European Union

Plenary sessions : Opening the extraordinary session, European Parliament President Martin Schulz noted that this was the first time that a plenary session had been convened at such short notice, but also that the UK citizens’ decision to leave the EU was equally unprecedented. He warmly welcomed Lord Hill and thanked him for his work in the EU Commission and deciding to step down, having campaigned for Britain to remain in the EU. His statement was followed by standing ovations from both MEPs and Commissioners.

Source : © European Union, 2016 - EP

Plenary sessions : Opening the extraordinary session, European Parliament President Martin Schulz noted that this was the first time that a plenary session had been convened at such short notice, but also that the UK citizens’ decision to leave the EU was equally unprecedented. He warmly welcomed Lord Hill and thanked him for his work in the EU Commission and deciding to step down, having campaigned for Britain to remain in the EU. His statement was followed by standing ovations from both MEPs and Commissioners.

Source : © European Union, 2016 - EP

Following the vote for the UK to leave the European Union, some Frequently Asked Questions (FAQs) on the future of UK-EU relations in the referendum aftermath:

EU Referendum Statement, Number 10, CC-BY-NC-ND-2.0

Has the UK already left the European Union, as of the referendum result on Friday 24 June?

No. The UK will continue to be a member of the EU until it has formally withdrawn. This will presumably take place after the exit negotiations are complete. The withdrawal agreement will likely set out a specific date on which the exit will be official.

What relationship will replace the UK’s EU membership?

It is currently unclear what kind of relationship the UK will have with the EU. It will be for the next UK government to set out its vision for this relationship and its objectives for the negotiations. The EU (that is, the remaining 27 Member States) will also have its position on the shape of that relationship. The outcome will be a compromise between the two.

How long will the negotiations take?

It is unknown how long the negotiations to leave the EU will take. Once the procedure under Article 50 is invoked, there will be a two-year period for the negotiations to be completed. This period can be extended, if the UK and all 27 remaining EU Member States agree. If a withdrawal agreement is not concluded within this period, then the EU treaties and EU law would cease to apply to the UK and it would exit by default. The initial withdrawal agreement could also include provision for further negotiations on details of the actual relationship in certain areas. There could also be transition periods to the new arrangements, which would add to the length of time before the future relationship is fully in place.

Will the UK continue to be part of the Single Market?

It is not clear whether the UK will remain in the Single Market. It will be up to the UK government to articulate whether it wishes for the UK to stay in the market – and it is unknown whether it will do so. It will also be up to the remaining EU Member States to decide whether they wish for the UK to remain in the Single Market. There would also have to be a mechanism for this. At present, the only way to be in the Single Market is to be part of the European Economic Area (EEA), either as a member of the EU or a member of the European Free Trade Association (EFTA).

What will happen to EU citizens in the UK, and UK citizens in the rest of the EU?

The rights of UK citizens to live and work in the European Economic Area and Switzerland, and of EEA/Swiss citizens to live and work in the UK, will depend on the negotiations. If the UK were to remain part of the Single Market – including the free movement of people – there would be little change. If the UK is not part of this, then there might be future controls on movement between the UK and the EU. While it is not certain, it is unlikely that current citizens living in the UK or the rest of the EU would be forced to leave. The measures would likely apply to future movement.

Can the UK reverse its decision to leave the EU?

The decision to leave the EU rests with the United Kingdom. In theory, the UK could abandon its exit negotiations up until the point at which the withdrawal agreement(s) are signed, ratified and entered into force. Once the withdrawal is complete, the UK would need to reapply to join the EU like any other state. In the politics of the UK, the choice to leave could be overridden by another referendum or a general election in which the winning party pledged to keep EU membership. However, this does not seem likely at present.

What will happen to the parts of the UK that voted to remain?

