Good morning and welcome to Europe Express.
The Franco-British fishing row may be somewhat calming down, with the UK’s Brexit minister David Frost in Paris today to speak to officials there before heading up to Brussels for a new round of talks on the Northern Ireland protocol. We’ll dig into the meeting and what’s expected.
But first, we’ll bring you the view of the City of London’s senior official in charge of financial services and her concerns that the eroding relations may have a negative impact on the European Commission’s pending decisions to grant British financial institutions so-called “equivalence” enabling them to operate on the continent.
And with the French elections fast approaching, we’ll explore why the government went on a diplomatic offensive against a social media campaign targeting hate speech which depicted women wearing a headscarf.
Financial anxiety
Among the many industries anxiously watching the rapid deterioration in the EU-UK relationship is financial services, writes Sam Fleming in Brussels.
Finance reaped a famously meagre harvest from the Trade and Cooperation Agreement forged late last year, winning a fleeting chapter in the trade deal but nothing that remotely compares with the guaranteed single market access that UK financial services companies used to enjoy.
The irony of the negotiations leading up to the deal in December 2020 was not lost on the City of London: the two sides spent far more time haggling over fisheries than finance, even though there were only 12,000 or so fishermen in the UK as of 2019 and the sector accounts for the tiniest of fractions of the country’s economic output.
Since then the paucity of provision for financial services has only been further underlined as the EU refrains from granting “equivalence” or market access decisions to key segments of the UK sector.
The broader EU-UK relationship is on track to get considerably worse.
Lord David Frost, the UK’s Brexit minister, has been openly preparing the ground for triggering Article 16 of the Protocol to the UK’s withdrawal agreement, in an attempt to suspend large parts of the trading arrangements between Great Britain and Northern Ireland.
EU member states are preparing a hard-hitting retaliation if the UK goes down that route, raising fears of major disruptions to economic relations between the two sides.
Other parts of the UK and EU economy may well get much harder hit than financial services in such a scenario, given how thin the financial services sections of the TCA already are.
But Catherine McGuinness, head of the City of London Corporation’s policy and resources committee, which oversees the financial district, told Europe Express on a visit to Brussels last week that she is worried by what she sees.
“It gives us cause for concern that the political temperature is rising, because we ought to be forging a new, positive relationship with our closest neighbours and trading partners,” she said, warning against triggering Article 16.
The EU and UK could, for example, be engaging in the closest possible regulatory dialogue given how deeply integrated their financial sectors are, but instead a planned memorandum of understanding on regulatory co-operation remains unsigned — an acknowledged casualty of the ever more cantankerous relations between the two sides. The prospect of that MoU getting signed seems ever more remote.
The most urgent question facing financial services is whether the European Commission will extend a licence that allows European banks to clear deals worth billions in London until the middle of next year. Here at least bankers are more sanguine.
Mairead McGuinness, EU financial services commissioner, told the FT last month that the commission would avoid market instability or any “cliff edge”, in words that suggested to many in the industry that an extension could be forthcoming.
McGuinness insisted in that interview that the bloc was not seeking to embroil financial services in the wider dispute over Northern Ireland and the UK withdrawal agreement, saying Brussels was not using financial services “as a reaction”.
“But then,” the commissioner added, “we don’t exactly know what the UK are going to do next.”
Chart du jour: Climate donors
In 2009, rich nations promised they would send at least $100bn a year in climate finance to poorer countries by 2020. But last week, on the eve of COP26, donor countries admitted they missed that target in 2020. Now they expect to reach it in 2022 or 2023, years later than planned. (More here)
Talking fish
The eyes of many French fishermen will turn inland to Paris today as ministers meet for the first time to tackle an Anglo-French fishing dispute, writes Andy Bounds in Brussels. (Clément Beaune, France’s minister for European affairs, is hosting Lord David Frost, the UK’s Brexit minister.)
Meanwhile, a Scottish fishing vessel seized last week by French gendarmes for suspected illegal fishing and sent to Le Havre was released by a judge yesterday. Paris said the scallop dredger did not have a licence. The court ruled that the boat could leave and not have to pay a deposit.
Seizing the vessel was part of France’s retaliation for what it believed was the UK unfairly denying French boats access to its waters under the Brexit trade deal. The Trade and Cooperation Agreement says French fishermen must prove they fished in those waters before or during 2016, when the Brexit referendum took place.
