The Weekly Vulcan View | Analysis of Latest EU Developments May 20 – 24

Key Events This Week

May announces resignation setting off leadership contest
Theresa May ended months of speculation about her leadership this morning as she gave an emotional statement confirming she would resign as Leader of the Conservative Party on June 7th. She will remain as Prime Minister until a new successor is chosen by Conservative party members with the expectation that over a dozen candidates may enter the race.

The Prime Minister’s fate was sealed this week after a bruising rejection from her own MPs and ministers as she sought to make a final attempt to pass her Withdrawal Agreement. The Prime Minister’s ‘bold new offer’ would give MPs a vote on a second referendum, a temporary customs union and proposals to quell concerns over the Irish backstop. However, the ink was barely dry on the Prime Minister’s revised deal when a host of her own MPs, many of whom had reluctantly supported her third meaningful deal, one by one ridiculed her latest move.

The groundswell of anger within the Conservative party was evident on Wednesday when multiple cabinet ministers sought private meetings with the Prime Minister in a bid to derail her plan to legislate for her new deal. However, in a move which signalled the perilous position of her premiership, she refused to meet with her cabinet colleagues.

The crisis facing the Prime Minister reached a new level on Wednesday night after the Leader of the House of Commons resigned from the cabinet. After Andrea Leadsom’s decision, which is the 36thministerial resignation under Theresa May’s leadership, the writing was on the wall for No. 10. Downing Street eventually ceded to pressure from MPs on Thursday when it announced it would not go ahead with publishing the Withdrawal Agreement Bill. All eyes will be focused over the coming days on the runners and riders who will seek to replace Theresa May, with Boris Johnson, Jeremy Hunt, Dominic Raab and Michael Gove expected to emerge as the main contenders.

 

Millions head to the polls in EU elections
More than 400 million European citizens are eligible to head to the polls this week in an election which, by all indications, is set to significantly impact the trajectory of EU politics and policy over the next five years. Voters in the Netherlands and the UK kicked off the election on Thursday with voters in Ireland and the Czech Republic following suit today. However, the counting of votes and the release of official results cannot commence until Sunday evening at which point all 28 member states will have voted on their MEPs for the next mandate.

Opinion polls throughout the campaign point to a significant shift in favour of Eurosceptic, anti-immigrant and nationalist parties at the expense of the grand coalition of centre left and centre right blocs that have set the direction of EU policy over the past five years.

Results in the UK, Hungary, France, Poland and Italy will be closely watched as the key battlegrounds in determining the true strength of the Eurosceptic wave. The latest opinion polls suggest Eurosceptic and nationalist parties will win a third of the 751 seats which would result in a highly fragmented parliament. Following the results, which will flow in on Sunday and will be digested early next week, attention will immediately turn to negotiations over the make-up of the next coalition in the European Parliament which will have significant influence over the make-up of the next European Commission too. The informal ‘horse-trading’ amongst the political players will begin with a dinner between EU Heads of State and Government on Tuesday next week.

 

Huawei Dropped by Google
Google has removed Huawei from the Android partner programme, suggesting that the latter will no longer have access to its android software, proprietary apps and services. As a result of the move, which follows on from a recent blacklisting of the company by the US government, Huawei will likely expedite the development of its own operating system. In the UK, EE and Vodafone quickly followed suit in cutting ties with Huawei, along with British chip designer ARM.

Under US rules the sale or transfer of American technology to a company or person(s) on the ‘entity list’ requires a license issued by the Department of Commerce. US authorities can deny such licences on the grounds that the sale or transfer of such technology will harm US national security or foreign policy interests.

The US and its allies have long been suspicious of Huawei, claiming to have intelligence stating Huawei has received funding from the Chinese military and intelligence services. Huawei denies these claims and insists it is a private company.

The European Commission made recommendations in March 2019 that at national level each Member State complete a national risk assessment of 5G network infrastructures by the end of June 2019. This includes assessment of the risks associated with engaging with suppliers deemed a threat to national security interests. The European Commission has also recommended that Member States should exchange information with each other and with the support of the Commission and the European Agency for Cybersecurity (ENISA), will complete a coordinated risk assessment by 1 October 2019. Huawei’s involvement in 5G development throughout the EU will now be further in doubt after the decision by US authorities.

Compliments of Vulcan Consulting, a member of the EACCNY