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UK-EU relations are in for a bumpy ride with Frost in the driving seat

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Welcome back. Do you work in an industry that has been affected by the UK’s departure from the EU single market and customs union? If so, how is the change hurting — or even benefiting — you and your business? Please keep your feedback coming to brexitbrief@ft.com.

Just when you thought it was safe to enter Whitehall, Wednesday’s Downing Street dust-up leading to the appointment of David Frost to the cabinet felt like a lurch backwards into the kind of court drama that was supposed to have ended with the departure of Dominic Cummings and friends.

There were furious denials that Frost had threatened to resign to win his seat at the top table along with the chairmanship of the joint partnership council governing the post-Brexit trade deal, but the fact that Michael Gove had been appointed “interim chair” only two days previously made it obvious that these moves were happening hastily.

This fight, by several accounts, had been brewing for a while as Dominic Raab’s foreign office made the case around Whitehall for the bilateral EU-UK relations to be repatriated to his department, but ultimately that was always a forlorn hope. Relations with Europe have effectively been run out of the centre long before even Brexit came along.

On the upside, the Frost appointment does at least clarify where power resides on EU-UK relations. He clearly has the ear of the prime minister and by simultaneously handing Frost control of the Northern Ireland protocol implementation, potential rivalry and confusion with Gove — who previously controlled that element of the deal — is also avoided. 

And for civil servants caught up in the middle of all this — many who well recall the mess created by the rival power centres of Downing Street and the ill-conceived Department for Exiting the European Union — the clarity in reporting lines should be helpful at an operational level. 

Frost’s elevation to the cabinet is also for the best. For too long Frost — a former Foreign Office official, turned Scotch whisky lobbyist and latterly political special adviser — has existed in a political grey zone. As Brexit chief negotiator, he was allowed to make policy speeches in Brussels, and yet was never formally accountable to parliament. That now ends.

But all that said, it is difficult to see Frost’s elevation as a move that will mollify relations between the EU and the UK, which — thanks to mistakes on both sides over vaccines and the implementation of the Northern Irish protocol — have got off to a tetchy start.

The problem is that Frost’s modus operandi with the EU has always been confrontation. He seems genuinely to believe that this is the best way to extract results and officials with close experience of working with Frost say he’s looking to “keep it confrontational”.

In 2019, during the negotiations over the Northern Irish protocol, officials on both sides said it was Frost who advised that taking a tough line would get the EU to force Ireland to accept the creation of a technological north-south trade border in Ireland. 

He was wrong, but ultimately that misjudgement was overtaken by the hasty creation of the Northern Ireland “front stop” that left Northern Ireland following the customs rules of a foreign trading bloc, but opened the door to the political triumph of Boris Johnson’s 80-seat majority in December 2019. 

Having won that majority to “Get Brexit Done”, there was then a second moment in early 2020 when the UK could have taken a less confrontational path. There was an option to extend the transition period, and then to seek the kind of mobility packages and regulatory alignments on chemical and medicine regulation that would have addressed many of the problems that industries and service professionals are now complaining about. 

But again, the Frost-Johnson approach was headlong confrontation — threatening to renege on sections of the Northern Irish protocol and then signing a “Canada-style” trade and co-operation agreement (TCA) that from the outset prioritised sovereignty over market access.

Having done that deal, these first few weeks of 2021 provided a third pivot-point at which the Johnson government could have “moved on”, focusing its energies on the domestic levelling-up agenda and — as the EU ambassador the UK João Vale de Almeida put it this week — worked to embrace “life after Brexit”.

But given all that recent history, it would take a supreme optimist to read Frost’s appointment as a step in that direction. Instead it seems like another triggering of the Conservative party’s EU fight-reflex that has driven the Brexit process ever since Johnson ousted Theresa May. 

To what strategic end remains unclear. Politically, confrontation might play well on the Tory backbenches — not giving full diplomatic recognition to the EU ambassador, for example — but the next year is going to be about real-world implementation of Brexit.

The first six weeks of this deal have generated a whirlwind of complaints as business discovers fully what it means — for product distributors, food exporters, SMEs and professional services — all of which are urging the government to work with the EU to better implement the TCA, limited in scope though it be.

In many ways — as Lord Hill observes in our long read this week on the future of EU-UK relations — confrontation is in-built in the EU-UK relationship, which creates a succession of pressure points by which Brussels can continue to exert its leverage.

