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BRIEFING PAPER Number 8362, 2 May 2019

The EU27: Internal Politics By Stefano Fella, Vaughne Miller, Nigel Walker and Views on

Contents: 1. 2. 3. 4. Croatia 5. 6. 7. Denmark 8. 9. 10. France 11. 12. 13. 14. Ireland 15. 16. 17. 18. 19. Malta 20. Netherlands 21. 22. 23. 24. 25. 26. Spain 27.

www.parliament.uk/commons-library | intranet.parliament.uk/commons-library | [email protected] | @commonslibrary

2 The EU27: Internal Politics and Views on Brexit

Contents

Summary 6 1. Austria 13 1.1 Key Facts 13 1.2 Background 14 1.3 Current Government and Recent Political Developments 15 1.4 Views on Brexit 17 2. Belgium 25 2.1 Key Facts 25 2.2 Background 25 2.3 Current Government and recent political developments 26 2.4 Views on Brexit 28 3. Bulgaria 32 3.1 Key Facts 32 3.2 Background 32 3.3 Current Government and recent political developments 33 3.4 Views on Brexit 35 4. Croatia 37 4.1 Key Facts 37 4.2 Background 37 4.3 Current Government and recent political developments 38 4.4 Views on Brexit 39 5. Cyprus 42 5.1 Key Facts 42 5.2 Background 42 5.3 Current Government and recent political developments 43 5.4 Views on Brexit 45 6. Czech Republic 49 6.1 Key Facts 49 6.2 Background 49 6.3 Current Government and recent political developments 50 6.4 Views on Brexit 53 7. Denmark 57 7.1 Key Facts 57 7.2 Background 57 7.3 Current Government and recent political developments 59 7.4 Views on Brexit 60 8. Estonia 65 8.1 Key Facts 65 8.2 Background 65 8.3 Current Government and recent political developments 66 8.4 Views on Brexit 67 9. Finland 70 9.1 Key Facts 70 9.2 Background 70 3 Commons Library Briefing, 2 May 2019

9.3 Current Government and recent political developments 71 9.4 Views on Brexit 73 10. France 76 10.1 Key facts 76 10.2 Background 76 10.3 Current Government and recent political developments 77 10.4 Views on Brexit 80 11. Germany 89 11.1 Key facts 89 11.2 Background 89 11.3 Current Government and recent political developments 90 11.4 Views on Brexit 92 12. Greece 103 12.1 Key Facts 103 12.2 Background 103 12.3 Current Government and recent political developments 104 12.4 Views on Brexit 105 13. Hungary 108 13.1 Key Facts 108 13.2 Background 108 13.3 Current Government and recent political developments 109 13.4 Views on Brexit 112 14. Ireland 116 14.1 Key Facts 116 14.2 Background 117 14.3 Current Government and recent political developments 117 14.4 Views on Brexit 118 15. Italy 129 15.1 Key Facts 129 15.2 Background 129 15.3 Current Government and recent political developments 131 15.4 Views on Brexit 135 16. Latvia 141 16.1 Key Facts 141 16.2 Background 141 16.3 Current Government and recent political developments 142 16.4 Views on Brexit 144 17. Lithuania 148 17.1 Key Facts 148 17.2 Background 148 17.3 Current Government and recent political developments 149 17.4 Views on Brexit 150 18. Luxembourg 154 18.1 Key Facts 154 18.2 Background 154 18.3 Current Government and recent political developments 155 18.4 Views on Brexit 156 19. Malta 160 4 The EU27: Internal Politics and Views on Brexit

19.1 Key facts 160 19.2 Background 160 19.3 Current Government and recent political developments 161 19.4 Views on Brexit 161 20. Netherlands 165 20.1 Key facts 165 20.2 Background 165 20.3 Current Government and recent political developments 166 20.4 Views on Brexit 168 21. Poland 175 21.1 Key Facts 175 21.2 Background 175 21.3 Current Government and recent political developments 176 21.4 Views on Brexit 178 22. Portugal 184 22.1 Key facts 184 22.2 Background 184 22.3 Current Government and recent political developments 185 22.4 Views on Brexit 186 23. Romania 189 23.1 Key Facts 189 23.2 Background 189 23.3 Current Government and recent political developments 190 23.4 Views on Brexit 193 24. Slovakia 196 24.1 Key Facts 196 24.2 Background 196 24.3 Current Government and recent political developments 197 24.4 Views on Brexit 198 25. Slovenia 205 25.1 Key Facts 205 25.2 Background 205 25.3 Current Government and recent political developments 206 25.4 Views on Brexit 208 26. Spain 212 26.1 Key facts 212 26.2 Background 212 26.3 Current Government and recent political developments 213 26.4 Views on Brexit 215 27. Sweden 221 27.1 Key Facts 221 27.2 Background 221 27.3 Current Government and recent political developments 222 27.4 Views on Brexit 223

5 Commons Library Briefing, 2 May 2019

Contributing Authors: Eleanor Gadd, Antonia Garraway, Julie Gill, Daniel Harari, Matthew Keep, Sylvia de Mars, Tim Robinson, Matthew Ward

Cover page image copyright: EU flags by Jo.schz. Licensed under CC BY 2.0 / image cropped.

6 The EU27: Internal Politics and Views on Brexit

Summary

Unity of the EU27 and Single Market integrity The EU27 Member States have maintained a largely united front in the Brexit negotiations, adopting joint negotiating guidelines in April 2017 following the UK Government’s Article 50 notification the previous month and mandating to lead negotiations on their behalf. Examining the positions on Brexit taken by the EU27, a number of common themes emerge, notably insistence on the integrity of the EU Single Market and an unwillingness to divide the four market freedoms (relating to goods, services, capital and people) when it comes to negotiating the future UK-EU trading relationship. This has also come alongside concerns that the new trading relationship should not enable the UK to gain a competitive advantage by retaining participation in some elements of the Single Market while no longer being required to comply with all the requirements of membership, including regulations relating to competition, the environment and labour market. The governments of the EU’s two leading Member States, France and Germany, have been influential in promoting these lines. However, other EU governments have also stressed the importance of the Single Market and the need to balance trading access with certain obligations arising out of membership, including free movement of people. Certain EU governments, notably those of Poland, Hungary and Italy, have for varying reasons been in dispute with the or other Member States. Both the Polish and Hungarian Governments face questions regarding their compliance with the EU’s rule of law framework and (along with Slovakia) face European Commission infringement proceedings regarding non-compliance with the EU’s refugee relocation plan. The new Italian Government has clashed with other EU governments over its calls for greater burden sharing in relation to migrant and refugee arrivals and its unwillingness to comply with budget strictures. However, notwithstanding occasional criticisms of the EU’s approach to negotiations from government figures in these countries, these differences have not translated into any major divergences from the principal EU lines in the negotiations. This partly relates to a preoccupation among these governments with their own national priorities and a lack of coincidence with those of the UK when it comes to the Brexit negotiations. Maintaining trade and security co-operation EU27 governments have expressed a wish to retain a close trading relationship with the UK and a desire to avoid a ‘no deal’ Brexit which would be harmful to EU economies as well the UK. Retaining strong trading links with the UK is a particular consideration for those Member States with a high proportion of trade with the UK, although this is secondary to preserving the Single Market. Table 1 identifies the level of trade each of the EU27 Member States undertakes with the UK, as well as the percentage of GDP to which trade with the UK is equivalent. It is notable that trade with the UK is equivalent to between 13% and 15% of GDP for Belgium, Cyprus, Luxembourg and the Netherlands, and more than 20% for Malta and Ireland. However, for the other 21 Member States trade with the UK is equivalent to less than 6% of GDP. While agreement on the future economic and trading relationship has proved difficult, there has been a greater level of convergence between the UK and the EU27 over continuing security co-operation. Former Soviet bloc states, including Bulgaria, Romania, Poland and the Baltic countries, have been particularly concerned to ensure that Brexit does not undermine the UK contribution to European security. 7 Commons Library Briefing, 2 May 2019

Table 1 UK trade with EU member states, 2017 (£ millions)

Goods Services Total All trade with the UK as a Exports Imports Balance Exports Imports Balance Exports Imports Balance % GDP1 Austria 1,768 3,255 -1,487 1,320 1,462 -142 3,088 4,717 -1,629 2.7% Belgium 14,060 25,478 -11,418 4,685 2,733 1,952 18,745 28,211 -9,466 13.5% Bulgaria 334 389 -55 292 538 -246 626 927 -301 4.0% Croatia 99 77 22 101 537 -436 200 614 -414 1.9% Cyprus 268 113 155 739 1,304 -565 1,007 1,417 -410 14.5% Czech Rep 2,021 5,602 -3,581 1,076 661 415 3,097 6,263 -3,166 5.9% Denmark 2,657 4,865 -2,208 3,916 1,489 2,427 6,573 6,354 219 5.5% Estonia 133 197 -64 77 33 44 210 230 -20 2.6% Finland 1,262 2,466 -1,204 1,337 506 831 2,599 2,972 -373 3.2% France 24,248 27,455 -3,207 16,130 13,359 2,771 40,378 40,814 -436 4.3% Germany 37,135 68,722 -31,587 19,683 9,387 10,296 56,818 78,109 -21,291 5.3% Greece 887 816 71 1,079 3,114 -2,035 1,966 3,930 -1,964 3.6% Hungary 1,348 2,714 -1,366 770 770 0 2,118 3,484 -1,366 5.5% Ireland 20,309 14,488 5,821 13,725 7,300 6,425 34,034 21,788 12,246 23.5% Italy 10,365 18,562 -8,197 8,504 5,448 3,056 18,869 24,010 -5,141 3.1% Latvia 247 557 -310 161 146 15 408 703 -295 5.6% Lithuania 465 675 -210 212 227 -15 677 902 -225 5.0% Luxembourg 187 339 -152 2,774 2,320 454 2,961 2,659 302 13.1% Malta 403 111 292 394 874 -480 797 985 -188 21.3% Netherlands 22,043 40,680 -18,637 17,003 6,251 10,752 39,046 46,931 -7,885 14.1% Poland 4,991 10,457 -5,466 1,880 2,342 -462 6,871 12,799 -5,928 5.0% Portugal 1,430 2,971 -1,541 940 2,941 -2,001 2,370 5,912 -3,542 5.3% Romania 1,146 1,910 -764 894 827 67 2,040 2,737 -697 3.4% Slovakia 470 2,451 -1,981 377 222 155 847 2,673 -1,826 4.9% Slovenia 157 331 -174 215 116 99 372 447 -75 2.3% Spain 10,367 16,436 -6,069 5,748 14,866 -9,118 16,115 31,302 -15,187 4.7% Sweden 5,285 7,024 -1,739 5,849 2,072 3,777 11,134 9,096 2,038 5.3%

Source: ONS,

1 House of Commons Library Calculations 8 The EU27: Internal Politics and Views on Brexit

The first phase of negotiations There has also been on the question of sequencing of the Brexit negotiations, and the need for agreement on the status and rights of EU citizens in the UK after Brexit, the UK’s financial settlement with the EU, and the Ireland-Northern Ireland border, all of which were addressed by the Joint Report on progress in the first phase of Brexit negotiations in December 2017. The status of Member State nationals in the UK was a priority for several states with large numbers of their citizens living in the UK, notably Poland, Romania and other recent accession countries as well as Italy. Reaching agreement on the UK’s financial settlement upon withdrawal from the EU was also critical, with net recipients from the EU budget concerned about a potential loss of funds and net contributors concerned about having to make up any shortfall. See Charts 1 and 2 outlining Member State contributions to the EU budget. The Withdrawal Agreement and the Northern Ireland Backstop The critical sticking point as the negotiations on the Withdrawal Agreement (WA) drew to a close was the question of the Northern Ireland-Ireland border and the measures required to prevent a hard border re-emerging. Again, the EU27 remained united on this front and supportive of Ireland’s position in the negotiations. Smaller states expressed their affinity with a fellow small state in the negotiations, while the German Government expressed itself as a guarantor of the interests of smaller states. The EU initially proposed a Northern Ireland specific backstop which kept Northern Ireland (but not the rest of the UK) in a customs union with the EU and parts of the EU Single Market in to avoid the need for border checks with Ireland. The UK Government rejected this and proposed the eventually agreed backstop which would keep the whole of the UK in a single customs territory with the EU until a new arrangement avoiding a hard border could be implemented. The level playing field provisions accompanying the backstop, covering state aid, competition and environmental and labour standards, reflected concerns from Member States that this could give the UK a back door to the EU Single Market without the obligations of membership. The UK’s ‘Chequers proposal’ in July 2018, involving a ‘common rulebook’ with the EU in relation to EU rules enabling frictionless trade in goods and a ‘facilitated customs arrangement’ whereby the UK would collect tariffs on behalf of the EU while maintaining a separate tariff, was rejected by the EU. However, there were reports that some countries including Poland, Hungary, Sweden, Denmark, the Netherlands and Belgium had pushed for greater engagement with these proposals. Since the WA was approved by EU leaders at the in November 2018, the EU27 has remained united behind the agreement and the position adopted by the December 2018 European Council that the WA was “not open for renegotiation”. This has also meant defending the principles underpinning the backstop in order to maintain an open border on the island of Ireland and protect both the Good Friday Agreement and the integrity of the Single Market. Some Member States have indicated a willingness to engage in further discussions with the UK in order to find solutions that allay concerns in the UK and enable the WA to win Parliamentary approval as long as these underlying principles are maintained. A suggestion in January 2019 from the Polish Foreign Minister that the backstop could be limited to a five-year period however did not win backing from other Member States. Extending Article 50 and avoiding no deal As a UK request to extend the Article 50 period in order to delay Brexit became likely following the House of Commons votes against the WA in January and March 2019, EU27 Government 9 Commons Library Briefing, 2 May 2019

representatives expressed an openness towards extension while also stressing the need for such an extension to have a clear objective. The French government appeared to take the toughest stance in this regard, while the German and other EU leaders appeared more determined to do what they could to avoid a no deal Brexit. Prior to the first decision to extend Article 50 taken on 21 March, the Irish Prime Minister, mindful of the potentially damaging on Ireland of a no deal Brexit, called on fellow EU27 leaders to “cut the British government some slack”. At the 10 April European Council meeting to discuss the UK’s second request for an Article 50 extension, the EU27 appeared more openly divided. The majority agreed on the need for a long extension with an option for the UK to leave earlier if it ratified the WA while France, with support from a smaller number of Member States including Austria and Belgium, argued for a short extension. A number of Member States, including France, Belgium and Spain, also expressed concern about the potential disruption to the EU’s future business arising out of the continued membership of a withdrawing Member State. This was assuaged to an extent by language in the European Council Conclusions referring to the UK’s continued commitment to “sincere co-operation” and to refrain from measures which could jeopardise attainment of the EU’s objectives. No Deal Preparations While preferring to avoid a no deal scenario Member States are implementing the EU’s no-deal preparedness legislation and have also made their own plans to mitigate a no-deal impact on the economy, trade, transport and other sectors. This also includes border and customs adaptations. Those with major ports (e.g. Belgium) and significant trade with UK (e.g. the Netherlands) have provided extra border infrastructure and new technology systems, and recruited extra customs or veterinary staff (e.g. France, Ireland, Poland, Netherlands, Spain). EU27 Member States have also agreed to continue existing residence, employment and travel rights at least for a temporary period. Some Member States, including Austria, Bulgaria, Croatia, Denmark, Cyprus, Italy, Malta, Romania and Slovakia, have offered permanent national ‘regularisation’ for UK citizens already living in the country. For more details, see the Commons Library Briefing EU preparations for a no-deal Brexit. Public Opinion The EU27 governments have also been mindful of public opinion and have been boosted in this regard by increasing support for the EU in surveys. Support for EU membership has increased since the UK in 2016 in countries with long-standing histories of -scepticism such as Sweden and Denmark as well as more recently Euro-sceptic countries like Italy. A special Eurobarometer survey for the published in April 2019 (based on a survey conducted in February-March 2019 of a representative sample of people aged 15+) showed net support for EU membership in all EU Member States, although support was below 50% in the UK, Czech Republic and Italy (with large numbers of don’t knows). See Table 2 below.

10 The EU27: Internal Politics and Views on Brexit

Table 2. Support for continuing EU Membership in the 28 Member States, April 2019.2

2 Eurobarometer 2019. Closer to the Citizens, Closer to the Ballot, Eurobarometer Survey 91.1 of the European Parliament, April 2019. 11 Commons Library Briefing, 2 May 2019

Chart 1. Member state contributions to the EU budget, receipts from the EU budget, and net contribution, 2017, € billion

Germany France Italy Netherlands Sweden Austria Denmark Ireland Finland Cyprus Contributions Receipts Spain Malta Net contribution Slovenia Croatia Estonia Latvia Slovakia Lithuania Bulgaria Luxembourg Belgium Czech Republic Portugal Hungary Romania Greece Poland

-30 -25 -20 -15 -10 -5 0 5 10 15

12 The EU27: Internal Politics and Views on Brexit

Chart 2. Member state contributions to the EU budget, receipts from the EU budget, and net contribution, 2017, € per head of population*

Netherlands Sweden Germany Denmark United Kingdom Austria Italy France Ireland Finland Spain Cyprus Slovenia Croatia Romania Contributions Receipts Slovakia Net contribution Belgium Bulgaria Poland Czech Republic Malta Portugal Latvia Hungary Greece Estonia Lithuania Luxembourg

-1,000 -500 0 500 1,000 1,500 2,000 2,500 3,000

*Belgium and Luxembourg are home to EU institutions are therefore receive a much higher level of EU funding through the location of these institutions than they otherwise would given their level of GDP. See also House of Commons Library Briefing Paper CBP 6455, A guide to the EU budget, 7 September 2018 13 Commons Library Briefing, 2 May 2019

1. Austria

1.1 Key Facts3 1. Government and Politics : Federal President Dr : Federal Chancellor Last election: Legislative, 15 October 2017 Next election: Legislative, by October 2022 2. Finance and Economy GDP (2017): €335 billion (GDP per head: €38,100) GDP average growth 2014-2018: 2.1% GDP growth 2019 (interim forecast, Feb 2019): 1.6% Net contribution to EU budget per head 2017: +€103 Currency: euro 3. Trade with UK Trade with UK as % of GDP: 2.7%

UK trade with Austria, 2017 £ millions Exports Imports Balance Goods 1,768 3,255 -1,487 Services 1,320 1,462 -142 Total 3,088 4,717 -1,629 Source: ONS Pink Book

4. Views on the EU 40% of Austrians have a positive view of the EU (net positive: +18%) 57% of Austrians agree that their voice in the EU (net voice counts: +18%) 45% of Austrians trust the EU (net trust: -4%) 76% of Austrians are in favour of free movement 75% of Austrians feel like EU citizens 5. Austrian nationals in the UK 18,000 (ONS estimate for Jan to Dec 2017)

3 For all EU27 Member States, Key Facts Point 1 is taken from Europa World Plus. Point 2 is taken from Eurostat; European Economic Forecast, European Commission, Winter 2019. Point 3 is taken from ONS Pink Book and library calculations. Point 4 is taken from European Commission Eurobarometer report, December 2018. Point 5 is taken from the Office for National Statistics: Population of the UK by country of birth and nationality, May 2018. 14 The EU27: Internal Politics and Views on Brexit

1.2 Background Austria after WWI and WWII Austria dominated the Austro-Hungarian Empire until it fell in 1918 at the end of World War I. Its boundaries were reduced under the Treaty of St Germain in 1919 and the constitution of 1920 created the Republic of Austria. In the 1930s the Government crushed a socialist uprising and abolished all political parties except the nationalist Catholic ‘Fatherland Front’. Austria was annexed by Germany in 1938 (Anschluss) and renamed Ostmark (Eastern March) by Hitler. In World War II Austria’s Germany controlled armed forces fought on the Eastern Front. In 1945 Vienna was liberated by Soviet troops and Austria was occupied by Soviet, British, US and French forces, and elections resulted in a People’s Party and coalition. In the following two years denazification laws were passed. In 1955 the State Treaty signed by the occupying Allies established an independent, “permanently neutral” Austria. Austria joined the in 1955 and the EU in 1995, adopting the Euro in January 1999. The far right enters post-War politics There has been a move to the right in Austrian politics since 1999, when the far-right Freedom Party (FPÖ) led by Jörg Haider won 27% of the vote in national elections, coming second equal with the centre-right Austrian People's Party (ÖVP); the centre-left Social (SPÖ) remained the largest party. But in January 2000 coalition talks between the SPÖ and the ÖVP broke down and the ÖVP began talks with the FPÖ. This resulted in the ÖVP entering the government with a FPÖ member as Deputy Chancellor. After the collapse of the coalition in 2002 and new elections, the ÖVP made large gains and the FPÖ lost seats but was again included in the ensuing coalition ÖVP/FPÖ government. In elections in 2006 the SPÖ narrowly defeated the ruling ÖVP and the two parties formed a coalition government in 2007. But the ÖVP withdrew in 2008, forcing an early election in which the SPÖ emerged as the largest party but with far-right parties taking 29% of the vote. In elections in 2013 the SPÖ again defeated the ÖVP and the ‘grand coalition’ was renewed. The electoral system The Federal President is elected by an absolute majority vote in a two- round system for a six-year term. The Federal Chancellor is appointed by the President. The members of the Federal Council (Bundesrat) are elected by the nine state legislatures. The Federal Council presidency is rotating on a six-month basis among the nine States. Members of the National Council (Nationalrat) are elected by an open-list proportional representation system for five-year terms. 15 Commons Library Briefing, 2 May 2019

1.3 Current Government and Recent Political Developments The migrant crisis The migrant crisis in 2015, in which tens of thousands of migrants, largely from conflict areas in the , crossed into Austria, gave rise to the Government announcing it would erect barriers at a border crossing with Slovenia. In 2016 Austria imposed a cap on the number of migrants and refugees allowed into the country. Elections in 2016 and 2017 In May 2016 presidential elections, a Party member narrowly beat the FPÖ candidate, but this result was annulled by the Constitutional Court. However, in December 2016 the ’s Alexander Van der Bellen (former professor of economics at the University of Vienna) defeated Norbert Hofer (FPÖ) in a re-run of the presidential election, with a larger majority. In early elections in October 2017 there was another swing to the right. The SPÖ campaigned on reducing social inequality, while the ÖVP and FPÖ focused on concerns about and Islam, calling for the securing of Austria's borders and swift deportations of failed asylum-seekers. A coalition of the ÖVP and the FPÖ took office in late December. The ÖVP leader Sebastian Kurz became chancellor. The full results of the 2017 elections of 183 seats to the Nationalrat were as follows: National Council (Nationalrat)4 Election, 15 October 2017 % of Party Votes Seats votes Austrian People’s Party (ÖVP) 1,595,526 31.5 62 Social of Austria (SPÖ) 1,361,746 26.9 52 Freedom Party of Austria (FPÖ) 1,316,442 26.0 51 NEOS – The New Austria (NEOS) 268,518 5.3 10 Peter Pilz List (PILZ) 223,543 4.4 8 The (GRüNE) 192,638 3.8 0 My Vote Countrs! (G!LT) 48,234 1.0 0 Communist Party of Austria (KPÖ) 39,689 0.8 0 The Whites (Weiße) 9,167 0.2 0 Free List Austria (FLÖ) 8,889 0.2 0 Others 5,537 0.1 0 Total 5,069,929 100.0 183 Turnout was 80% of 6,400,998 eligible voters.

