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EU and UK must push to get a Brexit deal over the line



As so often with Brexit negotiations, the two sides take one step forward and then take another back — as was demonstrated this week by the intervention of several EU member states worried that Michel Barnier was taking too many risks in pursuit of a deal.

France, Denmark and the Netherlands led the resistance, requesting that Mr Barnier, the EU’s chief Brexit negotiator, brief ambassadors on the progress of the talks after they became nervous that Ursula von der Leyen, president of the European Commission — perhaps in concert with Berlin — was pushing for a deal by the end of this week “whatever the cost”.

Time is now very tight, and much will depend on whether Mr Barnier brings positive news when he returns to Brussels this weekend that persuades the doubters that a thin deal is worth doing with the UK.

The same old sticking points have been endlessly elaborated these past six months, but there are now some signs of how far Mr Barnier has moved in order to get a deal, and which explain this week’s sharp tap on the brakes from some sceptical EU members.

One example is the apparent acceptance by Mr Barnier, according to EU diplomats familiar with the talks, that the UK will not have an “ex ante” state aid regulator — as the EU does in its own state aid regime — that can intervene in subsidies before they are handed out.

The UK government has always been adamant that given it is now an individual sovereign state, it no longer needs to mirror an EU state aid regime that was designed to ensure free and fair competition in a single market made up of 27 independent nation states. Canada, ministers are quick to point out, does not have an “ex ante” regulator. 

State aid has long been a sticking point in the talks because the EU is concerned that its industries could be undercut by UK subsidies and, without such a regulator, have no means by which to seek timely redress. An “ex post” system that allows complainants to seek redress after a distorting subsidy has been handed out risks the legal remedies coming long after the patient is past saving.

This is what worries EU member states, particularly those that trade intensely with the UK, and have to sell the deal to their own publics. As one EU official succinctly put it. “It’s one thing companies dying because of a pandemic; quite another because you’ve negotiated a rubbish trade deal with the UK.”

But this British refusal to mirror the EU’s “ex ante” system is no longer a deal-breaker, it seems — but only so long as member states do have sufficiently robust alternative routes to seek timely redress.

The focus is now on creating a satisfactory combination of what Mr Barnier in his debrief to EU ambassadors described as a combination of “definitions, principles and binding, workable and operational enforcement” to deliver a deal that still meets his mandate.

The EU has come a long way from demanding “dynamic alignment” on state aid, which explains the jitteriness of some member states, but also sets out a potential path to a deal based on pragmatism and focusing on “remedies” that would give EU member states the confidence to do a deal.

Those sceptical EU states still want non-regression on current social and environmental standards as a minimum floor and a nimble “cross-cutting” retaliatory dispute mechanism that allows an aggrieved party on either side to hit back swiftly in a sector where it hurts the other. 

All that late-night pizza is there to fuel the race to find a sufficiently robust blend of measures that will satisfy both sides in the respective core interests — the EU’s desire to constrain the UK as much as possible in exchange for “zero tariff, zero quota” access to its single market; the UK to minimise those constraints.

A very delicate balance remains to be struck. Sceptical member states fear that getting it wrong will lead to buyers’ remorse in the decades to come. But if both sides come off their ideological red lines, and focus entirely on remedies and outcomes, they should be able to get there. In any case, the “deal” will evolve over time.

Expect a successful result, if it comes this weekend as some expect, to elicit howls from ultras on both sides. Boris Johnson will have to face down the hardline Brexit caucus in his party, just as Ms von der Leyen may at some point have to isolate French-led opposition to a compromise that some in the EU may still feel breaches red lines.

But as one experienced negotiator puts it, to get there, the overriding focus now will have to be on getting over the line — there will be details that some are unsettled by and do not like — but they cannot get in the way of the overarching objective: to get a deal.

Brexit in numbers

As we tip-toe towards that trade deal, one area where Mr Johnson will be desperate to claim a “win” will be on fish — the bone of much contention during the talks, but surely never an issue that would scupper the deal if agreement was reached on the wider economic partnership.

The political sensitivity of this area was demonstrated this week when it was reported that Mr Barnier had told EU ambassadors that Britain had lowered its demand to reclaim 80 per cent of EU pre-Brexit fishing rights in UK waters. The news, swiftly denied by UK officials, led to accusations of a “Boris Johnson’s Brexit SELL OUT!” in the pro-Brexit tabloid press.

