Osborne sees “essential pieces” of renegotiation falling into place and warns EU referendum is “crucial decision of our lifetimes”
Speaking to BBC Newsnight in Berlin, Chancellor George Osborne said the “essential pieces” of the renegotiation with the EU are falling into place, with many countries understanding that the UK is putting forward a “perfectly reasonable case for change”, which could benefit the whole EU. He said the UK is pushing for a “safety mechanism to enforce” rules which mean non-Eurozone countries are not discriminated against. Osborne argued that the UK’s push to limit EU migrants’ access to in-work benefits would “remove the unnatural draw of welfare system…then will be able to reduce net EU migration”. Osborne also cited Open Europe’s work on migration during his interview.
Osborne also warned, “There’s no second vote. This is the crucial decision of our lifetimes.” He reiterated that the Treasury is not working on any Brexit contingency plan.
Sources: BBC Newsnight, The Daily Telegraph
Commission official suggests February summit could be decisive in securing UK-EU deal
The Times reports that Jonathan Faull, who is leading the European Commission’s work on the UK-EU negotiations, said that there was a “very good prospect” of agreement at next month’s EU summit. “Our hope in the Commission is this European Council proves to be the decisive one,” said Faull, adding that there was “pretty strong” political will for a deal. He said that there are a “range of possibilities” for legally binding and irreversible changes that the UK is asking for, including the Irish and Danish models – a political agreement to change the treaties at a later date – which he described as “a technique which has been used and is available to us.” Faull also noted, “A decision of the heads of state or government of the European Council can constitute an agreement between them in international law, and can quite legitimately be described as legally binding therefore.”
Meanwhile, The Sun and The Daily Mail both report that Germany has offered the UK a compromise on the demands for tighter access to in-work benefits. The Sun reports that it involves tightening up the criteria in EU legislation of who is defined as a ‘worker’ and therefore entitled to claim in-work benefits, but The Daily Mail suggests that the same criteria would need to be applied to Britons and could therefore see the lowest paid Brits lose out. Foreign Secretary Phillip Hammond is quoted by Reuters as saying, “Even as we speak we have civil servants working with (European) Council representatives trying to come up with a satisfactory proposal…which can be circulated before the Council meeting in February.”
Sources: The Sun, The Daily Mail, The Daily Telegraph, The Times, The Independent, Reuters
The Sun calls on Theresa May to lead Brexit campaign
The Sun’s leader calls on Home Secretary Theresa May to join the Leave campaign. “The EU referendum is not shaping up as a fair fight,” it says. “Aside from the restrictions David Cameron put on Eurosceptic ministers, the ‘leave’ campaign is still in dire need of a high-ranking Cabinet figurehead.” Writing in The Daily Telegraph, Fraser Nelson notes that simply leaving the EU is not enough to escape its influence. He writes, “It would certainly be in the EU’s self-interest to agree a free trade deal with Britain: it would need access to our markets as much as we’d need access to theirs. But as the EU demonstrates with terrifying regularity, it does not always act rationally.”
Sources: The Sun: Leader, The Daily Telegraph: Nelson
Wilders: Brexit would create ‘enormous incentive’ for others to follow
Geert Wilders, whose populist Freedom Party leads the Dutch polls, has said he “hopes” Britons will opt to leave the EU because “you will see that it will be easier for other countries to make the same decision.” He added, “The beginning of the end of the European Union has already started. And it can be an enormous incentive for other countries if the United Kingdom would leave.” Support for the Freedom Party has risen to the equivalent of 41 seats in the 150-member Dutch parliament, up from 15 in the 2012 elections.
