Brexit: Europe will be big Brexit winner, says German economics minister-by Guy Chazan and Claire Jones

Europe will be the big winner of Brexit, Germany’s economics minister said, as UK-headquartered companies move to the continent and Emmanuel Macron’s reform push leads to a new “spirit of revival” that will benefit the whole of the EU.

 Brigitte Zypries made the prediction on Wednesday as she revealed the German economy was growing at a faster rate than previously estimated. The government now expects gross domestic product growth of 2 per cent this year, up from a forecast of 1.5 per cent, as Europe’s economic powerhouse continues to charge ahead.

The economy will also grow by 1.9 per cent in 2018, she said. Ms Zypries said Germany’s economic boom had “gained momentum and become more broad-based”.

The economy would “also remain on a growth trajectory in the years to come”. “Germany is doing well and the next government must ensure that it continues to do so,” she said at a press conference in Berlin.

The global economic recovery had stimulated German exports and led to an increase in private sector investment: incomes were rising and unemployment falling. The number of people in work had grown by 2.5m during the past four years. 

Read more: Europe will be big Brexit winner, says German economics minister

The Netherlands: New Dutch coalition to cut 30% ruling for Expats from eight to five years - by Robin Pascoe

The new Dutch government plans to reduce the tax break for expats known as the 30% ruling, according to the coalition agreement published on Tuesday.

In the section on ‘a competitive place to do business’, the four-party alliance say they will ‘limit the tax advantages for expats’, before going on to explain that international workers will only be able to benefit from the ruling for five years, rather than eight as at present.

A report for the finance ministry published this June said that the ruling is too generous and its provisions could be reduced, while recognising its importance to attract top talents.

Some 60,000 people currently claim the tax break, which effectively means they do not pay tax on the first 30% of their salary. This, the report concludes, cost the treasury some €755m in 2015 and is set to cost €902 in 2017.

To claim the ruling, expats have to earn nearly €53,000 a year (or €37,000 after the 30% has been deducted) and must have lived at least 150 kilometres from a border with the Netherlands, effectively ruling out Germans and Belgians.

Read more:New Dutch coalition to cut 30% ruling from eight to five years - DutchNews.nl

Spain gives Catalan leader eight days to drop independence-by Blanca Rodríguez, Sonya Dowsett

Spanish Prime Minister Mariano Rajoy on Wednesday gave the Catalan government eight days to drop an independence bid, failing which he would suspend the Catalonia’s political autonomy and rule the region directly.

His move could deepen the confrontation between Madrid and the northeastern region but also signals a way out of Spain’s biggest political crisis since a failed military coup in 1981. 

Rajoy would probably call a snap regional election after activating Article 155 of the constitution that would allow him to sack the Catalan regional government. 

“The cabinet has agreed this morning to formally request the Catalan government to confirm whether it has declared the independence of Catalonia, regardless of the deliberate confusion created over its implementation,” Rajoy said in a televised address after a cabinet meeting called to consider the government’s response. 

He later told Spain’s parliament the Catalan government had until Monday, Oct. 16 at 0800 GMT to answer. If Puigdemont was to confirm he did declare independence, he would be given an additional three days to rectify it, until Thursday, Oct. 19 at 0800 GMT. Failing this, Article 155 would be triggered. 

It is not yet clear if the Catalan government will answer the requirement but it now faces a conundrum, analysts say. 

Read more: Spain gives Catalan leader eight days to drop independence

Spain Readies Forces Able to Arrest Catalan Leader Today if He Declares Catalan Independence - S.R Smyth and E.Duarte

Viva España un miembro de la Unión Europea

Spanish police are ready to arrest Catalan President Carles Puigdemont immediately if he declares independence in the regional parliament, according to two people familiar with the government’s plans.

While a final decision on whether to act has not yet been taken, Spain’s National Police force has elite officers deployed in Catalonia who are prepared to join a raid if Catalan police try to shield Puigdemont, said one of the people. If Puigdemont makes a statement that falls short of immediate independence, the government in Madrid may stay its hand.

The president is likely to use the words “declaration of independence,” but they will probably be qualified or hedged in some way, according to another person familiar with his plans. The Catalan government spokesman declined to comment on Puigdemont’s speech at a press briefing in Barcelona on Tuesday.

Puigdemont is due to address the regional legislature at 6 p.m with many of his supporters looking for him to announce a new republic to follow through on the illegal referendum held on Oct. 1. With his core supporters demanding he make good on the illegal vote for independence and officials in Madrid urging Prime Minister Mariano Rajoy to finally crack down on the separatist campaign, Puigdemont’s rebellion may be running out of road.

Rajoy has insisted all along that he’ll use only proportionate force in relation to the separatist government in Barcelona. Even so, prosecutors have been exploring charges of sedition against other separatist leaders including Jordi Sanchez, head of the biggest pro-independence campaign group. Sedition carries a jail term of up to 15 years.

The National Police and the Civil Guard have sufficient officers in place to overcome any resistance they might meet, according to one of the people familiar with the government’s preparations. Both people asked not to be named discussing confidential plans.

Read more: Spain Readies Forces Able to Seize Catalan Leader Today -

EU: Danish government backs burqa ban

Denmark’s coalition parties, the Liberal (Venstre) and Liberal Alliance, both back a public ban on garments that mask the face, including the burqa and niqab.

