France triggers €50M ‘hard Brexit’ contingency plan

Contingency plan sees investment in ports and airports, and measures to defend French fishing industry.

France is to invest 50 million euros to help its ports and airports cope in the event of a hard Brexit, Prime Minister Edouard Philippe announced Thursday.

The planned spending is part of a hard-Brexit contingency strategy that will also see France “defend the interests of French fishermen,” Philippe told a press conference following ministerial meetings earlier Thursday.

“The plan consists of legislative measures which aim to ensure that the rights of French citizens and businesses are protected,” the prime minister said.

“Today, we proposed that the National Assembly and the Senate adopt a habilitation law which will come into effect this week […] five orders that will provide us with a legal framework that responds to the challenges of a no-deal Brexit will be presented to the council of ministers and published in the next three weeks.”

Philippe highlighted the French government’s responsibility to ensure the “least possible impact” if Britain exits the European Union without a deal on March 29.

Planning across the EU for a potential no-deal Brexit has been ramped up after U.K. MPs heavily rejected Prime Minister Theresa May’s Brexit deal Tuesday.


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German industry seeks to push harder EU line on China

Europe’s industrial heartland signals it wants tougher policies from the next Commission.

German industry today launched a major offensive to ensure the next European Commission will take a harder line on China.

Ahead of this year’s European election, Germany’s most influential industry federation is calling on Brussels to ramp up EU defenses against what it sees as unfair competition from Beijing.

Crucially, its 54-point plan, obtained by POLITICO, seeks a bigger role for the European Commission’s powerful competition unit as the EU tries to combat China’s subsidized exports, industrial overcapacity and corporate buy-outs.

The proposals from the Federation of German Industries (BDI) offer a sign that Berlin and the EU are likely to gravitate toward a tougher position against Beijing after the departure of the more China-friendly U.K. from the 28-member bloc.

“The People’s Republic is establishing its own political, economic and social model,” said BDI President Dieter Kempf. Politicians could no longer afford to “simply ignore the challenges China poses to the EU and Germany,” he added.

A tougher line on China from Germany would align Berlin more closely with Paris.

“A battle of economic models is emerging,” the BDI said in Thursday’s paper.

A tougher line on China from Germany would align Berlin more closely with Paris. It would, however, also revive charges of hypocrisy from countries such as Portugal and Greece, which argue that Germany pushed them to sell off prized assets to the Chinese during the financial crisis. Germany’s critics say Berlin has only recently woken up to the risks posed by strategic Chinese buy-outs in sectors with core know-how such as robotics.

Battle of the systems

The BDI plan represents a major shift in the way German businesses think and talk about China, which American and French officials often criticized as naïve.

For many years, the Chinese economy was seen as largely complementary to Germany’s: China produced cheap consumer goods and components, while Germany produced larger machines and hi-tech products.

China’s President Xi Jinping (R) meets German Chancellor Angela Merkel at the Great Hall of the People in Beijing, China, May 24, 2018 | Jason Lee – Pool photo/Getty Images

When the European solar cell industry was wiped out by subsidized Chinese competitors, the German economy ministry saw it as the price to be paid to maintain good relations with Beijing, which was more than offset by Germany’s sales of luxury cars to the Middle Kingdom.

But as China moves up the value chain, Chinese subsidies pose an increasing threat to the German model. Chinese producers have now entered into direct competition with many traditional German champions.

As one of its lines of defense, the BDI on Thursday came out staunchly in favor of mergers that allow companies to bulk up into European champions. This is a subject of hot debate as Franco-German plans to merge Alstom and Siemens into a rail champion are meeting fierce headwinds over fears the two will form an uncompetitive behemoth in the EU. The Germans argue that EU regulators should take a more global perspective when calculating the effects of merger concentrations, and not just look at the harm to consumers in Europe.

France leads the charge for reciprocity but Britain and Sweden argue such measures would be counter-productive.

To fight Chinese subsidies, the BDI wants hard-hitting options on the table. EU state-aid rules only apply to European companies receiving subsidies, but the BDI wants these extended to cover “subsidies outside the EU.” The bloc should also consider creating a new mechanism for “subsidy control” to assess whether takeovers are financed with subsidies, the BDI argued.

