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Europe Daily Bulletin No. 12295
Contents Publication in full By article 25 / 27
The B-word: Agence Europe’s newsletter on Brexit / The b-word

No deal gets real

We’re the closest we’ve ever been to a ‘no deal’ Brexit. But will a new UK prime minister really lead the country off that cliff?

Boris Johnson and Jeremy Hunt, the two contenders for the UK premiership, are keeping a ‘no deal’ Brexit on the table, despite a scramble by their fellow MPs to prevent it. Tory MP Justine Greening wrote in the Independent online on 9 July that a no-deal departure is a “threat” to, and will “undermine”, the union of the United Kingdom, and put peace in Northern Ireland, as well as its economy, at risk. “There is no democratic mandate for no deal,” she insisted.

Irish foreign minister Simon Coveney called no deal an “ugly prospect” this week, warning up to 55,000 job losses and calling on companies to prepare for future customs procedures. The government also warned online shoppers that they may face higher VAT costs in the event of a hard Brexit.

But it’s Northern Ireland that is still causing the most concern and will bear the brunt of Brexit, with a civil service report predicting at least 40,000 job losses. The British parliament has issued unionists and nationalists with an ultimatum, after more than two years of stalled power sharing talks. If they can’t form a government by 21 October – days before Brexit day – the UK will reinstate direct rule of the country, and extend the right to abortion and marriage equality, a move that is vehemently opposed by the Democratic Unionist Party, whose 10 MPs support the Conservative government in Westminster.

However, direct rule will further complicate the search for a solution to keep the border infrastructure-free, while protecting the EU economy against smuggling, food safety risks and fraud.

While the Irish government acknowledged this week that there will have to be checks on goods, particularly on animals and animal products, crossing from Northern Ireland into Ireland, they are still unclear about where those checks are to take place. Irish officials are currently in talks with the European Commission to find a solution, with discussions expected to continue over the summer.

EU and Irish officials face the same problems as they did when drawing up a “backstop” solution for the Irish border, which Mr Johnson and Mr Hunt have promised to amend. The Irish Times reports that Mr Coveney told a private meeting this week that the two leadership contenders were having an “utterly disingenuous debate” on Brexit and said they “should know better”.

But analysts from the Eurasia group are more optimistic, and predict a deal can be done by essentially “burying’’ the backstop by extending the transition period beyond 2022. That would give the EU and UK more time to come up with “alternative arrangements” for the border as part of a new trade deal. However, the EU and Ireland will insist the backstop itself remain in the treaty, a compromise that Tory MPs are unlikely to back.

Ursula von der Leyen, the nominee for Commission president, made clear to EU parliamentarians this week that there would be no further negotiations on the withdrawal agreement, including the backstop. She also said she would prefer the UK to remain in the EU (EUROPE 12293/2), a possibility officials in Brussels have long since abandoned.

In the meantime, the Tory leadership race continues, with the winner set to be announced on 23 July. UK officials believe Mr Johnson, if elected, will present a short motion to the House of Commons on 25 July, asking for a mandate to negotiate an amended deal and, if that fails, to leave with no deal.

For recently elected UK MEPs, life goes on. Two British MEPs from the Renew Europe group even secured committee chairs this week, with Chris Davies taking fisheries and Lucy Nethsingha securing legal affairs (EUROPE 12293/5). Renew Europe MEPs also secured the first vice-chair of the subcommittee on human rights (Irina Von Wiese), while the S&D’s Seb Dance was chosen as the second vice-chair of the environment committee. (Sarah Collins)

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INSTITUTIONAL
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EXTERNAL ACTION
ECONOMY - FINANCE - BUSINESS
COURT OF JUSTICE OF THE EU
NEWS BRIEFS
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