Vulcan View – Monday 7th of January to Friday 11th of January

Vulcan View – Monday 7th of January to Friday 11th of January

 

 

 

KEY EVENTS THIS WEEK:

European Union:
The Polish and Italian Election Coalition 

With the European Elections in full swing, the leaders of the most popular populist parties in Poland and Italy will meet Wednesday to discuss a common strategy for the Elections in May.  Matteo Salvini and Jarosław Kaczyński (PiS) are hoping that the common ground they have concerning migration and their euroskepticism, will enable a joint position in the next election. However, they have very different views on Russia.

PiS, Poland’s ruling party are a founding member of the European Conservatives and Reformists (ECR) who are expected to lose seats due to British conservatives not standing for re-election due to Brexit. It is thought that Matteo Salvini may merge with Kaczyński in the European Parliament. Predictions have shown that PiS could see their number of MEPs rise to 24, while the League (Salvini) could get 27.  Russia could prove to be a stumbling block, and a possible deal breaker in this coalition. Joachim Brudziński, one of Kaczyński’s closest confidants who extended the invitation to Salvini, fired back at critics, tweeting that it is “pure stupidity” to criticise the meeting. Time will tell if Kaczyński will press ahead with the coalition.  Attacks from the opposition would be difficult internally for governing party in Anti-Russia Poland.

European Union:
Diplomatic Relations with the EU 

In a further sign of the deteriorating relations between the EU and the US, this week it emerged that the EU Ambassador, David O’Sullivan, had been downgraded to the bottom of the list of European Ambassadors.

Surprisingly, the US did not alert the EU Mission in the Washington to this significant change. It only became apparent during the funeral of former US President George H.W. Bush on 5 December 2018 when Ambassador O’Sullivan was one of the last diplomats to be called forward to pay his respects.

Ambassador O’Sullivan is set to leave his position next month. The former Chief Operating Officer of the European External Action Service (the diplomatic wing of the European Union) and Secretary General of the EU Commission will be replaced by Greek Stavros Lambrinidis, who currently serves as the EU’s Special Representative for Human Rights. This replacement is part of the European Union’s rotation of diplomats.

US politicians in the Trump administration have once again been speaking out against the EU in recent weeks. US Secretary of State Mike Pompeo gave a speech in Brussels where he asked: “Is the EU ensuring that the interests of countries and their citizens are placed before those of bureaucrats here in Brussels?” The US Ambassador to the EU, Gordon Sondland, believes that the European Union is ‘out of touch’.

Germany:
Fear of German economic recession heightens

As the German Minister of Foreign Affairs Heiko Maas was speaking in Dublin this week at the Global Ireland Conference addressing top diplomats and government officials, news broke that German industrial output had yet again performed below expectations. The slowdown in the Chinese economy, on-going trade negotiations between the United States and China, Brexit, recent turbulence in stock markets and the new emission regulations from the European Union, which have impacted the automotive sector, have all contributed to a decline of 1.9 per cent rather than the expected 0.3 per cent growth increase. Europe’s strongest economy has seen weak production across the board.

Despite efforts by the federal government to reassure investors and citizens, consumer sentiment remains weak. Heiko Maas reassured Ireland of Germany’s support for its stance on the border question in the Brexit negotiations. Germany is very dependent on its European neighbours and the EU for a well-functioning and prosperous economy. The outcome of Brexit, the European elections and global trade tensions will be major factors in how the economy will progress over the coming months.

Brexit:
Theresa May gearing up for meaningful vote in Westminster 

Barely into the New Year and Theresa May is struggling with the same issues she faced before Christmas. Parliament is set to vote on her Brexit deal next Tuesday and the Prime Minister is increasingly struggling to rally support. Brussels has again signalled that there won’t be any legal changes to the withdrawal agreement. This has seen increased preparations for a no-deal Brexit scenario across the EU 27 as well as in the UK.

This week several dozen trucks near Dover simulated a government lead exercise on how traffic overflow from the port would be managed in the event of a cliff edge departure.  An abandoned airfield was used to divert the truck traffic which could be used as a parking area, according to government plans. Pharmaceutical companies have been asked to start stock-piling medicines to be able to supply the UK market for longer periods, should negotiations between the EU and London take longer than expected.

In order for a no-deal Brexit to be avoided, Prime Minister May is trying to make last minute concessions including trying to woo Labour MPs on the issue of worker’s rights. In a significant vote earlier this week, May suffered another big loss as the House of Commons voted for her to return to parliament within three days of a losing the meaningful vote with a Plan B, rather than the expected twenty-one days. With time is running out between now and Tuesday’s meaningful vote, debate is beginning to turn to what Plan B might be including a possible extension of Article 50.  Such extension will not be countenanced by the EU unless the UK Government, or Parliament, indicates that it has some form of credible plan which will be approved in Westminster.  At present it is impossible to see any deal with will gain sufficient cross party support, so deadlock is looking likely.