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Will the Malthouse compromise work?

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On January 15, the British MPs cast their ballots on the Agreement on the British Withdrawal from the EU, which Theresa May had reached with Brussels – “Plan A”. The government lost the vote. On January 29 they voted on the government ‘s “plan B”. In fact, the Cabinet did not suggest anything new, having added a number of concessions for EU citizens in Britain, and abolishing the registration fee for them. In turn, the MPs proposed more than a dozen amendments, of which the Speaker of the House of Commons, J. Berkow, selected but a few. If we are to  understand the intricate mechanism of British politics, as well as the events to come, we must analyze some. Britain’s exit from the EU, according to the law, is scheduled for March 29, 2019.

Significantly, the deputies are divided not only by party affiliation – they create interparty alliances of Brexiteers and Bremainers. Quite frequently they call into question the “party’s general line”, thereby breaking the party discipline. Hence the amendments which reflect acute disagreements in the leading parties whose leaders maneuver between warring factions in their parties.

The opposition leader in parliament, J. Corbin, has proposed excluding a “catastrophic” exit of Britain from the EU without an agreement. His plan is to consider an alternative scenario – a permanent Customs Union with the EU and the option of participation in the EU Common Market, as well as to adopt a law on a referendum in which people will vote on a deal or a proposal that will gain the majority in parliament.

The main point of the amendment proposed by Conservative D. Greve, the former attorney general, was to put the alternatives to T. May’s plan to vote on March 26: the Labors’ plan, a second referendum, an exit “without a deal”, and the “Norwegian version” of relations with the EU. The amendment was supported by some Labor backbenchers and a number of deputies from other opposition parties (Liberal Democrats, the Green Party, Plaid Cymru).

The amendment by Caroline Spelman (Conservative) and J. Dromy (Labor) opposed Britain’s withdrawal from the EU “without the Exit Agreement and the Political Declaration” (but gave no details or specify how to achieve that).

The amendment by Labor I. Cooper and Conservative N. Bols suggested postponing Britain’s exit from the EU till December 31, 2019 (that is, to extend Article 50), if the deputies failed to approve the “deal” of the Prime Minister until the end of February. Such a measure would require the consent of Brussels. This amendment was supported by some Tory backbenchers and several deputies from other opposition parties. The Labor leadership also supported the Cooper Amendment, obliging its deputies to vote in its favor, but wished to cut the term of the extension of Article 50.

Labor MPs from constituencies who voted for Brexit were very dissatisfied about the amendment but it enjoyed the support of those in favor of the second referendum and opponents to exit without a deal (from both parties). However, critics from among the Conservatives argued that the amendment would only postpone the decision indefinitely. In fact, the amendment led to the empowerment of parliament to control the Brexit if the transaction did not take place. Journalists described it as a “legislative torpedo”, which deprives the government of the most important power – to formulate the agenda of parliament. As stated in the House of Commons by T. May, the Greve and Cooper amendments represent a “mechanism for usurping the proper role of the executive branch”, which will lead to “far-reaching long-term consequences for the government of the United Kingdom”. She has a good point here.

The opposite point was suggested by the amendment of G. Brady, the head of the 1922 Committee (which brings together Tory backbenchers). As is known, the stumbling block towards the approval of the Agreement with Brussels became so-called “additional guarantees” (backstop) – the provision that the entire territory of the UK will remain in the EU Customs Union until the issue of border regime between Northern Ireland and the Republic of Ireland is settled. It is a kind of “safety valve” against the violation of the 1998 Belfast Agreement on the settlement of the conflict in Ulster between Unionists (Protestants) and Irish Republicans (Catholics). The border should be open, while the exit of Britain from the EU implies its closure (Ireland is a member of the EU, Northern Ireland is part of the United Kingdom). The problem is akin to the quadrature of the circle, so  Brexiteers fear that Britain, under the Agreement with the EU, may remain in the EU Customs Union indefinitely long without the right to unilateral exit or the right to conclude trade agreements with third countries. The latter is one of the most important goals of Brexit.

The Brady Amendment proposed replacing “additional guarantees” with the phrase “alternative arrangements to avoid border closure” as an extra clause to the Agreement. Conservative Brexiteers saw the wording as too vague, doing nothing to lift their concerns about the Agreement. Brexiters from the European Studies Group (led by J. Rees-Mogg) opposed the amendment. However, Brexiteer B. Johnson and others were ready to support the Brady Amendment if T. May would be willing to force the EU to “cut open” the Agreement in order to make legally binding changes, which was significant. However, he withdrew his objections.