France threatened increased checks on British freight and a ban on its boats landing seafood at French ports last week, only to suspend action once talks began.
The European Commission is acting as intermediary, having already played a role sifting skippers’ applications for a licence. Last week it convinced Paris to drop 17 of the 46 applications to fish in the waters between six and 12 nautical miles off the UK coast.
Beaune, who was leading the charge last week, has since toned down his rhetoric but says the UK and Jersey have rejected almost half the boats that applied.
London says it has issued permits to almost 1,700 EU vessels, 98 per cent of all applications, since December 31.
One thing it would not do, it said, was change the requirements needed to gain a licence. “We remain confident that we are enforcing the rules as set out,” said a UK government spokesperson. “We have taken a number of steps to assist the French fishing fleet in providing the necessary evidence.”
UK diplomats said they had even purchased commercial data to try to validate vessels’ claims they were in UK waters.
Fourteen boats are still seeking a licence for the six to 12-mile zone, after 17 withdrew over lack of evidence.
The longer talks go on the more it takes the sting from the issue, with the hope that tensions will ease.
Bipartisan cancel culture
Moral panics about “cancel culture” are usually directed at leftwing social justice activists and stirred up by Europe’s populist hard right. In some parts of the EU, however, cancel culture is more of a bipartisan exercise, writes Mehreen Khan in Brussels.
Voices from both the EU’s nativist hard right and the left-leaning liberal camp rejoiced yesterday when the Strasbourg-based Council of Europe removed a social media video campaigning against hate speech after political uproar in France.
The 27-second video shows women with head coverings and without under slogans including “beauty is in diversity as freedom is in hijab”.
This campaign of the @CoE_fr promoting freedom and tolerance has been withdrawn following pressure from the Macron government. Let’s spread the word for an inclusive, fair and open Europe towards the world by sharing this campaign.⤵️ pic.twitter.com/cAkArFzeYF
— CCIE (@CCIEurope) November 3, 2021
The representation of the hijab sparked online fury from France’ far-right, left and liberals for promoting the headscarf. On Tuesday, French government minister Sarah El Haïry told LCI television that the government had used its “diplomatic channels” to request the video be taken down.
“It’s a campaign that shocked me enormously. We want a total withdrawal and the non-dissemination of this campaign neither on the site nor on social networks,” El Haïry told French radio yesterday.
The Council of Europe (not to be confused with the EU’s council of ministers or the European Council comprising of the bloc’s heads of state and government) calls itself Europe’s leading human rights organisation whose members include the EU and 20 other countries. Yesterday, the body said it removed the video “while we reflect on a better presentation of this project”.
“The tweets reflected statements made by individual participants in one of the project workshops, and do not represent the views of the Council of Europe or its secretary-general,” said the Council of Europe.
When asked directly about the French minister’s comments, the organisation declined to comment.
The fury over the representation of the hijab fits a broader pattern of French government complaints. Earlier this year, interior minister Gérald Darmanin unsuccessfully demanded the European Commission remove funding from a women’s rights charity in Grenoble — some of whom wear the headscarf — for “promoting” sharia law. Emmanuel Macron’s ruling En Marche also banned a woman from running for the party in May because she wore the headscarf.
“Women have the right to freedom of expression and religion, including the right to choose what they want to wear including the right to choose to wear a headscarf”, said Esther Major from human rights group Amnesty.
“The controversy around this campaign, which aimed to combat the stigma and hate speech which some women suffer, perhaps goes to show just how badly such campaigns are needed.”
What to watch today
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COP26 continues in Glasgow
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UK Brexit minister David Frost meets French Europe minister Clément Beaune
Notable, Quotable
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Poland row-back: Warsaw is planning a further radical overhaul of its Supreme Court and other parts of its judicial system after being told off by the EU top court and ordered to pay €1m a day for non-compliance with its orders.
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Benelux restrictions: The Dutch government has reintroduced mask-wearing in public and vaccine certificates, as part of its effort to curb the fastest rate of new infections since July. The move comes in the wake of new measures being introduced in Belgium.
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Back to black: Lufthansa exceeded expectations yesterday and posted a quarterly profit for the first time since the pandemic, as post-pandemic travel has been picking up again. In the previous quarter, the airline booked a loss of more than €950m.
Tech & Politics Forum 2021
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