Nearly 100 firms have moved to the Netherlands over Brexit fears, say Dutch

Close to 100 companies have moved from the U.K. to the Netherlands because of Brexit and more than 300 others are considering doing the same, according to a Dutch government agency.

“The ongoing growing uncertainty in the United Kingdom, and the increasingly clearer possibility of a no deal, is causing major economic unrest for these companies,” said Jeroen Nijland of the Netherlands Foreign Investment Agency in a statement. “That is why more and more companies are orienting themselves in the Netherlands as a potential new base in the European market.”

The agency said in addition to the almost 100 companies that have already made the switch, 325 are considering a move over concerns about losing access to the EU’s single market. The companies involved are in the finance, information technology, media, advertising, life sciences and health sectors, the Dutch agency said.

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Johnson to push at G7 for Osborne as IMF chief

LONDON — Prime Minister Boris Johnson will lobby for former Chancellor George Osborne to be the next leader of the International Monetary Fund at this weekend’s G7 summit, according to a U.K. official.

Downing Street wants to nominate a candidate to replace Christine Lagarde as IMF managing director and, while Osborne has not been announced as the preferred choice, an official familiar with the government’s strategy said Johnson would have discussions at the G7 about his potential candidacy.

The EU has already chosen to endorse Kristalina Georgieva, the World Bank‘s chief executive. Nominations close on September 6. The U.K. official said there had been concerns the EU “rushed” the decision to nominate the Bulgarian, but any move to install a Briton would also be viewed as a deliberate bid to assert U.K. influence on the global stage after Brexit.

Osborne was chancellor from 2010 to 2016 and right-hand man to then-Prime Minister David Cameron. He has been editor of the London Evening Standard newspaper since May 2017, after being sacked as chancellor by Theresa May in one of her first acts as prime minister. Under his editorship the newspaper has argued against a hard Brexit that could be damaging for London’s financial services sector. However, the paper backed Johnson in the Conservative leadership contest, despite his advocating for Brexit to happen on October 31, with or without a deal.

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Commission dismisses internal document outlining policy plans

The European Commission on Friday said an internal document outlining EU policy ideas — obtained by POLITICO — should be given “zero credence” and was not “mature enough” to make it to President-elect Ursula von der Leyen’s desk.

A 173-page wish list dating from July contains proposals from across the Commission’s directorates-general for policies ranging from creating a €100 billion wealth fund to bolster “European champions” against American and Chinese business rivals, to putting beehives on public buildings and placing greater restrictions on social media.

“Let me clarify that no such project or plans exist that are mentioned in several articles,” Mina Andreeva, the Commission’s chief spokesperson, told reporters. “Draft internal brainstorming documents from the services should never be confused with policies. The document from the services that you refer to has not even been seen by the political hierarchy of the Commission, nor by the president-elect or her transition team, let alone endorsed in any way,” she said, adding that “this leaked document should therefore be given zero credence.”

Asked why the Commission’s leadership had not looked at a document that involved all directorates-general and took EU resources to produce, the spokesperson said that “we have tens of thousands of Commission officials who have certainly bright and good ideas, but nothing is put forward by the Commission without political backing. We are in the run-up to forming a new Commission, and the president-elect has made her priorities clear in the political guidelines which will serve as the guidance for what will follow and what will be put forward to the deliberation of the new College.”

“It’s clearly not a document that was mature enough, since it did not make it, or did not reach neither the Commission nor the president-elect or her transition team,” Andreeva said.

The ideas in the document — including a European Future Fund that would invest more than $100 billion in equity stakes in high-potential European companies, as well as an aggressive new framework to slap tariffs unilaterally on the United States — would put the bloc on a Fortress Europe path against other global powers.

Responding to the plans on Thursday, a spokesperson for von der Leyen said that “nobody in the [president-elect’s] transition team has heard of that mysterious European Future Fund.”

The document suggests other expenditures for the next Commission, outlining plans to consider an EU-wide unemployment insurance program within the first 100 days of the new administration. That scheme, floated by von der Leyen in her maiden speech, could see the EU directly pay benefits to unemployed people.

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Macron’s masterplan for Trump, the universe and everything

PARIS — Another G7 summit blown apart by Donald Trump? Not on Emmanuel Macron’s watch.