The Prime Minister advised the faction to vote in favor of this amendment, which would empower it to negotiate with the EU on this issue. Consequently, T. May got off the ground and supported the amendment, which crossed out her agreements with the EU. The party believes that she should have warned Brussels  long ago that “additional guarantees” had no chance to sail through parliament.

Political maneuvering amidst the Conservatives in relation to the Brady Amendment suggested that, by supporting it, the Brexiteers would gain a few weeks, and will then fail the agreement with the EU again – in February.

The Democratic Unionist Party (DUP) deputies, whose support is crucial for the minority government of T. May, were ready to vote for the Brady Amendment: according to their logic, refusing to exit without a deal (under the Cooper Amendment) means bringing the exit closer.

Thus, the Conservatives are divided on the issue of the degree of intensity of ties with the EU in case of exit, whereas the Labor are split on whether to withdraw from the EU at all. None of the amendments, if successful, obliged the government to anything but would impose political obligations on the Prime Minister. The exception is the amendment of I. Cooper – if approved and followed by the adoption of the relevant law, the government would be obliged to obey the law.

VOTING RESULTS: J. Corbin’s amendment rejected (327: 296), Greve’s amendment rejected (321: 301), Cooper’s amendment not adopted (321: 298), since several Labor voted against their party’s policy and the pound sterling rate dropped, the Spelman-Dromy Amendment accepted (318: 310), the Brady Amendment adopted (317: 301).

Since T. May opted for siding with the Brexiteers and supported the Brady Amendment, she formally won, but her success was a Pyrrhic victory. The majority in parliament opposed exit without a deal (the Spelman-Dromy Amendment), which weakens London’s negotiating positions with Brussels (not only because of the results of the 2016 referendum, but also because, as it became clear recently, T. May does not want to rule out exit without a deal).

Thus, the chaos in parliament has manifested itself: the deputies voted for two mutually exclusive amendments – against exit without a deal and for adjusting the Agreement (which the EU refuses to do), thereby paving the way for exiting without a deal (exit without a deal is impossible, but the deal is impossible to accept while changing it is not what Brussels is willing to do). The European Commission Chairman stated: “The agreement is not subject to revision. It seems that some expect the remaining 27 member states to give up on the “additional guarantees” and on Ireland, but this is not a game, but the core of EU membership. The border of Ireland is the border of Europe – that is the priority of our union ”.

The recent voting does not close the chapter on Brexit. According to media reports, the warring factions of Brexiteers and Bremainers in the Tory parliamentary faction have reached an agreement – the so-called “Malthouse compromise” (after the name of a deputy). J. Ries-Mogg and S. Baker of the European Studies Group (the Brexiteer stronghold), together with Deputy Minister of Housing K. Malthouse, agreed with the Bremainers that T. May would first go to Brussels to seek a new wording for “additional guarantees”(on the basis of non-existing  barrier-free checks at the border). If the attempt fails, May will request the EU to extend the transition period until December 31, 2021. In exchange, Britain will fulfill its financial obligations and undertakes to respect the rights of EU citizens in the UK. Such an arrangement will enable both sides to prepare for the withdrawal of Britain from the EU on WTO rules in late 2021.

However, this “Plan B” (which served the interests of a fragile peace in the Conservative camp) has already been described by Brussels as a trick.

It appears that J. Blackford, the leader of the Scottish nationalists in the House of Commons, has expressed the hidden desire of the Brexiteers: readiness to sacrifice Northern Ireland. The Conservatives “tore to shreds” the Belfast Agreement, rejecting an open border with Ireland.

According to the Guardian: “A fairly dubious type of a compromise plan that does not offer a compromise … The new Malthouse Doctrine actually has the same misconceptions of hardline Brexteers, but in disguise. The Prime Minister proposes that the backbenchers vote against their agreements with Brussels so that she could return to Brussels to ask what she knows she will be denied.

May, having voted for the Brady Amendment, has de facto spoken out against her own brainchild in order to stay balancing on the edge of confrontation between the two factions in her party and not hold early elections. The Conservatives do not want to allow for even a fraction of a chance for a victory of Labor, led by ultra-leftist J. Corbin, although the leading opposition party in the country is also split.