But the group also suggests fighting fire with fire. This could mean taking account of “reciprocity” in tenders for big public procurement contracts like roads and railways. To date, France has led the charge for reciprocity, which means closing EU tenders to bids from companies based in (particularly Asian) countries that restrict European access to tenders on their soil. Free trading countries such as Britain and Sweden have long argued that such measures would be counter-productive and would close European markets to the best-value bids.

Changing the focus on Chinese takeovers

The BDI also called on the EU to change its approach to the Chinese state’s influence in mergers and acquisitions.

The European Commission’s directorate-general for competition has long been under pressure to take a more holistic view of how it values the market power of Chinese enterprises owned or steered by the state. The EU often treats each state-owned company as a separate entity. This limits the perception by regulators that a company could be distorting competition by coordinating with other limbs of the Chinese state. The BDI is calling for updated rules that would allow the Commission to consider those companies as part of a bigger market player: China Inc. This would expand Brussels’ powers to crack down on buy-outs.

European Commission Vice President Jyrki Katainen said on Wednesday that he was “open … to look at the competition policy due to the changing market.”

Many EU countries have pledged to push for “evolutions of the European rules applicable to competition and state aid.”

In a little-noticed statement just before Christmas, 18 EU countries also called on the next Commission to rethink its industrial policy, specifically calling for changes to competition rules.

France, Austria, Croatia, Czech Republic, Estonia, Finland, Germany, Greece, Hungary, Italy, Latvia, Luxembourg, Malta, the Netherlands, Poland, Romania, Slovakia, Spain said they would push for “possible evolutions of the European rules applicable to competition and state aid” particularly to “review the state aid framework to … promote the competitiveness of European industry at international level.”

The countries also called for updating antitrust rules to “better take into account international markets and competition in merger analysis.”

The BDI also stressed the value of so-called matching clauses, which have been overlooked as a potential weapon in EU state-aid policy. These clauses allow EU countries to offer state aid to investors to keep business in Europe, by matching the subsidies the companies are being offered by a rival such as China or Mexico.

German industry says it wants the scope of these matching clauses to be ramped up. The BDI sees such subsidies as an interim measure until the EU works out how to export its anti-subsidy standards internationally.

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


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Calais port boss: UK plan to create new Brexit trade routes ‘disrespectful’

‘There will not be any delay’ at Calais if Britain crashes out of the EU, Jean-Marc Puissesseau says.

A no-deal Brexit will have no impact on the flow of truck traffic through Calais port, the terminal’s boss, Jean-Marc Puissesseau, insisted on Wednesday while lashing out at British plans to create alternative ferry routes.

At present, some 10,000 trucks pass over the Channel on a daily basis between Dover and Calais at peak times. But the lack of space for customs and regulatory checks on the British side means the U.K.’s Department for Transport is funding alternative routes — like a Ramsgate to Ostend link — threatening to drain traffic from Dover-Calais.

Puissesseau insisted on the BBC’s Today program that his port will not restrict transit under a no-deal scenario. “There will not be any delay,” he said. “The trucks will be passing as they are doing today.” Puissesseau said preparations include an information campaign for hauliers and creating special checkpoints on-site.

But Cabinet Office Minister David Lidington later told the Today program that Calais does not have infrastructure in place to carry out all the necessary checks in the event of a no-deal exit.

“European law says all food exports and livestock exports from a third country to the EU have to be inspected 100 percent [and] checked at a designated border inspection post,” said Lidington.

Puissesseau said he was “very angry” that Seaborne Freight had been awarded a contract by the British government for ferry services even though it does not own any ships.

“I’m very shocked, I consider it disrespectful for Calais and Dover,” said Puissesseau.

He said the only benefit could be that migrants camped at Calais hoping for transit into the U.K. could move to Ostend as that port site is less protected.


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Heathrow airport grounds planes after drone sighting

Hundreds of flights were canceled at London’s Gatwick airport last month.

London Heathrow airport halted departures for a short period Tuesday evening in response to a drone sighting.

The airport said it was working closely with London police “to prevent any threat to operational safety,” and said it had grounded planes as a precautionary measure.

After resuming operations, the airport said it would “continue to monitor” the situation and remained in contact with the police and air traffic control.

Hundreds of flights were canceled at London’s Gatwick airport last month during the busy Christmas period because of drone sightings.

The U.K.’s Department for Transport proposed new legislation Monday to give more authority to police in dealing with rogue drones, and expand the restricted airspace around airports from a 1 kilometer radius to a 5 kilometer radius.