But to put those numbers in perspective, the value of EU fishing rights in UK waters is estimated at about £590m a year — a drop in the ocean when set against total EU-UK trade worth a total of more than £660bn. 

Most sensitive is the 6-12 mile zone where the small local boats fish, and are harder to compensate given they cannot go elsewhere, but here the numbers are even more tiddly. According to one internal EU estimate for Belgium, this 6-12 mile sector amounts to 150 boats that catch €5m a year.

And as the FT reported from the Devon fishing port of Brixham this week, even allowing for Mr Johnson’s political need for a “win” on fish, as the chart shows a balance will need to be struck between winning concessions on behalf of those who catch fish, and maintaining favourable market access terms for those who sell it.

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End of an era as Lionel Messi and FC Barcelona part company




Lionel Messi updates

Barcelona football club said on Thursday that Lionel Messi, widely regarded as one of the greatest of all players, is leaving because of “financial and structural obstacles” that it blamed on financial regulations imposed by La Liga, which runs the top two divisions in Spain, requiring the team to rein in its spending.

Messi, the frontman of FC Barcelona’s success for more than a decade, will be leaving a club where he has spent the entirety of his career, winning every leading trophy and personal accolade.

Messi and Barcelona had intended to sign a new contract on Thursday but ultimately the player and club were forced to separate, said Barcelona in a statement, adding that both sides “deeply regret” their split. La Liga declined to comment.

“Despite FC Barcelona and Lionel Messi having reached an agreement and the clear intention of both parties to sign a new contract today, this cannot happen because of financial and structural obstacles (Spanish Liga regulations),” Barcelona said. “As a result of this situation, Messi shall not be staying on at FC Barcelona. Both parties deeply regret that the wishes of the player and the club will ultimately not be fulfilled.”

Messi’s exit comes as Barcelona and rivals Real Madrid are at loggerheads with La Liga over the Spanish league’s plan to partner with private equity firm CVC Capital Partners, which plans to invest €2.7bn in the league, subject to clubs’ approval.

The exit of the superstar Argentina international, who earned a total of more than €555m between 2017 and 2021, according to Spanish newspaper El Mundo, underlines the financial pressures at Barcelona.

The Catalan club sunk to a net loss of almost €100m in the 2019-20 season, the first to be disrupted by the pandemic, as revenues of €855m fell short of the €1bn set in its budget. Its debt has soared north of €1bn. In June, the club approved a €525m debt refinancing.

On the pitch, Barca finished third in La Liga, its worst showing since 2008. It has not won the Uefa Champions League, Europe’s most prestigious club tournament, since 2015.

The decision comes just days after Barca president Joan Laporta said the club “have to make sure” Messi stays and that the process was “on the right track”. The president had also called for “greater flexibility” from La Liga.

Despite the long affiliation between Messi and Barcelona, the player last year told the club he wanted to leave but ultimately decided to stay on to avoid a legal dispute.

Messi’s departure comes a day after La Liga agreed a €2.7bn deal with US private equity group CVC Capital Partners to buy a minority stake in a new entity that would manage broadcast, sponsorship and digital rights for the league.

Barcelona and arch-rivals Real Madrid, which have been embroiled in a dispute with La Liga over plans for a breakaway European Super League, would stand to receive about €260m each from the deal with CVC.

The transaction was partly seen as a way to win over the support of Barcelona, which has been financially constrained by La Liga’s rules from making any high-profile acquisitions or renewal of contracts.

Real Madrid also lashed out at the CVC deal with CVC on Thursday, questioning its legality and accusing the Spanish league of negotiating the agreement without the club’s knowledge.

Barcelona followed up later on Thursday by joining Real in condemning La Liga’s planned partnership with the buyout firm. The club said: “FC Barcelona feels it is inappropriate to sign a half-century agreement given the uncertainties that always surround the football world. The terms of the contract that La Liga is describing condemn FC Barcelona’s future with regard to broadcasting rights.

“FC Barcelona wishes to express its surprise at an agreement driven by La Liga in which the teams’ opinions, including those of FC Barcelona, have not been taken into account.”

Spanish football clubs have yet to vote on the CVC agreement. Italy’s top football league, Serie A, turned down a similar agreement a few months ago.

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Europe targets adolescents for Covid jabs to curb Delta spread




Covid-19 vaccines updates

French President Emmanuel Macron, whose habitual garb in public is a dark suit and tie, switched this week to a black T-shirt to encourage the young to get vaccinated over the holidays. 