Against the backdrop of political battles, businesses have expressed extreme frustration over the continuing uncertainty. Voters are furious over the work of the deputies: according to a survey, the percentage of voters who have voiced their outcry in connection with the situation exceeds 70%, regardless of what they think about Brexit, or their place of residence (city, village).

The political crisis continues.

First published in our partner International Affairs

Head of the Center for British Studies at the Institute of Europe of the Russian Academy of Sciences (IE RAS), International Affairs observer

Europe

U.S. President Trump to meet Bulgaria’s Prime Minister at the White House: What to expect?

Iveta Cherneva

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Next Monday, 25 November, President Trump will welcome Bulgarian Prime Minister Borissov at the White House for a bilateral meeting.

This is not the first White House visit for Bulgaria’s Prime Minister Boyko Borissov who previously met President Obama at the White House in 2012.

The White House press secretary has announced that Trump and Borissov plan to discuss security in the Black Sea region, energy and countering malign influence – all Russia-related topics, as one would expect.

The real reason for the White House treat, however, is Bulgaria’s substantial purchase of US aircraft this year.

In August, Bulgaria bought eight F-16 airplanes from the US for the hefty price of USD 1.2bln. White House meetings with foreign leaders represent special thanks for something a foreign country has done for the United States and the F-16 airplanes purchase seems to be what we are looking at here. The US is a happy seller and Bulgaria is a happy customer.

In the area of energy, Bulgaria is looking towards the US while trying to reach energy diversification and gain independence from Russian natural gas. On this, there is a clear intersection with US interests. Bulgaria agreed in May to purchase natural gas from the US for the first time. Bulgarian Prime Minister Borissov met last week with the US Ambassador to Greece to explore the possibility of purchases of American liquid gas down the line.

What is not mentioned by the official White House position is that visa restrictions will be a topic of the meeting, too. The Bulgarian Prime Minister will likely request that President Trump dropped the visa requirements for Bulgarians – an issue the Bulgarian government has been chasing for a while now and something which Bulgarian President Radev had raised with President Trump also on the sidelines of the UN General Assembly in September. Visa restrictions were removed for Polish citizens last month. The Bulgarian Prime Minister will seek the same outcome. On this point, it is unlikely that President Trump would give the green light though.

What we won’t hear about publicly is the issue of the return of ISIS fighters to Europe. No one in Bulgaria really talks about this but one can imagine this is an issue for the US government. Bulgaria doesn’t have a problem with ISIS fighters itself but, as an EU external border country, it is Turkey’s neighbor and the closest to the Middle East EU ground entry point. Last week, Turkey began returning ISIS fighters back to Europe and President Trump has been adamant that European nations with ISIS fighters need to take responsibility for them. Western European EU countries do not want their ISIS fighters back to try them in court or to reintegrate them, which is understandable but also irritating because Europeans have had the unfounded expectation that the US would somehow take care of this. How Bulgaria as an EU country at the crossroads between Turkey, the EU and the US handles that is key. No one in Bulgaria really talks about it, and the various EU, US and Turkish pressures on Bulgaria are not really known, but one can imagine the situation is that of being between a rock and a hard place. So, the return of ISIS fighters is another issue to look out for, although it will not come through in public.

In the past, NATO ally Bulgaria has aided the US with criminal and law enforcement investigations in the areas of terrorism, drug trafficking and human trafficking. This is another area to look out for.

President Trump’s impeachment is not really a topic in Bulgaria, as no one here seems to be concerned with that. It will be interesting whether Prime Minister Borissov would mention this at all to issue words of support to President Trump. This is something that President Trump would appreciate, although protocol says Prime Minister Borissov would be smart to steer away from impeachment comments.

Direct, to the point and simple words can be expected from President Trump. Prime Minister Borissov, on the other hand, is learning English so the meeting will necessarily have a Bulgarian interpreter. Expect one or two jokes by President Trump about simultaneous Bulgarian interpretation. The meeting will not pass without that.

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EU chief prosecutor Laura Kovesi needs media freedom to do her job

Iveta Cherneva

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Last month, Laura Codruta Kovesi, the former chief prosecutor of Romania’s National Anti-corruption Directorate, was officially confirmed as the first ever EU chief prosecutor to head the newly created European Public Prosecutor’s Office. Her team will start work in the end of 2020. 

