The weekly Vulcan View for the 9th to the 13th of April featuring analysis of the latest EU developments

EAST-WEST RELATIONS

Tensions rise as West contemplates Syria military intervention after suspected chemical weapon attacks
With the relationship between the West and Russia having already plummeted to its lowest point in decades following allegations of poisoning, diplomatic expulsions and election interference, it reached crisis point over the last few days when a suspected chemical weapons attack by the Syrian president Bashar Hafez al-Assad on the city of Douma left western leaders considering military action.  
 
Dozens were killed last Saturday when a reported poison gas attack was carried out by the Syrian government in the rebel holdout of Douma on the outskirts of Damascus. This prompted the US, French and British governments calling for emergency meetings of the UN security council and scaling up preparations for military intervention in the country. Assad’s long term ally, Russia, dismissed any attribution of the chemical attack to the Syrian regime and blocked UN resolutions to establish an independent intervention.
 
Moscow’s continued backing and support of Assad led to days of intense discussions between the US, French and UK governments of whether or not to intervene militarily. As ever, President Trump took to twitter to vent his anger, warning Russia on Wednesday to ‘’get ready’’ for a missile attack on Syria before backtracking yesterday when he tweeted “Never said when an attack on Syria would take place. Could be very soon or not so soon at all!”. The White House quickly intervened making clear that all military options were being weighed up but no final decisions had been made.
 
As news broke yesterday that French president Emmanuel Macron had proof that the chemical weapons were used by the Syrian regime, it marked the passing of clear red line for the leader who once said that any use of chemical weapons would prompt an ‘’immediate response from France’’. Further support was provided by British Prime Minister Theresa May who called an emergency cabinet meeting in order to consider military action without the need of Parliamentary approval.

Discussions between Washington, London and Paris continued throughout last night and today. While no decision had been made, a Downing Street spokesperson confirmed that the Western powers ”agreed it was vital that the use of chemical weapons did not go unchallenged”. Despite the escalation of words, there appears no sign of Russia backing down from its support of Assad meaning the Syria crisis and the deterioration of the Russia-west relationship is set to roll on. 
 
 
DATA BREACH SCANDAL 
 
Old data breaches liable for new EU fines under incoming GDPR laws 
Companies operating in the EU will face wide-ranging new data regulations from the 25th of May onwards when the bloc’s new general data protection regulation (GDPR) formally comes into force. Under the incoming regulation, companies will have to gain clear consent from users about how they use their information and will have to alert the relevant data protection authority of any data breaches.
 
However, it will not just be new data breaches that occur once GDPR is in force that could be subject to massive fines. A European Commission official this week confirmed that data breaches that occur before the 25th of May, but may have been kept in the dark until after, will also be liable for such a fine. Once source within the Commission revealed that if ‘’this behaviour [of keep a data breach secret] would continue –even if it started a long time ago and continues – and is discovered after the GDPR comes into play, then it’s relevant’’.
 
This could lead to companies undertaking a thorough review of their data process system and admitting to previous past breaches in order to avoid the extremely heavy fines. With the Cambridge Analytica data breach still making headlines, along with the revelation that Uber attempted to cover up a data infringement last November, this warning will be carefully noted by companies across the EU.
 
 
BREXIT
 
British business federation calls for regulatory convergence with EU rules post-Brexit
One of Britain’s largest business lobbying group, the CBI, has warned that the domestic economy will face widespread losses if the UK moves too far away from EU regulation once it leaves the bloc. Speaking at the launch of its business survey publication entitled ‘’Smooth Operation’’ which sought the opinion from thousands of British companies of what it would Brexit outcome it favours, the head of the CBI Carolyn Fairbairn highlighted that business opportunities from future regulatory freedom was ‘’limited’’.
 
The research behind the CBI survey revealed that in 18 of the 23 sectors questioned, companies largely favoured continued convergence post-Brexit with regulations that were either close or identical to the rest of the EU. Asked at launch of the publication whether there was any kind of enthusiasm for breaking free from Brussels regulation, Ms. Fairbairn said that ‘’there are trade-offs between control and access. Our ambition is simple: to make sure that kind of ideological debate can be properly informed’’.
 
The in-depth survey totalling well over 100 pages makes a series of over-arching calls, including that the opportunities presented by Brexit are clearly outweighed by the potential costs and that while international rules are becoming increasingly important to businesses, a continued close regulatory relationship with Brussels is critical for decades to come. Companies both across the UK and the European continent will hope that Downing Street will heed  the words of the CBI and maintain close convergence.
 
UK departures could help deliver EU-India trade deal 
Pro-brexiters and leave campaigners have often touted the idea that the UK’s departure from the EU presents a lucrative opportunity to increase its trading ties among members of its old commonwealth. However, it appears that Brexit may in fact grant Brussels the chance to finally secure a trade deal with India, once the crown jewel of Britain’s vast global empire. London had long been a major trading obstacle to any kind of trade deal and negotiations between the EU and India five years ago were scuppered because of immigration and Scotch whisky.
 
A new round of talks between negotiators took place yesterday in Brussels and both sides will hope that with the UK no longer in the picture further progress will be achieved. Previous talks ran into the ground over Britain’s demand that India drop its enormous tariffs on Scotch whisky and its reluctance to move to a more liberal visa regime for Indian workers as it feared it would lead to another wave of immigration into the UK.
 
Despite Britain’s departure, obstacles still remain for any kind of trade deal to be reached. Secretary-general of the Europe-India Chamber of Commerce Sunil Prasad noted that tariffs on cars and dairy products will continue to prove difficult but acknowledged that Brexit has created a new sense of urgency in New Delhi to secure a trade deal with the EU. Meanwhile the bloc’s major players, France and Germany, have already begun to court Indian businesses, with announcements of huge investment deals and calls that the two countries can become India’s new strategic anchor in the EU.
 
 
HUNGARY 
 
Orban’s resounding general election win rings alarm bells in Brussels 
The controversial Hungarian prime minister Victor Orban secured a third successive election victory last weekend as his nationalist Fidesz party clinched a dominating 49% of the vote that should allow Mr. Orban to lead a massive two-thirds majority in parliament.  Riding on an anti-immigrant and Eurosceptic wave, Mr. Orban will be able to continue his strong-man campaign against opposition parties and independent media.
 
His election campaign had focused heavily on fears of mass immigration into the country and its threat to the traditional Hungarian way of life. Lambasting western governments and the EU institutions, the Prime Minister portrayed himself as the last defender of Christian Europe and the liberal tendencies that were sweeping the bloc. With strong support from pro-government media outlets that are controlled by Mr. Orban’s allies, his Fidez party is expected to secure 133 of the 199 seats in parliament.
 
While his election was warmly welcomed by fellow nationalistic eastern-European governments such as Poland, his victory marks a major challenge for the EU. Brussels has become increasingly alarmed in recent years as Budapest has slowly dismantled it’s country’s checks and balances and its judicial independence, while also refusing to take in any refugees as part of the EU’s refugee relocation scheme. Regardless of the Prime Minister’s clear disregard of EU laws and its liberal democratic principles, it seems clear that Brussels has no stomach to challenge Mr. Orban and his latest win will only embolden his crusade even further.
 

Dates ahead: Monday 16th April – Sunday 22nd April
Mon 16th – Wed 18th April: European Parliament Plenary Session (Strasbourg)
Wednesday 18th April: EBA Meeting
 
And Beyond 
Mon 23rd – Thurs 26th April: European Parliament Committee meetings
Tuesday 24th April: EU General Affairs Council Meeting
Thursday 26th April: ECB Monetary Policy Committee meetings