This article has been updated.


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UK MPs to vote on Brexit deal on January 15

Theresa May had delayed the vote on the deal agreed with the EU before Christmas.

LONDON — The House of Commons will vote on the Brexit withdrawal deal next Tuesday, January 15, Prime Minister Theresa May told her Cabinet today.

The debate will be opened again Wednesday by Brexit Secretary Stephen Barclay and will be closed by May next Tuesday, her spokesman told journalists at a briefing today.

May had delayed the vote on the deal agreed with the EU27 leaders before Christmas to seek further assurances over the Northern Irish backstop, amid opposition from her own MPs.


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How Britain ruined transport

Planes, trains and automobiles — the Brits can’t do any of them well.

Just a week into the new year and British transport policy resembles a drunk businessman making his way home from the office party — bashing into things and picking up the occasional serious injury but still wearing a paper hat and insisting he’s having a good time.

Exhibit A: During the Brexit campaign, the phrase “we have plans in place to ensure you can continue to travel abroad” was not written on the side of a bus.

Yet that’s exactly what the U.K.’s Department for Transport tweeted out late last week in a bid to, er, reassure the public that everything’s going to be just fine even if the country crashes out of the EU with no deal (spoiler alert: it probably isn’t).

But if you do want to leave the U.K., how should you go about it?  Here are a few options and their downsides:

By car

It might be a touch busy getting to a port after Brexit.

On Monday morning, a live test was carried out of an emergency system to prevent congestion in Dover in the event of a no-deal Brexit. The plan is to use Manston airport (which is no longer an airport) as a truck park for thousands of vehicles, to make sure roads around Dover’s port don’t clog up if custom checks come in.

The disused airfield was recently converted to act as a holding base for heavy goods vehicles. The port itself cannot expand any further so the airfield, which is 20 miles away, is conceived as a spill-over area for waiting traffic.

Lorries are held in a simulated traffic jam on the way to Dover | Leon Neal/Getty Images

When the Department for International Trade tweeted in 2016 that “France needs high quality, innovative British jams,” this probably wasn’t what they had in mind.

The dress rehearsal was meant to demonstrate how Operation Brock (named either after a badger or terrifying mixed martial artist and wrestler Brock Lesnar) would work in practice.

The DfT wanted 150 truckers to participate, but U.K. media reported that little more than half that number actually showed up, despite the offer of hundreds of pounds in reimbursement from the government. The Mirror reported the trial cost upward of £50,000 in fees to drivers that did take part.

Truck traffic through Dover peaks at a daily 10,000 vehicles during busy periods in the buildup to Christmas, so critics argue the Manston trial provides little indication of how to deal with congestion caused by a no-deal Brexit.

Rod McKenzie, from the Road Haulage Association which represents British freight transporters, tweeted that the tests are “too little too late” and “should have been done 9 months ago and repeatedly stress tested.”

By ferry

At least those taking part in the Manston trial owned trucks.

Transport Secretary Chris Grayling — whom the Guardian recently described as “a man you’d supervise if you saw him attempting to use scissors” — was last week forced to defend awarding a contract to operate ferries in the event of a no-deal Brexit to a company with no experience of running a ferry service.

“I make no apologies for supporting a new British business,” Grayling told BBC Radio 4’s Today program, adding it is a “tightly drawn-up contract that requires them to deliver.”

Chris Grayling, the embattled British transport secretary | Jack Taylor/Getty Images

The company in question, Seaborne Freight, might well deliver — but it could be pizzas.

The terms and conditions on the website of Seaborne, which was awarded a £13.8 million contract to operate a freight service between the ports of Ramsgate in the U.K. and Ostend in Belgium, appeared to be intended for a food delivery firm.

“It is the responsibility of the customer to thoroughly check the supplied goods before agreeing to pay for any meal/order,” read part of the text on the company’s website.

Even with airports open, there’s no guarantee it’ll be easy to fly out of the U.K. after a no-deal Brexit.

Another section appeared ready to crack down on prank pizza orders, warning that “users are prohibited from making false orders through our website” and that Seaborne “reserves the right to seek compensation through legal action for any losses incurred as the result of hoax delivery requests and will prosecute to the full extent of the law.”

Grayling said the company has been “looked at very carefully by a team of civil servants,” and said he thinks Seaborne Freight is “on track to be able to run ferries in April.” He didn’t specify which year.