As reported by The Local, the stance by Liberal Alliance represents a shift in the party’s official line on the issue. As for the Venstre, the senior party in the government, had waited before the announcement of an official line with opinion divided amongst its MPs.

“We in the Liberal party will support a ban on masking that will be forthcoming. It is not a religiously defined ban on masking, but the burqa and niqab will obviously be covered by it,” political spokesperson Jakob Ellemann-Jessen said according to DR.

Liberal Alliance, which was also previously against the proposal, has followed Venstre in pronouncing its support.

“Everyone agrees that the burqa is an expression of extreme oppression of women,” party leader Anders Samuelsen wrote in a Facebook post.
 
“Now there is a majority in parliament that thinks the burka/veiling should be fought… So if a ban like this is possible in practice without harming ourselves or our own values, then yes, LA will vote for it,” Samuelsen continued.

While burqas cover the face entirely with the wearer seeing through a mesh in the material, the niqabs have a slit through which the wearer’s eyes can be seen.

Read more: Danish government backs burqa ban

EU-Russia Relationship: Brexit Could Open the Door to Russia Joining the EU (and why not?) - by Cyrus Sanati

Could Russia become a full member of the EU?

A little over a year Cyrus Sanati  wrote in an OpEd for Fortune Magazine:  "Britain’s exit from the European Union opens the door to a possible Russian entry—a “Rentry” or perhaps “Russ-in”—into the (now) 27-member club. While it could take years, even decades, before the Russian Federation could meet all the criteria under the so-called Copenhagen Criteria to join the EU as a full member, it is far more likely to occur now with the U.K. out of the picture."

"Obviously the question now is: "why not? "

Tempting Russia with EU membership would do far more to elicit better behavior from Moscow than the weak economic sanctions the EU currently imposes on it. Russia’s entry would not only be a boon for trade in the region, but it would also finally make Europe a true superpower with the ability to take on China and the U.S. both economically and militarily.

At first blush, it might crazy to think “Rentry” could happen. After all, tensions between Russia and the EU are arguably at their highest level since the end of the Cold War. Last week, amid Russia’s continued aggression in the Ukraine, the EU extended its long-running banking sanctions against Moscow for another year.

Retaliatory Russian sanctions against EU foodstuffs will remain in effect as well, costing the EU agri-food sector billions of euros in lost revenue. Meanwhile, net foreign direct investment flows between Russia and Europe are now at their lowest level in nearly two decades, going from $80 billion in 2013 to almost nil last year.

And if the economic tension wasn’t bad enough, the Baltic states and Poland, which are all EU (and NATO) members, have increased their defense spending considerably following Russia’s invasion of the Crimea two years ago. They are increasingly concerned that Vladimir Putin, Russia’s long-standing leader, might try to reenact the opening scene of World War II and invade their territories. This might be paranoid, but it’s not totally off-base.

Still, despite the increased tensions and simultaneous crash in energy prices, Russia remains the EU’s fourth-largest trading partner and the EU continues to be Russia’s biggest trading partner; total trade between the two was nearly €209 billion in 2015, according to figures from the European Commission.

If energy prices rebound, which will happen sooner or later, those trade figures will explode. Back in 2012, before energy prices crashed and before sanctions were imposed, annual trade between the two equaled €338 billion, making Russia the EU’s third largest trading partner behind the U.S. and China.

If there was truly free trade and open borders between Russia and Europe, that number could easily double or triple in just a few years.

It will be hard for the sides to continue dismissing each other given their close geographical proximity and historical ties. Indeed, half of the European Union was either directly or indirectly ruled from Moscow at some point in the last century. As such, much of the infrastructure needed for trade—such as pipelines, roads, and railroads—are already connected. Today, Russia supplies nearly all he natural gas for many of the eastern members of the EU, as well as the bulk of Germany’s needs. As Germany continues to retire its nuclear and coal power plants, this link will only grow more important.

"The question is therefore not if, but when will both the EU and Russia start looking at their relationship in a more serious way, despite all the negative rhetoric coming from Washington about Russia."
 
EU-Digest

Spain-Catalonia: Tens of thousands rally in Spain to avoid Catalan split

Tens of thousands of people joined protests across Spain on Saturday calling for an end to the political crisis that has rocked the country since Catalan authorities held a barred independence referendum last Sunday.

In 50 cities, including Madrid and Barcelona, thousands of people gathered under the motto "Let's talk" and called for leaders from Madrid and Barcelona to enter peaceful negotiations to end the crisis. Organizers urged the crowds at both sites to wear white T-shirts and not to bring any Spanish or Catalan flags.

Ninety percent of those who voted opted for independence, according to the official vote tally released by the Catalan government on Friday. But turnout was only 43 percent. The final figures approximated the preliminary results released immediately after the referendum.

Former Prime Minister Felipe Gonzalez on Saturday joined calls for Prime Minister Mariano Rajoy to invoke Article 155 of the constitution. The article is described as being "for exceptional cases only" such as when a region’s failure to obey laws "gravely damages Spain’s general interest." It has never been invoked before.

On Tuesday, Spain's King Felipe VI accused the Catalan authorities of "disloyalty" and said the central government needed to ensure "constitutional order."

Read more: Tens of thousands rally in Spain to avoid Catalan split | News | DW | 07.10.2017