The United Kingdom is the sovereign state which is the member of the European Union. When the UK withdraws from the EU, all parts of the UK, and Gibraltar, will leave. The question has been raised whether parts of a state can be in the EU and parts out of the EU. A precedent would be the Kingdom of Denmark – Denmark is in the EU, while the Faroe Islands and Greenland are not. However, these territories are comparatively small and physically separate from Denmark. Such a scenario would presumably be easier for Scotland, Northern Ireland or Gibraltar, but less so for London or other English and Welsh cities. Any arrangement would form part of the negotiations.

What will the economic consequences be?

For now, volatility in financial markets and in the value of sterling may continue. The most significant challenge to economic performance is uncertainty – it is unknown what relationship the UK will have with the EU. As a result, business activity, such as investment and expansion, may be put on hold while companies wait to see what the final arrangement will be. Others may not want to wait, and will simply abandon efforts or relocate outside of the UK. Once the agreement is complete, the health of the economy will depend in part on how businesses respond to it and the other factors in the UK’s economic environment.

What does the result mean for the UK’s place in the world?

The process for withdrawal from the EU, and the resulting changes in British politics, will dominate UK public life for the months and years ahead. On a practical level, the amount of work required from government, parliament and society on redefining the new relationship will be enormous. During that time, it is difficult to see how the UK could continue to maintain its current level of engagement and influence in the world. However, the UK remains a member of most major international organisations – such as the UN (where it is still a Permanent Member of the Security Council), IMF, World Bank, WTO, G7 and G20. Once its relationship with EU becomes clear and then takes effect, the UK will presumably be in a more solid position to find its new place in the world.

What will the EU do now?

The remaining 27 Member States of the EU will want to stabilise the European project. They are already keen to begin the UK’s withdrawal negotiations, in order to close that chapter in the EU’s history and then move on. In parallel to the negotiations, the remaining states will also presumably reflect on the future of the EU going forward. While the governments are broadly supportive of European integration as it stands, many publics are more sceptical. It is possible that the EU could either integrate more, return powers to states or do a combination of both in different areas. Historically, the EU has had a poor record of changing course, even in the face of objections or events. It remains to be seen whether the departure of one of its biggest and most powerful members will serve as an impetus for such change.

This article was originally published as part of the free online course Towards Brexit? The UK’s EU Referendum.

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Shortened link: britainseurope.uk/24

How to cite this article:

Salamone, A (2016) ‘Brexit: Frequently Asked Questions’, Britain’s Europe (Ideas on Europe), 28 June 2016, britainseurope.uk/24

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Plenary sessions : The UK must respect the wish of a majority of its citizens, entirely, fully and as soon as possible, by officially withdrawing from the EU before any new relationship arrangements can be made, says the European Parliament in a resolution voted after an extraordinary plenary debate on Tuesday. MEPs also stress the urgent need for reforms to ensure that the EU lives up to its citizens’ expectations.

Source : © European Union, 2016 - EP

Plenary sessions : The UK must respect the wish of a majority of its citizens, entirely, fully and as soon as possible, by officially withdrawing from the EU before any new relationship arrangements can be made, says the European Parliament in a resolution voted after an extraordinary plenary debate on Tuesday. MEPs also stress the urgent need for reforms to ensure that the EU lives up to its citizens’ expectations.

Source : © European Union, 2016 - EP

Britain’s post-Brexit referendum rollercoaster continued full pelt on Monday, as the pound hit a new 30-year low, bank stocks crashed, and the opposition Labour party carried on tearing itself to pieces.

Having addressed parliament yesterday on his plans for handling the immediate next steps, David Cameron will face other EU leaders at a summit tonight in Brussels. His authority shattered at home, and with little remaining goodwill to draw on abroad, Cameron is set to find it a deeply awkward occasion.

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Portugal Telecom v Commission
Competition
The General Court confirms the unlawfulness of the clause relating to non-competition between Portugal Telecom and Telefónica in connection with Telefónica’s acquisition of the Brazilian mobile operator Vivo

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Fuelled by mounting public concern at the fast-growing number of asylum-seekers and migrants crossing Europe’s borders, the second half of 2015 saw a surge in support for illiberal parties, politicians and policies.