Last year’s gathering of G7 leaders ended in chaos after Trump abruptly announced via Twitter that he would not support the just-agreed summit communiqué, apparently out of anger over comments made by the host, Canadian Prime Minister Justin Trudeau.

The French president is determined not to let his American counterpart steal the show this year in the beach town of Biarritz in southwest  France so he has come up with a cunning plan: There will be no communiqué.

But that doesn’t mean Macron lacks ambition when it comes to the summit, which will run from Saturday to Monday.

As Macron expounded in a two-and-a-half-hour briefing for reporters on Wednesday night, he views the gathering as a key moment in his drive to save what he sees as an endangered multilateral liberal world order.

He will have his work cut out, and not just when it comes to trying to keep Trump and the other leaders even vaguely on the same page. The summit takes place at a time of multiple crises around the world.

Trump is engaged in feuds on multiple fronts — from a trade war with China to a bizarre battle with Denmark over the idea of buying Greenland. New U.K. Prime Minister Boris Johnson is immersed in battles at home and abroad over Brexit. Italian Prime Minister Giuseppe Conte will likely attend the summit after his government collapsed. Angela Merkel is facing a weakening German economy.

And that’s without even getting into the deep international disagreements over issues as diverse as Iran and climate change.

In his marathon briefing, Macron declared that France has a “particular responsibility” in a pivotal reshaping of the global liberal order. Otherwise, “Europe is at risk of fading … and losing its sovereignty,” or worse — “becoming vassals.”

Here are some of the key points in Macron’s strategy for handling the G7.

Trump containment

Though Macron conceded he and the U.S. president “don’t think the same thing about the global order, we don’t have the same objectives,” (which are pretty fundamental disagreements), he highlighted that “President Trump hasn’t been to any country as often as he has been to France. The G7 will be his fourth visit since the beginning of my term, [this] is useful to coordinate things because otherwise, divergences grow.”

And while Macron is aware that “with President Trump, when it’s a campaign promise, you can’t convince him otherwise,” as was the case with the U.S. withdrawal from the Paris climate agreement, the Iran nuclear deal, and waging a trade war with China, all of which have had destabilizing effects on Europe, he chose to focus on when they’ve “been able to achieve real things together.” As examples he cited convincing Trump not to pull all U.S. troops out of Syria and the U.S. president’s decision to carry out joint airstrikes in Syria in 2018 with the U.K. and France in response to a reported chemical weapons attack by the Syrian government.

No backing down on Brexit

Macron, who is having a working lunch with Johnson in Paris on Thursday, didn’t mince his words on the possibility of a no-deal Brexit.

“A hard Brexit … will be the responsibility of the British government,” he said.

“It was the British people who decided on Brexit, and the British government has the possibility up to the last second to revoke Article 50,” Macron continued.

He said a renegotiation of the Brexit deal to remove the Irish border backstop provision, as suggested this week by Johnson, “is not an option … because what Johnson suggests in the letter he sent … is to choose between the integrity of the European market and the respect of the Good Friday Agreement. We wouldn’t choose between these two.”

And as for the much-vaunted trade deal the U.K. would make with the U.S., Macron argued it will not compensate for the cost of Brexit, and would come at “the cost of a historic vassalization.”

“I don’t think it’s the will of the British people … to become the junior partner of the U.S.”

Russia rebuff

A day after the White House claimed Macron suggested that Trump invite Russia to the G7 next year, Macron rebuffed that claim.

He said major progress in the conflict in Ukraine would have to be found before Moscow could be welcomed back into the fold.

“It’s pertinent that, eventually, Russia be able to return to the G8 but … the indispensable preliminary condition … is that a solution be found, in connection with Ukraine, on the basis of the Minsk Agreement to resolve the issue,” he said.

He went further, in what could have been a dig at Trump, who has expressed support for reinstating Russia to the G8, apparently without conditions.

“I think saying that Russia can return to the table without any conditions is enacting the weakness of the G7,” he said. “It would be a strategic mistake and a profound injustice.”

Nevertheless, Macron said he is cautiously optimistic that conditions can be met to hold a summit in the coming weeks in Paris between Ukraine, Russia, France and Germany to negotiate the end to the conflict in Ukraine.