“Many of you have questions or are scared,” Macron said in one of several videos he posted on TikTok and Instagram from what seemed to be the presidential holiday residence in southern France. “So I’ve decided to answer your questions directly. Go ahead.”

He has also posted short videos to correct misconceptions about the vaccines and France’s supposedly “freedom-killing” insistence on health passports to access bars and other public places. “Vaccination saves lives, the virus kills — it’s as simple as that,” he said in one. 

Macron may be one of the EU’s more visible leaders to urge the young to be jabbed, but he is not alone. 

On Wednesday, the UK belatedly extended its Covid-19 vaccination programme to 16- and 17-year-olds. But across continental Europe, governments from Scandinavia to the Mediterranean have already been targeting as yet unvaccinated teenagers to fight rising infections and hospitalisations driven by the highly infectious Delta variant of the virus.

This vaccination drive, which anticipates the new school term starting in September, is partly why Europe has already overtaken the US in terms of vaccination rates per 100 people and, on current projections, will soon overtake the UK too.

In France, health ministry data show that more than 40 per cent of those aged between 12 and 17 have already received one jab, and nearly 20 per cent are fully vaccinated. (In the vulnerable age group between 70 and 80, full vaccination coverage is close to 90 per cent.) 

Chart showing that Europe and the US have already vaccinated millions of teens, leaving the UK far behind

Most Nordic countries have also started to vaccinate teenagers and, by the end of July, almost one-third of 12-15 year-olds in Denmark had received at least one jab. “We need the immunity of the population, especially before a winter season,” Soren Brostrom, head of the Danish health authority, said in June when announcing the decision.

Much the same is true in Germany, where more than 900,000 adolescents or 21 per cent of those aged between 12 and 17, have received at least one jab, and more than 10 per cent are fully vaccinated. 

Individual German parents and children already have had the legal right to get vaccinated since June, and several states had begun limited offerings of the jabs to 12-17-year-olds.

But health minister Jens Spahn announced on Monday plans to offer more jabs to youngsters before school begins. “This is absolutely not about applying pressure,” he said on RBB radio. “It is about giving those who want to be vaccinated, including children and adolescents, the opportunity.”

The next step in Europe will be to vaccinate young children, especially as Delta strain infections seem to be rising fastest among the unvaccinated young. In a recent UK study, almost a third of the positive Delta variant tests came from people aged 5 to 17.

“It’s clear that children under 12 will become the main reservoir of infections once a large share of the over-12 population is vaccinated,” said Antoine Flahault, director of the Institute of Global Health at the University of Geneva. 

“It seems reasonable today to suppose that we’ll only be able to finish with this pandemic by vaccinating a very large share of the population, perhaps 90-95 per cent, by including children,” he said, noting that the jabs would have to be supplemented by other measures such as continued border controls as well.

In Spain, which has already overtaken the UK and the US in vaccinating its population, the government says its inoculation drive must now focus on younger people. 

Prime Minister Pedro Sánchez has declared that the country, where 59 per cent are fully vaccinated, deserves “the gold medal for vaccinations”. This week he said the country was on course to fully vaccinate 70 per cent of its population before the end of August.

But officials increasingly recognise that will not be enough to provide “herd immunity”. Infection rates in Spain — now in its fifth coronavirus wave — remain extremely high, with cases particularly prevalent among people in the 12-19 and 20-29 age groups; in the former, the full vaccination rate is less than 4 per cent.

High infection rates among these groups — with a 14-day rate of above 1,300 per 100,000 people — have spilled over to older groups. The 14-day rate among the over-eighties has been close to 300, even though according to official figures that age group is 100 per cent vaccinated.

“What is happening in Spain shows quite simply that the vaccinations do not have the same efficiency that was indicated in the trials . . . It is going to be more difficult to reach herd immunity,” said Rafael Bengoa, a former Basque region minister for health and director at the World Health Organization. 

He said the Delta variant — now accounting for more than 75 per cent of Spanish cases — was a key factor blunting vaccines’ impact and argued that the necessary level of protection would now probably require full vaccination for closer to 90 per cent of the overall population.

“We are only going to achieve this when we have revaccinated older people who are losing protection relatively quickly and when we have vaccinated young people and children,” he said. “The end is further away than we predicted.”

Additional reporting by Richard Milne in Oslo

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Global house prices: Raising the roof




Global house prices: Raising the roof

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