The refugee crisis has been an opportunity to showcase the xenophobia and nativism that is central to illiberalism. Political parties on both the right and the left, and at all points of Europe’s geographic compass, seized the crisis as a chance to build political support. Among many examples, Slovakia’s left-wing prime minister Robert Fico allegedly called migration the ‘ritual slaughter’ of Europe’s nations, while two Alternative für Deutschland MEPs called for police to shoot at refugees entering Germany illegally.

Recent opinion polls show that the radical-right populist Sweden Democrats, who polled 13% in the 2014 parliamentary election, would now win 20% of the vote, just a few percentage points behind the centre-right Moderates and the Social Democrats that have long dominated Swedish politics. The Netherlands’ Geert Wilders – who has called for Islamic male refugees to be locked in camps to prevent a ‘sexual jihad’ – has seen his anti-Islamic Freedom Party surge to 29% support. As well as the publicity offered by the Brexit referendum campaign, fears about rising immigration also gave the United Kingdom Independence Party (UKIP) and its leader Nigel Farage a new lease of life after the party’s disappointing election results last May.

“The refugee crisis was an opportunity to showcase xenophobia and nativism”

Fears about the impact of refugees on Poland’s culture helped the Law and Justice party to power in last October’s election. Poland’s new government was welcomed into office by Hungary’s Viktor Orbán, who dedicated part of his Independence Day speech to lauding Poland’s new illiberal leaders, telling them that ‘we are with you, and we send this message to Brussels: more respect to the Polish people, more respect to Poland!’ Poland’s new leaders followed the Hungarian model immediately, with constitutional amendments limiting the independence of both the courts and the media. After the terrorist attacks in Brussels in late March, the Polish government also announced that it was reversing its initial agreement to take in 7,000 refugees as a part of the EU’s relocation plan.

Similar, albeit milder, limits to democratic freedoms are being deliberated elsewhere. In Latvia, the parliament has debated controversial amendments to the Criminal Code that would make public discussion of changes to the Latvian constitutional order a criminal offense with a prison sentence of up to five years.

This illiberal turn is not a new phenomenon – in 2007, Eurozine debated the rise of ‘Illiberal Europe’. But back then, illiberalism was largely limited to the new east-central European member states of the European Union. Now, though, driven by the refugee crisis, illiberalism has expanded further afield. Indeed, Donald Trump’s campaign for the US presidency has been powered by unexpectedly broad public support for illiberal language and policies such as promises to build a wall between Mexico and the US, and threats to ban Muslims from entering the country.

“Europe’s illiberal parties have been around for several decades pilfering votes from the left and the right”

Is this the end of the liberal democratic consensus that has shaped Europe since 1945? Liberal democracy has protected individual liberties such as the freedoms of speech, assembly and religion. It is underpinned by the laws and norms adopted by key European institutions such as the Council of Europe and Organisation for Security and Cooperation in Europe (OSCE). But these liberal values are not a necessary or a core part of democracy. States could be less liberal but remain democratic, as leaders like Orbán advocate. Such a consolidation of illiberalism, though, is unlikely for three reasons.

First, Europe’s illiberal parties have been around for several decades but remain relatively small. Their default position is opposition rather than government. They have become an established part of the party systems of many European states by pilfering votes from both parties of the left and the right through their appeal to the economic losers of globalisation – typically working-class men in post-industrial towns – as well as those left bewildered and alienated by the broad cultural shift towards secularism and tolerance of diversity. Except for some central European states, even where support for illiberals has swelled – as it has in the Netherlands – on the back of the refugee crisis, it is still some way short of a majority.

Second, there are significant differences between illiberal politicians in the east and west. Hungary and Poland are generally pro-EU, while Britain’s UKIP exists to be pro-Brexit and Marine Le Pen would withdraw France from not just the EU but also NATO. There are also significant east-west differences in attitudes to drugs, gay rights and other values issues. Illiberals are, well, illiberal – they find it difficult to cooperate with others. Hence, the long-standing problems in forming a stable illiberal – or radical-right populist – party group in the European Parliament. A broad pan-European coalition or movement of anti-refugee parties is unlikely.