“We can go forward on an exchange of prisoners, I had a long conversation with [Vladimir Putin] on this and he is ready, we can move forward on the Donbass [region], on demilitarization,” he said. “The [Russian and Ukrainian] presidents seem ready to go forward.”

Doubling down on tech tax

Macron said it was a “crazy” system that allows giant companies like Google or Facebook to avoid paying taxes in countries where they operate, giving them access to a “constant tax haven.”

But he stressed that the 3 percent digital tax he spearheaded —  adopted by nine other European countries after failing to get it adopted on the EU level — did not exclusively target American companies, but rather companies with a certain level of revenue.

The tax drew Trump’s ire, and prompted him to threaten to impose a 100 percent tax on French wine. But Macron pointed out that Trump’s treasury secretary had, along with other G7 finance ministers, signed on last month to the principle of tech companies being taxed in the countries where they make money.

Macron is standing firm on the issue, even if Trump says his European allies blame the French leader when they get criticized for the measure.

“That’s what President Trump told me last night — ‘they all say it’s you,'” Macron recalled. “OK, well I own it.”

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UK officials to withdraw from EU meetings from September 1

LONDON — U.K. officials will only attend EU meetings with a “significant national interest,” Brexit Secretary Steve Barclay announced Tuesday.

Attendance will be reduced by more than half, freeing up officials to work on Brexit preparations and post-Brexit trade opportunities, he said.

Officials will start to withdraw from meetings from September 1, unless the U.K. has an interest in the outcome of discussions, such as security, sovereignty, Brexit, international relations and finance.

“An incredible amount of time and effort goes into EU meetings with attendance just the tip of the iceberg,” Barclay said in a statement issued by the Department for Exiting the EU on Tuesday. “From now on we will only go to the meetings that really matter, reducing attendance by over half and saving hundreds of hours. This will free up time for Ministers and their officials to get on with preparing for our departure on October 31 and seizing the opportunities that lie ahead.”

The move comes after Prime Minister Boris Johnson promised to “unshackle” officials from EU meetings in the House of Commons in July. He will attend the October European Council meeting.

The Brexit department said the U.K.’s vote would be delegated in a way that “does not obstruct the ongoing business of the remaining 27 EU members, and a decision about which meetings to attend would be made on a “case by case” basis.

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Boris Johnson insists free movement ’will end’ October 31

LONDON — Boris Johnson’s post-Brexit immigration plan is still “being developed” but he insisted today that freedom of movement “will end” on October 31.

At a regular briefing for journalists, a spokeswoman for the prime minister said “tougher criminality rules” for people entering the U.K. would be immediately introduced, as one example of how the U.K.’s immigration policy would shift from day one after Brexit.

Johnson’s predecessor Theresa May had been planning a “transition” period until the end of 2020 during which the U.K. would continue to have the same obligations as an EU country, under the Withdrawal Agreement negotiated with the EU27. That deal was voted down by parliament and Johnson has called for it to be reopened.

The new prime minister’s tough stance has big implications for a host of industries reliant on workers from abroad such as the farming sector and the National Health Service, and would require immediate changes to immigration checks at airports and ports.

The spokeswoman said the government’s settled status scheme, which May’s government set up to guarantee that EU nationals living in the U.K. before the end of 2020 are able to remain in the U.K. indefinitely, would continue as it had previously been announced.

The Home Office said today that, while EU citizens will have until December 2020 to apply for settled status, it will only be EU citizens living in the U.K. before 11 p.m. on October 31 that will be eligible.

“Freedom of movement as it currently stands will end on October 31 when the U.K. leaves the EU. For example we will introduce immediately much tougher criminality rules for people entering the U.K. Details of other changes immediately on October 31 for a new immigration system are currently being developed and we will set out further plans on that front shortly,” the spokeswoman said.

“The prime minister has obviously been clear he wants to introduce an Australian-style points base immigration system,” the spokeswoman added. Australian visas are allocated in line with criteria including age, qualifications and English language ability.

Home Secretary Priti Patel has sent officials to Singapore to “understand how a well-functioning immigration IT system is developed. Specifically, ensuring we can count people in and out the country,” the Daily Telegraph reported Sunday.