4 National Council (Austria), Europa World online. London, Routledge. Retrieved 3 October 2018 16 The EU27: Internal Politics and Views on Brexit

In December 2017 a group which included former Spanish Foreign Minister Miguel Ángel Moratinos, former French Foreign Minister Bernard Kouchner and former Canadian Prime Minister Kim Campbell called for a boycott of far-right members in Austria’s government, referring to them as the “heirs of Nazism”. In an open letter published in French newspaper Le Monde, 28 December 2017, they urged European leaders to take action. The Kurz Government The new Austrian coalition government of the ÖVP and FPÖ was appointed on 18 December 2017. Sebastian Kurz (ÖVP) became the new and youngest Chancellor (31) and the far-right Heinz-Christian Strache (FPÖ) his vice- chancellor.5 The EUObserver reported that, in contrast with the last time the far-right entered government in 2000-2005 when there were attempts to ostracise it, this time “wisely enough and with few exceptions, such as commissioner , they limited themselves to raising eyebrows”.6 In October 2018 the Austrian Government followed the US and Hungarian governments in pulling out of the United Nations Global Compact on Migration (a non-binding global agreement promoting co-operation on migration policy). Bulgaria, the Czech Republic, Slovakia and Poland also later pulled out7. Results of the most recent Austrian elections President8 Presidential Election, First Ballot, 24 April 2016 % of valid Candidate Votes votes Norbert Hofer 1,499,971 35.05 Alexander Van der Bellen 913,218 21.34 Irmgard Griss 810,641 18.94 Rudolf Hundstorfer 482,790 11.28 Andreas Khol 475,767 11.12 Richard Lugner 96,783 2.26 Total 4,279,170 100.00

Second Ballot, 4 December 2016 Candidate Votes % of valid votes Alexander Van der Bellen 2,472,892 53.79 Norbert Hofer 2,124,661 46.21 Total 4,597,553 100.00

5 For details of the Austrian Government, see Federal Chancellery website, Ministers and State Secretaries. 6 EUObserver, New Austrian government is good news for EU project, 21 December 2017. 7 See House of Commons Library Briefing Paper CBP8459, The United Nations Global Compact for Migration, 5 December 2018. 8 President (Austria), Europa World online. London, Routledge. Retrieved 3 October 2018

17 Commons Library Briefing, 2 May 2019

Note: The results of the second ballot that took place on 22 May 2016, at which Alexander Van der Bellen secured 50.34% of votes and Norbert Hofer 49.66%, were annulled by the Constitutional Court. Dr Alexander Van der Bellen was duly elected President. Federal Council (Bundesrat)9 Election, July 2018 Die Total Provinces ÖVP SPÖ FPÖ Grünen seats Burgenland 1 2 0 0 3 Carinthia (Kärnten) 0 3 1 0 4 Lower Austria (Niederösterreich) 7 3 2 0 12 Upper Austria (Oberösterreich) 4 2 3 1 10 Salzburg 2 1 1 0 4 (Steiermark) 3 3 3 0 9 Tyrol (Tirol) 3 1 1 0 5 Vorarlberg 2 0 1 0 3 Vienna (Wien) 0 6 4 1 11 Total 22 21 16 2 61

1.4 Views on Brexit Austrian priorities Austria held the EU’s six-monthly presidency in the second half of 2018. Priorities for the Austrian Government have included securing the rights of its roughly 25,000 citizens living in the UK and ensuring Austria does not have to pay more into the EU budget as a result of Brexit. The Government would also like to make Brexit a catalyst for reforming the EU to make it more efficient. Outgoing President Christian Kern had been critical of EU bureaucracy: … there’s too much regulation in , the institutions work themselves to death in largely opaque decision-making processes, the balance of power among member states, Commission, Council and Parliament is badly calibrated… .10 Alexander Van der Bellen, although pro-EU, also believes there is a need for structural changes in the EU and the coalition government Agreement “commits to Europe” but will act to “steer the EU back in the right direction towards its fundamental ideas”.11 A potential Öxit? Austria’s shift to the right and its concerns about immigration led to some speculation that Austria might follow the UK in seeking to leave the EU. A

9 Federal Council (Austria), Europa World online. London, Routledge. Retrieved 3 October 2018 10 Repowering Europe: How To Combat Austerity, Alienation And Brexit, Social Europe, Christian Kern, 27 September 2016 11 See report on discussion with President Van der Belllen, 3 May 2018

18 The EU27: Internal Politics and Views on Brexit

blog by Dr Arnold Kammel (Director of the Austrian Institute for European and Security Policy) looked at Austria’s position on Brexit in spring 2016:12 In general, Austria favours continued membership of the UK in the EU. When it came to the UK-EU renegotiation earlier this year, the official Austrian position was best described as support for whatever might improve the quality of the process without changing its core pillars. A study of Austrian views on EU membership in late 2016 showed “the [overall positive] benefits of EU membership” and the “potential chaos of a so–called ‘Öxit’ (Österreich-exit)”.13 The report found that most Austrians (61%) would be opposed to leaving the EU.14 The in-coming chancellor, Sebastian Kurz, said the new government would not hold a referendum on EU membership.15 Van de Bellen - old-fashioned UK notions of sovereignty? President Van der Bellen is reported to have said Britain “must be crazy to believe that the old fashioned national sovereignty of the 30s gains you more power for your own country than being a member of the union”.16 During a press conference with the European Commission, Van der Bellen also spoke of the “tragic and inappropriate decision of the majority of UK voters to vote for Brexit” and said the result had “woken a lot of people up in Austria.17 Chancellor Kurz – an orderly Brexit and good future relations In July 2018 Chancellor Kurz commented that Austria was “unhappy” about the UK leaving the EU, but that managing an “orderly departure” was more important.18 He wanted to make sure there is no ‘hard Brexit’,19 and hoped Austria and the EU would be able to maintain strong ties with the UK after Brexit.20 It was also reported that he would rather extend the negotiations than give in to a hard Brexit if a deal on the Irish border was not agreed.21 In his capacity as Council President, Mr Kurz asked other EU leaders to support initiatives to prevent a hard Brexit,22 but he has also said his

12 Preparations for a Brexit IV: views from Austria, the Czech Republic, Finland, Greece, and Malta, LSE, 27 May 2016. 13 Euractiv Germany, Austria unwilling to copy Brexit as study reveals EU membership benefits, 17 November 2016 14 Ibid 15 Euractiv, EU silently accepts far-right in Austrian , 18 December 2017 16 Express, Austrian president brands Brexit voters thick and crazy in extraordinary Brussels rant, 13 February 2017 17 Ibid 18 , Brexit: We won’t let Britain split the EU member states’ united front in talks, 3 July 201 19 See, e.g. BBC News, Austria's Sebastian Kurz tells to avoid 'hard Brexit', 28 July 2018 20 Reuters, Austria seeks to avoid hard Brexit, Kurz tells May, 27 July 2018 21 See Politico, 6 July 2018 22 Independent, Austria and Germany will 'do all we can' to avoid no-deal Brexit, says chancellor Sebastian Kurz, 16 September 2018

19 Commons Library Briefing, 2 May 2019

government will “preserve the unity of the 27” on Brexit.23 At the Salzburg summit in September 2018 he said both sides in the Brexit negotiations would have to compromise.24 No deal planning and the Brexit negotiations According to Bloomberg (19 July 2018), Austria does not anticipate customs problems “because the current WTO regime could handle shipments to and from the UK”. Austria is also “confident the country’s banking industry is prepared for all scenarios”. Ahead of the European Council on 18 October 2018, Chancellor Kurz said Austria had a “plan B” in the event of a “hard Brexit” but that such a prospect would be a “catastrophe”. Asked about a no-deal situation, he said: "You have to be prepared, but you do not have to go on about it". Commenting on the Brexit process so far, Austrian European Minister Gernot Blümel said the negotiation process had been a great success in terms of the maintenance of EU unity. He said: “The unity of the EU, which is missing regarding many issues – in terms of Brexit we are united!” Speaking at the summit Chancellor Kurz said: I do not expect a big breakthrough tonight. But I do hope that in the next weeks and months we can get a deal. Today Theresa May will lay out her position, and I hope that we see a small step in the right direction, that would be a success. The ball is in Britain's court. We have made clear what we envision. There is no reason to dramatise this. It is always the case in negotiations that they are tense and difficult and challenging at the end. That doesn't mean they will fail. No one wants these negotiations to fail, neither the EU nor Theresa May want a hard Brexit. There is no reason to dramatise this. It is always the case in negotiations that they are tense and difficult and challenging at the end. That doesn't mean they will fail25. UK Citizens in Austria Reuters reported (15 January 2019) that the Austrian Government would take steps to protect the rights of UK citizens living in Austria in the event of a no deal Brexit. Austria’s Europe minister, Gernot Bluemel, said that in the event of a no-deal Brexit the Austrian Government would take steps so that UK citizens living and working in Austria could continue to do so after Brexit26.

23 Independent, Brexit: We won’t let Britain split the EU member states’ united front in talks, Austrian PM says, 3 July 2018 24 See Guardian, 'Both sides need to compromise' on Brexit, says EU summit host– Politics live, 20 September 2018 25 Express, Plan B for hard Brexit – but Kurz admits no deal would be ‘catastrophe’, 18 October 2018 26 Reuters, Austria preparing bill to protect Britons' rights in case of hard Brexit, 15 January 2019

20 The EU27: Internal Politics and Views on Brexit

The issue of whether UK citizens could apply for dual UK-Austrian citizenship was not mentioned. Austria does not usually allow dual citizenship. However, the previous week Foreign Minister Karin Kneissl said that Austria would allow its roughly 25,000 citizens living in the UK to acquire dual UK-Austrian citizenship. When asked whether a similar exception would be made for UK citizens living in Austria, Ms Kneissl indicated there was no such plan27.

Austrian EU Council Presidency: preserving EU27 unity Speaking in the European Parliament on the day of the first ‘meaningful vote’ on the Withdrawal Agreement in the House of Commons on 15 January 2019, Chancellor Kurz referred to the unity shown by the EU27 during the preceding six months when Austria held the Council Presidency. He said that the EU could face a number of “rocky” months ahead but that it needed to display the same unity in the face of any UK Government efforts to secure further concessions to the Withdrawal Agreement. He promised Austria would continue to support the EU throughout the Brexit process despite the threat of a no-deal Brexit. He commented: When we took over in July, we were asked to do everything in our power to preserve the unity of the 27. And my heartfelt thanks go to the President of the Commission as well as to Michel Barnier for their untiring efforts because they have been successful, we have preserved that unity amongst the EU27. The , I believe, in negotiations with the United Kingdom, has nothing to reproach itself for because we negotiated a very balanced exit agreement and we also have a political declaration on the future of our relationship. Now, even if things don’t go our way this evening in the vote in the British Parliament and even if the next few weeks and months are rocky it is important that we continue to sing from the same hymn sheet. Following on from its presidency, I can ensure you that Austria will do everything it can to support that line28. No re-opening of Withdrawal Agreement In response to the rejection of the Withdrawal Agreement the Austrian Foreign Minister Karin Kneissl tweeted: Result of ’s vote in the Commons means prolongation of uncertainty, which is bad for all of us. . . Orderly Brexit remains possible but UK gov. must act quickly. Austria is prepared for all scenarios. Keep calm and carry on. Chancellor Kurz also tweeted:

27 Reuters, Austria to loosen ban on dual citizenship for Brexit-hit nationals, 08 January 2019 28 Express, Brexit Block: Austria demands EU countries stand strong against UK concession demands, 15 January 2019

21 Commons Library Briefing, 2 May 2019

I regret the outcome of the Brexit vote in the British lower house in London . . . In any case there will be no renegotiation of the withdrawal agreement 29. In January 2019, Chancellor Kurz ruled out re-opening negotiations on the Withdrawal Agreement but indicated changes to the Political Declaration on the future relationship could be possible. He said: The Austrian government’s but also the European Union’s message to London is clear: our hand is extended for a common solution, also for clarifications on the issue of the future relationship if that’s what it takes . . . But we’re not ready to renegotiate the exit agreement. The Chancellor also said that his cabinet had approved a draft omnibus law to cover contingency measures necessary if the UK leaves the EU without a deal30.

Extending Article 50 and avoiding no deal Speaking from the World Economic Forum in Davos in January 2019, Chancellor Kurz said that “we should have the courage to defer the date of Brexit” although he said his preference would be for the UK parliament to ratify the Withdrawal Agreement. Chancellor Kurz said it would be very difficult to keep the UK inside the EU beyond the European Parliament elections at the end of May, but also suggested that it might be possible to “find a flexible solution” to enable the UK to stay in the EU beyond the elections. Chancellor Kurz cited the precedent of Austria’s own accession to the EU in 1995, in which, for a period of time, Austria sent national parliamentarians to sit in the European Parliament. The Chancellor added that the EU was preparing for a “hard Brexit” on 29 March but was simultaneously doing everything it could to avoid it31. Foreign minister Kneissl said on the Marr programme on 10 February 2019 that: all the 27 will have to decide in a unanimous way to say yes, let us extend, but we have to know for what kind of purpose, we have to know the substance of the proposal made by the British Government and this is a unanimous decision to be taken by the 27 of us. At a joint press conference with Michel Barnier on 28 February, Chancellor Kurz also talked about the need for an Article 50 extension to have an objective. He said: If this extension should take place it is also necessary to ask the question: what is the goal for the time frame, what good does this extension do? Does it ensure that we will be able to finish all the work? But if this is the way out to prevent a hard Brexit then we will support this path.

29 Reuters, 'Keep calm and carry on', Austria urges after UK Brexit vote, 15 January 2019 30 Bloomberg, Austria's Kurz Rules Out Renegotiation of Brexit Treaty, 30 January 2019 31 Austrian premier Kurz calls on UK to defer Brexit date, Financial Times, 24 January 2019 22 The EU27: Internal Politics and Views on Brexit

On 15 March, Ms Kneissl said that Austria would be in favour of granting Britain a “short extension”. She told BBC Politics Live that it remained to be seen whether other EU states would also agree and that it would be very difficult to say whether a longer extension would be granted. She said: A longer extension of course coincides with the European Parliamentary elections and this cause a problem . . . It’s not just an issue of the British participating in elections. It’s about the presidency of the parliament and we could enter into a debate about parliamentary legitimacy. On 16 March, Reuters reported an interview given by an Austrian diplomat involved in the Brexit negotiations, Gregor Schusterschitz, with Austrian newspaper Der Standard. He said: We have to wait and see what the government in London actually proposes. If there is an extension beyond July 1, then in any event, the United Kingdom must vote in May for the European elections . . . The EU has never been the side in the negotiations that has rejected something for reasons of principle. This also applies to the question of the extension: it shouldn’t fail because of us. Schusterschitz also said that the EU might have been too soft on the UK in the negotiations and allowed it too long to conduct a largely domestic discussion, which involved less debate with the EU than it did “internal political back-and-forth”. He said: Maybe we could have been more brutal sometimes. . . We didn’t do that, and so we probably allowed British politics too long to fool around - and not face the really difficult questions, which are being discussed now, much earlier32. On 18 March, speaking from the meeting in Brussels, Ms Kneissl pointed to the risks of a chaotic Brexit extension. She said that if the EU granted the UK an extension for one year without requiring UK participation in the EP elections that the EU would “end up in a big dilemma, a real quagmire in terms of democratic legitimacy”. Prior to the European Council meeting of 21 March 2019, Chancellor Kurz said he was in favour of a short Brexit extension in order to avoid the UK leaving without a deal and taking part in European Parliament elections. He said: I think that an extension is better than a no-deal scenario and so for that reason she (British Prime Minister Theresa May) has our support, but we will have to discuss today how long the suspension should be . . . I think it is important that the UK does not take part in the European elections and it's also necessary to make clear how we can solve the open issues because a suspension is one step but the necessary

32 Reuters, UK must take part in EU elections if Brexit delayed - Austrian negotiator, 16 March 2019

23 Commons Library Briefing, 2 May 2019

second step is to find a way how to guarantee that we have not a no- deal scenario but a well-organised Brexit. Chancellor Kurz said however that the UK taking part in the upcoming European Parliament elections would be "absurd". He said: They are going to leave Europe and if somebody wants to leave the European Union, it wouldn't be understandable why this country should take part in the European elections33. On the BBC Today programme on 4 April Foreign Minister Kneissl said she found it hard to imagine the UK being offered an extension beyond 22 May but this was based on the assumption that she thought it unlikely that the UK would take part in those elections. She said: It is very difficult to imagine how an extension going beyond the European elections is feasible. I’m just wondering who is ready to campaign, which British politician is ready to campaign for the European parliament. Ms Kneissl also indicated the EU27 might not be unanimously in favour of a long extension. She said: It remains to be seen what kind of cohesion is still available among the EU 27 - I’m not in a position to tell whether there really will be this unanimous readiness to accept. Ms Kneissl said she sympathised with French President Macron’s view that the EU must not let itself be held hostage by Brexit. She also said that if the UK were to elect MEPs only for them to leave later in the year, there would still be a problem. She said: If the British participate, but quit the European Union, sometime in [the] autumn, then the elections would have to be redone. So, the one or the other way, [this] could trigger a crisis of legitimacy. Arriving at the European Council meeting of 10 April to discuss the second UK extension request Chancellor Kurz said he had sympathy for Theresa May: She has to do what she has to do because of the decision of the people of the U.K. and I think she does it in a very transparent and respectful way. . . We all know she has no majority for the deal … but besides that I think she’s trying hard. Mr Kurz said there were three priorities for the meeting. Firstly, the EU27 had to remain united. If it failed to do so, he said “we import the chaos from Britain into the EU. That's why my top goal is to find a compromise”. Secondly, it was important to avoid a no-deal Brexit. Thirdly, it was important to decide how long the extension should be. Kurz said that like President Macron he was in favour of an extension that is “as short as possible”.

33 Euronews, UK taking part in EU elections would be 'absurd', says Austria's Kurz, 21 March 2019 24 The EU27: Internal Politics and Views on Brexit

He said: I've always said I find it absurd for the Brits to participate in the EU election. I won't oppose [their participation] — but it's not an ideal solution”. Following the meeting Mr Kurz said that Austria’s position had been close to the French position in arguing for short extension: He said: We were of the opinion that a shorter extension made more sense in order not to prolong the Brexit debate. We ended up with a compromise. Mr Kurz added that it would have been ideal if the UK had come to an agreement to leave earlier.

25 Commons Library Briefing, 2 May 2019

2. Belgium 2.1 Key Facts 1. Government and Politics Head of State: HM King Philippe Head of Government: Prime Minister Charles Michel Last election: Legislative, 25 May 2014 Next election: Legislative, 26 May 2019 2. Finance and the Economy GDP (2017): €397 billion (GDP per head: €35,000) GDP average growth 2014-2018: 1.6% GDP growth 2019 (interim forecast, Feb 2019): 1.3% Net contribution to EU budget per head 2017: -€200 Currency: euro 3. Trade with UK Trade with UK as % of GDP: 13.5%

UK trade with Belgium, 2017 £ millions Exports Imports Balance Goods 14,060 25,478 -11,418 Services 4,685 2,733 1,952 Total 18,745 28,211 -9,466 Source: ONS Pink Book

4. Views on EU 41% of have a positive view of the EU (net positive: +23%) 63% of Belgians agree that their voice counts in the EU (net voice counts: +28%) 52% of Belgians trust the EU (net trust: +8%) 81% of Belgians are in favour of free movement 79% of Belgians feel like EU citizens 5. Belgian nationals in the UK 25,000 (ONS estimate for Jan to Dec 2017) 2.2 Background Belgium is a constitutional and hereditary monarchy, consisting of a federation of the largely autonomous regions of Brussels, Flanders and and of the Dutch-, French- and German-speaking linguistic communities. The Belgian Constitution, originally promulgated in 1831, was revised and consolidated in 1993 to provide for a federal structure of government. It 26 The EU27: Internal Politics and Views on Brexit

has been subsequently amended on a number of occasions to give more autonomy to the regions and communities, most recently in 2012. The central legislature consists of a bicameral Parliament (the Chamber of Representatives and the ). The Chamber has 150 members, all directly elected for a term of five years by universal adult suffrage, on the basis of proportional representation. Since May 2014 the Senate has been an entirely indirectly elected body, comprising a total of 60 members drawn from the autonomous Regions and Communities. There are a complex set of regional and community institutions. The three regions and three linguistic communities are represented by the following directly elected legislative administrations: a combined administration for the Flemish and Community; administrations for the Walloon and Brussels-Capital Regions; and separate administrations for the French and German communities. The regional administrations have sole responsibility for the environment, housing, transport and public works, while the language community administrations supervise education policy and culture. Under a constitutional amendment in June 2001, the regions were also granted greater autonomy over taxation and public expenditure, agriculture, and policies on foreign aid and trade. Further powers were devolved to the regions and communities in 2012.34 The regional administrations also have responsibility for international relations, including the right to conclude international treaties, in those areas where they have domestic competence. This means that international treaties negotiated by the Belgian government must be approved by the regional parliaments where these relate to regional competences. A notable example occurred in 2016 when the Wallonian regional parliament blocked the Belgian parliament from ratifying the EU-Canada Comprehensive Economic and Trade Agreement (CETA - it later gave its approval following an addendum to the treaty). 2.3 Current Government and recent political developments35 Prime Minister Charles Michel currently leads a coalition comprising his own francophone liberal (MR), the Flemish nationalist N-VA, the Flemish Christian Democrats (CD&V) and the Flemish liberal Open VLD. The Government was formed in October 2014 after protracted coalition negotiations following the general election of May 2014.

34 Constitution and Government (Belgium), Europa World online. London, Routledge. Retrieved 13 June 2018 35 Domestic Political Affairs (Belgium), Europa World online. London, Routledge. Retrieved 14 June 2018; BBC Belgium Profile - Timeline. 27 Commons Library Briefing, 2 May 2019

The N-VA, which calls for the eventual separation of Flanders from Belgium and has been the largest party in the Belgian Parliament since 2010, was included in the Belgian Government for the first time. Divisions between the French- and Dutch-speaking parties over the rights of different communities and proposed constitutional reforms have caused instability and led to protracted and difficult coalition negotiations in recent years. The formation of the previous government, led by of the francophone Socialists (PS), took 541 days from elections in June 2010 to the government being sworn in in December 2011. Dispute over Global Migration Compact leads to collapse of Belgian Government Disagreement within the Belgian Government over whether it should endorse the United Nations Global Compact on Migration (a non-binding global agreement promoting co-operation on migration policy36) led to the collapse of the ruling coalition in December 2018. The N-VA said that the GCM was “unacceptable” to the party and demanded that Belgium withdraw from it, claiming it would add to the “illegal migration crisis” in Europe. Prime Minister Michel refused to cede to the N-VA request and a majority of parties within the Belgian Parliament endorsed the agreement. The N-VA withdrew from the ruling coalition on 8 December. After attempts by Prime Minister Michel to form a failed, King Phillippe asked Mr Michel to stay on at the head of a caretaker government until the general election scheduled for May 2019. Results of recent Belgian elections Legislature Belgium has a bicameral Parliament, comprising the Chamber of Representatives and the Senate. Chamber of Representatives (Chambre des Représentants/Kamer van Volksvertegenwoordigers)37 General Election, 25 May 2014 % of Party Votes cast Seats votes New Flemish (N-VA ) 1,366,414 20.26 33 Socialist Party (PS) 787,165 11.67 23 Christian Democratic and Flemish (CD&V) 783,060 11.61 18 Open Flemish Liberals and Democrats (Open Vld) 659,582 9.78 14 Reformist Movement (MR) 650,290 9.64 20 Socialist Party - Differently (SP.A) 595,486 8.83 13 Green () 358,947 5.32 6 Humanist Democratis Centre (CDH) 336,281 4.99 9

36 See House of Commons Library Briefing Paper CBP8459, The United Nations Global Compact for Migration, 5 December 2018. 37 Chamber of Representatives (Chambre des Représentants/Kamer van Volksvertegenwoordigers) (Belgium), Europa World online. London, Routledge. Retrieved 9 October 2018 28 The EU27: Internal Politics and Views on Brexit

Flemist Interest (Vlaams Belang) 247,746 3.67 3 Ecologist () 222,551 3.30 6 Workers' Party (PTB-Go!)* 132,956 1.97 2 Francophone Democratic Federalists (FDF)** 121,403 1.80 2 People's Party (Parti Populaire) 102,599 1.52 1 Others (each less than 1% of total vote) 380,579 5.64 0 Total (incl. others) 6,745,059 100.00 150 * Comprises PvdA/PTB (Workers’ Party of Belgium), LCR (Revolutionary Communist League) and the PC (Communist Party). ** FDF was renamed DéFI (Démocrate Fédéraliste Indépendant) in November 2015. Senate (Sénat/Senaat)38 Distribution of seats, May 2018 Party Members (N-VA ) 12 Socialist Party (PS) 10 Reformist Movement (MR) 8 Christian Democratic and Flemish (CD&V) 8 Ecologist-Green parties (Ecolo-Groen) 6 Open Flemish Liberals and Democrats (Open Vld) 5 Socialist Party - Differently (SP.A) 5 Humanist Democratis Centre (CDH) 4 Flemist Interest (Vlaams Belang) 2 Total (incl. others) 60

Note: With effect from May 2014 the Senate became an indirectly elected body comprising 50 representatives of regional and community administrations (29 from Dutch-speaking, 20 from French-speaking and one from German-speaking regions), and an additional 10 co- opted members. 2.4 Views on Brexit Prime Minister Charles Michel – no special treatment for UK In various public statements on Brexit, Prime Minister Charles Michel has stressed the importance of maintaining unity among the EU27 and not allowing the UK to divide and rule. Like other EU leaders he warned that the UK cannot expect to have preferential access to the Single Market while assuming none of the obligations of membership and that the UK must fulfil its financial obligations to the EU during and after the withdrawal process. The EU must play fair and stay united Ahead of the EU leaders’ meeting in Malta in February 2017, Mr Michel was quoted in Time as saying the EU should play fair with the UK, not be “naïve”, and remain united against any UK attempts to divide and rule. He continued:

38 Senate (Sénat/Senaat) (Belgium), Europa World online. London, Routledge. Retrieved 9 October 2018 29 Commons Library Briefing, 2 May 2019

