The early stages of any negotiation are all about positioning. The Brexit negotiation is no different. British Prime Minister Theresa May’s letter invoking Article 50 - and the draft negotiating guidelines issued by European Council President Donald Tusk - are both exercises in positioning. Each sets out objectives and constraints, as the two sides compete to shape the negotiations in their favour.
When the European Commission holds its public hearing on the Capital Markets Union (CMU) tomorrow, one of the key questions will be how to promote fintech while ensuring consumer confidence. Tools such as crowdfunding have become a potentially revolutionary means of alternative financing, giving the CMU serious growth potential. At the same time, they present new policy challenges on solvency, cyber risk and data access.
Whatever gets discussed at Mar-a-Lago between Donald Trump and Xi Jinping, it probably won’t include climate change. Trump has just ripped up Obama’s Clean Power Plan and approved Keystone XL. Xi is positioning China as the new global leader in climate change. Anyone trying to make sense of what this means for demand for renewables and the global dynamic in climate policy obviously has an interest in wondering what this adds up to. Xi can legitimately argue that he is bringing more to the energy transition table than the Trump administration is. But that is a very low bar. How seriously can we take China’s claim to leadership?
Regional UK city Lincoln’s hospital’s Accident & Emergency Department was at risk of being closed this week. This was not due to a deluge of patients or a lack of funding but rather the result of a recent tweak to the UK’s tax rules and could have far reaching ramifications for the UK-wide review of self-employment practices, currently underway.
As European leaders head to Rome this weekend to contemplate the EU’s future, there is an elephant in the room, and it is not actually Brexit. It is the question of whether the EU is ultimately reaching the zenith of the harmonising push begun with the creation of the single market thirty years ago. The logic of Brussels has always been that unity follows uniformity. One of the more interesting subtexts in Rome will be the idea that one path to unity may be to accept – even encourage – differences. In Versailles a few weeks ago when France, Germany, Spain and Italy met and formally restarted the multi-speed debate, French President François Hollande proclaimed that “unity does not equal uniformity”.
We were lucky to have former MEP and Dutch Labour Party President Michiel van Hulten in to GC this week for a briefing on the Dutch election. Michiel provided plenty of food for thought, especially on the coalition-building dynamic over the weeks (months?) ahead. A couple of things stood out from the group’s discussion for me.
The Dutch election has set a precedent: It pays for ‘mainstream’ European politicians to take a tough line on Turkey, which has become the symbol for the challenges of immigration in many EU member states. Mark Rutte’s stand-off with Ankara was certainly a vote winner. This has not gone unnoticed by party strategists in Paris and Berlin, who are preparing for their own landmark elections this year. Turkey is also heading towards its own vote in a few weeks, making domestic politics an important part of current disputes between the Turkish government and its counterparts in Europe. Once the dust settles later this year, will both sides return to more cooperative relations?
During a trip to Chicago earlier this month, I reflected on the differences between my time in office and the present. Despite economic gains from globalisation, failures in politics and in policy have led to a crisis of confidence in global cooperation. This has made the identity-based, pessimistic politics promoted by populists more attractive. But it also poses a challenge to the centre left and the centre right as they try to reset their policies and appeal to the moderate majority of citizens.
One of the big political stories in the UK this week was the ‘u-turn’ by Chancellor Philip Hammond on his budget proposal to raise National Insurance Contributions (NICs) for the self-employed. These are the basic levies on all UK taxpayers to fund social welfare provision. Despite being praised by some as a progressive tax reform, Hammond reversed the policy just one week after announcing it after coming under pressure for breaking a 2015 manifesto commitment to not raise personal taxes. The NICs u-turn demonstrated a couple of important things about politics and policymaking at Westminster as the UK prepares for the most complex bout of parliamentary activity in its modern history, namely legislating its way out of the EU.
Mark Carney knows that the Financial Stability Board, the global financial regulator he chairs, needs the US on board. And he knows that the Trump administration is facing pressure to abandon ship. These facts explain the thrust of his letter to the G20 finance ministers and central bank governors ahead of this weekend’s summit in Baden, Germany. It is an almost explicit appeal for US participation in the FSB and an almost official admission that the organisation is worried.