However, concerns have been raised it would be impossible to implement immediate changes because the government has not yet solved the question of how to distinguish between those who were already in the U.K. before Brexit and those who will enter the country post October 31, and because government will not have finished registering all EU citizens already in the U.K. by then.

A Downing Street official privately admitted that in a no-deal scenario there would not be a lot of time available to make a “significant change” to the U.K.’s immigration system and to get a new system ready.

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A UK-US trade deal. Never mind the economics (at least for a moment). Feel the politics.

“While trade deals have taken on an important political and symbolic value in the context of Brexit,” Dominic Walsh of Open Europe wrote recently on this site, “their economic benefits are typically smaller and slower to materialise than many realise.” This is the place to start when considering a possible UK-US agreement on trade.  Boris Johnson’s enthusiasm for one is as much political as economic: a successful deal would show Britain, as it moves a bit further from the EU, also moving a bit closer to America.

Such a rebalancing is a strategic consequence of Brexit, at least in the eyes of many backers of leaving the EU.  Future trade deals were a Vote Leave EU referendum priority – though it may be significant that the United States was not one of the headline countries named.  Perhaps the reason was a wariness of anti-American sentiment among a section of the voting public.  None the less, the prospect of a trade agreement with the United States was mooted during the 2016 campaign: hence Barack Obama’s line, written for him by Team Cameron, of Britain being “at the back of the queue” for such a deal.

The obstacles to one are formidable.  For while the Prime Minister is bound to view it through the lens of politics, Donald Trump is more likely to do through that of economics – though the one admittedly tends to blur into the other.  America’s approach to such matters as food safety and animal welfare, environmental protection and intellectual property rights is different from ours in any event.  Never mind the red herring of chlorinated chickens – so to speak – or autopilot claims from Corbynistas about NHS selloffs. The real action is elsewhere.  The United States has long had a protectionist streak, and is resistant to opening up its financial services markets, for example.

The conventional view is that Trump is the biggest America Firster of all; that he would drive a hard bargain, that he has the muscle to do so – and that he wouldn’t be in control of an agreement anyway.  Congress could block one if it wished, and might well do so in the event of No Deal, since the Irish-American lobby is as well-entrenched as ever.  It has been a headache for British governments over Ireland-linked matters before: remember the McBride principles.  A different take is that politics may win out in the end, because both Trump and Congress will want a UK trade deal in order to put economic and political pressure on the EU: we will publish more about that later this week.

John Bolton, Trump’s National Security Adviser, is visiting Britain.  He said yesterday that the UK will be “first in line” for a trade agreement post-Brexit – a deliberate counter to Obama’s line.  Bolton will be dangling the prospect as an inducement.  He will want Johnson to take a more resistant line to Huawei than Theresa May did, and for the UK to move closer to America’s position on Iran.  But the possibility of early sector deals – or at least the exclusion of Britain from new pro-protection moves – seems to be real enough.  As with the NHS, policing, immigration and stop and search, so with trade.  Johnson wants progress towards a quick win as a possible election looms.

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Trump envoy: US would ‘enthusiastically’ back no-deal Brexit

America would “enthusiastically” support a no-deal Brexit, U.S. National Security Adviser John Bolton said on Monday during a visit to London.

“If that’s the decision of the British government, we will support it enthusiastically, and that’s what I’m trying to convey,” Bolton told reporters on the first day of his two-day visit to the British capital, according to the Guardian. “We’re with you, we’re with you.”

He said the U.S. would consider striking sector-specific deals ahead of a full-scale trade pact.

“The ultimate end result is a comprehensive trade agreement covering all trading goods and services,” Bolton said. “But to get to that you could do it sector by sector, and you can do it in a modular fashion. In other words, you can carve out some areas where it might be possible to reach a bilateral agreement very quickly, very straightforwardly.”

Bolton also took aim at Brussels, saying: “The fashion in the European Union is when the people vote the wrong way from the way the elites want to go, is to make the peasants vote again and again until they get it right. There was a vote — everyone knew what the issues were. It is hard to imagine that anyone in this country did not know what was at stake. The result is the way it was. That’s democracy.”

He added: “Britain’s success in successfully exiting the European Union will be a statement about democratic rule and constitutional government. That’s important for Britain. But it’s important for the United States, too. So we see a successful exit as being very much in our interest, and there’s no quid pro quo on any of these issues.”