By plane

The fallout continues from Gatwick Airport, the second-busiest in Britain, being brought to a standstill by drones just before Christmas.

Paul Gait, a window fitter who along with his partner was falsely, and very publicly, accused of being behind the drone disruption, said at the weekend that “Christmas was s**t” (presumably as a result of the media attention, not having to talk to your relatives).

The naming and shaming of Gait and his partner Elaine Kirk was part of a shambolic police and airport operation after two drones were sighted flying over the airport — resulting in about 1,000 flights affecting 140,000 passengers being canceled or diverted over three days.

Passengers sit with their luggage during the rogue drone delay at Gatwick Airport in December 2018 | Ben Stansall/AFP via Getty Images

Even now, several weeks after the incident and with Gatwick back to normal (i.e., awful), we’re none the wiser as to what actually happened. The head of Sussex police, Giles York, told the BBC he is “absolutely certain” there was a drone or drones, after other, unnamed officers suggested there might not have been.

Even with airports open, there’s no guarantee it’ll be easy to fly out of the U.K. after a no-deal Brexit.

The European Commission proposed in December a set of no-deal contingency plans, which if approved by the EU27, would allow direct flights between the EU and the U.K. for a period of 12 months after March 30. So yes, even in the event of a no-deal Brexit, you will — pending EU27 and European Parliament approval of the Commission’s no-deal plans — be able to fly from the EU to the U.K. and the other way round.

The Commission is keen to point out, however, that this is a “bare-bones” agreement, and not only is it less than what the U.K. already has, it is also temporary. British airlines will lose the right to operate intra-EU flights. They will also lose the right to operate flights from the U.K. to the EU and then on to another destination — London-Madrid-Buenos Aires, say.

By train

It happens every year, as regular as clockwork. Not a British train arriving on time but the uproar at rail prices going up.

At the turn of the year, rail fares increased by an average of almost 3 percent in Scotland and 3.1 percent in England and Wales.

Grayling, that man again, said the fare increases “are higher than they should be because the unions demand — with threats of national rail strikes if they don’t get them — higher pay rises than anybody else.”

Commuters attempt to board a full Southwest Train carriage at Clapham Junction in London | Daniel Leal-Olivas/AFP via Getty Images

The Rail, Maritime and Transport Union described that reaction as “scandalous.”

The cost of an annual standard-class Liverpool to Manchester season ticket (a journey of 34 miles) is now £3,252, up from £3,152 in 2018, an increase of £100, according to figures from consumer organization Which? 

By bicycle

Even bikes aren’t immune to the transport woes.

Brompton, which makes upmarket folding bikes, has built up a £1 million stockpile of parts to guarantee that its London factory can keep working in case of a hard Brexit.

Will Butler-Adams, the firm’s CEO, said they have hired advisory firm Grant Thornton to help with “s**t hits the fan planning.” Although, to put things into perspective, £1 million of Brompton bike parts can probably fit inside a suitcase.

Rumors that Grayling is pushing for future British transport policy to be based on rubbish-looking film “Mortal Engines,” in which London is fitted with huge engines and wheels, enabling it to eat other cities for resources, were unconfirmed at the time of going to press.

UK transport secretary defends Brexit contract for firm with no ferry experience

‘I make no apologies for supporting a new British business,’ Chris Grayling says.

U.K. Transport Secretary Chris Grayling on Wednesday defended awarding a contract to operate ferries in the event of a no-deal Brexit to a company with no experience of running a ferry service.

“I make no apologies for supporting a new British business,” Grayling told BBC radio’s Today program, adding it was a “tightly drawn-up contract that requires them to deliver.”

The company, Seaborne Freight, was awarded a £13.8m contract to operate a freight service between the ports of Ramsgate in the U.K. and Ostend in Belgium. The company so far does not own any ships nor has ever run any, the BBC reported.

Grayling said the company had been “looked at very carefully by a team of civil servants” who “reached a view they can deliver.” The transport secretary added he thought Seaborne Freight was “on track to be able to run ferries in April.”

The British government said earlier this week it had awarded the contract in “the full knowledge that Seaborne is a new shipping provider.”

Grayling stressed he was “expecting the channel ports to operate normally in all Brexit circumstances.”

“I’ve had detailed discussions with the French, the French counterparts. They want the ports moving freely, and I’m confident that will happen. We’re putting in place a bit of extra capacity for the start of the Brexit process just to ease the pressure on the ports,” Grayling said.

