Following yesterday’s formal confirmation of 21st Century Fox's bid to take control of Sky, UK Culture Secretary Karen Bradley will soon need to decide on whether to launch a public interest investigation into the takeover. There is a strong sense of déjà vu with News Corporation’s ill-fated bid for BskyB in 2010.
At the end of November, the Chinese government indicated that it intended to exert greater scrutiny over Chinese outbound investment. Draft policy papers released online outlined a new policy whereby government approval would be required for foreign acquisitions valued over US$10 billion, or US$1 billion if the target was considered to be outside of the acquirer’s core business. In addition, a moratorium would be imposed on state-owned companies acquiring real estate overseas beyond a value of US$1 billion. In addition, it was mooted that the State Administration of Foreign Exchange (SAFE) would lower the upper threshold for money transfers requiring approval from the current level of US$50 million to US$5 million.
Once again, much of the European mainstream was relieved on Sunday evening, when – against expectations - the far-right FPŐ candidate was defeated by a 46-54 margin by the Green-backed independent Alexander Van der Bellen in the re-run of the second round of the presidential elections. Following the UK vote to leave the EU and Donald Trump’s election to the US presidency, the Austrian result has been hailed as a rare victory for liberal internationalism. However, this relief may be premature, as attempts to use this wealthy, Central European country as a proxy for balancing North, South, East and Western European attitudes work both ways. The FPŐ may not have won the presidency, but their candidate still came very close and won 46% of the popular vote, up from 21% in the 2013 parliamentary election and 15% in the 2010 presidential election.
This week’s ‘Winter Package’ of new energy and climate change legislation was described by an effusive European Commission Vice President Maroš Šefčovič as “a Christmas present” for MEPs on the ITRE and ENVI committees. They will now be the envy of their legislation-starved peers. At well over 1000 pages it is a monster, with 11 main documents and a plethora of supporting technical and risk assessment documents. However, within a complex package of measures, headlines jump out: the Commission’s proposal to increase the EU’s 2030 energy efficiency target from at least 27% to a binding 30% target; the removal of renewable energy’s priority access to the grid; and the failure to ban subsidies for food-based energy crops. The latter two have already been the target of NGO fire.
In the 12 months before the EU referendum, migration to the UK remained at historically high levels, with a record 284,000 new settlers from the EU contributing to a net intake of 335,000. While this reflects the buoyancy of the British economy compared to the rest of the continent, it will create a headache for Theresa May in trying to balance implementing a referendum result implicitly predicated on public displeasure with high levels of migration with the demands of an economy increasingly driven by the availability of migrant labour. Crucially, the headline figures conceal evidence that migration from the EU has now peaked. The rate of national insurance number registrations by EU nationals has flattened off after seven years of steady growth, with only an uptick in registrants from Romania and Bulgaria preventing the beginning of a decline. NI registration data has been published covering the period up to the end of September, so the immediate impact of Brexit can now begin to be analysed.
Global Counsel hosted an interesting seminar with Nicolas Véron of Bruegel recently about the future of international standards for financial regulation. This assessed the EU’s appetite for designing its rulebook to be attractive for other jurisdictions, and more specifically whether this might help the UK agree some form of ‘super-equivalence’ that could provide regulators with confidence to allow continued cross-border trade. Yesterday’s failure in Santiago to agree global standards for capital requirements highlighted one of our reasons for scepticism: that EU interest in global standards has weakened considerably since the high point of promoting Solvency II for insurers in 2012. With the incoming US administration promising more ‘competitive’ regulation of the financial sector by amending the post-crisis Dodd-Frank legislation and showing little interest in maintaining the G20 as a policy-making forum, and with carve outs for large Asian markets from FSB standards, it is worth considering why the largest players have retired from the competition to set universal standards.
Frustrated by the lack of progress in its attempt to reach a voluntary agreement with BT Group about the future of its Openreach subsidiary, UK telecoms regulator, Ofcom, this week raised the stakes. Chief Executive, Sharon White, notified the European Commission of its intention to impose legal separation between BT and Openreach, its infrastructure network. This separation would establish Openreach as a "distinct company with its own board" with a majority of non-BT Group affiliated non-executives – owning its assets and directly employing staff.
"I am tackling the longstanding problem of our fastest growing technology firms being snapped up". So said UK Chancellor Philip Hammond this week. Yet the very next day it was announced that Skyscanner, one of the UK’s leading tech companies, had been “snapped up” up by Ctrip.com, the Chinese online travel company for £1.4 billion. Should we see this as an example of the kind of problem Hammond thinks he needs to solve? If so, what might he do?
The EU-Ukraine summit in Brussels on Thursday just ended on an unusual note - and not just because Donald Tusk delivered some of his closing remarks in Ukrainian. He also officially said that the EU now bears the entire responsibility for successful completion of the visa facilitation process and the Association Agreement implementation impeded by the results of the Dutch referendum earlier this year. This was quite a concession. So why make it?
The Spanish parliament’s vote earlier this week to raise the minimum wage from 655 to 800 euros a month - despite the opposition of the governing People’s Party (PP) - highlights the unusual situation that the PP finds itself in, of having to govern in a parliament where a hostile opposition has a majority.