Bolton also said he couldn’t see a threat to the Good Friday Agreement as a result of Brexit, the Guardian wrote.

Bolton was expected to urge Britain to align more closely with America’s stance on Iran and on Huawei’s involvement in 5G telecoms networks, but he told reporters that Washington understood Brexit was the priority, given Britain’s Prime Minister Boris Johnson had promised to exit the EU by October 31.

“The U.S. government fully understands that in the next 80 days the U.K. government has a singular focus on the Brexit issue, so that we’re not pushing for anything on these broad and complex questions,” he told reporters.

The comments came after Johnson joined a meeting with Bolton and senior officials on Monday.

Bolton said Johnson’s relationship with U.S. President Donald Trump had “got off to a roaring start,” with the two having shared multiple phone calls since he assumed the British prime ministership. Their most recent conversation was on Monday, when Trump “expressed his appreciation for the United Kingdom’s steadfast partnership in addressing global challenges,” according to the White House readout of the call, and said he “looks forward” to meeting Johnson “personally in the near future.” Trump and Johnson are both expected to attend the G7 summit in Biarritz, France at the end of the month.

This article is from POLITICO Pro: POLITICO’s premium policy service. To discover why thousands of professionals rely on Pro every day, email for a complimentary trial.

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UK faces pressure over Brexit stance as economy dips

LONDON — The British government faces fresh pressure to contain the economic fallout of a possible no-deal Brexit after statistics Friday showed the country on the edge of a recession.

The U.K. economy contracted by 0.2 percent from April through June, its first quarterly decline since 2012, the Office for National Statistics said. Economists typically define a recession as two contractions in a row.

Chancellor of the Exchequer Sajid Javid played down the figures in a statement, pointing to “growth slowing in many countries.” He restated government policy that the UK would leave the EU at the end of October with an agreement or not.

But analysts said not all of the trend was down to trade tensions and more general weakness across the region.

“Today’s negative growth figures reflect a combination of Brexit uncertainty and global economic slowdown, with both challenges set to persist over the near term,” said Matthew Whittaker, deputy chief executive at the Resolution Foundation, a think tank. “That doesn’t mean we’re necessarily heading for recession, but the risk is certainly heightened right now.”

Capital Economics said in a note, “The U.K. should avoid a recession … unless there’s a no deal Brexit.”

The statistics point to weak manufacturing coupled with an end to Brexit-related stockpiling, which outweighed otherwise strong consumer demand. The services sub-sector was the sole growth area, gaining 0.1 percent.

Elizabeth Martins, HSBC economist, said that “the global story thus far has largely affected the manufacturing sector, not the service sector. So, for the latter to be looking so weak in the U.K. is worrying.”

“Whatever happens on October 31, the government needs to give business leaders a significant shot in the arm to return investment and productivity growth to the country after a prolonged period of uncertainty,” said Tej Parikh, chief economist at the Institute of Directors.

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Bank of England holds rates as no-deal pressure grows

The Bank of England maintained its interest rate at 0.75 percent and stood by its assumption of a “smooth” Brexit, despite growing pressure from market participants factoring in a high probability of no deal.

While continuing to say it expects a Brexit deal — in line with government policy — the Bank of England acknowledged the differing view of investors, as implied by falling asset prices, such as the value of sterling against other currencies. Market movements are an important part of the bank’s economic projections.

The British economy is growing slower than expected, the bank said, with an expectation that output was zero in the second quarter, compared with previous projections of a 0.2 percent expansion. Brexit uncertainty in business coupled with global trade tensions are to blame, the institution said.

Surveys carried out by the central bank show businesses expect Brexit uncertainty to persist until 2021 — longer than shown in its May report.

At the same time, a majority of the 240,000 U.K. businesses that trade exclusively with EU clients are unprepared for border checks that would ensue in a no-deal Brexit, the bank found. They have not yet obtained the necessary registration number or taken other steps required to continue exporting, the BoE said.

The odds of a recession in the medium term have increased to one in three, from one in four in May, according to the monetary policy report.

A Brexit deal would propel the economy into “robust” growth, the BoE said, and also drive up the value of sterling, which fell to multiyear lows in recent days due to no-deal fears.

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