically cannot be politicised in an attempt to thwart the majority view of the two Houses – any attempt to do so would lead to a full blown constitutional crisis”.



Theresa May is greeted by Dutch Prime Minister Mark Rutte upon her arrival in The Hague, Netherlands

Theresa May meets with Dutch PM Mark Rutte in The Hague

Theresa May and Mark Rutte

Theresa May and Mark Rutte

Theresa May will be told on her European tour to stop trying to appease her mutinous backbenches by throwing them the “red meat” of Brexit promises she can never deliver upon, EU diplomatic sources have told The Telegraph.

As Mrs May embarked on a whistle-stop tour of the EU, including the Netherlands, Germany and Brussels, diplomats expressed growing exasperation at Mrs May’s constant attempts to placate the impossible demands of clean-break Brexiteers with unrealistic promises. The message will be the same one Mrs May received from Europe over the weekend, when the Telegraph understands Mrs May was directly warned against feeding unreasonable expectations. “She was told ‘don’t keep feeding them red meat. We know how this ends. You get eaten up last,” said a senior EU diplomat. The uncompromising tone comes as Mrs May seeks a “legally binding assurance” that the UK will not be trapped indefinitely in the Irish backstop arrangement that puts the UK into a customs union with the EU to avoid the return of a hard border in Ireland. After Mrs May pulled today’s the ‘meaningful vote’ in the Commons, the race is now on to secure concessions from Europe that might convince opponents of the deal to change their minds, particularly on the question of the Irish backstop.



Bank of England votes for first ‘real’ interest rate rise since financial crisis.

The Bank of England has voted for its first “real” interest rate rise since the financial crisis as it builds ammunition to tackle a economic downturn following Brexit. The Bank’s Monetary Policy Committee (MPC) voted unanimously to hike rates to 0.75pc, their highest level in nine years. Sterling spiked following the decision but enthusiasm on currency markets quickly faded as governor Mark Carney warned that policy ahead of Brexit needed to “walk, not run”. The MPC said that recent data has confirmed that the economic slowdown in the first quarter of the year was “temporary”and that more hikes will be needed to bring inflation back to the Bank’s 2pc target. The central bank’s policymakers lifted rates last November but it was widely seen as a correction of its post-EU referendum rates cut. The hike provides savers some relief and pushes up borrowing costs but rates remain close to ultra-low levels. “The main argument for raising rates now is that it gives the Bank more room for manoeuvre when the next downturn hits,” argued Hargreaves Lansdown economist Ben Brettell. “If interest rates are 1pc or more by the time the economy sails into stormier seas, policymakers will at least be able to cut rates a couple of times before cranking up the printing presses for more QE.” Millions of homeowners with variable rate mortgages face higher payments, with many braced for increased charges of £260 a year. Following the Bank of England’s decision to raise the Bank Rate from 0.5pc to 0.75pc today, many customers with variable rate mortgages will see their interest rates increase by a corresponding amount. For those with mortgages tied directly to the Bank Rate, the interest rate will increase on 1 September for customers with most major lenders. However, HSBC confirmed it will apply higher rates from tomorrow.


Airbus accused of reigniting ‘Project Fear’ after issuing Brexit threat to pull out of UK

An Airbus SAS A380 super jumbo performs a flying display on day two of the 51st International Paris Air Show in Paris, France, on Tuesday, June 16, 2015

Airbus has been accused of reigniting “Project Fear” for political reasons after the European planemaker threatened to pull out of the UK in the event of a “no deal” Brexit. The aerospace giant, which employs 14,000 people at 25 sites across the country, said it would “reconsider its investments in the UK, and its long-term footprint in the country” if Britain crashed out of the single market and customs union without a lengthy transition agreement. But Brexiteers said you “couldn’t have a more politically motivated threat than this” and suggested Airbus was seeking to pressure the Government into staying as close as possible to the EU in order to protect its own “narrow, vested brexit3interests”. Airbus set out its stance in a “risk assessment” published on its website in which it also called on the Government to extend the Brexit transition period which is currently due to run until December 2020 if a deal is agreed. It said the proposed transition was too short for the business to reorganise its supply chain and that if there was no extension it would “carefully monitor any new investments in the UK and refrain from extending the UK suppliers/partners base”. But Peter Bone, the leading Tory Brexiteer, said: “It is just another part of Project Fear. I have given up counting how many times people have said it will be the end of the world. They are not going to pull out. “They are just trying to put pressure on the British Government because they want us to continue to be a part of the European Union. You couldn’t have a more politically motivated threat than this and I don’t believe for one minute that Airbus would move from the UK.” Nigel Farage, former Ukip leader, said it was “hardly surprising Airbus are threatening us today when they’ve taken billions in EU funding” as he also questioned whether the company would pull out of the UK. He told Sky News: “Twenty years ago I heard car manufacturers saying if Britain didn’t join the euro they may well consider pulling out of Britain – Nissan, others like that. “We build the wings in this country. If they close down production it would take them at least two years to put that back in place somewhere in France or Germany. “Big business will always lobby for their interests, of course they will. I understand that.” Meanwhile, John Longworth, the co-chairman of the Leave Means Leave campaign group, said: “The latest scare story from Airbus screams of more Project Fear. “The French-run Airbus is a classic multi-national business that clearly doesn’t care about the UK as we embark on a new post-Brexit future, because it is intrinsically wrapped up in the EU and trying to undermine the UK Government’s negotiating position.” Tom Williams, the chief operating officer of Airbus Commercial Aircraft, told BBC Radio 4’s brToday programme the firm was “becoming increasingly frustrated with the lack of clarity” over Brexit and “obviously time is running”. He said: “Now we have to come to the point where we have to make serious decisions. Quite often those decisions are long-term in nature and without clarity it’s too dangerous for us to proceed. “We’re talking about decisions in terms of safety stocks, buffer stocks of components, assuming that there will be chaos at the borders and that material won’t be moving freely. “We are talking about ‘do we invest in further capacity?’ And we are also talking about what will happen to components from suppliers to us and to airline customers, which today are certified under IATA rules and at the end of March next year those certifications will be invalid. Those components won’t be able to be fitted in aeroplanes.” Asked how soon decisions would have to be taken, Mr Williams said: “As we go through this summer, over the next weeks, we need to get clarity. We are already beginning to press the button on crisis actions. “The challenge of this is not a one-off decision. It will be a series of significant decisions that will accumulate as we go over the next couple of months.” He added: “When we look at the next generation of wings – which is called Wing of the Future – we are working on that today in the UK. Clearly now we are seriously considering whether we should continue that development or find alternative solutions.” Mr Williams insisted no political pressure had been put on Airbus to speak out. “I’m an engineer, not a politician,” he said. “I have to deal in certainty. We can’t continue with the current vacuum in terms of clarity.” The Airbus row comes after Philip Hammond, the Chancellor, warned the EU against an “ambition to force the location of business into the EU”.