Finally, the migrant issue will eventually fade. As the flow of refugees slows down – whether this year or next – the public fear and rage of ‘the other’ that has fuelled illiberal parties and attitudes will diminish. Mainstream parties of the left and right will roll-back the illiberal language they partially stole from the political fringes, and European politics will return to its liberal democratic default. This refugee crisis is an episode of European politics, not the beginning of a return to the institutionalised illiberal politics of the inter-war era.

 

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Plenary sessions : The European Parliament held an extraordinary plenary session in Brussels on Tuesday 28 June for MEPs to discuss and vote on a resolution assessing the outcome of the UK referendum and its consequences for the European Union. European Commission President Jean-Claude Juncker and Council representatives also took part

Source : © European Union, 2016 - EP

Plenary sessions : The European Parliament held an extraordinary plenary session in Brussels on Tuesday 28 June for MEPs to discuss and vote on a resolution assessing the outcome of the UK referendum and its consequences for the European Union. European Commission President Jean-Claude Juncker and Council representatives also took part

Source : © European Union, 2016 - EP

After declaring that Hungary ‘will not be a colony’ and won’t ‘live according to the commands of foreign powers’, Hungarian Prime Minister Viktor Orbán announced that he is instead building an ‘illiberal democracy’ based on states like China, Russia, Turkey and Singapore. He has curtailed the independence of the judiciary, purged the civil service of those who are not his ardent supporters, introduced new election rules to give himself the advantage and launched a wholesale assault on the freedom of the press. When some of his new laws – such as those criminalising homelessness and ruling-out the possibility of gay marriage – were criticised as unconstitutional, he simply changed the constitution. In his reaction to the refugee crisis, he assumed a position of rabid nationalism, prosecuting asylum-seekers entering Hungary, building razor-wire fences on the borders and flouting the 1951 Geneva Convention on refugees.

The European Union seems absolutely helpless in dealing with these infringements of democracy. When you cannot correct the situation, it seems the best way out is to pretend the problem does not exist. Last December, the EU’s justice commissioner Věra Jourová made it clear this was the case by saying in the European Parliament that Hungary’s illiberal ways are not actually a problem.

The Polish general election in October was won by the extreme populist Law and Justice Party (PiS), which is both on the far right and left because while being positioned on the extreme right of the political spectrum, its economic policies are state-orientated and its behaviour towards opponents is highly authoritarian – strongly reminiscent of the pre-1989 ruling communist party. The PiS has quickly followed in Orbán’s footsteps, paralysing the Polish constitutional court and enfeebling the media. Its assault on democracy has been strongly criticised by the Venice Commission, an advisory body of the Council of Europe, which has decreed that an ongoing constitutional crisis in Poland poses a danger to the rule of law, democracy and human rights. But, as in the case of Hungary, Brussels is more or less powerless.

There have been no such anti-democratic constitutional changes in the other two countries of ‘New Europe’, the Czech Republic and Slovakia, but even these countries have found themselves in the grip of irrational eurosceptic, anti-Muslim and anti-refugee xenophobia over the past year. Slovakia’s (allegedly) social democratic prime minister Robert Fico peddled so much fear and loathing against refugees, of which there are none in Slovakia, that he emerged seriously weakened from the general election on 6th March. Slovak voters did not vote for him, and because of his scare campaign instead put their confidence in extreme right-wing parties. An openly neo-Nazi party has entered the Slovak parliament with 14 seats as a result. In the Czech Republic, too, President Miloš Zeman systematically makes strongly fearmongering statements using factually incorrect information, and the public love him for it. The leader of the Czech “Anti-Islamic Bloc” was even invited to sing the national anthem with the president at a public event last November. The finance minister and first deputy prime minister Andrej Babiš, a powerful oligarch, supports Zeman in this and has also expressed his admiration for Donald Trump’s ‘solution to the immigration problem’.