“.. we also have capacities in the negotiations and we also have instruments in our hands for negotiations and I hope it will be possible to find a balance. It will not be easy, and I know the UK will certainly try in these negotiations to have parallel negotiations and bilateral negotiations with a few countries […] But you have to be strong and convince the 27 countries that our interests are to have a common negotiation”. UK must accept the consequences of Brexit In an interview reported in the Irish Independent in May 2017, Mr Michel again emphasised that the UK must accept the financial and other consequences of Brexit: “those who think in Britain they can push the Brexit button and not have a bill to pay are seriously mistaken” and “In Britain ever more, they will realise that Brexit, well, has consequences - economic, commercial, partnerships”. He welcomed the December 2017 agreement on phase one of the Brexit negotiations, tweeting that it was: “an important step . An intelligent agreement on Brexit is in the interest of our citizens and our businesses. The UK is and will remain our neighbor forever. But our work isn’t over yet!” (see The Brussels Times). The Whitehouse Consultancy’s profile of the EU27’s positions on Brexit (22 November 2016) highlighted the importance to Belgium of trade with the UK (8.8% of all Belgian exports go to the UK) and of close co-operation with the UK on security and terrorism. It also confirmed that the Belgian Prime Minister supported the broad EU position on Brexit. He called for a “smart Brexit … where economic interests are protected on both sides and where we are careful that Brexit is not a starting point of Europe’s dismantlement”. Finance Minister comments on ‘no deal’ scenario On 3 August Belgian Finance Minister (N-VA) gave an interview with Belgian radio in which he commented on Governor of the Bank of England Mark Carney’s comments that the risk of a no deal Brexit was “uncomfortably high”. Mr Van Overtveldt said: The general economic situation in England is not exactly great, but rather better than the major Brexit pessimists had expected, but you also have to look at the long term and if we have a no-deal scenario with a number of abrupt, unforeseen situations then we could have the situation whereby the British economy very quickly changes.39 Different approaches in Belgian linguistic communities Writing for Europa World, Professor Anthony Mughan pointed to different approaches to Brexit among Belgium’s linguistic communities: In view of their region’s historically close and beneficial trading relationship with the UK, Flemish politicians are arguing that the UK should be allowed to retain close economic ties with Europe when the withdrawal is complete, whereas Walloon politicians support the EU’s position that a departed UK should be granted no special

39 See BBC Monitoring, 6 August 2018

30 The EU27: Internal Politics and Views on Brexit

privileges in any subsequent trade deals that might be negotiated with the EU.40 Brexit planning The Belgian Government is reported to be hiring more agents for the port of Antwerp and looking into “the need for scanners, sniffer dogs, weapons and drones to beef up post-Brexit customs surveillance” to monitor its coastline and the North Sea.41 Open Europe reported in August 2018: The Belgian customs administration has also set up an internal committee which will be responsible for the extra infrastructure and for training the new staff. It has drawn up a list of potential items that may be needed after Brexit, which reportedly includes more luggage scanners, sniffer dogs, manual scanners, drones to survey the coastline, a submarine to examine ships in the North Sea, as well as vehicles, computers, work spaces, and uniforms. There are also plans to coordinate with neighbouring countries, the European Commission, Belgian ports and airports. Special attention is being devoted to the ports of Zeebrugge and Antwerp, which are big re-exporters of goods to the UK. with the Dutch ports they account for the majority of total inbound and outbound traffic with Britain’s ports. The CEO of Zeebrugge, which has 46% of its traffic with the UK, has claimed the port will be ready for Brexit. It is building a digital platform to speed up bureaucratic procedures, and thinks it may be better equipped than some competitors, because it specialises in people-free freight.42 Flanders News reported on 16 January 2019: Only one in five Belgian businesses trading with Britain is ready to fulfil customs formalities on shipments bound for the UK after it leaves the European Union at the end of March. An estimated 25,000 Belgian companies trade across the English Channel. Today 20,000 remain unprepared. Preserving citizens’ rights On 16 January 2019 , , said that safeguarding the rights of UK and Belgian citizens living in each other’s country was “a priority” in its no-deal planning. The social affairs minister, , wrote in a blog on 16 January 2019 that reciprocal rights would be guaranteed and the Belgian Government is expected to publish measures shortly. Article 50 Extension and possible No Deal On 18 March Belgium’s foreign minister, Didier Reynders, told at the EU Foreign Affairs Council meeting that the EU was awaiting a clear signal from the UK regarding its intentions regarding a possible extension of Article 50 and that:

40 Mughan, Anthony. History (Belgium), Europa World online. London, Routledge. Retrieved 16 August 2018 41 New York Times, 19 July 2018; The Express, Brexit no deal MAPPED: How EU countries are secretly preparing for no deal UK exit from EU, 20 July 2018 42 Open Europe, The view from Brussels: How are the EU27 preparing for a ‘No Deal’ Brexit? Pieter Cleppe, 30 August 2018 31 Commons Library Briefing, 2 May 2019

We are not against an extension in Belgium, but the problem is to do what? Of course, if it is possible to avoid a no-deal situation it would be better. We are sure that a no-deal would be a lose-lose situation for both sides, but we are prepared. It was reported on 6 April, following the second UK Article 50 extension request, that Belgium was supportive of the French position that there should only be a short extension of a couple of weeks to prepare in the markets and avoid a financial crisis, if there were no significant new proposals from the UK. However, a spokesman for the Belgian Prime Minister said that Belgium had “never publicly or privately opposed extending Article 50”. On 8 April, it was reported that the Belgian Prime Minister Charles Michel would be hosting a pre-meeting prior to the European Council of 10 April of a small group of EU leaders whose countries will be most affected by Brexit. This was likely to include the leaders of France, Germany, Spain, the Netherlands, Denmark and Ireland. This was with the aim of steering discussions in the European Council meeting. On 10 April, prior to the European Council, Mr Michel told reporters: “It is not certain there will be a delay. And it is not certain what that would mean”. However, he said it would be crucial for the EU27 to have guarantees during any extension for the “good functioning” of the EU institutions. Mr Michel also told reporters on 10 April that an extension could not be allowed “to endanger the EU, endanger the European elections” and that the EU must avoid “being taken hostage” by a prolongation that would undermine “the capacity of the EU to function normally and correctly”. He said: “You can’t be a half member of the EU” and that if an extension was granted the “presence in the EU must be done in perfect loyalty”. It was reported that during the meeting on 10 April, Belgium held up the discussion by asking for tougher language on the UK’s responsibilities as a Member State during the extended Article 50 period. Belgium also reportedly leaned towards the French view that an extension should be limited to a short period43.

43 See The Times, Fright night ends in leaders subduing Macron monster, 12 April 2019 32 The EU27: Internal Politics and Views on Brexit

3. Bulgaria

3.1 Key Facts 1. Government and Politics Head of State: President Head of Government: Prime Minister Last election: Legislative, 26 March 2017 Next election: Legislative, due in 2021 2. Finance and the Economy GDP (2017): €105 billion (GDP per head: €14,800) GDP average growth 2014-2018: 3.6% GDP growth 2019 (interim forecast, Feb 2019): 3.6% Net contribution to EU budget per head 2017: -€203 Currency: new lev 3. Trade with UK Trade with UK as % of GDP: 4.0%

UK trade with Bulgaria, 2017 £ millions Exports Imports Balance Goods 334 389 -55 Services 292 538 -246 Total 626 927 -301 Source: ONS Pink Book

4. Views on EU 56% of Bulgarians have a positive view of the EU (net positive: +39%) 42% of Bulgarians agree that their voice counts in the EU (net voice counts: -1%) 53% of Bulgarians trust the EU (net trust: +23%) 87% of Bulgarians are in favour of free movement 51% of Bulgarians feel like EU citizens 5. Bulgarian nationals in the UK 86,000 (ONS estimate for Jan to Dec 2017) 3.2 Background The post-Communist constitution of the Republic of Bulgaria took effect in July 1991. This followed a process of political reform between 1989 and 1991 which put an end to the Communist-era People’s Republic, with multi- party legislative elections taking place in 1990. 33 Commons Library Briefing, 2 May 2019

Legislative power is held by the unicameral National Assembly, comprising 240 members elected for four years by universal adult suffrage. The President of the Republic is head of state and is directly elected for a period of five years.44 Bulgaria became a member of NATO in 2004 and of the EU in 2007. It is not in the Schengen common travel area, although it has asked to join and its membership has been supported in principle by the European Commission and European Parliament. The Commission said in 2017 that this would require further reforms. Bulgaria has not adopted the Euro, but the Government has said it wishes to join the European Exchange Rate Mechanism (ERM) by the end of 2018 as a stepping stone to Eurozone membership. In July 2018 the Government agreed measures that will help it to progress to ERM membership. Bulgaria has the lowest GDP per capita in the EU (49% of the EU average). It also has the highest level of public sector corruption in the EU, according to Transparency International. 3.3 Current Government and recent political developments The President of the Republic (since January 2017) is Rumen Radev. He ran as an independent candidate with the support of the Bulgarian Socialist Party (BSP – the successor to the Bulgarian Communist Party). Radev defeated of the centre-right GERB (Citizens for the European Development of Bulgaria) in the second round of presidential elections in November 2016. In response to the defeat of his party’s candidate, Prime Minister Boyko Borisov tendered the resignation of his Government. After various attempts at government formation failed, early legislative elections were held in March 2017. In the elections, Borisov’s GERB took 33.5% of the vote and 95 seats, although the BSP (at the head of an electoral alliance) with 27.9% of the votes increased its representation to 80 seats. The (OP), a nationalist right-wing coalition of parties, obtained 9.3% of the vote and 27 seats. A new government headed by Borisov took office in May 2017, heading a coalition of GERB, the OP and independents. Boyko Borisov has been Prime Minister at the head of GERB-led governments for most of the period since the July 2009 general election. In November 2018, the European Commission issued a report on progress in Bulgaria and Romania under the Co-operation and Verification Mechanism (CVM) set up after these countries joined the EU in 2007 to monitor progress in the fields of judicial reform, corruption and (for Bulgaria) organised crime. The report noted “positively” Bulgaria’s continued efforts and determination to implement the Commission’s recommendations and said it was confident that Bulgaria would be able to

44 Bulgaria, Europa World online. London, Routledge. Retrieved 15 June 2018 34 The EU27: Internal Politics and Views on Brexit

fulfil the remaining recommendations and enable the CVM mechanism to be concluded in 2019. Results of the most recent Bulgarian elections President45 Presidential Election, First Round, 6 November 2016 % of valid Candidate Votes votes Rumen Radev (Independent) 973,754 25.44 Tsetska Tsacheva (GERB - Citizens for European 840,635 21.96 Development of Bulgaria) (United Patriots)* 573,016 14.97 Veselin Mareshki (Independent) 427,660 11.17 Others 1,012,585 26.56 Total 3,827,650 100.00 * A coalition of the VMRO—Balgarsko Natsionalno Dvizhenie (IMRO—Bulgarian National Movement), the Natsionalen Front za Spasenie na Bulgaria (NFSB— for the Salvation of Bulgaria) and the Partiya Ataka (Ataka— Party) Second Ballot, 11 January 2015 % of valid Candidate Votes votes Rumen Radev (Independent) 2,063,032 59.37 Tsetska Tsacheva (GERB) 1,256,485 36.16 Neither candidate 155,411 4.47 Total 2,197,381 100.00

Rumen Radev was duly elected President.

National Assembly (Narodno Sobranie)46 General Election, 26 March 2017 Party Votes % of votes Seats Citizens for European Development of Bulgaria 1,147,292 33.54 95 (GERB) BSP for Bulgaria (BSP)* 955,490 27.93 80 United Patriots** 318,513 9.31 27 Movement for Rights and Freedoms (DPS) 315,976 9.24 26 Will –formerly the Liberal Alliance (Volya) 145,637 4.26 12 Others 537,616 15.72 0 Total 3,420,524 100.00 240

* BSP for Bulgaria, a coalition led by the BSP. ** United Patriots, a coalition including the Bulgarian National Movement (VMRO), the National Front for the Salvation of Bulgaria (NFSB) and the Attack party (Partiya Ataka).

45 President (Bulgaria), Europa World online. London, Routledge. Retrieved 9 October 2018 46 National Assembly (Narodno Sobranie) (Bulgaria), Europa World online. London, Routledge. Retrieved 9 October 2018 35 Commons Library Briefing, 2 May 2019

3.4 Views on Brexit Bulgarian EU Presidency pessimistic According to the Whitehouse Consultancy profile of EU27 positions on Brexit, Mr Borisov respected the UK vote, but thought it marked a “severe split“ in the people of Europe. The EU, he said, would have to “show that it can do without Britain […] and we have to start thinking about Europe without them. Any negotiations about a special status should not be held because they will break the union apart”. As Bulgaria prepared to take over the European Council Presidency at the end of 2017, Borisov was reported to be pessimistic: things were moving in the direction of a hard or no-deal Brexit (this was before the December summit agreement on the Joint Report). He thought Brexit would be bad for the EU and that the EU itself was not prepared for the implications of a hard Brexit.47 Mr Borisov stressed the importance of maintaining the current levels of co-operation with the UK on security, policing and anti- terrorism. He did not think the EU27 were sufficiently prepared for a hard Brexit.48 UK - Bulgaria relations Bulgaria held the European Council Presidency in the first half of 2018. In March Borisov was reported to have said at a meeting with then Brexit Secretary David Davis that Bulgaria should maintain close relations with the UK in politics, the economy, tourism and security, “because they meet the interest of both countries and their strategic partnership in NATO”. But he also emphasised that “Europe must remain strong despite Brexit”. Brexit preparations Bloomberg reported in July that Bulgaria was preparing for the risks of three possible Brexit scenarios: a comprehensive agreement, a partial agreement, and no deal; in the autumn the Government would “develop a detailed action plan for the three scenarios”.49 Need to maintain EU unity and ask why Brexit happened In a joint press conference with the German President on 5 April 2019, President Rumen Radev said: It is very important to have a common European position on Brexit and not to allow Brexit to block, as it has been happening for a long time, Europe's ability to make timely, important and unified decisions. President Radev said that the emerging crisis with Brexit needed to be resolved, otherwise it would be harder for Europe to make and defend such decisions. He added that:

47 Euractiv, Borissov: My sentiment is there will be a hard Brexit, 24 November 2017 48 Ibid 49 Bloomberg, How Europe Is Bracing for Messy Brexit: Dogs, Drones, Do Nothing, 19 July 2018 36 The EU27: Internal Politics and Views on Brexit

I also think that we are currently focusing on Brexit's mechanisms. However, it is very important for Europe to answer the question of why there are states that want to leave the EU, and focus our efforts there. Avoiding no deal In a conversation with Theresa May on 8 March, Prime Minister Borisov said that “Smooth and regulated exit of the European Union is needed to preserve the good cooperation on a bilateral basis'' according to the Bulgarian Government information service. It also reported that the two prime ministers were united around the need to avoid political instability with a negative reflection of Brexit on everyone in the EU, and that Prime Minister Borisov had stressed that Britain remains a strategic partner for Bulgaria. Article 50 extension Following the European Council agreement on extending Article 50 on 21 March, Prime Minister Borisov said: The EU has always been a dialogue. It is important to have Brexit with rules. That is why this compromise has been made. We supported this solution. May 22 is the cut-off date, because then the UK has to go to elections. March 29 will become actually April 12th. This compromise was made to allow the British Parliament to decide. If it does not decide, April 12 is like March 29. Why am I a pessimist? 1000 days were not enough, and we have a ready contract, Michel Barnier has done a great job.

37 Commons Library Briefing, 2 May 2019

4. Croatia 4.1 Key Facts 1. Government and Politics Head of State: President Kolinda Grabar-Kitarović Head of Government: Prime Minister Andrej Plenković Last election: Legislative, 11 September 2016 Next election: Presidential, due 2019 2. Finance and the Economy GDP (2017): €77billion (GDP per head: €18,500) GDP average growth 2014-2018: 2.9% GDP growth 2019 (interim forecast, Feb 2019): 2.7% Net contribution to EU budget per head 2017: -€62 Currency: kuna 3. Trade with UK Trade with UK as % of GDP: 1.9%

UK trade with Croatia, 2017 £ millions Exports Imports Balance Goods 99 77 22 Services 101 537 -436 Total 200 614 -414 Source: ONS Pink Book

4. Views on EU 39% of Croatians have a positive view of the EU (net positive: +21%) 59% of Croatians agree that their voice counts in the EU (net voice counts: +25%) 48% of Croatians trust the EU (net trust: +4%) 83% of Croatians are in favour of free movement 66% of Croatians feel like EU citizens 5. Croatian nationals in the UK 6,000 (ONS estimate for Jan to Dec 2017)

4.2 Background50 The Constitution of the Republic of Croatia took effect on 21 December 1990. The country issued a declaration of independence from Yugoslavia in June 1991, leading to the attempted succession of Serbian-dominated areas

50 Croatia, Europa World online. London, Routledge. Retrieved 30 August 2018 38 The EU27: Internal Politics and Views on Brexit

from Croatia and the intervention of the Yugoslav army. The brief war with Yugoslavia left 6,000 dead and 400,000 internally displaced in Croatia, before a United Nations-brokered ceasefire in January 1992. This was followed by Croatian involvement in the war in Bosnia-Herzegovina, in which more than 100,000 died. This was ended by the Dayton Peace Accord in 1995, of which Croatia was a signatory. The then 12 European Community member states recognised Croatia on 15 January 1992, and Croatia was formally admitted to the United Nations in May 1992. In August 1996 an agreement providing for the establishment of full diplomatic relations between Croatia and Yugoslavia was signed, and in October 1996 Croatia was accepted into the . Croatia’s Treaty of Accession with the EU was signed on 9 December 2011. A referendum on EU membership was held on 22 January 2012, in which 66.3% voted in favour of joining the EU (turnout was 43.5%). Croatia became the EU’s 28th Member State on 1 July 2013. The Kuna continues to be the currency in Croatia. Prime Minister Andrej Plenkovic has indicated an intention to join the ERM within the next two years, before Croatia takes over the rotating EU presidency in 2020. The Government hopes to introduce the Euro by 2025.51 4.3 Current Government and recent political developments Under Croatia’s Constitution legislative power is vested in the unicameral Sabor (Assembly), which consists of 151 seats with Members directly elected to serve four-year terms. The head of state is the president, who is elected by popular vote to serve a five-year term. The conservative Croatian Democratic Union (HDZ) candidate Kolinda Grabar-Kiratovic, became the fourth on 15 February 2015 (following elections on 11 January 2015), the first female to hold the post. She narrowly beat Social Democrat incumbent Ivo Josipovic in a run-off vote. Before her election as President, Grabar-Kiratovic served as Foreign Minister, Ambassador to the and Assistant Secretary-General of NATO. Andrej Plenković, head of the conservative Croatian Democratic Union (HDZ) party, was sworn in as Prime Minister on 19 October 2016. 52 He heads a government comprising representatives of the HDZ, the Croatian People’s Party-Liberal Democrats (HNS) and independents.

51 Reuters, Croatia wants to adopt euro within 7-8 years: prime minister, 30 October 2017 52 Andrej Plenković CV, , accessed 17 July 2018

39 Commons Library Briefing, 2 May 2019

Results of the most recent Croatian elections President53 Presidential Election, First Ballot, 28 December 2014 Candidate Votes % of votes Ivo Josipović (SDP) 687,678 39.09 Kolinda Grabar-Kitarović (HDZ) 665,379 37.82 Ivan Sinčić (Živi Zid) 293,570 16.69 Dr Milan Kujundžić (Hrvatska Zora) 112,585 6.40 Total 1,759,212 100.00

Second Ballot, 11 January 2015 % of valid Candidate Votes votes Kolinda Grabar-Kitarović (HDZ) 1,114,945 50.74 Ivo Josipović (SDP) 1,082,436 49.26 Total 2,197,381 100.00

Kolinda Grabar-Kiratovic was duly elected President. Legislative Assembly (Sabor)54 General Election, 11 September 2016 Parties/coalitions % of votes Seats Croatian Democratic Union (HDZ) 40.40 61 People’s Coalition (Narodna Koalicija) 35.76 54 Bridge of Independent Lists (MOST) 8.61 13 Human Shield (Živi Zid) 5.30 8 Istrian Democratic Assembly (IDS) 1.99 3 Milan Bandić 365—Party of Labour and Solidarity (Bandić 1.32 2 365) Representatives of minority ethnic groups 5.30 8 Others 1.32 2 Total 100.00 151 Note: The General Election on 11 September 2016 was a result of a Sabor vote on 20 June 2016 to dissolve the legislature on 15 July that year, resulting in a . The next legislative elections are due to be held by December 2020.

4.4 Views on Brexit Preserving EU unity a priority On 11 October 2016 Theresa May met with President Grabar-Kitarovic in Downing Street. The Croatian President said the UK’s decision to leave the

53 President (Croatia), Europa World online. London, Routledge. Retrieved 30 August 2018 54 Assembly (Sabor) (Croatia), Europa World online. London, Routledge. Retrieved 30 August 2018

40 The EU27: Internal Politics and Views on Brexit

EU was a “great shock” and a “wake-up call” to the remaining 27 Member States.55 The final agreement between the UK and EU would be “a process like no other with far reaching consequences—its final scope no one can predict with absolute certainty”. It was not just about trading arrangements and Single Market access, but “about preserving our joint and unique culture, our decades of strategic partnership and our commitment to the same shared values. This relationship needs to be tailor-made”.56 At a conference on the future of the EU on 22 March 2017 Prime Minister Andrej Plenkovic was cautious about the idea of a “multi-speed” Europe.57 He cited Brexit analyses that showed “Croatia would be least affected by Brexit but it would nevertheless feel it just as all the countries will”. Criticism of the UK referendum Arriving at the June 2017 European Council meeting, Mr Plenkovic said the UK referendum “should never have taken place” and he regretted Brexit. He said the EU27 would “find specific measures for those who need them”.58 He reiterated his criticism a week later: Britons allowed manipulators, those who speak untruths, like Nigel Farage and the likes, to contaminate public space and convince most Britons that it is better to leave than to stay, and they had a very good status and many benefits. It was a big mistake and it will negatively affect Britain the most.59 But at a World Economic Forum panel discussion on the future of Europe on 25 January 2018, Mr Plenkovic was more optimistic. He thought the EU had recovered from its shock of a year ago and was “trying to come to terms with this situation and manage it”.60 Concerns about UK extending free movement restrictions When Croatia joined the EU in 2013, the UK decided to restrict the access of Croatian citizens to its labour markets for five years. The UK (with Austria, Slovenia and the Netherlands) applied restrictive measures, which meant that unless an exemption applied, Croatians needed Home Office permission to work in the UK. The Croatian Government was keen that the UK should not extend restrictions for another two years and used the Brexit negotiations as an opportunity to assert equal status for Croatian nationals with those of other EU Members States. The five-year period ended in June

55 Reuters, Brexit to be Difficult Process Like No Other—Croatia President, 12 October 2016 56 Ibid 57 One of the possible future scenarios outlined by Commission President Jean-Claude Juncker in a ‘White Paper’, in which some Member States could integrate ahead of or without others. See Government of Croatia, PM Plenkovic: We Must Not Fall into the Trap of Multi-speed Europe, 22 March 2017 58 European Commission Audiovisual Services, European Council – all arrivals, 22 June 2017. You can view Prime Minister Plenkovic’s comments in the video of all arrivals (jump to 12:10 in the video) 59 Government of Croatia, PM Plenkovic says Croatia to be least affected by Brexit, 29 June 2017 60 Government of the Republic of Croatia, “PM Plenkovic: It would be good for Croatia to be in "closer circle of the European project"”, 26 January 2018.

41 Commons Library Briefing, 2 May 2019

2018 and the UK Government concluded that there was “not enough evidence to satisfy the legal requirements to extend the controls for the final 2 year period”.61 More clarity needed about future relations After talks with the Irish on 23 July 2018, the Croatian Prime Minister said the UK’s withdrawal from the EU has been “a lose-lose-lose situation” from the start and called for “a clear picture of the future agreement and relationship with the UK”.62 In an interview with Good Morning Britain on 7 August 2018, President Grabar-Kitarovic said she wanted a “soft Brexit” and for Croatia and the UK “to remain as close as possible”. She respected the UK’s decision but was “hoping secretly” that the UK would come back again.63 Extending Article 50 and European Parliament elections On 13 March 2019, Croatian Prime Minister Andrej Plenković was asked if his country would be willing to accept an extension to the then 29 March deadline for Britain’s exit from the EU, replying: “We are open to extending the deadline.64" During the European Council on 22 March 2019, which provided for an extension to the Article 50 process, Plenković endorsed the decision to postpone Brexit: That message is one of reliability, predictability and security for natural and legal persons, for the financial markets, and for all political actors on the British political scene to know exactly what will be going on and also for us to know what will be going on. That's why that message is very good, it is a reasonable answer to Prime Minister Theresa May's letter. If they ratify the agreement next week, they will have enough time by 22 May to adopt all the necessary laws. This is realistic and this is a positive scenario. If this does not happen, and at this point we cannot know what will happen in the United Kingdom and what will be the political consequences of another possible rejection, then we have the second deadline of 12 April. If they do not call the election by then, they leave automatically on 22 May.65 The possibility of the UK taking part in elections to the European Parliament directly affects Croatia and 13 other member states. Should the UK not take part in EP elections, then Croatia would gain an additional seat under a new seat distribution plan – taking their numbers to 12 MEPs. If the UK does participate in EP elections, Croatia would maintain 11 MEPs.

