Newsletter 10/07/23

Dear Subscribers,

This week, the UK signed a bilateral ‘strategic partnership’ with Poland. As well as reaffirming a commitment to NATO, the agreement promises to support Ukraine, Georgia, and Moldova against threats from Russia. Poland has moved troops to its eastern border over concerns about the presence of Wagner Group fighters in Belarus. It is quickly becoming a leading power in European defence, with military spending set to reach 4% of GDP by 2025.

A stronger alliance with a stronger ally

Meanwhile, President Biden is reportedly pushing for Ursula von der Leyen to be the next NATO chief, after snubbing UK Defence Secretary Ben Wallace. Those who have forgotten her unimpressive record as German Defence Secretary can read about it here.

Supermarket chiefs have said they will not use the so-called ‘green-lane’ system for sending goods to Northern Ireland at least not in full or by October . The system is the centrepiece of the Windsor Framework, which they said will not solve the problems faced by businesses trading in the UK on both sides of the Irish Sea. As predicted by Brexiteers, special labelling requirements are proving costly.

President Orban of Hungary has said his country will refuse to implement new EU migration laws which would see countries fined for failing below a migration quota. The Polish government has said it intends to hold a referendum on the new laws at the same time as its general election this Autumn. Dutch PM Mark Rutte handed his resignation to the King of the Netherlands after his government was undone by disagreements over migration.

Meanwhile, in the UK, a group of 25 Tory MPs, calling themselves the ‘New Conservatives’, published a 10-point plan to reduce migration. This week the government has suffered a string of defeats in the Lords as its Illegal Migration Bill passes through the House.

The EU laws that Nigel Farage blamed for his banking woes and which commentators have criticised for allowing banks to penalise people for their political affiliations are to be scrapped under plans being drawn up by the Treasury.

Media

Julian Jessop writes for The Telegraph about the UK joining the EU’s Horizon project. You can read the full article here.

Gwythian Prins writes for The Telegraph about the EU’s attempt to supplant NATO. You can read the full article here.

Blog

EU on the march

Protecting UK National Security from PESCO: the EU’s Most Daring Hostile Post-Brexit Ploy by Gwythian Prins

Gwythian Prins views PESCO as the EU’s Most Daring Hostile Post-Brexit Ploy. It looks like a military alliance. It sounds like a military alliance. It is a military alliance. And as such it is a threat to NATO… PESCO/EUDU’s formal goal is swiftly to acquire equal legal purchase over members and collaborating ‘Third Countries’, to acquire equal scale and status with NATO and then …to effect a reverse takeover of NATO by the EU: all this in time of war.

PESCO (Permanent Structured Cooperation) with an emphasis on the P, is evolving into a EU Defence Union that is now positioning for a reverse take-over of NATO. Nothing could be more dangerous to UK national security, to continental European security and to the global Free World, in time of grey and hot war.

Ursula’s running rings around Joe by Adrian Hill

Germany’s strategic Perspective 2040 plan aims to make European defence independent of US and NATO. If this happens the UK needs to build new global alliances with the US involving Japan, South Korea and the Commonwealth.

In November 2017 Der Spiegel published leaks from the German Army’s latest planning paper – Strategic Perspective 2040. The plan was a watershed. Not since the Second World War has the German Army contemplated a future outside NATO’s command structure. The author, Katrin Suder, worked for McKinsey. The core message was that Europe cannot rely on the Americans… Ursula von der Leyen was the German Defence Minister who commissioned that plan and adopted it as Germany’s strategy. Far too many British politicians fail to read the fine print and grasp the detail in the diet fed them by Whitehall. Ursula’s running rings round them as well as round Joe Biden.

Trade with EU doing fine by Catherine McBride

Seven years after the vote to Leave the EU, UK trade is mostly unchanged. Possibly because EU membership didn’t really help the UK export to the EU, but also because the Department for Business and Trade has embraced the freedoms offered by Brexit and rolled over, improved or negotiated from scratch over 80 trade agreements. Incredibly, it is domestic trade between Northern Ireland and Great Britain that has become more difficult since Brexit, not trade with the EU.

On the seventh anniversary of the Brexit referendum on 23rd June, the usual suspects claimed that Brexit has destroyed UK trade, put up trade barriers with our biggest trading partner and that the UK has swapped trading with the EU in order to trade with Australia or with other CPTPP countries. Nothing could be further from the truth. UK trade is doing just fine. For the most part it is business as usual since Brexit.

Key Points

Tobias Ellwood MP has once again called for the UK joining the Single Market, citing economic stagnation and (remarkably) the war in Ukraine as reasons. Briefings have rebutted his arguments before, but they still find favour in the media. There are three basic points to be made:

Single Market members’ economies are faring no better than the UK’s.

Since 2016, Britain, in terms of GDP, has not been an outlier amongst other major economies, performing better than some and not as well as others. In the last year, GDP growth in Britain has been consistently higher than in Germany, and marginally lower than in France. European countries also face persistent inflation, albeit at lower levels on average than the UK (though Sweden and Poland still lag behind).

The Single Market is not a “free trade area”.

Membership of the Single Market did not come cheap. Consumers pay twice – firstly through taxpayer-funded contributions to the EU budget (our last net contribution as an EU member was some £12.6 billion, as a non-EU member Norway continues to pay almost as much per capita as the UK did), secondly through high tariffs on goods from non-EU countries, protecting EU industries from international competition. Tariff-free trade with similar economies encourages businesses to chase the cheapest labour without increasing overall efficiency, while imposing tariffs on imports from more exotic economies limits the increases in efficiency that make free trade good for the wealth of the nation.

The Single Market is not just about trade.

Membership of the Single Market requires a commitment to free movement of people from other member countries, making it impossible for the UK to limit immigration. It also requires a commitment to EU regulations which are interpreted and enforced by an EU court. As a non-EU member state, the UK would have no say over how these regulations are made and would have no power to change them once they were. The only beneficiaries of this loss of sovereignty (the only ones in the UK, that is) appear to be politicians – having surrendered control over the UK economy they could at least say in all honesty that they were no longer responsible for its performance.

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