It is quite remarkable that there is such unity defying liberal, humanitarian and pan-European solutions to the refugee crisis in central and eastern Europe. This includes some of former East Germany, because in Saxony-Anhalt, the anti-Islamist and anti-refugee party Alternative für Deutschland gained more than 24% of the popular vote in the regional elections on 13th March, and Saxony is the birthplace of the anti-Islamic movement Pegida. Large numbers of Czechs, Slovaks, Poles, Hungarians and East Germans now express open defiance towards European values. But what are the sources of this widespread illiberalism?

It is of course well known that since the mass murder of Jews during the Second World War and the wholesale deportation of Germans after 1945, central and eastern European societies have been extremely homogeneous, predominantly white, and have not experienced the multiculturalism that has been common in western Europe for decades. Fear of the unknown is somewhat understandable, especially when unscrupulous media outlets create the impression that Middle Eastern refugees are no different from Daesh terrorists. Social networks such as Facebook are in large part to blame for this as vehicles for the dissemination of alarmist ‘news’ and racist hoaxes. Facebook rarely removes racist hate speech, especially when it is published in eastern European languages, and this has greatly contributed to the normalisation of what was unacceptable only a few years ago. Trapped in an echo-chamber of self-generated fear and hate, most central and eastern Europeans feel that they are genuinely threatened by the unknown ‘other’, and so they grasp for illiberal solutions.

Social and economic frustration is another important factor in illiberalism’s success. Economic development across central and eastern Europe is very uneven, and there are areas that remain very poor. Most of the inhabitants of such regions are in opposition to the political and media elites in their capitals. They disdain the mainstream media, hate Brussels and fully believe all the hoaxes disseminated on Facebook, helping Islamophobic material to quickly go viral. It is this kind of frustration that brought the PiS to power in Poland, that is the source of Czech President Zeman’s high popularity, that has brought neo-Nazis into the Slovak parliament and that sustains Viktor Orbán’s power. After 25 years of low pay, the rule of multinational companies and lecturing from the West, many central and eastern Europeans are fed up. They have assumed the role of a defiant pupil of the West. They no longer want to listen, Czech political scientist Ondřej Slačálek has said, and so they have reverted to nationalism and illiberal values.

There are rough times ahead for the European Union. Nationalist populism is on the rise in both the east and the west, and it is advisable to resist nationalist pressures and defend civic principles at all cost. Maybe it is at this point fitting to think of the predicament of the former Yugoslavia. The moment Yugoslavia abandoned the civic principle after 1989, the whipping up of nationalism on all sides for political advantage led to the brutal war of the 1990s. Is this the same story we will someday be telling about the EU?

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When China joined the World Trade Organisation (WTO) at the end of 2001, its Accession Protocol stated, though ambiguously, that China would be removed from the list of non-market-economy countries by the end of 2016. During those 15 years, China and other WTO members have been free to reach bilateral agreements so that market economy status (MES) could be granted early.

China has always been especially eager to get MES treatment from the EU, its largest trading partner. From 2002 to 2012, Wen Jiabao as the Chinese Premier pushed the EU with all available means to recognise China as a market economy, but failed. Facing heavy pressure from China in this period, the EU created five market-economy criteria and inspected the Chinese situation carefully, but the conclusion in 2008 was that China only met one of the five criteria. Nevertheless, the EU was still prepared to recognise China’s MES after the 15-year transitional period came to an end. The EU’s then trade commissioner Karel De Gucht said in a speech to the European Parliament in November 2013 that ‘in 2016, China will receive market economy status’.

A turning point has come in the last three years. Inspired by the US position, some of the EU’s lawyers started to pay more attention to the wording under Article 15 in China’s WTO Accession Protocol, and challenged the EU’s original automatic recognition at the end of 2016. In the meantime, fearing that MES treatment for China would make the EU’s trade tools less effective when dealing with anti-dumping cases targeted at Chinese imports, European manufacturers – steel producers in particular – launched powerful lobbying campaigns in Brussels as well as in member states. As a result, the current trade commissioner Cecilia Malmström has stated that there is ‘no automaticity’ in granting China MES this year.