61 Croatia: Written statement - HCWS560, 19 March 2018 62 Irish Times, Brexit a ‘lose-lose-lose situation’ – Croatia’s prime minister, 24 July 2018. 63 Daily Express, ITV Good Morning Britain: Kate Garraway DEMANDS to know why Croatia want SOFT Brexit, 7 August 2018. 64 Total Croatia News, Croatia Open to Possible Brexit Delay, 13 March 2019. 65 Total Croatia News, Croatia Supports Brexit Delay Decision, 22 March 2019. 42 The EU27: Internal Politics and Views on Brexit

5. Cyprus 5.1 Key Facts 1. Government and Politics Head of State: President Nikos Anastasiades Head of Government: President Nikos Anastasiades Last election: Presidential, 28 January 2018 Next election: Legislative, May 2021 2. Finance and the Economy GDP (2017): €22billion (GDP per head: €25,500) GDP average growth 2014-2018: 3.8% GDP growth 2019 (interim forecast, Feb 2019): 3.3% Net contribution to EU budget per head 2017: -€56 Currency: euro (Turkish lira in the ‘Turkish Republic of Northern Cyprus') 3. Trade with UK Trade with UK as % of GDP: 14.5%

UK trade with Cyprus, 2017 £ millions Exports Imports Balance Goods 268 113 155 Services 739 1,304 -565 Total 1,007 1,417 -410 Source: ONS Pink Book

4. Views on EU 36% of Cypriots have a positive view of the EU (net positive: +13%) 24% of Cypriots agree that their voice counts in the EU (net voice counts: - 48%) 41% of Cypriots trust the EU (net trust: -11%) 87% of Cypriots are in favour of free movement 65% of Cypriots feel like a citizen of the EU 5. Cypriot nationals in the UK 19,000 (ONS estimate for Jan to Dec 2017)

5.2 Background66 Cyprus was a dominion of the British Empire, administered from 1878 to 1914 as a British protectorate, under military occupation from 1914 to 1922

66 See Cyprus, Europa World online. London, Routledge. Retrieved 15 June 2018. 43 Commons Library Briefing, 2 May 2019

and as a Crown Colony from 1922 to 1960. The UK granted independence to Cyprus on 16 August 1960 and formed the Republic of Cyprus. The 1960 Constitution provided for a system of government in which power would be shared by the Greek and Turkish communities. There would be a Greek Cypriot president and a Turkish Cypriot vice-president. A coup d'état by the Greek military junta in 1974 was followed by 's invasion of Cyprus and the occupation of the northern part of the island. Although the 1960 Constitution remains in force, each community administers its own affairs. The Greek Cypriot administration of Cyprus is internationally recognised as governing the whole of Cyprus, but it has no de facto control of the northern part of the island (since 1983 the Turkish Republic of Northern Cyprus – TRNC - which is recognised only by Turkey). Cyprus’s Treaty of Accession with the EU was signed in April 2003, with a protocol specifying that the EU would not apply in the area administered by the TRNC. Cyprus joined the EU on 1 May 2004 and adopted the Euro on 1 January 2008. In June 2012 the Government confirmed that it needed to apply for financial assistance to save the struggling banking sector. In March 2013 an agreement was reached with the EU and the International Monetary Fund (IMF) on a €10 billion rescue package to avert financial collapse and to keep Cyprus in the single currency. 5.3 Current Government and recent political developments Cyprus has a unicameral legislature, the Vouli Antiprosopon (House of Representatives). This consists of 80 seats: 56 assigned to Greek Cypriots and 24 to Turkish Cypriots. Only those seats assigned to Greek Cypriots are filled. Members are directly elected for five-year terms. In the TRNC the unicameral Cumhuriyet Meclisi (Assembly of the Republic) has 50 seats with members directly elected for five-year terms. The Cypriot President is both the head of state and head of government. Presidents are elected by an absolute majority of the popular vote (with two rounds if necessary) and serve a five-year term. Conservative Democrat was first elected President in 2013, just before Cyprus agreed to the EU and IMF bailout. He was re- elected President in the second-round run-off vote on 4 February 2018 and heads a coalition government formed by the (DISY) and independents. Although the position of vice president is reserved for a Turkish Cypriot, as Turkish Cypriots do not participate in the Cyprus Government, this post has remained vacant. 44 The EU27: Internal Politics and Views on Brexit

The TRNC held elections in April 2015 and Social Democrat Mustafa Akinci was elected President.67 Results of the most recent Cypriot elections President68 Presidential Election, First Ballot, 28 January 2018 Candidate Votes % of votes Nikos Anastasiades (DISY) 137,268 35.51 Stavros Malas (Ind., with AKEL support) 116,920 30.24 Nicolas Papadopoulos (DIKO) 99,508 25.74 Christos Christou (ELAM) 21,846 5.65 Giorgos Lillikas (Citizens’ Alliance) 8,419 2.18 Andreas Efstratiou (Ind.) 845 0.22 Charis Aristidou (Ind.) 752 0.19 Michalis Minas (Justice Party) 662 0.17 Christakis Kapiliotis (Ind.) 391 0.10 Total* 386,611 100.00 * Excluding 9,338 abstentions and blank or invalid votes (2.36% of the total votes cast) Second Ballot, 4 February 2018 Candidate Votes % of votes Nikos Anastasiades (DISY) 215,281 55.99 Stavros Malas (Ind., with AKEL support) 169,243 44.01 Total* 407,475 100.00 * Excluding 22,951 abstentions, and blank or invalid votes (5.63% of total votes cast). Nikos Anastasiades was duly re-elected President. The next elections are to be held in February 2023. Legislative Assembly (House of Representatives)69 General Election, 11 September 2016 Elections for the House of Representatives, 22 May 2016 % of Party Votes Seats votes Democratic Rally (DISY) 107,825 30.69 18 Progressive Party of the Working People (AKEL) 90,204 25.67 16 Democratic Party (DIKO) 50,923 14.49 9 Movement of Social Democrats EDEK (KISOS) 21,732 6.18 3 Citizen’s Alliance 21,114 6.01 3 Solidarity Movement 18,424 5.24 3 Cyprus Green Party (KOP) 16,909 4.81 2 National People’s Front (ELAM) 13,041 3.71 2 Total (incl. others)* 351,389 100.00 56

67 See BBC News, Cyprus country profile”, 7 February 2018 68 President (Cyprus), Europa World online. London, Routledge. Retrieved 2 October 2018 69 Legislature (Cyprus), Europa World online. London, Routledge. Retrieved 2 October 2018 45 Commons Library Briefing, 2 May 2019

* Excluding 7,675 invalid votes and 3,478 blank votes. The next legislative elections are due to be held in May 2021. 5.4 Views on Brexit Strong UK – Cyprus relationship The UK and Cyprus have strong historical ties,70 which the Cyprus High Commissioner to the UK, Euripides Evriviades, recalled before the UK referendum: Our position is clear: the UK should remain in the EU. We need a strong UK in a stronger EU to address collectively the multitudes of challenges facing us. In a globalised world, we are joined at the hip. And we are all in the same strategic boat.71 He continued: Cyprus and the UK have a strong bilateral historical if not an umbilical relationship. Approximately 250,000-300,000 British citizens of Cypriot origin live in the UK; thousands of Cypriot students and others study/work in the country; tens of thousands of Britons live as permanent residents in Cyprus. Almost every Cypriot I know has lived or studied in the UK, or has children or relatives living here. Millions of Britons have visited Cyprus as tourists or lived and worked there for a period of time. All these will be affected one way or another with a possible Brexit. According to the electoral procedure, all Cypriots living in the UK are eligible to vote since Cyprus is a member of the Commonwealth. We are not hiding. We are openly calling for all Cypriots living in the UK to make their voice heard by registering and voting. The High Commissioner went on to quote Cypriot Foreign Minister, Ioannis Kasoulides who emphasised Brexit’s potentially damaging effects on Cyprus and the EU : It is not in the interest of Cyprus for the UK to leave the EU for many reasons, mainly financial but other ones as well. It is neither in the interest of the Commonwealth to have a Brexit, because the Commonwealth benefits from the British presence in the EU, as the UK is in the forefront of policies such as tackling , pursuing sustainable growth etc. Therefore, I call upon our compatriots in the UK to seriously support the UK remaining in the EU. The EU which is facing so many challenges must be reinforced and not weakened by exits. Following the referendum, a Cypriot Government spokesman said the EU’s aim should be to facilitate “the smoothest possible exit” of the UK from the

70 Cyprus was a dominion of the British Empire, administered from 1878 to 1914 as a British protectorate, under military occupation from 1914 to 1922 and as a Crown Colony from 1922 to 1960. 71 London School of Economics and Political Science blog, High Commissioner for the Republic of Cyprus to the UK: “A Brexit would not be in the interests of the Commonwealth”, 7 June 2016

46 The EU27: Internal Politics and Views on Brexit

EU.72 On bilateral UK – Cyprus relations, the Cypriot Government recalled their “excellent bilateral relations and the unbreakable friendly ties [… that] existed before the accession of the two countries to the EU” and through their membership of the Commonwealth. He said Cyprus would “work to further enhance and deepen its relations” with the UK and looked forward to “strengthening our existing close cooperation, so that the interests of the two countries and their peoples are, inter alia, fully ensured, on the basis of the new conditions created”.73 UK Sovereign Bases a priority The reality of Brexit and the possibility of a hard Brexit replaced the rhetoric of historic friendship in 2017. Ahead of UK - Cyprus talks in October 2017, Foreign Minister Kasoulides said a hard or soft Brexit “mattered” for Cyprus.74 An article in Bloomberg provided made clear that the future status of the UK’s two Sovereign Bases in Cyprus were a priority for the Cypriot Government: The two sovereign bases, which cover 3 percent of the geographically strategic island, are home to Cypriot citizens as well as U.K. soldiers. If the U.K. walks away from Brexit talks without a deal, any agreement between Cyprus and Britain won’t go into effect, leaving the status of the bases unclear and the residency rights of Cypriots living there in question, Kasoulides said. […] In the case of Cyprus, if there’s no overall Brexit deal, Cypriot farmers producing goods in the base areas may find themselves stranded beyond the reach of EU agricultural policy, with implications for exports. Cypriots who work and own property on the bases may find their rights on the bases in doubt. Cyprus wants to protect the rights of its citizens on the bases by maintaining the status quo that was agreed when the country joined the EU in 2004, and is optimistic the U.K. will agree, Kasoulides said. U.K. retained two sovereign base areas on Cyprus under the 1960 treaty of independence granted to its former colony, and the zones have British Overseas Territory status. If the two countries fail to reach agreement, then they may have to revert to the status of the bases under the 1960 treaty. That wouldn’t cover issues such as EU agricultural policy, as the treaty pre-dates EU membership.75 On 17 April 2018, Prime Minister Anastasiades met with Theresa May in Downing Street. A joint press release stated that they had “agreed on the need to maintain the close relationship on defence and security”; they

72 Cypriot Government’s Press and Information Office, ‘Written Statement of the Government Spokesman on the Result of the British Referendum’, 24 June 2016 [as quoted in House of Lords Library Note: Leaving the European Union: Profile of the EU27] 73 Ibid 74 Bloomberg, Brexit Raises Questions About U.K. Sovereign Bases on Cyprus, 5 October 2017 75 Ibid

47 Commons Library Briefing, 2 May 2019

wanted “greater co-operation across a range of activities, including military training and search and rescue” and an agreement on the legal framework for the Sovereign Base Areas “to avoid any negative impact on Cypriots living and working on the bases”.76 Mr Anastasiades described the meeting as “very useful” and noted that they were “on the right track” towards an agreement between Cyprus, the UK and the EU.77 In October 2018 the UK Government announced that a protocol relating to the UK sovereign base areas in Cyprus had been “developed”.78 The aim is for the withdrawal agreement to establish a specialised committee of UK and EU officials on the Sovereign Base Areas to oversee implementation of the Protocol when it is agreed and after ratification of the overall Agreement.79

On 30 October 2018 Foreign Minister Nicos Christodoulides announced that Cyprus and Britain were very close to reaching agreement on the status of the British Bases. He said that in addition to residents’ rights, “Cyprus and Britain will still have to agree on ‘border’ arrangements regarding supplies for the bases imported through Cypriot ports”, but that this would be discussed as part of the future relations discussions.80 The UK Government has outlined that the protocol on the sovereign base areas (like that on Gibraltar) “will be part of the international treaty which we will sign with the withdrawal agreement and the implementation period. The long-term future relationship will supersede that once we have that partnership”. Cyprus outlines post-Brexit residency plans On 1 September 2018, the Cyprus Interior Ministry published a document explaining how, under the draft withdrawal agreement, Cyprus intended to implement post-Brexit residency rights for UK nationals and their family members: • UK nationals and their family members who, by 31 December 2020, have been continuously resident in Cyprus for five years will be eligible for permanent residence. • UK nationals and their family members who already reside in Cyprus or arrive by 31 December 2020, but will not yet have been continuously resident in Cyprus for five years, will be eligible for residence, enabling them to stay until they have

76 Prime Minister’s Office, PM meeting with : 17 April 2018, 10 Downing St, 17 April 2018 77 Cyprus Mail, Anastasiades has ‘very useful’ meeting with Theresa May, 17 April 2018. 78 Theresa May, statement on October EU Council, 22 October 2018 79 European Scrutiny Committee, Cyprus: Brexit and UK Sovereign Base Areas, 18 July 2018 80 Ekathimerini.com, Cyprus says close to Brexit agreement with Britain on status of bases' residents, 31 October 2018. The UK Government has outlined that the protocol on the sovereign base areas (like that on Gibraltar) “will be part of the international treaty which we will sign with the withdrawal agreement and the implementation period. The long-term future relationship will supersede that once we have that partnership”, Baroness Evans of Bowes Park, debate on October European Council, 22 October 2018 c 698

48 The EU27: Internal Politics and Views on Brexit

reached the five-year threshold, allowing them to apply for permanent residence. • UK nationals and their family members who are covered by the Withdrawal Agreement, will be able to continue their lives in Cyprus, with the same access to work, study, benefits and public services that they enjoy now, subject to the specific provisions provided for in Withdrawal Agreement.81 Brexit preparations Foreign Minister Nikos Christodoulides has said “all relevant government services” are following European Commission guidance on contingency planning.82 According to The Times report in August 2018 UK ministers are considering expanding the port at Akrotiri to keep the base supplied if access to commercial ports in Cyprus is disrupted.83

Arrangements for a ‘no deal’ Brexit After the second ‘Meaningful Vote’ rejection of the WA in the House of Commons in March 2019, Cypriot Foreign Ministry spokesman Demetris Samuel said: Even though we fully respect the sovereign decision of the House of Commons, we are disappointed by the result of last night’s voting in London, as it is obvious that it does not lead us closer to an orderly Brexit.84 We continue to consider, as our European partners and the European Commission do, that the ratification of the withdrawal agreement between the EU and the United Kingdom government that was concluded last November, in combination with the additional assurances given on behalf of the EU, is the only way which secures that Brexit will be completed in the most orderly and smooth way, under the circumstances. More recently, on 4 April 2019, it emerged that Cyprus was putting in place special arrangements for British citizens in the event of a no-deal Brexit. A Bill is expected to be submitted to the Cypriot parliament and includes details of a visa waiver for short-term visits.85

81 Cyprus Ministry of Interior, Implementing [the withdrawal agreement] : Residence rights and residence documents in the Republic of Cyprus, 1 September 2018 82 Bloomberg, How Europe Is Bracing for Messy Brexit: Dogs, Drones, Do Nothing, 19 July 2018 83 The Times, Brexit: MoD fears need for new port in Cyprus to serve RAF Akrotiri, 30 August 2018 84 Ekathimerini.com, Cyprus prepares for hard Brexit, 13 March 2019 85 CyprusMail Online, Cyprus making arrangements for no-deal Brexit, 4 April 2019 49 Commons Library Briefing, 2 May 2019

6. Czech Republic 6.1 Key Facts 1. Government and Politics Head of State: President Miloš Zeman Head of Government: Prime Minister Andrej Babiš Last election: Presidential, 12–13 and 26–27 January 2018 Next election: Legislative, due in 2021 2. Finance and the Economy GDP (2017): €284 billion (GDP per head: €26,900) GDP average growth 2014-2018: 3.7% GDP growth 2019 (interim forecast, Feb 2019): 2.9% Net contribution to EU budget per head 2017: -€222 Currency: koruna 3. Trade with UK Trade with UK as % of GDP: 5.9%

UK trade with Czech Republic, 2017 £ millions Exports Imports Balance Goods 2,021 5,602 -3,581 Services 1,076 661 415 Total 3,097 6,263 -3,166 Source: ONS Pink Book

4. Views on EU 28% of have a positive view of the EU (net positive: -4%) 23% of Czechs agree that their voice counts in the EU (net voice counts: - 49%) 32% of Czechs trust the EU (net trust: -26%) 80% of Czechs are in favour of free movement 56% of Czechs feel like EU citizens 5. Czech nationals in the UK 49,000 (ONS estimate for Jan to Dec 2017) 6.2 Background The Czech Republic was established in January 1993 after the dissolution of the Czech and Slovak Federative Republic which had been established in 1990, a year after Communist rule in was peacefully brought to an end by the so-called ‘’. Under the Czech Constitution, which entered into force in January 1993 and has subsequently been revised, legislative power is vested in the 200- 50 The EU27: Internal Politics and Views on Brexit

member Chamber of Deputies and the 81-member Senate. Members of the Chamber of Deputies and the Senate are elected for terms of four and six years respectively by universal adult suffrage (one-third of the seats in the Senate are renewable every two years). Since 2013 the President of the Republic (head of state) has been directly elected by popular vote for a term of five years for no more than two consecutive terms (previously the position was elected by a joint session of the legislature). The President appoints the Prime Minister and, on the latter’s recommendation, the other members of the Council of Ministers.86 The Czech Republic became a full member of NATO in 1999 and of the EU in 2004. In 2016 ‘Czechia’ was officially confirmed as the alternative short English name for the Czech Republic. 6.3 Current Government and recent political developments At legislative elections held on 20-21 October 2017, the populist anti- corruption ANO (Movement of Dissatisfied Citizens) party founded by billionaire Andrej Babiš in 2012 emerged at the leading party, with 29.6% of the votes and 78 seats. The centre-right Civic Democrats (ODS) came second with 11.3% of the vote and 25 seats. The pro-EU Czech obtained 10.8% and 22 seats. The right-wing populist SPD - Freedom and Direct Democracy (established in 2015) got 10.6% and 22 seats, securing parliamentary representation for the first time. The Communist KSČM won 7.8% of the vote and 15 seats. The Social Democrats declined to 7.3% and 15 seats, their worst result since the formation of the Republic in 1993. They were the leading party in 2013 with 20.5% of the vote and 50 seats, and had led the outgoing coalition of the ANO and the Christian Democrat KDU-ČSL. ANO’s emergence ended the dominance of the two leading parties, the centre-right Civic Democrats (ODS) and the centre-left Social Democrats (ČSSD), which have alternated in government since the establishment of the Czech Republic. ANO fought its first election in 2013, winning 18.6% of the vote, after which it joined an acrimonious coalition government with the CSSD and the smaller KDU-ČSL. Babis held the role of finance minister until he was dismissed in May 2017 over allegations of tax evasion. In December 2017, Andrej Babiš formed a minority government of ANO and independents. The other main parties refused to join a coalition

86 The Czech Republic, in Europa World online. London, Routledge. House of Commons. Retrieved 15 June 2018 from http://www.europaworld.com/entry/cz.

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government with Babiš while criminal investigations were ongoing against him about the alleged misuse of EU subsidies by his business interests.87 The Government lost a delayed parliamentary vote of confidence on 16 January 2018 and Andrej Babiš subsequently tendered the resignation of his administration. However, he remained in office in an interim capacity pending further coalition negotiations, after President Milos Zeman granted him a new mandate. Later in January Milos Zeman was re-elected at President, defeating Jiří Drahoš, a former Chairman of the Czech Academy of Sciences, in a second- round run-off with 51.4% of the votes cast. Zeman was previously a social democrat Prime Minister but in recent years had shifted to the right, making strong anti-immigration and anti-Muslim comments, opposing EU refugee quotas and EU sanctions against . He also backed in the US Presidential election. Babiš backed Zeman in the presidential election and shares his opposition to EU refugee quotas. In an interview with Politico in January, Babiš repeatedly stated that would grow in the Czech Republic if the EU did not respect opposition to policies such as migrant quotas, which the Czech and other Central European governments had rejected. However, he said he saw himself as a defender of the EU in the Czech Republic. In July 2018 a new governing coalition headed by Babiš, bringing together ANO and the Social Democrat ČSSD, and with external parliamentary support from the Communist KSČM, won a parliamentary vote of confidence. Prime Minister Babiš said in August 2018 that it was important for the Czech Republic to remain a reliable and active partner in the EU and NATO, although it would push for reforms in areas where it disagreed with the direction of the EU.88 He thought the EU should focus primarily on its essential role of securing European stability and a smoothly functioning Single Market; Czech membership of the Euro was not on the agenda at present, and the Eurozone needed to reform before the Government would consider joining. He also reiterated the Government’s opposition to EU refugee/migrant quotas. In November 2018, the minority government survived a no-confidence vote called by opposition parties following claims by Prime Minister Babiš’s son that he had been kidnapped by associates of his father to prevent him testifying into an investigation into the Prime Minister’s business affairs. In December 2018, the European Parliament adopted a resolution raising concerns about Prime Minister Babiš’s conflicts of interests and the use of

87 Sources: Recent developments: ANO election victory and government resignation (The Czech Republic), Europa World online. London, Routledge. Retrieved 15 June 2018; LSE Europp blogs: “Three lessons from the Czech presidential election” and Czech election preview: Is Andrej Babiš heading for a Pyrrhic victory?; BBC News, Czech election: Zeman beats Drahos to win second term. 88 Radio Praha, Czech PM: Czexit would threaten country’s future, 27 August 2018

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EU money in the Czech Republic, and called on the European Commission to recover all funds that had been illegally or irregularly paid out. Results of the most recent Czech elections President89 Presidential Election, First Ballot, 12-13 January 2018 Candidate Votes % of votes Miloš Zeman (Party of Citizens’ Rights – SPO) 1,985,547 38.57 Jiří Drahoš (Independent) 1,369,601 26.60 Pavel Fischer Independent) 526,694 10.23 Michal Horáček (Independent) 472,643 9.18 Marek Hilšer (Independent) 454,949 8.84 Others 338,707 6.58 Total 5,148,141 100.00

Second Ballot, 26-27 January 2018 Candidate Votes % of votes Miloš Zeman (Party of Citizens’ Rights – SPO) 2,853,390 51.36 Jiří Drahoš (Independent) 2,701,206 48.63 Total 5,554,596 100.00 Miloš Zeman was duly elected President. Legislature The Czech Republic has a bicameral legislature, comprising the Chamber of Deputies and the Senate. Chamber of Deputies (Poslanecká Sněmovna)90 General Election, 20-21 October 2017 % of Party Votes Seats votes Movement of Dissatisfied Citizens (ANO) 1,500,113 29.64 78 Civic Democratic Party (ODS) 572,962 11.32 25 (Piráti) 546,393 10.79 22 Freedom and Direct Democracy (SPD) 538,574 10.64 22 Communist Party of Bohemia and (KSČM) 393,100 7.76 15 Czech Social Democratic Party (ČSSD) 368,347 7.27 15 Christian Democratic Union-Czechoslovak People’s Party 293,643 5.80 10 (KDU-ČSL) Tradition, Responsibility, Prosperity 09 (TOP 09) 268,811 5.31 7 Mayors and Independents (STAN) 262,157 5.18 6 Others 316,659 6.29 0 Total 5,060,759 100.00 200

89 President (The Czech Republic), Europa World online. London, Routledge. Retrieved 9 October 2018 90 Chamber of Deputies (Poslanecká Sněmovna) (The Czech Republic), Europa World online. London, Routledge. Retrieved 9 October 2018

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Senate (Senát)91 Partial election, 7-8 October and 14-14 October 201692 Party Seats Czech Social Democratic Party (ČSSD) 25 Christian Democratic Union-Czechoslovak People’s Party 11 (KDU-ČSL) Civic Democratic Party (ODS) 7 Movement of Dissatisfied Citizens (ANO) 7 Others 31 Total* 81 * Results in one municipality were annulled and the election repeated in January 2017. 6.4 Views on Brexit Visegrad Group solidarity A chapter on the previous Czech Government’s approach to Brexit in a report on EU27 positions by the academic ‘Negotiating Brexit’ project93 referred to the positions of the Government both before and after the UK referendum. The Czech Government rejected David Cameron’s attempts to limit free movement as part of UK-EU arrangements agreed in February 2016 (although supporting his other objectives relating to deepening of the internal market, increasing competitiveness and equal treatment of Eurozone and non-Eurozone countries). After the UK referendum, the Czech government signed a joint declaration of the Visegrad Group (the Czech Republic, Hungary, Poland and Slovakia) underlining their key demand: protection of EU citizens in the UK and their equal treatment. The Government also stressed the “indivisibility of the four freedoms,” while advocating a constructive approach to the negotiations and warning against any punitive approach towards the UK. President Zeman: Czech referendum on EU membership? Shortly after the UK referendum, President Zeman suggested the Czech Republic should also hold a referendum on EU and NATO membership, although he himself was against leaving the EU. The Czech Government later said it had no intention of holding a referendum on either matter. In an interview with Czech TV after the Brexit vote, Zeman said the UK vote was “bad for both sides” and that it would not have happened if the EU had been headed by “forceful personalities”. He thought the UK vote meant the EU would not be an equal partner in dialogue with , Russia and the US, as he had hoped. He also predicted that the vote would lead to Scotland leaving the UK, and the UK being undermined economically. Don’t punish the UK

91 Senate (Senát) (The Czech Republic), Europa World online. London, Routledge. Retrieved 9 October 2018 92 Senators serve a six-year term, with one-third of seats up for election every two years. 93 Co-ordinated by academics at the University of East Anglia and University of Surrey.