In almost any scenario this was going to be tough, but it is difficult to see how confrontation helps address complaints from UK business. Pressure will only grow as pre-Brexit stockpiles expire and the UK starts to implement its own border controls in July, which will affect UK importers and exporters. 

Add to that the coming unemployment surge as the Covid-19 furlough scheme expires and the minister charged with running the EU-UK relationship (that covers 48 per cent of total UK trade, lest we forget) is going to find himself in the operational, as well as ideological, cockpit of Brexit. I do not forecast a smooth ride.

Brexit in numbers

France-Ireland freight routes map

There was a time when Brexit just meant “Brexit”. Slowly but surely, however, a picture is emerging about what Brexit does actually mean, and how it is shifting EU-UK trade patterns.

With the usual caveats about this being early days, some data from an industry source on how Irish businesses are cutting out the UK “land bridge” by shipping direct from Ireland to the EU to avoid customs hold-ups is remarkable.

Fleet-footed shipping lines such as Stena have responded by redirecting capacity into new routes, like Dublin-Cherbourg, while boosting other routes, including by redirecting one ship destined for the Liverpool-Belfast route to work Rosslare-Cherbourg instead. Irish Ferries did something similar.

Roll-on, roll-off freight movements between Ireland and the continent this January have increased more than threefold (329 per cent) since last January. Even off a low base, that is a startling number.

Conversely, movements from the Republic of Ireland ports to Great Britain ports (Holyhead, Fishguard, Pembroke) are down 45 per cent — levels that are ringing alarm bells in Wales and among affected shipping lines. 

Last week Nick McCullough, managing director of the ferry company DFDS Northern Ireland, told MPs on the Northern Ireland affairs select committee that in a low-margin business those kinds of drop-offs could not be sustained for long.

Of course, while shipping companies can move their ships (as Stena did) ports themselves cannot up sticks and chase the business. 

Time will tell if this is a permanent shift, or if the teething problems can be dissipated to the extent that volumes across the “land bridge” will return to previous levels, but for now it seems as if Irish hauliers are voting with their feet.



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Gastronomes look beyond pandemic to a revolution in French fine-dining

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Chef Yannick Alléno used to serve a €395 menu featuring langoustines and foie gras at his three-starred Michelin restaurant near the Champs-Elysées.

But as France prepares to allow restaurants to reopen for outdoor service next week after six months of closure, he will instead be serving up burgers at his wine bar for a fraction of the price. 

That a superstar chef such as Alléno, whose stable of high-end restaurants from Courchevel to Marrakesh hold more than a dozen Michelin stars, is changing strategy underscores the difficulties facing France’s grands restaurants as they seek to recover from the ravages of the coronavirus pandemic

“We have to inspire people to come here by sparking their curiosity,” he said of the Pavillon Ledoyen, the neoclassical building that houses several of his restaurants, including the three-starred Alléno Paris.

Such temples to French gastronomy have long catered to wealthy foreign tourists, who will happily pay more than €1,000 for a meal for two as long as they experience l’art de vivre à la française. But with international travel severely curtailed by the pandemic, such customers are not expected back for some time. 

Chef Yannick Alléno
Yannick Alléno operates high-end restaurants from Paris to Courchevel and Marrakesh that hold a dozen Michelin stars combined © Francois Durand/Getty

Attracting locals is the new challenge, as well as retaining employees, many of whom have left the sector and its notoriously challenging working conditions. Many restaurants are also saddled with large debts after taking state-guaranteed loans to ride out the crisis.

“I have three years of struggle ahead,” said Alléno, adding that half the group’s €4m in cash reserves had been spent. “For three-star restaurants, there will be many casualties.” 

His flagship restaurant used to generate more than three-quarters of revenue from foreign diners, mostly from Asia and the US. As there is little point reopening without them, the doors will remain shut until September. Alléno will for now experiment in the less-formal location as he plots an overhaul that seeks to drag fine-dining into the 21st century.

“Everything must change,” he said, quoting the title of the book he co-wrote during lockdown. In it, he called for a revamp of everything from the style of service (warmer, more personalised) to staffing (more flexible and family-friendly).

French haute gastronomie traces its roots back to visionary 19th-century chefs such as Auguste Escoffier and Marie-Antoine Carême, who created a cuisine based on rich sauces and meticulous — often theatrical — service. For decades it was considered the world’s best and became a key part of French identity.