Ferry services have not been operating from Ramsgate’s port since 2013 after cross-Channel operator TransEuropa collapsed, the BBC said.


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UK to spend over £100M on ferries in case of no-deal Brexit

Contracts given to British and European companies.

The U.K. will spend more than £107 million on ferries to ease congestion at ports in case of a no-deal Brexit.

The Department of Transport has awarded contracts to French, Danish and British companies to develop additional lorry capacity at the ports of Poole, Portsmouth, Plymouth, Immingham and Felixstowe.

Increased checks after Brexit could “cause delivery of critical goods to be delayed” and significantly disrupt the road network around the port of Dover, the BBC reported, citing documents outlining the agreements.

Liberal Democrat leader Vince Cable described the move as “complete madness” as the government has the power to stop a no-deal Brexit at any time.

“The fact that this money is predominantly going to European companies is nothing short of ironic,” Cable told the BBC.

The Danish company DFDS was awarded a contract worth £47.3 million and British firm Seaborne a £13.8 million deal. France’s Brittany Ferries’ contract is worth £46.6 million.

The additional crossings would amount to about 10 percent of existing traffic across the Strait of Dover and provide up to half a million tonnes a month in extra capacity.

The documents state that an “unforeseeable” situation of “extreme urgency” meant there was no time for the contracts to be put out to tender.

According to the BBC, however, a number of firms were considered and there was a private negotiation process.


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Two arrested over Gatwick drone disruption

Draft drone bill delayed as civil servants focus on Brexit, the Times reports.

British police Saturday said they have detained two suspects following drone interference at Gatwick airport that let to partial shutdowns of the U.K.’s second-largest airport.

Sussex police said the arrests, made just after 10 p.m. Friday, form part of an “ongoing investigations into the criminal use of drones which has severely disrupted flights in and out of Gatwick Airport.”

Authorities did not release further details on the two persons arrested.

Drone sightings Wednesday night saw severe disruption to the airport’s activities as flights were suspended for security reasons. Flights resumed Friday morning but were suspended again that afternoon, restarting around 7 p.m. Friday, police said.

The Times Saturday reported that U.K. Transport Secretary Chris Grayling this year ditched plans for a draft bill to regulate drone use and develop technology to prevent them from being used near airports.

The outlet reported the legislation “had been due for publication in the spring, [but] was dropped amid pressures on the department, with civil servants diverted to work on Brexit.”

The British Airline Pilots’ Association said Friday it “remains extremely concerned at the risk of a drone collision,” and had issued advice to pilots on how to respond to a drone sighting.

Gatwick airport said Saturday: “Our runway is open. Passengers are advised to check with their airline before travelling to the airport.”


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Gatwick reopens after airport implements anti-drone measures

Britain’s Gatwick airport reopened this morning after rogue drones prompted it to ground all flights since Wednesday night, disrupting the travel plans of 120,000 passengers. Just under 700 flights are expected to take off today and over 100 have been canceled, Gatwick Chief Operating Officer Chris Woodroofe told the BBC’s Today program. Woodroofe said 120,000 passengers who were due […]

Britain’s Gatwick airport reopened this morning after rogue drones prompted it to ground all flights since Wednesday night, disrupting the travel plans of 120,000 passengers.

Just under 700 flights are expected to take off today and over 100 have been canceled, Gatwick Chief Operating Officer Chris Woodroofe told the BBC’s Today program. Woodroofe said 120,000 passengers who were due to fly in or out of Gatwick had their flights delayed or canceled.

Woodroofe said the airport had put in place unspecified “additional mitigating measures,” provided by military and government agencies, which enabled it to reopen. He wouldn’t specify what the measures entailed or say whether the airport would be forced to shut down again if more drones were sighted.

The Gatwick chief said the airport had been working for a year to resolve the challenges posed by drones, but that more needed to be done to deal with such an “unprecedented event.”

“What the last 36 hours have demonstrated is that an awful lot more work has to be done both in the U.K. and internationally to address the risk of drones to airports,” Woodroofe said. “We need to work with both technology providers and government to address this risk.”

Woodroofe said police have not yet found those responsible for the rogue drones.

The Gatwick chief advised passengers to check with airlines to confirm whether their flights have been canceled before coming to the airport today.