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In some respects the former and current Czech governments’ views on the EU indicate some sympathy with the UK. Former Prime Minister was reported as saying after the UK referendum that the EU “must change quickly” and “be more ready to act, be flexible, less bureaucratic and much more sensible to the diversity that the 27 member states represent”.94 The then Foreign Minister Lubomír Zaorálek in March 2017 warned the EU against a punitive approach towards the UK: I absolutely disagree with those statements suggesting ‘now we will make life tough for Britain’. Because we need the best economic, political, strategic and defence relationship with the UK. Besides, the EU should not be held together on the basis of threats about what happens if you leave, but rather by the positives, and the things that make membership of the EU feel like a definite.95 But in January 2017, then Finance Minister Andrej Babiš said in an interview with Bloomberg that it was important for the EU to negotiate together as one bloc with the UK, and he dismissed an idea put forward by the Czech interior minister96 that the Czech Government negotiate a separate deal with the UK on the status of Czech citizens post-Brexit (suggesting this was motivated by electioneering). In October 2017 Babiš was reported as warning that the EU would fail “unless leaders learn Brexit lessons” – that pursuing a federalist agenda was not what most EU Member States wanted. Brexit priorities In the January 2017 interview Andrej Babiš stressed that it was a Government priority to safeguard the status of its citizens in the UK after Brexit, as well as to maintain important trading relations. Babiš was surprised by Theresa May’s Lancaster House speech the previous week, which he characterised as a “hard Brexit”. He said it was important for the EU that the UK fulfilled its financial obligations and he hoped a solution could be found on trade that was similar to that of Switzerland or . Like others in the EU27, he was anxious for the UK to get on with the negotiations because the uncertainty was unsettling for markets. An LSE blog in June 2017 by Dr Monika Brusenbauch Meislová (Palacký University, Olomouc) highlighted the following Czech Government priorities with regard to Brexit: • The Czech Republic is keen to minimise post-Brexit disruption to its economic links with the UK, and is seeking to safeguard the interests of its exporting firms and stimulate further inflow of British investment. She cites the words of the previous Prime Minister Social Democrat Bohuslav Sobotka: “We would like future relations between Britain and Europe to exist in such a way as to not threaten our exports to the UK, and for Czech jobs not to be threatened. So that is the spirit in which we intend to negotiate.”

94 See House of Lords Library Note Leaving the EU: Profile of the EU27, 31 March 2017. 95 Whitehouse consultancy’s profile of the EU27’s positions on Brexit 96 The suggestion was made by , a prominent Social Democrat, who later served as interim leader of the ČSSD from June 2017 to March 2018. 55 Commons Library Briefing, 2 May 2019

• Ensuring that the UK delivers on its financial commitments to the EU. As a net recipient from the EU budget, the Czech Republic has already made plans on the grounds of current EU funding and does not want to see it cut. • Protecting Czech citizens living, working and studying in the UK. The Czech Republic has been very vocal in making it clear that it will seek guarantees for its nationals and make sure that they retain their privileges in terms of social, health and benefits. • Retaining strong links in security and defence policies, ensuring that the UK remains a close partner in these areas. Brexit lessons – no more federalism? Following the December 2017 European Council agreement on phase one of the negotiations, a Czech Government press notice reported a statement from Mr Babiš about the need for good EU-UK relations: It is good that we have succeeded in moving to the next stage of the Brexit negotiations today. We do not take Brexit lightly, but European politics must not shrink only to talks about negotiations of the Great Britain's exit. Great Britain will always be an ally for us and it is important to maintain the best possible relations with it and to protect the rights of our citizens working in the Great Britain. Beyond a trade agreement, cooperation in the area of security and defence will be crucial. Babiš rejects Chequers ‘customs partnership’ Ahead of a meeting with Theresa May in July 2018, Mr Babiš indicated in a BBC interview that he supported the European Commission’s position in rejecting the UK’s Chequers proposal for a customs partnership in which the UK would collect tariffs on behalf of the EU. He told the BBC why he thought this would not work: There is a clear problem with the fact that the EU will not have a mechanism to control its borders and it would be delegated – without any EU control – to a third country, which would be Britain after March. He also said that the UK proposals on Single Market regulations lacked “a certain balance between the rights and obligations”. Hopes for a ‘soft’ Brexit and a second UK referendum In an interview with the Czech News Agency CTK in July 2018, President Zeman said he hoped that the UK and EU would reach agreement on a “soft Brexit” involving free movement of people, goods, capital and services. He believed “in soft Brexit that will create no substantial obstacles to the four freedoms” and wished that “except for the English Channel, there would be no significant barriers between Britain and the EU to worsen the mutual situation”. In an interview with the BBC Today programme on 20 September 2018, coinciding with the Salzburg EU leaders meeting, Prime Minister Babiš, said he hoped for a deal between the EU and the UK but also for a second UK referendum on EU membership and a different result. He told reporters at the summit that he felt “sorry” for the UK. 56 The EU27: Internal Politics and Views on Brexit

On 13 March 2019 Prime Minister Babiš said he had called Theresa May the previous weekend and urged her to hold a second referendum with a view to staying in the EU. Prime Minister Babiš tweeted: I told her the best solution would be for Great Britain to stay in the European Union. Therefore I am convinced it is worth calling a new referendum. . . She rejected this, but according to me it is still not ruled out. Extension of Article 50 On 15 March, Prime Minister Babiš said following a meeting with the Romanian Prime Minister that the Czech Republic would be open to the UK request to extend Article 50 and postpone Brexit. He also repeated his view that while it did not seem possible now, it would be best if the UK called a second referendum and decided to stay in the EU. He said that the second best option would be if the Withdrawal Agreement negotiated with the EU was passed, even though this had been twice rejected by MPs in the House of Commons. Arriving at the European Council on 10 April to consider the UK’s second Article 50 extension request Prime Minister Babiš said he hoped that EU leaders would have a “short discussion” and that the meeting would not go on for eight hours, as it did the last time the European Council was discussing an Article 50 extension. He also said he expected the UK to “get much more time than expected” and that the extension would be until March 2020. Earlier in the day Prime Minister Babiš told Politico that the “integrity of the EU” was essential for him but that he was “inclined to be flexible as regards a longer extension as suggested by President Tusk”. He said that he knew that some colleagues were “worried”, but he was “hoping for a positive outcome”.

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7. Denmark

7.1 Key Facts 1. Government and Politics Head of State: HM Queen Margrethe II Head of Government: Prime Minister Lars Løkke Rasmussen Last election: Legislative, 18 June 2015 Next election: Legislative, due by June 2019 2. Finance and the Economy GDP (2017): €221 billion (GDP per head: €38,400) GDP average growth 2014-2018: 2.1% GDP growth 2019 (interim forecast, Feb 2019): 1.6% Net contribution to EU budget per head 2017: +€141 Currency: krone 3. Trade with UK Trade with UK as % of GDP: 5.5%

UK trade with Denmark, 2017 £ millions Exports Imports Balance Goods 2,657 4,865 -2,208 Services 3,916 1,489 2,427 Total 6,573 6,354 219 Source: ONS Pink Book

4. Views on EU 43% of Danes have a positive view of the EU (net positive: +33%) 73% of Danes agree that their voice counts in the EU (net voice counts: +49%) 60% of Danes trust the EU (net trust: +29%) 78% of Danes are in favour of free movement 78% of Danes feel like a citizen of the EU 5. Danish nationals in the UK 32,000 (ONS estimate for Jan to Dec 2017)

7.2 Background97 Denmark is a constitutional monarchy organised as a parliamentary democracy. Legislative power is held jointly by the hereditary monarch

97 Denmark, Europa World online. London, Routledge. Retrieved 4 September 2018 58 The EU27: Internal Politics and Views on Brexit

(currently Queen Margrethe II, who has no personal political power) and the unicameral Folketing (Parliament). Denmark joined the EEC in 1973 after a long and divisive campaign leading to a Danish referendum on EEC membership in October 1972. The Danes voted 63.2% in favour of joining. Significant developments on the national political scene coincided with the ratification of the (TEU - the ). All parties in the Folketing, with the exception of the Socialistisk Folkeparti (Socialist Peoples’ Party – SF) and Fremskridtspartiet (the populist right Progress Party) supported the Treaty, but in the national referendum held in June 1992, which was mandatory under the Danish Constitution, the TEU was narrowly rejected (50.7% of the votes cast were against ratification). The ‘no’ vote showed that, even though support for membership of the European Community (EC) had increased during the 1980s, many voters - especially those on -were still opposed to any suggestion of a federal Europe. As the support of the SF was seen as essential to winning a second referendum on the TEU, the party was included in negotiations on conditions for Danish ratification of the Treaty. In the end, the SF, Socialdemokraterne (Social Democrats) and Det Radikale Venstre (the social liberal Radical – RV) proposed an amendment to the Treaty in the form of four opt-outs on: European citizenship, defence and security policy, justice and home affairs and the third stage of Economic and Monetary Union (EMU). The Government secured acceptance of the opt-outs by the other EC governments at the Edinburgh Summit in December 1992. The then Prime Minister Schlüter resigned soon afterwards. The most urgent task facing the new Government was to arrange a referendum on the Edinburgh Agreement amending the Maastricht Treaty with the four opt-outs. The amended TEU was adopted by the Folketing and was approved in a referendum in May 1993 with a safe majority (56.7% voted in favour). However, the results indicated that many on the left still opposed the widening and deepening of co-operation within the EC. In 2000 the Government suffered another defeat. The EU’s had been approved in a referendum in May 1998, with 55.1% of votes in favour. In early 2000 polls showed that a majority of voters might support the adoption of the Euro, and in March Prime Minister announced that a referendum on full EMU membership would be held in late September. The Government and the other parties supporting full EMU membership argued that by continuing to stay outside the Eurozone Denmark would lose influence in the EU and the Danish economy would suffer from higher rates and lower growth. Opponents argued that full membership of EMU would pose a threat to the Danish welfare state and that the EU wanted to intervene in the internal politics of Member States. The Government’s expert council on economic policy undermined the ‘yes’ campaign when it published a report arguing that the Danish economy had not suffered as a result of the opt-out and was unlikely to do so in the 59 Commons Library Briefing, 2 May 2019

future. This meant that the referendum was framed as an issue of further integration in the EU rather than one of economic policy. The opt-out stayed in force, with 53.2% voting against full EMU membership. Voter turnout, at 87.6%, was the highest for any referendum since the 1972 referendum on EC accession. Denmark continues to use the krone as its currency today. 7.3 Current Government and recent political developments Denmark has a unicameral legislature – the Folketing (People’s Assembly) – an assembly consisting of not more than 179 members, two of whom are elected in the Faroe Islands and two in Greenland, an autonomous Danish territory. Members are directly elected in multi-seat constituencies by proportional representation, with Members serving four-year terms unless the Folketing is dissolved earlier. Following the 2015 general election, the centre-left government of Helle Thorning Schmidt was replaced by a minority government led by Lars Lokke Rasmussen of the Venstre (Liberal) Party. Mr Rasmussen had previously served as prime minister from 2009 to 2011, before the centre-left’s narrow victory in 2011. Although Thorning-Schmidt’s Social Democrat Party increased its share of the vote in 2015 and was the leading party at the election, its coalition partners the social liberal Radical Left had lost ground. The Socialist People’s Party had also been part of Thorning-Schmidt’s ruling coalition but had pulled out in January 2014, also losing ground at the 2015 election. Mr Rasmussen’s minority government initially sought parliamentary support from other parties on a vote-by-vote basis. However, in November 2016 he formed a new coalition involving the Liberal Alliance and the Conservative People’s Party as well as Venstre and was also reliant on the parliamentary support of the anti-immigrant populist Danish People’s Party (DPP). The DPP had been the biggest gainer at the 2015 election, increasing its vote share from 12.3% to 21.1%. It had previously provided parliamentary support to the centre-right governments of from 2001 to 2009 and of Lars Lokke Rasmussen from 2009 to 2011. 98 Results of the most recent Danish elections Legislature (Folketing)99 General Election, 18 June 2015 % of Party Votes Seats votes Social Democratic Party 924,940 26.28 47

98 Domestic Political Affairs (Denmark), in Europa World online. London, Routledge. House of Commons. Retrieved 06 November 2018. 99 Folketing (Denmark), Europa World online. London, Routledge. Retrieved 3 October 2018 60 The EU27: Internal Politics and Views on Brexit

Danish People's Party 741,746 21.08 37 Liberal Party of Denmark (Venstre) 685,188 19.47 34 Red- 274,463 7.80 14 Liberal Alliance 265,129 7.53 13 The Alternative 168,788 4.80 9 Radical Left 161,009 4.58 8 Socialist People’s Party 147,578 4.19 7 Conservative People’s Party 118,003 3.35 6 Christian Democrats 29,077 0.33 0 Total (incl. others) 3,518,987* 100.00 179** * Metropolitan Denmark only. ** Includes two members from the Faroe Islands and two from Greenland.

The next legislative elections are due to be held by June 2019. 7.4 Views on Brexit Denmark ‘disappointed’ Denmark has often sided with the UK in the EU institutions on law-making and Treaty amendments. Like the UK, it has secured Treaty opt-outs - from security and defence, citizenship, police and justice provisions and the adoption of the Euro. So for Denmark Brexit represents to a certain extent the loss of an important political ally. The morning after the UK Brexit referendum, Prime Minister Rasmussen expressed his disappointment: We must respect the choice that a majority of the British people have made. At the same time, I won't hide the fact that I think it is a very sad result for Europe and for Denmark.100 In an event on 8 September 2016, having come to terms with the UK referendum decision, Mr Rasmussen cautioned: We need to be extremely careful that the side that leaves doesn’t get particular competitive advantages on its way out. We all want a peaceful divorce, but when you agree to part ways — and in this situation, only one side wants to part ways — then we need to protect our own interests first.101 In response to Theresa May’s Lancaster House speech in January 2017 on the UK’s priorities for the Brexit negotiations, the Danish Prime Minister said Denmark wanted to be constructive and cooperate with the UK in negotiating a new agreement with the EU.102 Danish criticism and support In a period of UK-Danish tension in June 2017, reported on a public row that erupted when the Danish finance minister, ,

100 AFP / The Local DK, Danish PM: Brexit ‘very sad' for Denmark and EU, 24 June 2016. 101 Gulf News, UK mustn’t get competitive edge after Brexit, Danish PM says, 11 September 2016. 102 The Local DK, Danish PM urges 'constructive' approach to UK's hard Brexit, 17 January 2017.

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warned that the UK needed to be realistic about its importance when it stands alone on the global stage. But the British Ambassador to Denmark, Dominic Schroeder, insisted he saw no sign “of a diminished or diminishing power”.103 Mr Jensen later said he hoped the UK would general election would “mean a time out, a pause in their direction they are taking and a chance to rethink the UK and EU27 go on forward”. Brexit, he thought, would be “a disaster” for Europe and the UK.104 In an interview with The Guardian in October 2017 he expressed Denmark’s readiness to help secure a swift trade deal: In any political negotiations, there is not enough time, not enough money, not enough this, not enough that. This is part of the game. Because what we are dealing with here is not rocket science. We are not speaking about putting a man on Mars or solving the problem of CO2 emissions. We are now on the same page … In my view it is rather important we get into a more close and more speedy process on concluding some of the issues. The UK is a great trading partner of EU27, a strong ally in defence and security, so we need to find out how we can have a good and close relationship post-Brexit.105 Jensen supported a transition period but had concerns about its length: I think it is in our interest to have a transition period. We will find common ground on that. The difficult part will be the length of the transition period, what are the issues of cooperation afterwards, and that’s why it is important we keep momentum in the negotiations, and both sides are ready and able to negotiate fast.106 In April 2018, Prime Minister Rasmussen told Theresa May that leaving the Single Market had a “price tag” not just for Britain but for Denmark; there would be “more bureaucracy in future, unfortunately”. He continued: “Of course we will have to balance rights and obligations. The UK are leaving the EU and not Europe and from the Danish point of view we want as close a relationship with the UK as possible”.107 Prime Minister Rasmussen has recently criticised the UK's handling of Brexit, suggesting it was a political "circus" playing out in a "melting down" system. Referring to the UK politicians, he said the rival Conservative and Labour parties were "so busy in tactical warfare that they can't even talk to each other," while Brexiteers turned out to be "untrustworthy con men." 108

103 The Guardian, Theresa May confirms start date for Brexit talks after pressure from EU, 13 June 2017. 104 Ibid 105 The Guardian, Brexit: stop the 'games' over the bill and get on with EU deal, says Denmark, 8 October 2017 106 Ibid 107 The Independent, Danish prime minister tells Theresa May Brexit will cause more bureaucracy and has a 'price tag', 9 April 2018 108 Euronews, Brexit is a 'circus', warns Danish PM, 4 March 2019

62 The EU27: Internal Politics and Views on Brexit

Response to Chequers plan On 17 August 2018, Politico reported on an interview with Finance Minister Jensen in BBC Radio 4’s ‘Today programme’, in which he described the Government’s Chequers proposal as “a positive step forward and good basis for further negotiations”.109 Referring to an earlier meeting with UK Foreign Secretary Jeremy Hunt, Mr Jensen said Denmark wanted “a deal that is as good and as solid as possible”. However, he warned that the negotiators were running out of time. In a chapter of Denmark in the Negotiating Brexit: Where Now? report released in October 2018,110 Professors Mads Dagnis Jensen and Jesper Dahl Kelstrup of Roskilde University said that the key position for Denmark in the Brexit negotiation was that the UK “cannot continue to fudge”, and there must be “a balance between rights and obligations”. However, the Chequers proposal was interpreted as one such “fudge” in the sense that the UK wanted to be in parts of the Single Market for goods without being subject to the full set of obligations. Jensen and Kelstrup explained that Danish business supported the Government’s position, and that Danish support for the integrity of the Single Market trumped any concern about loss of trade with the UK: From Denmark’s perspective, it is important to make sure that Danish companies are not at risk of being outcompeted in the future because British firms have been allowed to play by rules other than those of the EU’s single market. As other countries in the single market account for roughly 50% of Danish exports a simple cost- benefit analysis suggests that the single market will remain more important than exports to the UK market, which accounts for some 5- 8% of Danish exports. Although Danish agriculture will be among the industries most adversely impacted by Brexit, there is broad recognition among Danish stakeholders, including the Danish Farmers Association, that the rights and obligations in the Single Market must go hand in hand. Brexit planning Denmark has been making contingency plans for a no-deal Brexit, including setting aside 700 million kroner to cover extra payments to the EU. Finance Minister Jensen said: We don’t expect Brexit to materially impact the 2019 budget structurally, so the budget will be stable and reliable. But what actually will happen is that our payment to the EU may change if we get a hard Brexit.

109 Politico, Danish finance minister puts risk of ‘no deal’ Brexit at 50-50, 17 August 2018 110 Negotiating Brexit: Where Now?, 23 October 2018, produced by the “Negotiating Brexit” project examining the positions of the EU27 Governments, co-ordinated by Professor Hussein Kassim of the University of East Anglia and Dr Simon Usherwood of the University of Surrey.

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Through 2019 and maybe into 2020 we’ll be negotiating the EU budget for years to come and we’ll be missing the voice of the U.K. when advocating fiscally responsible spending.111 On 2 October 2018 Prime Minister Rasmussen told the new Danish Parliament “We are employing customs officers and preparing the system”. He also assured British citizens living in Denmark that “no matter the end result of the negotiations”, they would be looked after.112 In their Negotiating Brexit chapter, Jensen and Kelstrup reported that the Danish Government’s Brexit task force is collecting intelligence from ministries and stakeholders on areas that will be affected by a no-deal Brexit and preparing contingency plans. 50 new customs officers had been hired to cope with trade with the UK post-Brexit. In February 2019 the Danish government filed a bill setting out the rights of British citizens living in Denmark in the event of a no-deal Brexit. The 129- page bill provides for a temporary continuation of most rights currently enjoyed by British citizens who live in Denmark under EU free movement rules.113 Delaying Article 50 Ahead of the European Council meeting in March 2019, Prime Minister Rasmussen told reporters “It’s not clear what Theresa May’s next step will be in regards to Brexit. The EU needs clarity.”114 This reinforced a statement from Danish Foreign Minister, Anders Samuelsen, who said the UK needs to explain to the EU27 what it wants from a delay, writing “We’re still awaiting clarity from the British side. Before we get that we cannot help the Brits.”115 Following Mrs May’s proposal for cross-party talks and indication that she would be requesting a further Article 50 extension on 2 April, Mr Rasmussen tweeted: Since we could agree to postpone Brexit to right before EP election given the approval of May’s agreement, we should also be patient IF there suddenly is a cross party way forward in UK. But is it too good to believe? On 10 April, prior to the European Council meeting which agreed a second Article 50 extension, Mr Rasmussen said he was open to a proposed “flextension” to the end of the year. He said: I am willing to offer it personally, but the big question is if there is any added value to a long extension. And I think that is what we have to find our from our conversation with Theresa May.

111 Bloomberg, Hard Brexit? Denmark Prepares for Worst with Budget Reserve, 30 August 2018 112 The local.dk, Brexit is 'tragedy', Danish government will 'look after' Brits in Denmark: PM, 2 October 2018; YouTube, 2 October 2018 113 The local.dk, Denmark’s no-deal Brexit bill: What British residents need to know, 22 February 2019 114 Reuters, The EU needs clarity from Britain regarding Brexit - Danish PM, 20 March 2019 115 Reuters, Britain needs to provide clarity about Brexit delay - Danish Foreign Minister, 15 March 2019 64 The EU27: Internal Politics and Views on Brexit

In the early hours of the morning on 11 April, following the meeting, Mr Rasmussen tweeted: One more chance for the UK. Managed to avoid a #NoDealBrexit tonight. New deadline 31.10. Up to the UK to find solutions Fisheries fears A recent report from the Department of Food and Resource Economics at the University of Copenhagen warned Denmark’s fishing fleet will lose out on 30% (about 1 billion kroner) of its total income, should the fleet be denied access to British waters as a result of Brexit. Denmark’s Fishing Minister, Eva Kjer Hansen, said “a Brexit without access to fishing in British waters can potentially have serious consequences for the fishermen and that is very concerning. Additionally, Brexit can impact the industry, associated sectors and local communities, with hundreds of jobs being at stake.”

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8. Estonia 8.1 Key Facts 1. Government and Politics Head of State: President Head of Government: Prime Minister Jüri Ratas Last election: Legislative, 3 March 2019 Next election: Legislative, due in March 2023 2. Finance and the Economy GDP (2017): €31 billion (GDP per head: €23,600) GDP average growth 2014-2018: 3.5% GDP growth 2019 (interim forecast, Feb 2019): 2.7% Net contribution to EU budget per head 2017: -€352 Currency: euro 3. Trade with UK Trade with UK as % of GDP: 2.6%

UK trade with Estonia, 2017 £ millions Exports Imports Balance Goods 133 197 -64 Services 77 33 44 Total 210 230 -20 Source: ONS Pink Book

4. Views on EU 45% of Estonians have a positive view of the EU (net positive: +36%) 22% of Estonians agree that their voice counts in the EU (net voice counts: - 46%) 53% of Estonians trust the EU (net trust: +28%) 94% of Estonians are in favour of free movement 81% of Estonians feel like EU citizens 5. Estonian nationals in the UK 10,000 (ONS estimate for Jan to Dec 2017) 8.2 Background Estonian independence was proclaimed in February 1918 in the wake of the 1917 Russian Revolution. Estonia was annexed by the Soviet Union in 1940. The changing political environment of ‘perestroika and ‘glasnost’ in the Soviet Union in the late 1980s allowed pro-independence and reform groups to come to the fore in the so-called 'Singing Revolution'. In March 1990 these groups assumed control of government. Independence was 66 The EU27: Internal Politics and Views on Brexit

restored on 20 August 1991 and was recognised by the UK and the rest of the EU on 27 August 1991. After independence Estonia’s main foreign policy objective was to integrate into European and transatlantic institutions. Estonia joined the United Nations in September 1991 and the Council of Europe in May 1993. Its focus then turned to membership of the EU and NATO. Estonia started EU membership negotiations in 1998 and joined the EU on 1 May 2004, together with nine other countries. In March 2004 Estonia joined NATO and in December 2007 the . Under the 1992 Constitution, Estonia is an independent, sovereign democratic parliamentary republic. The Riigikogu, the unicameral parliament of Estonia, is composed of 101 members who are elected for four years according to the principle of proportionality. In addition to adopting legislation, the Riigikogu elects the President (head of state) for a term of five years. power is held by the Council of Ministers, which is headed by the Prime Minister, who is nominated by the President.116 8.3 Current Government and recent political developments On 1 March 2015 there were elections for the 13th Riigikogu. The Riigikogu elected Kersti Kaljulaid to be Estonia's first female president in October 2016. The President has a largely representative function. Legislative elections took place in March 2019 with the opposition centre- right led by Kaja Kalla polling ahead of the ruling Estonian led by Prime Minister Juri Ratas. Ratas had previously headed the coalition government which took office in November 2016. Ms Kalla initially sought to form a new coalition with the support of the Social Democratic Party but was unable to win enough support from other parties. On 6 April, Mr Ratas unveiled a new coalition agreement involving his Centre Party, the conservative Union of Pro Patria and Res Publica and the far right Conservative People’s Party of Estonia (EKRE). Mr Ratas had previously said he would not form a government including EKRE. The coalition agreement took on board some of EKRE’s strict immigration policies and included a pledge not to participate in the EU’s refugee quota plan.