But its popularity has faded in recent decades thanks to competition first from the flashiness of molecular gastronomy and then the pared-back Nordic style. As French haute cuisine lost ground, it became much more expensive, putting it out of the reach of many.

“The pandemic has exposed that the business model of high-end restaurants in France simply doesn’t function without tourists,” said Joerg Zipprick, co-founder of La Liste group, which ranks the world’s best restaurants.

“This is a relatively new development. It used to be that . . . a local doctor or manager would come to these places to celebrate a special occasion. No longer.”

Zipprick said that for the top chefs, many of whom had spent the past year experimenting with takeouts and meal kits, success depended on their willingness to adapt.

A customer picks up his order from Baieta in Paris
Baieta restaurant in Paris. Many top chefs have experimented with takeouts and meal kits during the past year © Franck Fife/Getty

Diners would not want fussy and experimental dishes on their return, he predicted, but would instead want to eat good food at a nice restaurant in the company of friends and family.

“No more technical stuff or food that requires a long explanation from the waiter about the fermentation process. People don’t want their meal to be a work of art,” Zipprick said.

The last time French cuisine reinvented itself was in the 1970s when chefs such as Paul Bocuse and the Troisgros brothers created nouvelle cuisine. The movement, less opulent and calorific than the fine-dining that preceded it, put fresh and high-quality ingredients to the fore and service became less formal. 

Alléno believes top restaurants must aim to tailor experiences by talking to clients beforehand about the occasion for their dinner, the guests and their tastes.

This “concierge service” approach would allow menus to be better planned, improving the customer experience and the economics for the restaurant.

“If I know I only have three people who’ll eat langoustine on a given night then I don’t need to order six kilos just in case,” he said. “It really changes things for the kitchen.” 

Others are being even more radical. Daniel Humm’s three-starred Eleven Madison Park in New York will no longer serve meat and seafood when it reopens next month, as the Swiss chef seeks to show that sustainable and environmentally conscious eating can be compatible with luxury.

However, Éric Fréchon, the three-Michelin-starred chef behind restaurant Epicure at the five-star Le Bristol Paris hotel, played down expectations of radical change.

“Things will return much as they were before,” Fréchon said, noting that the hotel’s restaurants had a significant local client base. “People have missed the experience of haute gastronomie for so long they’ll be eager to come back.”

Fréchon said he would retain some coronavirus-era innovations, including the €1,390 “gastronomy and to bed” package that is marketed as a one-night staycation for locals that includes dinner in their suite or hotel room.

“For New Year’s Eve we had 60 servers running back and forth to rooms, it was really difficult,” he said. “But it allowed us to reach new clients who perhaps would not have dared to come to a three-star restaurant. Now we have to keep them.”

Additional reporting by Domitille Alain in Paris



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Ireland’s healthcare system taken down by cyber attack

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Ireland has shut down most of the major IT systems running its national healthcare service, leaving doctors unable to access patient records and people unsure of whether they should show up for appointments, following a “very sophisticated” cyber attack.

Paul Reid, chief executive of Ireland’s Health Service Executive, told a morning radio show that the decision to shut down the systems was a “precautionary” measure after a cyber attack that impacted national and local systems “involved in all of our core services”.

Some elements of the Irish health service remain operational, such as clinical systems and its Covid-19 vaccination programme, which is powered by separate infrastructure. Covid tests already booked are also going ahead.

However the system for processing referrals from GPs and of close contacts is down, the HSE tweeted, adding that those in need of testing should go to walk-in centres which would prioritise symptomatic cases.

“This is having a severe impact on our health and social care services today, but individual services and hospital groups are impacted in different ways. Emergency services continue, as does the @AmbulanceNAS [National Ambulance Service],” health minister Stephen Donnelly wrote on Twitter.

No group has yet claimed responsibility for the attack. Speaking on Friday morning, Reid said the HSE had also not yet been served with a ransom demand. “We are at the very early stages of fully understanding the threat, the impact and trying to contain it,” he said, adding that it was receiving assistance from the Irish police force, defence forces and third-party cyber support teams.

The master of Dublin’s Rotunda Maternity Hospital said it was advising patients who were less than 36 weeks pregnant not to present for appointments on Friday. In a statement, Cork University Hospital said patients should present for outpatient appointments, chemotherapy and surgery “unless you are contacted to cancel”, but that X-ray and radiotherapy appointments for Friday were cancelled.