Kovesi will shake things up. She has a lot of hurdles to overcome. Among the main ones is the silencing and stifling of journalists across Europe, including in Bulgaria. The lack of media freedom will make it exceptionally difficult for Kovesi to do her job and uncover crimes involving EU funding.

As soon as the news hit that Kovesi was to become EU’s top prosecutor, anti-corruption activists across Europe applauded loudly. One could hear the applause also in Bulgaria where we face issues with EU funds misappropriation and theft but also complaints regarding the freedom of the press – a place where Kovesi’s work is much needed.

Defined institutionally, Kovesi’s mandate is “to investigate, prosecute and bring to judgment crimes against the EU budget, such as fraud, corruption or serious cross-border VAT fraud”. The EU’s top prosecutor is tasked with the tough job of going after crimes involving EU money. 

It might sound as a disappointment to many, but Kovesi will not have the institutional competence to address everything that is wrong with a country or a sector. Corruption and fraud are covered by the EU prosecutor’s mandate only as long as they are related to EU funds.

So if Kovesi won’t be a see-it-all, do-it-all messiah, where does this leave media freedom then and why am I talking about it in the context of her job?

Well, bringing to justice crimes related to EU funds is almost impossible without the leads on the ground – work often done by a functioning free media and hard-hitting  investigative journalism that uncovers fishy deals and contracts. It is journalists that sometimes lead the way. Often media investigations chart a course for criminal investigations. The media is a key ally in uncovering crimes involving EU funds. This is particularly true of a service such as the EU’s prosecutor office that will operate from EU headquarters and will rely on leads and allies on the ground.

We can’t expect that an EU service will get all the intricate, hidden local information on its own or through cooperation with the state authorities in question. This is where media and journalists come in. 

Bulgaria – as sad I am to say this – gives a clear illustration of why Kovesi’s job could prove to be especially tough. The country ranks 111th in the world in terms of media freedom, according to Reporters without Borders. 

To illustrate the situation, one should look no further than the current scandal involving the nomination of Bulgaria’s own chief prosecutor and the simultaneous firing of a seasoned journalist who has been critical of the only candidate for Bulgaria’s top prosecutor post.

As reported by Reuters, the national radio journalist Silvia Velikova was fired for allegedly being critical of the work of the deputy chief prosecutor Ivan Geshev, who has already been selected to become Bulgaria’s next chief prosecutor. Bulgaria’s President Rumen Radev vetoed the appointment last week, so now the country is facing judicial uncertainty and protests such as the ones from today. 

Among the reasons why the chief prosecutor’s appointment has been controversial – to say the least – is the sacking of the Bulgarian Radio journalist Silvia Velikova. Her ousting caused protests by Bulgarian journalists which I have been attending, while the capital Sofia saw thousands of protesters marching in the streets against Geshev’s nomination in September, October and now, after the presidential veto.

Where the story gets interesting or horrific – or both – is that as many as four unnamed individuals made phone calls in September to the Director of the National Radio, allegedly asking for the journalist critical of the prosecutor candidate to be fired, or at least to be silenced until Geshev’s selection as chief prosecutor. The journalist Velikova was subsequently fired. She was reinstated to her post after Prime Minister Boyko Borisov spoke in her defence. And the Director of the National Radio was himself fired for stepping over by a media oversight organ.  

In Bulgaria, a persistent complaint is that journalists who ask the inconvenient questions can be removed in a heartbeat, after so much as a phone call. The suspicion remains that shady dealings – not merit – continue to play a significant role in the firings and hirings of Bulgarian journalists.

One should look no further than the stories of investigative journalists Miroluba Benatova and Genka Shikerova. They are both known as hard-hitting investigative journalists that ask the tough questions and uncover corruption and mismanagement. They are both out of job after being pressured to quit a mainstream media. 

Genka Shikerova faced severe intimidation over the years, as her car was set on fire not once but twice, in 2013 and 2014, in relation to her work on Bulgaria’s significant anti-government protests during these years.

Miroluba Benatova, on the other hand, caused massive waves with her recent revelation that she has become a taxi driver – only to surprise foreign tourists about how politically astute and knowledgeable Bulgarian taxi drivers are. “The service in Bulgaria has improved greatly”, told her a German tourist assuming he was being driven by just a regular taxi driver.

So, how is this related to Kovesi?

It is unlikely that by driving a taxi Benatova will be coming across many leads about EU funds theft, to assist Kovesi. Such a waste of talent, and also funds.