116 Constitution and Government (Estonia), Europa World online. London, Routledge. Retrieved 5 November 2018

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Results of the most recent Estonian elections State Assembly (Riigikogu)117 General Election, 3 March 2019 Party Votes % of votes Seats Estonian Reform Party 162,363 28.9 34 Estonian Centre Party 129,618 23.1 26 Conservative People’s Party of Estonia 99,671 17.8 19 Union of Pro Patria and Res Publica 64,219 11.4 12 Social Democratic Party 55,175 9.8 10 Other parties 48,505 8.7 0 Individual candidates 1,590 0.3 0 Total (incl. others) 561,141 100.0 101

8.4 Views on Brexit Respect for referendum result but no hard Brexit After the UK referendum Estonia’s EU Affairs Committee Chairman Kalle Palling spoke of his sadness at the result, but stressed that it was a decision that should be respected: We must respect the decision of the British nation, although we hoped that the UK would remain in the EU, being an important partner for Estonia. For Estonia, Brexit means that we will lose an important economic and security partner.118 This sentiment was echoed in February 2017 by the Chair of the Foreign Affairs Committee Marko Mihkelson on his meeting with David Davis.119 He also emphasised that it was in the interests of Estonia and the whole EU to find a solution that would not weaken the “unity of the western world”. He was concerned about the possibility of a ‘hard Brexit’.120 In the same month Riigikogu Vice-President Taavi Rõivas met David Davis and emphasised the importance of continuing cooperation between the EU and UK after Brexit.121 During a meeting in March 2019 with the Finnish Prime Minister, Prime Minister Ratas said of the withdrawal agreement: “We agree with other European Union Member States that the best option for the departure of the United Kingdom is the current withdrawal agreement, although

117 State Assembly (Riigikogu) (Estonia), in Europa World online. London, Routledge. Retrieved 18 March 2019 118 Parliament of Estonia, Palling is saddened by the British decision to leave the European Union, 24 June 2016 119 Parliament of Estonia, Mihkelson to Davis: Brexit will give experience to both sides, 20 February 2017 120 Parliament of Estonia, Mihkelson: Unity of the Western world is more important than Brexit, 23 November 2017 121 Parliament of Estonia, Rõivas: Estonia is interested in close relationship between Great Britain and the EU, 9 February 2017

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naturally we are ready for other types of scenarios. We await the steps and decisions of the United Kingdom.”122 Unity of the EU27 and no hard border with Ireland Estonia wants to preserve the unity of the EU27 and maintain good relations with the UK, which Riigikogu President Eiki Nestor stressed in November 2017.123 Estonia agrees that there should be no hard Irish border and in January 2018 Prime Minister Ratas was optimistic that this could be avoided: “No ghosts of the past should return as a result of this process. I am sure that detailed arrangements giving effect to this promise will be found during the second phase of negotiations”.124 In an interview with Reuters in February 2019 Estonian President Kersti Kaljulaid said there could be no changes to the Irish backstop and dismissed any time limits stating: “Then it is not a backstop any more. We agreed that there will be an Irish backstop. It can’t be changed.”125 No deal Brexit and extending Article 50 President Kaljulaid has also expressed her worry over the UK leaving without a deal: “We are all concerned ... A no deal Brexit – if it will happen – will be a huge problem. It would be terribly difficult administratively.”126 EER News reported on 14 March 2019 that the Estonian Government would consider extending the deadline for the UK withdrawal from the EU.127 The Estonian foreign minister Sven Mikser told reporters at the Foreign Affairs Council on 18 March that the EU was ready to consider an extension, but that the decision would depend very much on UK politics. He said: “The ball at the moment is firmly in the UK side of the court.” Speaking at the European Council meeting on the 21 March 2019 Prime Minister Ratas said: Estonia has always been positive about extending the date fixed in Article 50. Nevertheless, I expect that today’s discussions will be earnest, laying down dates and further steps that we are expecting from London. The uncertainty cannot continue any longer128.

122 , Jüri Ratas met with Finnish Prime Minister Juha Sipilä, 7 March 2019 123 Parliament of Estonia, Nestor and Barnier think the EU countries should be of one mind at the Brexit negotiations, 27 November 2017 124 Government of Estonia, Prime Minister Ratas's presentation at the Institute of International and European Affairs titled “Will hope and history rhyme again for Europe? 31 January 2018 125 Reuters, Irish backstop can't be changed for Brexit deal - Estonian president, 17 February 2019 126 Reuters, Irish backstop can't be changed for Brexit deal - Estonian president, 17 February 2019 127 ERR News, Estonia open to giving UK Brexit deadline extension, 14 March 2019 128 Republic of Estonia Government, Prime Minister Ratas is discussing Brexit and the development of the EU internal market at the European Council, 21 March 2019 69 Commons Library Briefing, 2 May 2019

Arriving at the European Council meeting on 10 April, to decide a second extension, Prime Minister Ratas spoke in favour of an extension, and said that all must be done to avoid a no-deal scenario. Brexit preparations The Estonian Government has created a website, “What do you need to know with regard to Brexit?” which advises citizens and businesses on how to prepare for Brexit. It states that “Various authorities in Estonia are also making the necessary preparations for the UK’s withdrawal from the EU”. In February 2019 the Estonian Parliament passed an Act that regulates the conditions for residing in Estonia after Brexit for the citizens of the United Kingdom and their family members. In a press release it confirmed: If the United Kingdom leaves the European Union without a deal, the Aliens Act will immediately apply to the citizens of the UK and their family members living in Estonia. In such a case, the Act will grant them a temporary residence permit for settling permanently in Estonia, with the period of validity of up to five years, or a long-term resident’s residence permit, depending on whether they live in Estonia on the basis of temporary or permanent right of residence at the Brexit moment. All UK citizens who wish to settle in Estonia after the withdrawal of the UK from the EU will have to apply for a residence permit like all other citizens of third countries.129

129 Parliament of Estonia, The Riigikogu safeguards the future of the British living in Estonia after Brexit, 21 February 2019 70 The EU27: Internal Politics and Views on Brexit

9. Finland 9.1 Key Facts 1. Government and Politics Head of State: President Sauli Niinistö Head of Government: Prime Minister Juha Sipilä Last election: Presidential, 28 January 2018 Next election: Legislative, due by April 2019 2. Finance and the Economy GDP (2017): €180 billion (GDP per head: €32,700) GDP average growth 2014-2018: 2.1% GDP growth 2019 (interim forecast, Feb 2019): 1.9% Net contribution to EU budget per head 2017: +€43 Currency: euro 3. Trade with UK Trade with UK as % of GDP: 3.2%

UK trade with Finland, 2017 £ millions Exports Imports Balance Goods 1,262 2,466 -1,204 Services 1,337 506 831 Total 2,599 2,972 -373 Source: ONS Pink Book

4. Views on EU 40% of Finns have a positive view of the EU (net positive: +25%) 55% of Finns agree that their voice counts in the EU (net voice counts: +13%) 52% of Finns trust the EU (net trust: +18%) 92% of Finns are in favour of free movement 81% of Finns feel like EU citizens 5. Finnish nationals in the UK 16,000 (ONS estimate for Jan to Dec 2017) 9.2 Background On 6 December 1917 Finland declared its independence. In the civil war of 1918 a Finnish-German alliance defeated the Finnish Communists and drove out the Russians. In 1919 the Finnish Republic was established and a new constitution introduced. In November 1939 the Soviet Union invaded Finland, starting the ‘’ that ended with the Treaty of Moscow in March 1940. In 1944 Finland signed an Armistice with the USSR. It ceded 12% of its territory to the Soviet Union, agreed to pay heavy reparations 71 Commons Library Briefing, 2 May 2019

and to rid Finland of German troops still in its territory. In 1947 Finland concluded a peace treaty with the Allied Powers and in 1948 the Treaty of Friendship, Co-operation and Mutual Assistance with the USSR (the FCMA). This committed Finland to repelling attacks by Germany or its allies on Finnish territory or on the Soviet Union through Finnish territory. In 1955 Finland joined the Nordic Council and the UN. In 1956 succeeded as Finland’s President, continuing his foreign policy of combining Finnish neutrality with special relations with the USSR (the ‘Paasakivi-Kekkonen Line’). In 1961 Finland became an associate member of the European Free Trade Association (EFTA) and joined the Organisation for Economic Cooperation and Development (OECD) in 1967. In 1982 became President and committed to maintaining the ‘Paasikivi-Kekkonen Line’ in foreign policy. Finland became a full member of EFTA in 1986 and joined the Council of Europe in 1989. Finland joined the European Union in 1995. A new entered into force on 1 March 2000, amending the 1919 Constitution. Further amendments came into force in 2012. Under the new Constitution, the executive power of the President was significantly reduced while the authority of the Eduskunta was increased, with the power of decision-making being divided more equally between the Eduskunta, the Valtioneuvosto (Cabinet) and the President. In addition, the President was to co-operate more closely with the Cabinet on foreign policy issues. In domestic policy the President’s role became more ceremonial. The Eduskunta has two hundred members, who are elected for a four-year term. The President is elected for six years by direct popular vote. The Eduskunta elects the Prime Minister, who is then appointed by the President. The other government ministers are appointed by the President on the basis of nominations by the Prime Minister.130 9.3 Current Government and recent political developments Post-war politics in Finland was dominated by the liberal centrist Centre Party (KESK) and the Social Democratic Party (SDP). The SPD has suffered a declining vote share in recent decades while the centre-right (NCP) has played a more prominent role as a coalition partner. Sauli Niinisto of the NCP won the presidential election in 2012 to become the country's first conservative head of state since 1956. Niinisto won a second term in the January 2018 election. In the 2015 parliamentary elections, KESK emerged as the leading party with 21.1% of the vote, followed by the NCP with 18.2% and the nationalist

130 Constitution and Government (FinlandConstitution and Government (Finland), in Europa World online. London, Routledge. Retrieved 5 November 2018 72 The EU27: Internal Politics and Views on Brexit

populist with 17.65%. However, the Finns finished second, ahead of the NCP, in terms of parliamentary seats. KESK leader Juha Sipila became Prime Minister, heading a coalition which as well as the KESK and NCP, included the Finns for the first time. The Finns had previously been known as the True Finns, making a breakthrough at the 2011 election with 19.1% of the vote. In June 2017, Jussi Halla-aho, a hardline critic of immigration and multiculturalism, was elected as the new chair of the Finns Party, defeating a more moderate candidate . Prime Minister Sipilä and NCP leader Petteri Orpo both said they would no longer work in government with the Finns Party led by Halla-aho. There were indications that Sipilä was about to resign as Prime Minister. However, 20 of the Finns Party MPs including Terho then left the party to form a new parliamentary group, New Alternative (later becoming ), and formed a new government coalition with KESK and NCP.131 2019 General Election In March 2019, Prime Minister Sipila resigned following a failed health care reform. He remained as Prime Minister until the General Election of 14 April. In the election, the Social Democrats emerged as the leading party with 17.7% of the vote (and 40 seats), with the Finns party coming second with 17.5% (and 39 seats). NCP got 17% of the vote (38 seats) and KESK got 13.75% (31 seats). Blue Reform got less than 1% of the vote and no seats. Following the election, the leader of the Social Democrats began talks with other parties in order to form a government. Results of the most recent Finnish elections President132 Presidential Election, 28 January 2018* Candidate Votes % of votes Sauli Niinistö (Independent) 1,875,342 62.7 () 371,254 12.4 (Finns Party) 207,337 6.9 Paavo Väyrynen (Independent) 185,305 6.2 (Finnish Centre Party) 122,383 4.1 (Finnish Social Democratic Party) 97,294 3.3 Merja Kyllönen () 89,977 3.0 Nils Torvalds (Swedish People’s Party) 44,776 1.5 Total 2,993,668 100.0 * There was no second round of voting as Sauli Niinistö won an outright majority.

131 Recent developments: the 2015 general election and the 2018 presidential election (Finland) ,in Europa World online. London, Routledge. Retrieved 22 March 2019 132 President (Finland), Europa World online. London, Routledge. Retrieved 9 October 2018

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Suomen Eduskunta (Parliament)133 General Election, 14 April 2019

Party Votes % of votes Seats Finnish Social Democratic Party 546,471 17.73 40 Finns Party 538,805 17.48 39 National Coalition Party 523,957 17.00 38 Finnish Centre Party 423,920 13.75 31 Green League 354,194 11.49 20 Left Alliance 251,808 8.17 16 Swedish People’s Party 139,640 4.53 9 Finnish Christian Democrats 120,144 3.91 5 Others* 182,977 5.94 2 Total 3,081,916 100.00 200 * Including a representative of the Åland Islands. 9.4 Views on Brexit Disappointment and shock In an announcement to Parliament after the UK referendum, Prime Minister Juha Sipila voiced disappointment and shock at the UK vote: Last Friday many Finns, too, couldn't believe it when they read the result of the United Kingdom's EU referendum. The British people had voted to leave the EU. Few believed beforehand that this could really happen. The UK's referendum outcome was a disappointment for Finland and the entire European Union. The UK is an important partner for Finland both in terms of the economy and security. The UK, like Finland, has been taking the EU in a more transparent, more effective direction that also emphasises the Single Market. It is, nevertheless, beyond doubt that the referendum result will be respected.134 EU is stronger now In a speech in November 2017 Sipila thought the EU had become stronger since the referendum, and pointed out that contrary to some speculation, “Brexit did not lead to the disintegration of the European Union; rather it drew the Union closer together”. 135 In a speech at the Europe Forum Turku in August 2018 Sipila made the point that the EU was stronger together rather than divided: Everyone who follows the discussion on Brexit in Great Britain is beginning to understand the true meaning of being apart. Being apart leads to a great deal of uncertainty both in Member States and the

133 Parliament (Finland), Europa World online. London, Routledge. Retrieved 23 April 2019 134 , Prime Minister’s announcement to Parliament following the United Kingdom's EU referendum, 1 July 2016 135 Finnish Government, Prime Minister Juha Sipilä’s announcement on Current EU agenda, 22 November 2017

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whole Europe. It is better to work together and achieve more than stay alone and achieve less — our place is in the front line of influencing what happens in the world.136 UK – Finnish ties will stay strong In August 2018, on a visit to Finland, Foreign Secretary Jeremy Hunt said that the UK’s “strong ties” with Finland would “not diminish” after Brexit.137 Foreign Affairs Minister said Finland would continue to be close partners and friends with the UK and hoped for a fair and good deal in the Brexit negotiations.138 Extension to Brexit In an interview with Politico in January 2019 Juha Sipilä commented that: "Brexit has taken too much time from our decision-making process…I hope that this issue will be off our table as soon as possible." Sipilä did indicate that he would be open to an extension of the Brexit deadline: "We are ready also to move the deadline of the Brexit date, if there is a reason for extra time."139 A press release from Finland’s Ministerial Committee on European Union Affairs also discussed the possibility of an extension to the Brexit negotiations. Finland would agree to an extension, though this would depend on how the extenstion would be used by the UK.140 Attending an EU foreign affairs Council meeting on 8 April, Foreign Minister Soini said that if a further Brexit extension was needed, it should be granted. However, he also told reporters that without a significant sign of progress in the cross-party talks in the UK “it may be that an extension is not so easily to be achieved”. Brexit preparations The Finnish Government has instructed ministries to prepare for any outcome in the Brexit negotiations. It is concerned mainly about the aviation industry, “but no concrete contingency preparations have started”.141 A report on the fate of UK nationals living in Finland said that according to officials at the Interior Ministry, “up to now, not much thought has gone into the scenario of what should happen to more than five thousand British passport holders who currently live and work in Finland”.142

136 Finnish Government, Prime Minister Juha Sipilä’s speech at the Europe Forum Turku, 31 August 2018 137 FCO, Foreign Secretary to discuss Brexit with 4 European allies, 14 August 2018. 138 Finland Ministry for Foreign Affairs, @Ulkoministerio, 14 August 2018 139 Politico, Finnish PM: Brexit taking EU attention away from important issues, 1 February 2019 140 Finnish Government, Ministerial Committee on European Union Affairs discussed the management of EU affairs and March European Council, 13 March 2019 141 Bloomberg, How Europe Is Bracing for Messy Brexit: Dogs, Drones, Do Nothing, 19 July 2018 142 Newsnowfinland, Interior Minister: No guarantees for Brits in Finland if Brexit deal fails, 17 October 2018

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On 25 January 2019 the Ministerial Committee on European Union Affairs supported the Ministry of the Interior’s proposal to draft a special act to continue, for a fixed term, UK citizens’ right of residence in Finland. The special act would state that all UK citizens registered by 30 March could continue to stay, live, work and study in the country and receive social security benefits at least until the end of 2020.143 Minister of the Interior Kai Mykkänen said: “We hope that the EU and the United Kingdom will reach an agreement on the withdrawal agreement. However, we want to dispel uncertainty among UK citizens living in Finland in case no agreement is reached.”144 The Prime Minister’s Office and the Ministry for Foreign Affairs have both set up pages with information on the impact of Brexit for citizens and businesses in Finland, as well as information on withdrawal without an agreement.

143 Finnish Government, Special act to protect UK citizens’ right of residence after Brexit, 25 January 2019 144 Finnish Government, Special act to protect UK citizens’ right of residence after Brexit, 25 January 2019 76 The EU27: Internal Politics and Views on Brexit

10. France

10.1 Key facts 1. Government and Politics Head of State: President Head of Government: Prime Minister Edouard Philippe Last election: Legislative, 11 and 18 June 2017 Next election: Presidential, April 2022 2. Finance and economy GDP (2017): €2,086 billion (GDP per head: €31,200) GDP average growth 2014-2018: 1.5% GDP growth 2019 (interim forecast, Feb 2019): 1.3% Net contribution to EU budget per head 2017: +€66 Currency: euro 3. Trade with UK Trade with UK as % of GDP: 4.3%

UK trade with France, 2017 £ millions Exports Imports Balance Goods 24,248 27,455 -3,207 Services 16,130 13,359 2,771 Total 40,378 40,814 -436 Source: ONS Pink Book

4. Views on EU 34% of French citizens have a positive view of the EU (net positive: +7%) 44% of French citizens agree that their voice counts in the EU (net voice counts: -7%) 33% of French citizens trust the EU (net trust: -24%) 82% of French citizens are in favour of free movement 62% of French citizens feel like EU citizens 5. French nationals in the UK 181,000 (ONS estimate for Jan to Dec 2017) 10.2 Background The French 5th Republic established in 1958 created a semi-presidential system. Executive power is held by the President, originally elected for a seven-year term, amended to a five-year term before the 2002 election. The President appoints the Prime Minister, who directs the operation of the Government and needs to command majority support in the National 77 Commons Library Briefing, 2 May 2019

Assembly. Ministers are constitutionally prohibited from being members of Parliament. The bicameral Parliament comprises the Sénat (Senate) and the Assemblée Nationale (National Assembly). 348 Senate Members are elected for six years by an electoral college (326 for Departments in Metropolitan France and the Overseas Departments, 10 for Overseas Territories and 12 for French nationals abroad). The National Assembly has 577 Members elected for five years by universal adult suffrage (555 for metropolitan France and 22 for the overseas territories). France was a founder member of the European Economic Community, Schengen and the Eurozone, and hosts the European Space Agency. 10.3 Current Government and recent political developments Presidential elections May-June 2017 Emmanuel Macron won the 7 May 2017 presidential election, defeating the National Front candidate Marine Le Pen in the second round, and was inaugurated on 14 May 2017. Mr Macron was previously Minister for the Economy, Industry and the Digital Sector during his predecessor François Hollande’s Presidency. He left the Socialist-led Government in August 2016, having launched his own ‘En Marche!’ (Forwards!) movement in July that year. After winning the Presidency, Mr Macron named Edouard Philippe from the centre-right les Républicains as his Prime Minister. The full results of the first and second election rounds were as follows: President145 Presidential Election, First Ballot, 23 April 2017

Candidates Votes % of votes Emmanuel Macron (REM) 8,656,346 24.01 Marine Le Pen (FN) 7,678,491 21.30 François Fillon (LR) 7,212,995 20.01 Jean-Luc Mélenchon (FI) 7,059,951 19.58 Benoît Hamon (PS) 2,291,288 6.36 Nicolas Dupont-Aignan (DLF) 1,695,000 4.70 Jean Lassalle (Résistons!) 435,301 1.21 Philippe Poutou (NPA) 394,505 1.09 François Asselineau (UPR) 332,547 0.92 Nathalie Arthaud (LO) 232,384 0.64 Jacques Cheminade (S&P) 65,586 0.18 Total 36,054,394 100.00

145 President (France), in Europa World online. London, Routledge. Retrieved 9 October 2018 78 The EU27: Internal Politics and Views on Brexit

Second Ballot, 7 May 2017

Candidates Votes % of votes Emmanuel Macron (REM) 20,743,128 66.10 Marine Le Pen (FN) 10,638,475 33.90 Total 31,381,603 100.00

Emmanuel Macron was duly elected President.

Legislative elections In legislative elections on 11 June 2017 Macron’s renamed La République en Marche (Republic on the Move - REM) and its allies won 32.3% in the first round. After the second round on 18 June, REM had an overall majority of 308 of the 577 seats. The full results were as follows: National Assembly (Assemblée Nationale)146 General Election, 11 and 18 June 2017

Party % of votes Seats First ballot Second ballot* Forwards! - En Marche! (REM) 28.21 43.06 308 (LR) 15.77 22.23 112 Democratic Movement (MoDem) 4.12 6.06 42 Socialist Party (PS) 7.44 5.68 30 Union of Democrats and Independents (UDI) 3.03 3.04 18 Indomitable France (FI) 11.03 4.86 17 Various left-wing candidates 1.60 1.45 12 French Communist Party (PCF) 2.72 1.20 10 National Front (FN)** 13.20 8.75 8 Various right-wing candidates 2.76 1.68 6 Regionalist candidates 0.90 0.76 5 Various candidates 2.21 0.55 3 Radical Party of the Left (PRG)*** 0.47 0.36 3 Ecologist candidates 4.30 0.13 1 France Arise (DLF) 1.17 0.10 1 Various far-right candidates 0.30 0.10 1 Various far-left candidates 0.77 — — Total 100.00 100.00 577 * Held where no candidate had won the requisite overall majority in the first ballot, between candidates who had received at least 12.5% of the votes in that round. The total number of valid votes cast was 22,654,164 in the first round, and 18,176,066 in the second round. ** The Front National changed its name to Rassemblement National in June 2018. *** The Parti Radical de Gauche merged with the Parti Radical (which stood candidates as part of the UDI) in December 2017 to form the Mouvement Radical (Social Libéral).