“The whole debacle demonstrates that the mutually-beneficial nature of Chinese trade relations is in doubt”

The Chinese side has dropped its request for MES from the EU, but insists that the EU follow the WTO provisions and treat China as a normal country after 15 years of its accession. Its argument is that reform has been carried out for more than 35 years in China to great success. China is no longer, as some Europeans have accused, a planned economy; the market now plays an important role in stimulating Chinese economic growth. China also argues that when the European Commission calculates dumping margins against some of its trade to the EU, the analogue country is often the United States, which is unfair because China and the US are not at the same economic level and there is a big difference between the two countries’ production costs.

When dealing with China’s MES, the EU needs to take into consideration at least three pivotal questions. First, how should the EU revise its own legislation to avoid violating the provisions of the WTO? Of the four points under Article 15, point one’s second sub-section will definitely expire on 11th December. This will require adjustments to EU law, in particular Council Regulation No. 1225/2009, or Europe may risk conflicting with the WTO rule. But the problem is the difficulty of achieving a common position in the Council and the Parliament. As a matter of fact, it is not impossible to maintain trade defence measures against Chinese imports, including anti-subsidy and countervailing measures. Even if in anti-dumping investigations, where China is selected as the analogue country, the EU has the possibility of introducing higher import tax against those Chinese enterprises that dump in the European market by removing the ‘lesser duty rule’, but of course, this may need the approval of the legislative bodies first.

The EU must secondly consider how to balance different interest groups within Europe. In other words, not only the voices of stakeholders in the steel industry, but also those who benefit from free trade should be taken into account. It is of course not an easy task to deal with the different positions of member states, so it will be a big challenge for the EU to align the interests of transnational industrial sectors with those of the 28 member states.

“A ‘no’ to China’s MES will most probably initiate a series of steps taken by Beijing to punish Brussels”

Last but not least, how should the EU take care of its overall relationship with China? The decision taken by the EU will have a direct impact on EU-China relations at least in the short term. Although China has not specified its plan of revenge yet, a ‘no’ to China’s MES will most probably initiate a series of steps taken by Beijing to punish Brussels by, for example, withdrawing Chinese investment from the Juncker Plan, suspending the purchase agreement with Airbus, slowing down negotiations on the Bilateral Investment Agreement, dividing the EU by exploring bilateral cooperation projects with some member states that are more favourable to granting China MES.

No matter what decision the EU takes, and especially if no decision is reached by the time limit, the whole debacle demonstrates that the mutually-beneficial nature of Chinese trade relations is in doubt. Unfortunately for China, some economic problems have appeared with poor timing – signs of stagnation and its huge overcapacity for steel production have seriously lowered international optimism over the Chinese economy, which have worried Europeans about the possibility of increased trade disputes with China in the coming years. The common understanding of the EU-China relationship now tends to lean towards the view of a zero-sum game.

The EU needs to hurry up and form a policy as soon as possible, otherwise the WTO dispute mechanism may interfere when the deadline expires. But who knows, maybe a final WTO ruling is the best solution. In this way, the EU does not need to face what is probably ‘mission impossible’ for its institutions.

IMAGE CREDIT: FLICKR/CC – European External Action Service

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The NATO Summit in Warsaw will be a key meeting to decide on next steps in ensuring the Alliance’s collective defence. Strengthening and modernizing NATO’s defence and deterrence posture will be at the core business of the Summit. To successfully adapt NATO to a rapidly changing security environment, the Warsaw Summit will need to consider in its deliberations several relevant and highly important issues.
Further information
Draft agenda and meeting documents
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General : The UK referendum and its consequences are discussed during an extradition plenary session in Brussels on Tuesday 27 June. In addition the financial repercussions of the refugee and migrant crisis are discussed at a joint committee meeting, while political groups are also preparing for next week's full plenary session in Strasbourg.

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