The media across Europe has a key role to play in supporting the work of the new EU prosecutor. As long as journalists in countries like Bulgaria lack the freedom to do their jobs, crimes involving EU funding will go uncovered. If Laura Kovesi wants to succeed in her new job, she will have to take context into account and recognize that in many EU states, including Bulgaria, journalists are often not allowed to do their jobs and ask the hard questions. And that’s a shame because Kovesi will not be able to do it alone. 

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Why German car giant Volkswagen should drop Turkey

Iveta Cherneva

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War and aggression are not only questions of ethics and humanitarian disaster. They are bad news for business.

The German car giant Volkwagen whose business model is built on consumer appeal had to stop and pause when Turkey attacked the Kurds in Syria. A USD 1.4bln Volkswagen investment in a new plant in Turkey is being put on hold by the management, and rightly so.

Unlike business areas more or less immune from consumer pressure – like some financial sectors, for example – car buying is a people thing. It is done by regular people who follow the news and don’t want to stimulate and associate themselves with crimes against humanity and war crimes through their purchases. Investing in a militarily aggressive country simply is bad for an international brand.

As soon as the news hit that Turkey would be starting their military invasion against the Kurds, questions about plans for genocide appeared in the public discourse space. Investing over a billion in such a political climate does not make sense.

By investing into a new plant next to Turkish city Izmir, Volkswagen is not risking security so much. Izmir itself is far removed from Turkey’s southern border — although terrorist attacks in the current environment are generally not out of the question.

The risk question rather lies elsewhere. Business likes stability and predictability. Aggressive economic sanctions which are likely to be imposed on Turkey by the EU and the US would affect many economic and business aspects which the company has to factor in. Two weeks ago the US House of Representatives already voted to impose sanctions on Turkey, which now leaves the Senate to vote on an identical resolution.

Economic sanctions affect negatively the purchasing power of the population. And Volkswagen’s new business would rely greatly on the Turkish client in a market of over 80mln people.

Sanctions also have a psychological “buckle-up” effect on customers in economies “under siege”, whereby clients are less likely to want to splurge on a new car in strenuous times.

Volkswagen is a German but also a European company. Its decision will signal clearly if it lives by the EU values of support for human rights, or it decides to look the other way and put business first.

But is not only about reputational damage, which Volkswagen seems to be concerned with. There are real business counter-arguments which coincide with anti-war concerns.

Dogus Otomotiv, the Turkish distributor of VW vehicles, fell as much as 6.5% in Istanbul trading after the news for the Turkish offensive.

Apart from their effects on the Turkish consumer, economic sanctions will also likely keep Turkey away from international capital markets.

There is also the question of an EU company investing outside the EU, which has raised eyebrows. It is up to the European Commission now to decide whether the Volkswagen deal in Turkey can go forward after a complaint was filed. Turkey offered the German conglomerate a generous 400mln euro subsidy which is a problem when it comes to the EU rules and regulations on competition.

The Chairman of the EPP Group in the European Parliament, Manfred Weber filed a complaint with the EU competition Commissioner about the deal, on the basis of non-compliance with EU competition rules. Turkey’s plans to subsidize Volkswagen clearly run counter EU rules and the EU Commission can stop the 1bln deal, if it so decides.

In a context where Turkey takes care of 4mln refugees — subject to an agreement with the EU — and often threatens the EU that it would “open the gates”, it is not clear if the Commission would muster the guts to say no, however. In that sense, the German company’s own decision to pull from the deal would be welcome because the Commission itself wouldn’t have to pronounce on the issue and risk angering Turkey.

While some commentators do not believe that Volkswagen would scrap altogether the investment and is only delaying the decision, it is worth remembering that the Syria conflict is a complex, multi-player conflict which has gone on for more than 8 years. Turkey’s entry in Syria is unlikely to end in a month. Erdogan has communicated his intention to stay in Syria until the Kurds back down.

In October it was reported that the Turkish forces are already using chemical weapons on the Kurdish population which potentially makes Turkish President Erdogan a war criminal. For a corporate giant like Volkswagen, giving an economic boost for such a state would mean indirectly supporting war crimes.

As Kurdish forces struck a deal for protection with the Syrian Assad forces, this seems to be anything but a slow-down. Turkey has just thrown a whole lot of wood into the fire.

Volkswagen will find itself “monitoring” the situation for a long time. There is a case for making the sustainable business decision to drop the risky deal altogether, soon.

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