146 National Assembly (Assemblée Nationale) (France), in Europa World online. London, Routledge. Retrieved 9 October 2018

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Senate (Sénat)147 Senators are elected for a term of six years, with half of the seats renewable every three years. Seats are allocated through a combination of majority voting and proportional representation. A partial election to the Senate took place on 25 September 2011, when the number of senators was increased to 348. Partial elections were held in September 2014 and September 2017. The strength of the parties at September 2018 was as follows:

Grouping Seats The Republicans group 146 Socialist and Republican group 75 Centrist Union group 51 European Democratic and Social Rally group 23 Forwards! - En Marche! Group 22 Communist, Republican, Citizen and Ecologist group 15 The Independents – Republic and Territories group 11 Non-affiliated 5 Total 348

Domestic pressures Since his election in May 2017, President Macron has faced scandal in connection with a presidential aide who attacked demonstrators at a May Day protest; pressure from the populist right who oppose (among other things) his suggested Eurozone reforms, and falling ratings of his presidency as a result of his economic and social reforms.148 The activities of the gilets jaunes (yellow vest movement) who since November 2018 have demonstrated against the government on an eclectic platform of left- and right-wing issues, have been challenging for the French President. In recent polls, Mr Macron’s La République En Marche! party is only just ahead of Marine Le Pen’s Rassemblement National (formerly National Front), by 23% to 21.5%.149 In the face of domestic problems, President Macron has promoted closer EU integration in several areas. In an op-ed on 4 March 2019 addressed to “the citizens of Europe”, Mr Macron promoted the EU “as the only solution to protect against foreign threats and economic crises”.150 He spoke of freedom, protection and progress, proposing new institutions to provide these: a “European agency for the protection of democracies”, an enhanced Schengen area, a common border police and European asylum office, a

147 Senate (Sénat) (France), Europa World online. London, Routledge. Retrieved 9 October 2018. 148 See Politico, Macron’s approval ratings hit record low: poll, 23 March 2018; and Business Insider, French President Emmanuel Macron's job-approval rating hits its lowest point yet, 5 September 2018. 149 Linternaute, Elections européennes 2019 : que disent les sondages ? Qui est candidat? 26 March 2019 150 Politico, Macron calls for big EU changes in ‘European Renaissance’, updated 5 March 2019

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European “council of internal security”, increased defence spending, an operational mutual defence clause and a European Security Council.151 10.4 Views on Brexit No ‘punishment’ but there are ‘consequences’ President Emmanuel Macron appears to have distanced himself from his predecessor, François Hollande’s, ‘punishment’ line on Brexit in 2016 that “there must be a threat, there must be a risk, there must be a price” to be paid for choosing to leave the EU. But Macron’s tough stance on Brexit was articulated even before he became . He told the Times in April 2017: My hope is that we can bring a lot of rigour to managing Brexit, anchoring Britain in a strategic partnership — in particular in the military dimension — while allowing no weakness when it touches on matters affecting the integrity of the union or the durability of the project.152 Macron ‘passionately’ Pro-EU Widely described as passionately pro-European, Mr Macron has made EU27 unity and preserving EU ‘red lines’ priorities in the Brexit negotiations. In an interview with Andrew Marr in January 2018, Mr Macron firmly upheld the European Commission’s line: yes, the UK could secure a bespoke trade deal with the EU, but “this special way should be consistent with the preservation of the Single Market and our collective interests”; also that “[t]here should be no cherry picking in the single market…because that is dismantling of the single market…As soon as you decide not to join the [EU’s] preconditions, it’s not full access”.153 Macron ‘tougher’ than Barnier? Mr Macron is in some respects tougher than the Brexit negotiator Michel Barnier, having said that if the UK leaves the EU, it should leave completely and not retain any privileged access to the Single Market. In his view, the Chequers proposals for future EU-UK relations sought to avoid the hard choices between a simple free trade agreement and remaining in the Single Market with freedom of movement. He has also described the future UK-EU relationship as “something perhaps between this full access [to the Single Market] and a trade agreement”, but that “[f]ull access for financial services to the single market is not feasible, given the functioning of the Single Market”. As an alternative to full access, he referred to an ambitious trade agreement of the type negotiated with Canada, “but not a cherry-picking approach whereby the UK would have the advantages of access to the without what is required in return”.154

151 E Macron, letter to Le Parisien, Pour une Renaissance européenne» : la lettre d’Emmanuel Macron aux Européens, 4 March 2019 152 The Times, Exclusive interview: Emmanuel Macron on Brexit, Le Pen and the teacher who became his wife, 2 April 2017 153 Open Europe, UK could have a bespoke arrangement between full single market access and a free trade deal, says Emmanuel Macron, 22 January 2018 154 Ibid 81 Commons Library Briefing, 2 May 2019

Politico commented on Mr Macron’s Brexit position: Domestically, there is no political benefit to the French president from going soft on the Brits in a deal on their future relationship with the EU. Marine Le Pen’s National Rally has edged ahead of Macron’s En Marche in polling for the European election. The far-right leader talks less about “Frexit” these days but if the U.K. were to walk away from the EU with a cushy deal that gives it many of the benefits without the responsibilities of membership then it will surely embolden Macron’s Euroskeptic opponents at home and farther afield.155 ‘Le Touquet’ In January 2018 President Macron raised the Brexit stakes with regard to migrants in Calais, asking the UK Prime Minister for more money156 and support in return for maintaining the Le Touquet border agreement.157 He wanted to update the agreement so that the UK would accelerate procedures to take more adult migrants with family ties, and accept more unaccompanied minors.158 Some reports maintained that France’s approval of a post-Brexit EU-UK trade agreement was conditional on the UK taking in more migrants, but Home Office Minister Caroline Nokes said in January that both countries had “reaffirmed their commitment to the agreement and to the continued effective management of our shared border in Northern France”. Warning about Commentators describe President Macron’s defence of the EU’s red lines as a ‘warning’ to others - in France (Marine Le Pen’s ‘National Rally’) and elsewhere in the EU - who might be seeking to undermine the EU. They suggest his fight to protect the EU against such populist forces has made him less likely to compromise on Brexit. The BBC summarised his position as follows: Mr Macron is a pragmatic man, but he has staked his presidency on a strong EU, and has so far stuck fast to core principles on the single market. France may show a little flexibility later in the game, one former French official told me, but not the kind of flexibility on which Britain is currently banking.159 EU unity is paramount Theresa May and President Macron met in early August 2018 in what the French press described as a “cry for help”160 (it was in fact one of many

155 Politico, The Brexit playbook in the 11 EU countries that will shape a deal, 9 November 2018 156 £44.5m according to Guardian, 18 January 2018. 157 ‘Le Touquet’ was signed at a summit between President Chirac and in 2003. It provided for France and the UK to erect border controls in Channel ports, effectively moving the French border to Kent and the UK Border to Calais. 158 Le Monde, 18 January 2018. 159 BBC News, Brexit: Theresa May and Emmanuel Macron hold talks, 3 August 2018. 160 See Les Echos.fr, Brexit : May appelle Macron à l'aide, 4 August 2018.

82 The EU27: Internal Politics and Views on Brexit

bilateral meetings the Prime Minister held with other EU leaders over the summer). At the end of August Mr Macron said preserving EU unity was more important than forging a close relationship with the UK after Brexit. But there were also reports that he was “preparing to throw Theresa May a lifeline by pushing other EU leaders to agree a close relationship with Britain after Brexit as part of his vision for a united Europe”;161 that at the Salzburg summit in September he wanted to suggest a new structure for European alliances based on “concentric circles … with the EU and the euro at its core and Britain in a second ring”.162 This idea, which is not new, is unlikely to be universally accepted now, any more than it was in the past. The Netherlands and Poland, for example, are reported to be concerned about an inner EU core dominated by France and Germany. Macron rejects Chequers After the Salzburg meeting Mr Macron described the Prime Minister’s Chequers proposal as a “courageous step”, but one that EU leaders had found “not acceptable, especially in the economic area”; the coherence of the Single Market had to be defended. He was reported to have appealed to other EU leaders to “maintain their tough approach to Brexit in response to Theresa May’s demand for compromise”.163 Mr Macron, together with European Council President and German Chancellor , insisted the EU would not agree to a single market for goods but not services. At a press conference following the summit, President Macron criticised the pre-referendum Brexit campaigners, calling them “liars, they left the next day so they didn’t have to manage it”. He added that Brexit shows “it’s not so easy to leave the EU, it’s not without a cost, it’s not without consequences”. Mr Macron also finds the Irish backstop plan “very convincing” because it respects “citizens and companies while protecting borders and the integrity of the single market”.164 Preparing for Brexit France has been preparing for Brexit for almost two years in sectors ranging from fisheries and borders to financial services.165 Prime Minister Édouard Philippe said on 27 August 2018 that France would be ready in the event of a ‘cliff edge’ exit. He “tasked ministers to prepare contingency measures that would be necessary... to mitigate the difficulties linked with this

161 The Times, Emmanuel Macron tells EU leaders to make a deal with Britain, 30 August 2018. 162 Ibid. 163 The Guardian, Macron urges EU leaders to stand firm against Theresa May, 20 September 2018. 164 Politico, Emmanuel Macron says leading Brexiteers are ‘liars’, 20 September 2018. 165 The Express, Brexit no deal MAPPED: How EU countries are secretly preparing for no deal UK exit from EU, 20 July 2018

83 Commons Library Briefing, 2 May 2019

unprecedented challenge”.166 Mr Philippe appointed a ‘Brexit ministerial coordinator’ to manage the impact of Brexit on ports and France’s northern coast. Le Monde reported that the transport ministry had listed measures to be taken in case of a no-deal outcome so that train drivers’ licences remain valid in France.167 According to The Guardian, Xavier Bertrand, a former French minister and president of Hauts-de-France, said that “Calais was prepared to solve the problem of space for checks in Dover”. The port had acquired 17 hectares (42 acres) of land, which could be used for customs inspection posts and storage. France is also reported to be planning to recruit new customs officials for Calais and other northern ports.168 An additional 250 members of staff have been recruited in 2018, rising to around 700 by the end of 2020.169 Calais also wanted to test a new ‘Fastpass’ virtual queuing system, whereby preloading passport and cargo information would speed up border inspections.170 Speaking at Chatham House on 13 September 2018, Europe Minister Nathalie Loiseau said the French Government would introduce emergency legislation to protect its citizens from the impact of a no-deal Brexit (see below). She warned that in the absence of any contingency plans, Eurostar trains could be stopped on reaching French territory, and planes from the UK could be prevented from entering French airspace.171 France was against a “blindfold Brexit” in which there would be a withdrawal agreement but key details of the future UK-EU relationship would be deferred until the UK had left the EU: We have to have a clear sense of the balance of rights and obligations on the future relations between the UK and the EU27. Details will be worked out afterwards, but it would be to the benefit of neither the UK or the EU27 to remain vague on what is going to be our future relations at the moment of leaving. Ms Loiseau also thought those who suggested the significance of the Irish border was being exaggerated were irresponsible; a legal backstop was essential to avoid a hard border in Ireland: “we cannot wake up on 30 March to tell our Irish colleagues we don’t have a solution and we must go back to a hard border”.172 Bill on status of UK citizens in France and border controls

166 France24, France and Germany are making contingency plans for a no-deal Brexit, with looking at residency issues and Berlin examining medical supply chains with the UK, 29 August 2018 167 Le Monde, Brexit : la France envisage toutes les hypotheses, 3 October 2018 168 Politico, Brexit playbook in the 11 EU countries that will shape a deal, 9 November 2018 169 The French customs authority has produced detailed online information (in French) for businesses on how to prepare for Brexit. 170 ‘Dover-Calais 'facing economic catastrophe' due to Brexit’, Guardian, 17 July 2018 171 See also Independent, Eurostar will not run if there is a no-deal Brexit, French Europe minister warns, 13 September 2018; EurActiv, Hard Brexit may stop Eurostar trains entering France: French minister, 14 September 2018 172 The Guardian, France may stop trains and planes from UK under no-deal Brexit, 13 September 2018.

84 The EU27: Internal Politics and Views on Brexit

The French Government has prepared legislation on the status of around 150,000 UK citizens living in France and to ensure fluid border controls in the event of no deal.173 In October 2018 the Government published a draft bill providing for measures to be taken if there is no deal to reinstate checks on goods and passengers going to and from the UK, and inspections of food, plants and live animals. BBC News summarised the Bill as follows: The draft bill would give the government (rather than parliament) the power to introduce new measures by emergency decree if it needed to avoid or mitigate the consequences of a hard or no-deal Brexit. But politicians representing channel ports are warning that chaos and long queues would be unavoidable and both the French government and the EU need to take further steps to avoid that happening. The draft bill also focuses on citizens' rights in the event of no deal, including what would be the legal situation of UK nationals resident in France. The bill also raises the possibility of other UK nationals needing visas to visit France. Any emergency legal measures introduced to ease the situation would, the bill says, depend on the UK taking reciprocal steps, which the UK government has already indicated that it would do.174 The Senate adopted the Bill on 6 November 2018 and the National Assembly on 11 December 2018. Further Brexit contingency measures On 17 January 2019 Prime Minister Édouard Philippe announced that the Government would introduce five proposals under an emergency procedure as part of its no-deal Brexit planning, on: • the rights of British citizens in France; • emergency infrastructure at borders (customs checks, sanitary and phytosanitary checks); • UK transport companies to continue to operate in France and security at Eurotunnel. • Continuation of certain financial activities such as insurance after loss of financial ‘passport’; • Transfer of defence materials between France and UK. Mr Philippe announced the triggering of €50 million preparedness fund for infrastructure at ports and airports so that they will be operational from 30 March.175 On 3 April, a UK Government source was quoted as saying that France was pushing for checks on trade between Ireland and continental Europe in the

173 The Guardian ibid and The Local Fr, No-deal Brexit: French government makes contingency plans for Brits living in France, 28 August 2018 174 BBC News, Reality Check: What are EU countries doing to prepare for a no-deal Brexit? 6 November 2018 175 Prime Minister, Communiqué de Presse, 17 January 2019 85 Commons Library Briefing, 2 May 2019

event of a no deal Brexit in order to avoid a hard border on the island of Ireland. The source said: This is a real pickle for the EU side, who have slipped behind the UK by failing to publish their no deal border plans. . . . French officials have been categorical that in a no-deal scenario there must be checks between Ireland and the rest of the EU if a hard border on the island of Ireland is to be avoided. How ‘tough’ is President Macron on Brexit? Mr Macron has taken an increasingly hard-line position on the UK’s handing of Brexit, giving rise to comparisons with President de Gaulle, who repeated refused to let the UK join the then European Economic Community in the 1960s. Mr Macron has accused Brexiteers of telling 'lies' to British voters about a no-deal Brexit being quick and easy.176 After the UK Parliament rejected the Prime Minister’s negotiated withdrawal agreement for the second time and Mrs May said she would seek an extension of Article 50, President Macron said “[t]he European project must not remain a prisoner to Brexit”.177 He has ruled out a long extension to Article 50 and, according to some reports, has signalled he is quite prepared to see the UK leave the EU without a deal.178 According to the France 24 report, “some analysts and diplomats say Macron's rhetoric is simply a more direct way of saying what other leaders are expressing more quietly”. Bloomberg commented on France’s “competing priorities on Brexit”: Civil servants and bankers close to the finance ministry were focused at first on grabbing business from the City of London. But the triumphalism has faded. Now the worry is the potential impact of a no-deal Brexit on France’s 3.5 billion euro ($4 billion) trade surplus with Britain. A U.K. departure without agreement could cost France 3 billion of exports in 2019, according to credit specialist Euler Hermes, at a time when economic indicators already point to sputtering French demand. That wouldn’t help defuse the Gilets Jaunes street protests.179 The first Article 50 extension On 19 February, France’s European Affairs Minister Nathalie Loiseau was reported as saying that “a delay for some days for technical reasons” would be supported. But said: if it’s for political reasons there has to be a real advance on something that is supported by a majority in the British parliament which corresponds to our red lines, our negotiating directives.

176 The Guardian, Macron accuses Brexiters of 'lies' over no-deal Brexit – video, 21 March 2019 177 France 24, Europe cannot remain a 'prisoner' to Brexit delays, Macron says, 22 March 2019 178 France 24, Macron cast as Brexit tough guy as deadline nears, 21 March 2019 179 Bloomberg, Emmanuel Macron Keeps a Door Open for the British, 26 March 2019 86 The EU27: Internal Politics and Views on Brexit

If we have to talk about a reformulation of our future relationship it’s entirely possible to do that. If it’s about reopening the withdrawal agreement we have all already said that this point is not negotiable. At a joint press conference on 27 February with German Chancellor Angela Merkel, French President Emmanuel Macron President Macron said that the time had come for the UK “to make choices” and that the UK would need to have a clear reason for an extension: We could examine a request for an extension, if it is justified by new choices by the British. But under no circumstances would we accept an extension without a clear perspective. On 19 March, an official working for the French President was reported as saying: Playing for time just for the sake of playing for time would not constitute a project or strategy. Now is not the time for procrastinating. The official was reported as saying that the UK had to give clarity on the way forward: An extension is merely an instrument, it’s not a solution or a strategy in itself ... Now is not the time for pondering or looking at perspectives on Brexit The official also stressed the importance of protecting “the functioning of the EU”. If a longer extension were to be granted, for example 12 months, the implications would need to be examined in terms of how a Member State planning to leave would have a seat and a say in key future decisions. On 20 March, the French Foreign Minister Jean-Yves Le Drian told the French parliament that France was willing to block an extension if the WA was not approved by the House of Commons. He said France would only be open to a “technical” extension of a few weeks to allow formal ratification of the WA but that without a Commons vote to approve the deal, “the central scenario is a no-deal exit”. He also said that if Mrs May could not present “sufficient guarantees of the credibility of her strategy” that would lead to the extension being refused and a no-deal exit. Arriving at the European Council on 21 March, President Macron said: Prime Minister Theresa May has asked, in the case of a positive vote in the British parliament, for a purely technical extension. I am quite open to a technical extension - it should be as short as possible - in the case of a positive vote. The exit process has taken two years of negotiation. It cannot be renegotiated. . . In the case of a negative vote in the British parliament, we will be going to a no-deal. We all know that. It is absolutely essential to be clear in these days and these moments, because it is a matter of the good functioning of the EU. We cannot have what I would call an excessive extension which would harm our capacity to decision and to act. President Macron also said: “There must be a deep political change for there to be anything else other than a technical extension”. 87 Commons Library Briefing, 2 May 2019

The second Article 50 extension On 2 April, with the UK poised to make a second Article 50 extension request, French President Macron said that a long extension, implying the UK takes part in EP elections and the EU institutions, had “nothing easy or automatic about it” and warned that the EU “can’t be held hostage long- term by the resolution of a political crisis in the UK”. He referred to the three rejections of the WA by the House of the Commons putting the UK on a path to exiting the EU without a deal, and said it would up to the UK “to present a credible alternative plan backed by a majority before 10 April in order to avoid that”. Following the second UK extension request on 5 April a French diplomatic cable reportedly stated that that France was arguing for a short extension of “a couple weeks” only, to be offered to avoid an instant financial crisis and “prepare ourselves in the markets” unless there were significant new UK proposals. On 9 April, a source in the French President’s office reportedly said that if the Article 50 period was extended again, there would need to be measures to protect the future workings of the EU, with “very strict guarantees” that the UK “as an exiting member state” would not fully take part in or disrupt key European Council or Commission decisions on the future of the EU. This would mean limits being placed on the UK’s participation in European Council and Commission business, though not in the European parliament. The source suggested that the UK would need to agree to these guarantees and agree to regular checks on the UK’s “good faith” every three or four months. On 10 April, the day of the European Council meeting, it was reported that France would demand that the UK should no longer be able to nominate a if there was a longer Article 50 extension. There was also reports that France was calling from the UK to be prevented from exercising its voting rights in the Council of Ministers during the extended period, and that the UK should be required to leave if it did not meet its promise of “sincere cooperation” as a Member State. However, these proposals did not have any basis in EU law and were rejected. Following the European Council meeting agreeing a further extension on 10 April, President Macron told reporters that he had blocked proposals for a longer Article 50 extension, which he said would not have been logical for the EU. He said: We would have decided to weaken our institutions, by having a member who is permanently there but leaving. It’s true that the majority was more in favour of a very long extension. But it was not logical in my view, and above all, it was neither good for us, nor for the UK. I take responsibility for this position, I think it’s for the collective good. President Macron reportedly expressed concerns during the meeting that a long extension would “import Britain’s political crisis” into the EU and that keeping a potentially obstructive UK within the EU would pose 88 The EU27: Internal Politics and Views on Brexit

than no deal, arguing for a short extension only until 22 May180. He also reportedly insisted on inserting the wording in the European Council Conclusions that the UK would “refrain from any measure which could jeopardise the attainment of the union’s objectives, in particular when participating in the decision-making processes of the union”. Prior to the meeting on 10 April, President Macron had tweeted: What is essential: that nothing compromises the European project. We have a European Renaissance to lead, I believe very deeply and I do not want the subject of Brexit to block us on this point. He also said that it shouldn't fall to EU27 leaders to contest the decision of the British in the 2016 referendum or to do all that they can to prevent it being carried out.

180 See The Times, Fright night ends in leaders subduing Macron monster, 12 April 2019 89 Commons Library Briefing, 2 May 2019

11. Germany

11.1 Key facts 1. Government and Politics Head of State: Federal President Frank-Walter Steinmeier Head of Government: Federal Chancellor Angela Merkel Last election: Legislative, 24 September 2017 Next election: Legislative, September 2021 2. Finance and economy GDP (2017): €3,086 billion (GDP per head: €37,100) GDP average growth 2014-2018: 1.9% GDP growth 2019 (interim forecast, Feb 2019): 1.1% Net contribution to EU budget per head 2017: +€155 Currency: euro 3. Trade with UK Trade with UK as % of GDP: 5.3%

UK trade with Germany, 2017 £ millions Exports Imports Balance Goods 37,135 68,722 -31,587 Services 19,683 9,387 10,296 Total 56,818 78,109 -21,291 Source: ONS Pink Book

4. Views on EU 47% of Germans have a positive view of the EU (net positive: +32%) 70% of Germans agree that their voice counts in the EU (net voice counts: +43%) 51% of Germans trust the EU (net trust: +13%) 92% of Germans are in favour of free movement 86% of Germans feel like EU citizens 5. German nationals in the UK 154,000 (ONS estimate for Jan to Dec 2017) 11.2 Background Political structure Germany is a democratic, federal parliamentary republic, where federal legislative power is vested in the Bundestag (Lower House) and the Bundesrat (Upper House). Germany has 16 Länder or states, each with its own legislature, whose interests are represented in the Bundesrat. The Bundestag has around 600 members (the exact number varies depending 90 The EU27: Internal Politics and Views on Brexit

on election results) and the Bundesrat has 69 members. The Bundestag is elected every four years in general, direct, free elections by secret ballot. Voters can cast two votes; the first is to select candidates in one of the 299 constituencies, and the second is cast for a party list. The head of state is the president, who is chosen for a five-year term by a specially convened assembly. The President signs all federal legislation and treaties, nominates federal judges, the federal chancellor and the chancellor’s cabinet. The Chancellor is elected by the Bundestag. End of WWII – present The Federal Republic of Germany (West Germany) was officially founded in May 1949 and the German Democratic Republic (East Germany) in October 1949. In the first West German elections that year, the CDU and its sister party the Bavarian Christian (CSU) won a narrow majority in the new Bundestag. In September Konrad Adenauer became the Chancellor of West Germany. In 1950 the term Wirtschaftswunder (‘economic miracle’) was used to describe West Germany’s rapid post-War economic growth. From 1949 to 1990 Bonn was the provisional capital of West Germany, and Germany's constitution, the Basic Law, was declared there in 1949. On 3 October 1990, at the end of the Cold War, East and West Germany were reunited and Berlin was reinstated as the capital of Germany, although from 1990 to 1999 Bonn remained the seat of government. Germany is now Europe's most industrialised and most populous country (around 82 million). Having recovered from two world wars in the 20th century, Germany has become Europe’s biggest economy and is at the forefront of European integration and cooperation. From 1969 Germany had a succession of mostly SPD-led governments: Willy Brandt (SPD 1969–74), (SPD 1974–82), (CDU 1982–98) and Gerhard Schröder (SPD 1998–2005). Angela Merkel (Christian Democrat Party - CDU) became Germany's first female Chancellor and has led German coalition governments since 2005. 11.3 Current Government and recent political developments Legislative elections, 24 September 2017 In the 2017 elections the two largest parties, the CDU/CSU and SPD, suffered heavy losses, while the far right, anti-immigration Alternative für Deutschland (AfD) took seats in the Bundestag. The CDU losses and AfD gains were widely attributed to disapproval of Chancellor Merkel’s open- door refugee policy in 2015 -16. The CDU/CSU won 33% of votes and 246 seats (a loss of 65 seats compared with the 2013 elections). The SPD won 20.5% and 153 seats (a loss of 40 seats from 2013). The AfD won 94 seats with 12.6% of votes. The FDP re-entered the Bundestag with 10.7% of votes 91 Commons Library Briefing, 2 May 2019

and 80 seats, and the far-left Die Linke took 69 seats (9.2% of votes). Bündnis 90/Die Grünen (Alliance 90/) won 67 seats (8.9%).181 The election endorsed a fourth term for Angela Merkel as Chancellor but forming a new governing coalition proved difficult. Coalition talks collapsed in November 2017. The SPD initially refused but then agreed to a coalition agreement and joined a CDU/CSU/SPD ‘grand coalition’ government in March 2018. Federal Assembly (Bundestag)182 General Election, 24 September 2017 % of Parties and Groups Votes* votes* Seats Christian Democatic Union of Germany (CDU) / Christian Social Union in Bavaria (CSU)** 15,317,344 33.0 246 Social Democratic Party of Germany (SPD) 9,539,381 20.5 153 Alternative for Germany (AfD)*** 5,878,115 12.6 94 Free Democratic Party (FDP) 4,999,449 10.7 80 The Left (Linke) 4,297,270 9.2 69 Alliance 90 / The Greens 4,158,400 8.9 67 Others 2,325,533 5.0 0 Total 46,515,492 100.0 709 * Figures refer to valid second votes (i.e. for state party lists). The total number of valid first votes (for individual candidates) was 46,389,615. In addition, there were 586,726 invalid first votes and 460,849 invalid second votes. ** Of which the CDU received 12,447,656 votes (26.8%—200 seats) and the CSU received 2,869,688 votes (6.2%—46 seats). *** Although the AfD secured 94 seats, two legislators elected on the party’s list opted to sit as independents. A fragile coalition government Although the main political parties in Germany have always been different shades of pro-EU,183 the AfD has brought a eurosceptic dimension to the Bundestag. Politico reported in April 2018, the AfD “is competing with the conservative wing of the CDU to promise German taxpayers their money won’t be used to finance spendthrift Southern Europe”.184 The pressures on Chancellor Merkel’s coalition government have continued, including criticism from her CSU interior minister Horst Seehofer over immigration policy. In state elections in Bavaria and Hesse in October 2018 both the CDU and the SPD lost votes to the Greens and the AfD – which will enter the two regional assemblies for the first time.

