Spain’s budget majority promises political stability

Significance The minority Socialist Party (PSOE) - Unidas Podemos (UP) government needed the support of several left-wing and pro-independence parties to get the budget through. Its approval makes early elections unlikely and gives the government a better chance to shape the COVID-19 economic recovery and implement some of its 2019 electoral pledges. Impacts Spain’s poor record in absorbing EU funds suggests it will struggle to make the most of the EU recovery fund. The weakening of the UK currency will hurt Spanish exports to the United Kingdom, especially with fewer UK tourists coming to Spain. Greater political stability will enable Spain to pursue a more assertive foreign policy.

Author(s):  
Ananieva Elena

Prime Minister T. May has put forward the concept of "Global Britain". After the United Kingdom had left the EU, the concept was formalized under the government of Boris Johnson in the document “Integrated Review of Security, Defense, Development and Foreign Policy "Global Britain in a Competitive Age"”. The article presents an analysis of its goals, methods and practical implementation. Britain, realizing itself as a "middle power", intends to build a system of alliances to counter China and Russia, the latter designated as an ”acute direct threat” to the UK.


Subject Brexit and the UK constitution. Significance After Brexit, the United Kingdom will move from a protected constitutional system, established by EU treaties, to one dominated by the sovereignty of Parliament. Such an unprotected system is difficult to reconcile with the protection of rights and with devolution. Impacts There will likely be entrenched division over the prospect of a codified constitution and what it includes. The United Kingdom should remain in a close and strategic foreign-policy relationship with the EU. There will be pressure from free-market Conservative MPs to lower tariffs and deregulate personal and corporate tax to encourage business.


Significance Johnson's cabinet overhaul is the largest in decades, replacing 17 cabinet ministers from the previous government mostly with individuals who support Johnson’s hard-line stance on Brexit. Impacts Brussels could offer London a ‘Northern Ireland only’ backstop, but this will be rejected by the UK government. The government will likely pass legislation to protect EU citizens’ rights in the United Kingdom if there is a no-deal Brexit. The EU will only grant another extension if a deal is almost agreed, or if there is a UK general election or second Brexit referendum.


Subject Russia, the EU and United Kingdom after Brexit. Significance Russian leaders largely refrained from commenting on the UK referendum of June 23, in which voters chose to leave the EU ('Brexit'). Before and after the vote, President Vladimir Putin and other officials voiced anger at UK politicians who cited threats from Russia as reason not to abandon the EU. The outcome is causing market uncertainty, but longer-lasting economic impacts for Russia are not yet apparent. However, a divided and weaker EU fits well with Moscow's foreign policy aims in the region, allowing it to exert bilateral pressure. Impacts EU cohesion on foreign policy is likely to decline, constraining efforts to deal with challenges south and east of the bloc. Many senior Russian officials will watch the United Kingdom closely out of anxiety for their personal assets in the country. As EU members become reluctant to expand the union, Ukraine, Georgia and Moldova will find integration slower than hoped.


Significance The three parties successfully negotiated a coalition agreement with a strong emphasis on modernising Germany’s economy. Throughout the negotiations, the parties presented a public image of stability and harmony, yet several divisive issues will test the new government's stability and effectiveness. Impacts The composition of the new government will make it harder for Berlin to win approval for the EU-China Comprehensive Investment Agreement. Chancellor Olaf Scholz will seek to prioritise more unity at the EU level when it comes to foreign policy decision-making. The spread of the Omicron variant will slow economic recovery and potentially delay the transition to a greener economy.


Subject The package of reforms on a new EU-UK relationship. Significance The agreement between the United Kingdom and its EU partners sets the stage for the UK referendum on EU membership, which Prime Minister David Cameron has set for June 23. Cameron said he had negotiated new terms that would allow the United Kingdom to remain in the EU. Impacts The deal bolsters the campaign to remain in the EU, but the referendum outcome is still highly uncertain. The deal will only come into effect if the outcome is for remaining, forestalling a second referendum for better terms. If the outcome is for leaving, a new relationship with the EU would have to be negotiated during a two-year transition period. It would also probably lead to a second Scottish independence referendum and UK break-up.


Subject The impact of Brexit on the UK agricultural and food and drink sectors. Significance Agriculture and the food and drink sector will be among those industries most affected by Prime Minister Theresa May’s decision to pursue a ‘hard’ Brexit. It is uncertain to what extent domestic agricultural policies will replace the support and funding mechanisms of the EU. The food and drink sector will have to adjust to the possibility of future tariffs. Impacts Scottish independence would hit the drink sector, with Scotch whisky alone accounting for almost one-quarter of UK food and drink exports. The burgeoning UK wine industry could be damaged if the informal knowledge transfer from French wine experts slows down. The United Kingdom and the EU will need to cooperate on the issue of access arrangements for fishing.


Significance This followed a landmark speech on January 17 in which she added more clarity and detail to her previous stance on the United Kingdom’s departure from the EU. May indicated a willingness to leave the single market, strongly implied that the United Kingdom would not be part of the customs union in its current form and asserted that she would rather quit the EU with no permanent or transitional deal agreed than accept an arrangement which limited the United Kingdom’s future freedom of action. Impacts The government is likely to meet its preferred timetable for triggering Article 50 even if it has to obtain approval from parliament. The United Kingdom will probably lose its passporting rights, which allow UK-based banks to sell their products across the EEA. Paris and Frankfurt will probably benefit as banks may seek to move some of their staff out of London.


Subject France’s foreign policy. Significance Following several speeches by President Emmanuel Macron on France’s international ambitions and priorities, a new strategic review was published on October 11, updating the 2013 White Book on defence and security. Nonetheless, many questions remain around the implications of Macron’s new foreign policy agenda. Impacts Strategic bilateral relationships will be marked by toughness and pragmatism, as is the case in Macron’s personal relations with Trump. France’s position in the EU -- ambitious but often lonely -- and the Brexit negotiations will be a priority for the government. The 2019-24 military procurement programming law will allocate financial means and indicate which of Macron’s ambitions may be realistic. The modernisation of France's nuclear forces will put additional pressure on the defence budget.


Significance This comes after the Telegraph reported last week that Soros had donated 400,000 pounds to the group. There is an ongoing debate as to whether the United Kingdom will in fact leave the EU. Central to it is the question of whether the UK government can unilaterally revoke its decision to trigger Article 50 in March 2017. Impacts Voters would be less likely to support the revocation of Article 50 if the Council imposed conditions that made membership less attractive. Revoking Article 50 and remaining in the EU would reduce damage to the UK economy. If Article 50 is revocable, Eurosceptic governments could be tempted to use the prospect of triggering it as leverage in EU negotiations.


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