Professor Donal O’Shea, consultant endocrinologist at St Vincent’s Hospital in Dublin, told RTE radio that there could be implications for patient care. “Clinical systems haven’t been targeted, but if you can’t access your computer, then getting results is impossible . . . so before long, there are going to be clinical implications,” he said. In its statement, Cork University Hospital said “only emergency bloods” would be processed at this time.

Reid said that patients nationally “should still come forward until they hear something different” and that an update should be available later on Friday. A spokeswoman for the HSE was unable to provide a further update on patient care by mid-morning. “We apologise for the inconvenience to the public and will give further information as it becomes available,” she added.

Healthcare workers told the FT they were told to turn off their laptops, leaving staff at home offline and those working in hospitals reverting to pen and paper to manage patients’ information.

In a statement on its website, Ireland’s child and family agency Tusla said that its emails, internal systems and portal for child protection referrals was also offline because it was hosted by the HSE’s network.

The attack comes as actions by cyber criminals to disrupt public services have increased during the pandemic. Earlier this month, hackers believed to be from eastern Europe breached the IT systems of the Colonial Pipeline, a major fuel conduit that supplies much of the eastern US.

“Opportunistic cyber attackers targeting flooded healthcare organisations has been a common theme throughout the course of the pandemic,” said Charlie Smith, consulting solutions engineer at Barracuda Networks. “These scammers are aware of the huge significance of health services’ IT systems at this time, and so will stop at nothing to disrupt said systems or steal valuable data in exchange for ransom.”





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Watchdog turns on Polish government over coronavirus election

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Poland’s supreme audit office has accused prime minister Mateusz Morawiecki of exceeding his powers, as it unveiled a highly critical report into the government’s attempt to hold last year’s presidential election by post because of the pandemic.

The salvo by the supreme audit office (NIK) is the latest in a series of disputes over last year’s election, which was meant to be held in May, but was eventually postponed until June as coronavirus swept through Europe.

It is also the latest in a series of clashes between the ruling Law and Justice party and Marian Banaś, a former finance minister who was put in charge of the NIK in 2019 thanks to the support of politicians from the ruling camp, but has since become a thorn in the government’s side.

Representatives of NIK, which is responsible for auditing government spending, on Thursday said the attempt to hold the presidential election by post in May — which was ultimately abandoned after disagreements in the ruling camp — had cost at least 76m zloty ($20.2m).

They also said that there had been no legal basis for the prime minister to give any orders to two state-controlled entities, the Polish Post and the Polish Security Printing Works (PWPW), in relation to holding the election, such as the printing of voting cards.

“The only body entitled to organise elections was the State Election Commission,” Banaś said during a press conference. “Organising the elections on the basis of an administrative decision should not have happened and was without legal basis.”

He said the NIK had informed prosecutors of possible crimes committed by the boards of the Polish Post and PWPW, which were involved in the preparations for the postal ballot.

The Polish Post said “categorically” that “all its actions taken to implement the prime minister’s decision of April 16 2020 were founded on legal provisions”. PWPW said it considered NIK’s move “unjustified” and “baseless”.

Banaś added that the NIK was analysing whether to notify prosecutors of concerns relating to the actions of other parties involved in the preparations for the election.

The government said that “all decisions on beginning technical preparations for postal voting in the presidential elections were in accordance with the law”.

“All the actions [of the prime minister and the head of the chancellery of the prime minister] were aimed at holding elections by the constitutional deadline,” the government’s information office said in a statement.

“The prime minister never called for presidential elections or for postal voting. The goal of the actions taken was to allow the participation in the elections of those who were entitled to vote, but whose life and health were at risk as a result of the pandemic.”

Jacek Sasin, minister for state assets, took a similar line, and told Polish state radio that the NIK report was “a certain element in the fight between the government and . . . Marian Banaś”.

Banaś has been under pressure to step down from his post since media reports emerged alleging that a building he owns was used as a brothel. In an interview with Politico, he dismissed the allegations as a “smear campaign” aimed at ousting him.

He concluded his press conference by drawing attention to the fact that the NIK was one of a series of institutions targeted by fake bomb threats earlier this week, and to an email sent to the NIK this morning falsely claiming that Banaś’s son was going to commit suicide.

“I ask you yourselves for a comment on this,” he said to the assembled journalists.



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