Source: Bloomberg
EU Home Affairs Commissioner: Refugee relocation scheme has not delivered the expected results
During a debate with the European Parliament’s Civil Liberties Committee yesterday, EU Home Affairs and Migration Commissioner Dimitris Avramopoulos admitted that the Commission’s flagship refugee relocation scheme “has not delivered the expected results” with only 272 out of a total of 160,000 relocated between member states so far. He added that if member countries “act on the pressure of the domestic agenda, it will fail.” Politico cites senior EU diplomats as saying that the sexual assaults against hundreds of women in Cologne on New Year’s Eve “risk being the final nail in the coffin” of the relocation scheme. Speaking at a press conference this morning, Commission President Jean-Claude Juncker said he had not given up on the relocation scheme and he warned that if internal borders were to be restored within the EU, “it would mean less single market and in turn higher unemployment.”
Meanwhile, Bild reports that 51,395 new refugees have entered Germany since January 1. In protest against German Chancellor Angela Merkel’s decision to continue to allow refugees to enter Germany, Peter Dreier, the chief administrator of the Bavarian district of Landshut yesterday personally delivered a bus with 51 Syrian refugees to Merkel’s Chancellery offices in Berlin. In an interview with Die Welt, Stephan Weil, the SPD Minister President for the Lower Saxony calls on Merkel to adopt a ‘Plan B’ consisting of securing the EU’s external borders.
Sources: Politico, Der Standard, Bild, Deutsche Welle
Reuters: ECB governing council members don’t see further ECB easing in near future
Reuters reported yesterday that the ECB will not ease policy further, citing an unnamed swing voter on the governing council as saying, “The ECB has done its job, created the space with exceptional accommodation. Now it’s time for others to do their job: fiscal policy, infrastructure investments [and] structural reforms.” It also cites and unnamed dovish member of the council as saying, further easing “will have to come…[but it] won’t come very soon.”
Meanwhile, the ECB yesterday released its accounts of its December monetary policy meeting which showed that there was a discussion of greater monetary easing including increasing the monthly amount of ECB asset purchases, cutting the deposit rate further and extending the purchase programme for longer. However, it also showed that a number of the ECB governing council members did not believe any further easing was justified by the economic data and were concerned about the effectiveness of further easing.
Sources: ECB accounts, The Financial Times, Reuters
Merkel under pressure from her party to raise issue of prolonged low rates with ECB
Bloomberg reports that German Chancellor Angela Merkel is coming under pressure from members of her party to raise the issue of low interest rates during her upcoming meeting with ECB President Mario Draghi. CSU MP Alexander Radwan and a member of the German parliament’s finance committee said, “I trust that the chancellor will clearly address the concerns related to the ECB’s policy…[and ensure] that Europe recognizes the limits of central-bank policy.” Antje Tillmann, CDU finance policy spokesperson, said “I will not deny that the low interest rates are worrying us…I hope therefore that this will change. I believe Mr. Draghi knows that we’re waiting for this.”
Source: Bloomberg
German Constitutional Court to hold second hearing into legality of ECB OMT on 16 February
The German Constitutional Court confirmed this morning that it will hold its second hearing into the challenge against the ECB’s Outright Monetary Transactions (OMT) on the 16 February 2016. The case had been referred to the European Court of Justice which found the OMT to be legal, and is now to be referred back to the German court for a final ruling. In its initial findings the German court suggested OMT may be illegal, as such, the hearing will show whether this can be reconciled with the ECJ’s view.
Sources: German Constitutional Court press release, Open Europe blog
Eurozone and Greece confirm IMF to remain involved in Greek bailout
Eurogroup Chief Jeroen Dijsselbloem said ahead of yesterday’s Eurozone finance ministers meeting, “[Greek Finance Minister Euclid] Tsakalotos confirmed to me that the Greek government accepts that the IMF needs to be part of the process,” despite comments to contrary by a number of senior Greek government ministers in recent months. Following the meeting he also confirmed the IMF wanted to remain involved. ESM Chief Klaus Regling warned on the need for Greece to make swift progress in reforms to allow the next review to be completed, saying, “The Greek liquidity situation could become tight again in February.”
Sources: Reuters, EUObserver
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