181 For a summary of German political parties in the 2017 election, see Deutsche Welle piece, Germany's political parties CDU, CSU, SPD, AfD, FDP, Left party, Greens - what you need to know, 23 October 2017. 182 Federal Assembly (Bundestag) (Germany), Europa World online. London, Routledge. Retrieved 13 October 2018 183 Centre for European Reform, Berlin to the rescue? A closer look at Germany’s position on Brexit, Sophia Besch and Christian Odendahl, March 2017 184 Politico, Macron’s eurozone reforms meet German ‘duvet diplomacy’, 18 April 2018

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Chancellor Merkel announced she would stand down as CDU party Chair in December 2018 and would not seek a fifth term as chancellor or any political post after her term ends in 2021.185 The new head of the CDU is Annegret Kramp-Karrenbauer (known as ‘AKK’), although it is not yet clear whether she will be the candidate for Chancellor. More fragile Franco-German relations The long-standing Franco-German ‘motor’ in the EU has also looked a little more fragile, with the Merkel Government unwilling to endorse all of President Macron’s proposed Eurozone reforms.186 Chancellor Merkel agreed that the EU needed “quicker economic convergence” but stopped short of Mr Macron's vision of a major investment budget.187 At the end of July 2018 Jeremy Hunt called on France and Germany “to send a strong signal to the Commission that we need to negotiate a pragmatic and sensible [Brexit] outcome that protects jobs on both sides of the Channel, because for every job lost in the UK, there will be jobs lost in Europe as well if Brexit goes wrong”.188 11.4 Views on Brexit Not a major issue for Germany? Brexit was not a major issue for the German Government during the election campaign or in the period of internal political uncertainty in the weeks after the election. The coalition agreement reached in February made only passing mention of Brexit and called for “trusting cooperation” between Germany and the UK. A poll in April 2018 found that for most Germans Brexit was still not a major issue; indeed, that there was “quite some Brexit-fatique”: We deem other foreign-policy challenges more urgent. Only a minority of 39 percent are actually very concerned about Brexit. Germans have much more Angst about the US-presidency of Donald Trump (82 percent), the crises in the Middle East (75 percent), the nuclear situation in North Korea (71 percent), and tensions between Europe and Russia (66 percent).189 German priorities In a presentation to the ‘UK in a Changing Europe, Negotiating Brexit: Where Now’ conference in October 2018, Dr Nicolai von Ondarza of the Berlin-based Stiftung Wissenschaft und Politik, identified the following principles that have guided Germany’s approach to the Brexit negotiations:

185 Spiegel online, Merkel will nicht mehr für Parteivorsitz kandidieren, 29 October 2018 186 Wolfgang Munchau in the Financial Times spells out what parts of Macron’s reform package are acceptable to the CDU/CSU. See also Deutsche Welle, German economists slam Macron's eurozone reform agenda, 22 May 2018 187 Deutsche Welle, Paris welcomes Merkel's 'first answer' to Macron's EU reform plan, 4 June 2018 188 Evening Standard, Foreign Secretary Jeremy Hunt in plea to Merkel and Macron to strike 'sensible' pro-jobs Brexit deal, 31 July 2018 189 Handelsblatt, Germans don’t really worry about Brexit and want EU to be uncompromising, 30 April 2018. 93 Commons Library Briefing, 2 May 2019

i) The importance of the unity of the EU27 Member States in the negotiations, meaning no bilateral discussions between Germany and the UK would take place, and ensuring that the integrity of the Single Market and the indivisibility of the four freedoms are maintained; ii) An emphasis on the protection of the interests of the smaller EU states, notably Ireland; iii) The need for an orderly Brexit process, with sequenced negotiations that could only start once the UK had issued the Article 50 notification. However, this did does not mean achieving a deal at any cost (the integrity of the Single Market and the unity of EU27 being more important); iv) The UK to be treated as a normal third country in its future partnership with the EU, meaning other third country partnerships such as the agreement with Canada or the European Economic Area agreement should be referred to as potential models. This is a position strongly supported by industry; v) A desire for a continued strong EU partnership with the UK in security and foreign affairs, going beyond existing third country precedents. Dr von Ondarza said Germany was insistent on the need for a backstop relating to the Irish border covering customs and Single Market regulations, but that this arrangement could not apply to the whole of the UK. However, the German government is prepared to be more flexible about a customs union backstop applying to the whole of the UK than it would be with regard to allowing the UK to remain part of the Single Market through the backstop. Dr von Ondarza said German political leaders and business rejected the UK proposals set out in the Chequers plan and had made this position clear before the Salzburg summit in September. The German position in the negotiations has been consistent over time and is substantially similar to that of France, but Germany is perhaps “more polite” than France, he said. German preparations for a ‘no deal’ are also developing, reflecting a growing sentiment that such a scenario is a possibility. However, the German view is that there will be no side deals with the UK in the event of no deal being reached; there will only be unilateral actions to address the consequences. Preserving the integrity of the EU The German Government’s priority has been consistently to preserve the integrity of the EU and Germany has led the EU27 in urging Michel Barnier to maintain a tough line in preserving the EU’s Brexit ‘red lines’. Any UK hopes that Germany might “soften” the EU27’s position in the Brexit 94 The EU27: Internal Politics and Views on Brexit

negotiations have not been realised and were probably “misplaced”, according to a CER report in March 2017.190 The report continued: Germany’s commercial interests on Brexit are largely aligned with its politics: German businesses are deeply connected to the EU through a network of supply chains, and rely on Europe and the rest of the world for their exports. They have more interest in preserving the EU’s single market and the EU’s clout in international trade negotiations than they have in tariff-free access to the British market. At her meeting with Theresa May in July, Angela Merkel emphasised that it was the European Commission leading the Brexit negotiations, not individual Member States.191 The Financial Times noted German “dismay” and “puzzlement” at a perceived UK expectation that Germany would help the UK to “achieve good deals on withdrawal and the future UK-EU relationship”.192 The German and EU position are closely aligned on Brexit, and after a meeting between Michel Barnier and German Foreign Minister Heiko Maas at the end of August, the two agreed that an a deal could still be reached in order to avoid a “disorganised Brexit”. For Maas the “last big hurdle” was the Norther Ireland border question. Chancellor Merkel supports the Irish Government’s position on Irish border issues and has emphasised the importance of finding a solution.193 German contributions to the EU budget The EU Budget Commissioner, Günther Oettinger, said in February 2018 that Germany should pay around €3 - €3.5 billion more to the EU budget than at present to help close the gap left by Brexit, particularly in the protection of the EU’s external borders and the fight against terrorism. He said this would mean only 10 cents more per day per head for Germans.194 Chancellor Merkel’s CDU party and the opposition SPD said they were willing in principle to increase Germany’s contribution to the EU budget. But with no coalition government in place at the time, it was not clear what amount would be acceptable. Business concerns German business leaders have been concerned about the state of Brexit negotiations and asked the UK Government to soften its position as they entered a “critical phase”. Joachim Lang, director general of Germany’s BDI industry federation, told the Financial Times that if there was no agreement

190 See, e.g. Berlin to the rescue? A closer look at Germany’s position on Brexit, Sophia Besch and Christian Odendahl, Centre for European Reform, March 2017. 191 See Deutsche Welle, Where Germany stands on Brexit, 5 July 2018. 192 Financial Times, Germans see Brexit as a UK own goal, 1 May 2018. See also, Johnny Pring (Public Affairs Manager at McKesson Europe), Europe’s World, Looking across the North Sea: a German view of Brexit, 20 April 2018. 193 See Handelsblatt, Merkel will keine harte Grenze zwischen Irland und Großbritannien, 20 March 2018. 194 Deutsche Welle, EU budget chief wants billions more from Germany post-Brexit, 16 February 2018.

95 Commons Library Briefing, 2 May 2019

by mid-November 2018, “German companies will start implementing their emergency plans for a no-deal Brexit”.195 Mr Lang’s concerns were that no deal and no transition phase would mean “a border and customs regime that no one is prepared for”, “considerable uncertainty” and “interruptions to supply chains”. He also criticised the UK’s Chequers proposals on trade, in which the UK would remain part of a single market for goods but not the free movement of services, capital and people.196 Defence and security matters The UK wants to continue to contribute to defence and security in Europe, but if the UK Government thought this would give it leverage in the Brexit negotiations, the German Government might beg to differ. However, the CER thinks the UK might still have some bargaining power: Looked at through these traditional lenses of German foreign policy, Britain’s security card is just not as strong in Germany as London assumes. However, given more recent security challenges, the British do have some leverage in Berlin, if Theresa May plays her cards right. The acute threat of terrorism in Europe, a belligerent Russia, an unstable southern neighbourhood, and the weakening of transatlantic relations and American security guarantees under President Trump are all challenges in response to which Berlin to some degree depends on the UK. Brexit preparations Like France, Germany is preparing for Brexit, “including the recruitment of additional personnel to deal with a less open economic relationship with the UK”.197 Although traditionally it is the Chancellor’s office that deals with EU policy, there is a cross-ministerial Brexit Task Force headed by the Foreign Ministry and a dedicated Brexit team in the Finance Ministry. The Foreign Ministry website sets out German Government preparations for Brexit. In 2017 the Deutscher Industrie und Handelskammertag (Association of German Chambers of Industry and Commerce) looked at the possible impact of Brexit on German business: In the estimation of German companies, the withdrawal of the United Kingdom from the European Union will represent a significant drag on the trade of goods and services. The business outlook of companies which are engaged in trade with the United Kingdom is worsening significantly, as expected cost burdens due to taxes and tariffs and increasing bureaucratic hurdles at Europe's new borders will negatively affect business on both sides. The magnitude of this effect largely depends on negotiations between the United Kingdom

195 Financial Times, German business leaders raise alarm over Brexit progress, 2 September 2018. 196 For further information on the Brexit White Paper, see Commons Briefing Paper 8387, The Brexit White Paper on future relations and alternative proposals, 28 August 2018. 197 BBC News, Reality Check: What are EU countries doing to prepare for a no-deal Brexit? 6 November 2018

96 The EU27: Internal Politics and Views on Brexit

and the EU. Regardless of the specific outcome of these negotiations, almost one in every ten companies is already planning to shift investments away from the UK because of Brexit and towards Germany or other countries within the EU internal market.198 Many German businesses have been preparing for Brexit, including for the possibility of a no-deal Brexit. Deutsche Welle looked at some of their “worst scenario” planning: Among other measures companies are setting up new facilities, looking for other suppliers that operate within the single market and are hiring people in order to process goods through customs […]. They are even setting up new servers because they are uncertain about “whether the free flow of data is still possible with the UK and the EU”.199 By contrast, the Financial Times commented in May 2018 that Germany did not think much of the UK’s preparations: Certain themes crop up regularly in such articles and conversations with Germans about Brexit. The first is sheer amazement at how ill- prepared British politicians were for the talks, how ignorant they were of basic facts about how the EU works and, consequently, how unrealistic their negotiating positions have been.200 Draft Brexit transition law Preparations for Brexit include managing the status of the estimated 100,000 British citizens living in Germany and Germans living in the UK. In July 2018 Germany published a draft law, the Brexit-Übergangsgesetz (Brexit Transition Act), which provides that during the transition period the UK is deemed to be an EU Member State for all purposes of German Federal Law (though not state law). In May there were reports of record numbers of Britons applying for German citizenship,201 and the new law would also allow qualifying Britons living in Germany to become German citizens during the post-Brexit transition period.202 The German Cabinet approved the bill on 5 September 2018 and it will go to the Bundestag.203 The German Foreign Ministry outlines the wider purpose of the Bill and the citizenship provisions as follows: The main aim of the bill is to create legal clarity for the transition period as regards provisions of federal law that refer to membership of the EU. The bill contains a clear and simple transitional rule for the transition period: wherever federal law refers to the EU Member

198 The Impact of Brexit on German Businesses. Results of the IHK Business Survey, Going International 2017, March 2017 199 Deutsche Welle, Growing unease over Brexit in German business community, 28 June 2018 200 Financial Times, Germans see Brexit as a UK own goal, 1 May 2018 201 See, for example, Deutsche Welle, Brexit causes record number of Britons to be granted German citizenship, 23 May 2018 202 See Brexit Legal, Germany Provides Draft of Brexit Implementation Act, Jens Rinze, 26 July 2018 203 The act must be approved by the Bundestag with the consent of the Bundesrat.

97 Commons Library Briefing, 2 May 2019

States, this will also include the United Kingdom as long as none of the stated exceptions apply. The bill also includes a provision to help British and German citizens who apply for citizenship of the other country before the end of the transition period. Under this provision, they will be allowed to retain their original citizenship even if the decision on their naturalisation is made after the end of the transition period. In such cases, dual citizenship will be tolerated under certain conditions.204 On 17 January 2019 the Bill was introduced in the German Bundestag. It is intended to enter into force on the same date as the withdrawal agreement, so its provisions will not apply if there is no withdrawal agreement. The Federal Ministry of the Interior, Building and Community has FAQs on right of residence in the context of Brexit in which it sets out provisions for UK residents in Germany with and without a deal.

European Arrest Warrant The UK-EU Withdrawal Agreement (WA) provides for a transition period until the end of December 2020 whereby, with a few exceptions, EU rules will continue to apply to the UK. This will include Justice and Home Affairs (JHA) measures that the UK has opted into. However, Article 185 provides that from the entry into force of the WA (i.e. the beginning of the transition period) Member States may no longer surrender nationals to the UK under the European Arrest Warrant (EAW), if the EU declares that the relevant Member State has raised a concern “related to fundamental principles of national law” at the time of notification of approval of the WA. The UK can reciprocate within a month of the declaration. It was reported in February 2019 that Germany was exercising this option to issue a declaration that it would not surrender its nationals to the UK under the EAW after exit date. Germany has constitutional provisions barring extradition of its citizens to countries outside of the EU205. Will the end of the Merkel era affect Brexit? The announcement that Angela Merkel was stepping down came as a surprise to many commentators, even though the CDU had lost votes in two recent state elections. Tony Barber, writing in the Financial Times, 30 October 2018, thought Chancellor Merkel’s commitment to maintaining the integrity of the Single Market and the EU’s legal order was “deeply ingrained in German policymakers and will shape any future government’s stance on the post-Brexit EU-UK relationship”. Barber comments further that “as time passes, Ms Merkel’s lame-duck status and exit from German politics will make a difference. Here what matters is not so much Brexit as the many daunting challenges that will confront the EU and eurozone in coming years”. In the run-up to the post-

204 Auswärtiges Amt, Brexit transition act, 5 September 2018 205 See sections 5.7 and 5.14 of House of Commons Library Briefing Paper 8453 The UK's EU Withdrawal Agreement, 11 April 2019. 98 The EU27: Internal Politics and Views on Brexit

Merkel era and beyond Germany will not be concerned with helping the UK to secure a favourable Brexit: Ms Merkel’s successor, whoever that may be, will need time to consolidate his or her power. Meanwhile, the overriding concern of any German government will be to protect the EU against the storms that lie ahead, not to do favours to the UK, whose exit from the bloc is seen as part of the problem. James Kirkup, writing in The Spectator, thought the announcement would “reduce [her] scope for showing personal flexibility towards the UK”, but that German ‘concessions’ to the UK had been over-estimated in any case.206 Charles Grant, director of the Centre for European Reform, writing in the Guardian, 30 October 2018, thought Ms Merkel’s departure from the party leadership “would make little difference to the Brexit negotiations”; that Germany would continue to support Michel Barnier and seek to maintain solidarity among the EU27. Grant concluded: Brexiteers have often claimed that German industrialists would intervene in favour of a deal that suited businesses in Germany and the UK. But that hasn’t happened. Although industrialists are fearful of no deal, they have put very little pressure on their government to seek a softer Brexit, for example by allowing the UK to stay in the single market for goods. Many of them echo the politicians, saying that if the British are allowed to pick holes in the single market, others will follow suit, weakening one of the EU’s greatest achievements as well as its institutions. Unwilling to rescue the Chequers plan, Germany – with or without Merkel – will push Britain towards the relatively hard Brexit of a Canada- free trade agreement. In a letter to The Times on 18 January 2019, the new CDU leader, Annegret Kramp-Karrenbauer, along with several other politicians and figures from German political, industry, religious and cultural bodies, asked the UK to stay in the EU.

The first extension of the Article 50 period On 19 February, Germany’s Minister for Europe Michael Roth said: An extension would only make sense if we have new substantial ideas on the table. Otherwise there’s no point. And of course we would look at such a suggestion closely should the British in fact decide to ask for an extension. But this is solely the responsibility of the British, we can’t make such a suggestion. And then we have to unanimously vote on it. In the end the deadlines are very clear: if there is a substantial extension, for example past the 1 July, then of course there will also have to be [European Parliament] elections in Great Britain, but I don’t want to speculate about this. Chancellor Merkel has however been supportive of an Article 50 extension and has offered a less conditional approach than other EU leaders. At a

206 The Spectator, How Cameron’s misreading of Merkel led to Brexit, 29 October 2018 99 Commons Library Briefing, 2 May 2019

joint press conference with French President Macron on 27 February, Ms Merkel said: If Great Britain needs more time we will not oppose it but of course we are seeking an orderly exit. We regret this step, but it is reality and we now have to find a good solution. It was later reported in The Guardian that Ms Merkel had said at the Sharm el-Sheikh summit on 25 February that an extension until the European Parliament elections on the 23 May would be “very easy” and a longer delay until 30 June, before the new Parliament convenes would be “easy”. Arriving at the EU meeting on 19 March, Mr Roth said to reporters: The clock is ticking and time is running out. [We are] really exhausted by these negotiations. And I expect clear and precise proposals [from] the British government why such an extension is necessary. It is not just a game. It is an extremely serious situation, not just for the people in the United Kingdom, but for the people in the European Union. For my government, the key priority is to prevent a no-deal Brexit ... I don’t have any appetite for substance-less, very abstract discussions and negotiations on the Brexit. Please deliver, dear friends in London, please deliver. The clock is ticking. But also on 19 March, Ms Merkel said: I will fight until the final hour of the deadline of March 29 that we have an orderly exit. We don’t have a lot of time for that, but a few days, and I can’t foresee how I’ll be placed on Thursday [the European Council of 21 March) – that will all depend on what Theresa May puts forward, what the situation is, what happens in parliament, and then we the 27 will respond adequately and jointly. On 21 March, prior to the European Council meeting, Ms Merkel told the German parliament [There was a request from Theresa May] to delay the exit date to June 30. The leaders of the EU27 will intensively discuss this request. In principle, we can meet this request if we have a positive vote in the British parliament next week about the exit document. With regard to the date of June 30, we have to take into consideration that we have European elections in May. This means the future and legality of the European election must be respected. But we can surely talk positively about a short extension. Deutsche Welle also commented on reaction from the AfD leader, Alexpander Gauland, who said the UK should be “respected” for confronting the present dilemma. Mr Gauland accused the EU of punishing the UK, saying “it shouldn't be difficult to simply allow the UK to leave the 100 The EU27: Internal Politics and Views on Brexit

backstop unilaterally”.207 After the European Council meeting, Chancellor Merkel said the EU was “prepared for all scenarios”, and that although they still wanted to see an orderly departure, “we must now prepare for other options, to ensure that they are acceptable for the people in Europe”.208 The second Article 50 extension Following a meeting with the Irish Prime Minister Leo Varadkar on 4 April, and with the UK poised to make a second Article 50 extension request Ms Merkel said: We do hope that the intensive discussions that are ongoing in London will lead to a situation by next Wednesday, when we have a special council meeting, where Prime Minister Theresa May will have something to table to us on the basis of which we can continue to talk. We want to stand together as 27. Until the very last hour – I can say this from the German side – we will do everything in order to prevent a no-deal Brexit; Britain crashing out of the European Union. But we have to do this together with Britain and with their position that they will present to us. Ms Merkel said that there was a “need to be patient and understanding of the predicament that they [the UK] are in” but that “any further extension must require and must have a credible and realistic way forward.” Following the UK’s request for a further Article 50 extension on 5 April, Germany’s foreign minister Heiko Maas said that Mrs May needed to explain more about how she will get a Brexit plan through Parliament before the EU could justify another Article 50 extension. He told reporters at a meeting of G7 foreign ministers: It is a difficult situation. There are, I think, many questions still to clarify in London ... We will come together with our European colleagues at the next council meeting and come to an opinion over the question of an extension and how long such an extension should be. Mr Maas said protecting the legitimacy of the European Parliament elections would be a priority. He said: The European elections are an important point in time and it is very important that they proceed in an orderly fashion. Therefore, we need great legal security and we should not endanger the legitimacy of the EU elections. The German Permanent Representative to the EU reportedly said however that there were “positive elements” to Mrs May’s letter to Donald Tusk and that the Government talks with the “provides enough to justify an extension”. The German view was that all efforts should be made to avoid a no deal Brexit.

207 DW, ibid 208 The Federal Chancellor website, An orderly solution to Brexit, 21 March 2019 101 Commons Library Briefing, 2 May 2019

On the morning of the European Council meeting on 10 April, Ms Merkel told the German parliament that the EU had “only 59 hours to stop a disorderly exit from the European Union”. She said: I can say for the German government that such a scenario, a disorderly exit, is not in our interest. Therefore we are pleased that the British prime minister, who was again in Berlin yesterday, expressed her strong commitment to find a way out of this difficult situation together with the opposition in the lower house. . . . We know that such talks across parliamentary groups require compromise and time, so I and the government are of the opinion that we should offer both parties a reasonable amount of time, because an orderly exit is only possible in cooperation with the UK. She also said that the EU would “deliberate over what kind of extension we want to grant Britain” and this “could well be that it is a longer extension than has been requested by the British prime minister”. But, she said: . . . we will organise this extension such that when Britain has passed the withdrawal agreement, Britain can very quickly thereafter execute the exit in an orderly fashion. Arriving at the European Council meeting, Ms Merkel said: We should be open and constructive with the British Prime minister's request for an extension. Ms Merkel reportedly disagreed with French President Macron at the meeting. While the President was arguing for a short extension, the Chancellor argued that a short extension to 30 June was unlikely to provide enough time for the impasse in Westminster to be broken. She argued that an extension until 31 December was needed, and that the biggest incentive for Conservative MPs to support the WA in the House of Commons was the threat of holding European elections. After the meeting had finished Ms Merkel said: We decided to postpone until October 31. We want an orderly exit, and that can be ensured by allowing for some more time. … For me it was clear that we, that Germany would fight for an orderly exit — not because of British demands but for our own interest. . . . Looking at the many problems in the world today, it means a lot to us that we Europeans show that if there is such a difficult decision such as a member state leaving, we manage an orderly exit … It was a good evening, which demonstrated the EU’s unity. In an interview with the Financial Times published on 16 April Foreign Minister Heiko Maas appeared to warn against the possibility of a further extension to the Article 50 period being agreed in October. He said: They will have to decide what they want by October . . . You cannot drag out Brexit for a decade”. He added that another extension “could send the signal that they plan to stay in the EU after all.” Merkel stresses need to keep Irish border open The Times reported on 23 March that Angela Merkel had urged Michel Barnier “to explore a fallback plan that would keep the Irish border open, even if the UK left the EU without a deal”. It is not clear how this could be achieved. 102 The EU27: Internal Politics and Views on Brexit

During her visit to Ireland on 4 April, Ms Merkel was asked whether averting a border was compatible with protecting the Single Market. She responded: “Where there’s a will, there’s a way … we simply have to do this, we simply have to be successful.” Her visit involved a meeting with a group of people from Northern Ireland who talked about their experience of the Troubles. Ms Merkel said the stories moved her, and she compared them to her own experience: I lived behind the Iron Curtain, so I know only too well what it means once borders vanish … what I have heard here will encourage me to explore ways and means to continue the peaceful co-existence. On 9 April, a German government spokesman dismissed media reports that Chancellor Merkel was willing to re-open the WA and accept a time-limit to the Northern Ireland backstop. The spokesperson told the Guardian that the reports “are without any basis in fact”.

103 Commons Library Briefing, 2 May 2019

12. Greece

12.1 Key Facts 1. Government and Politics Head of State: President Prokopis Pavlopoulos Head of Government: Prime Minister Last election: Legislative, 20 September 2015 Next election: Legislative, due October 2019 2. Finance and the Economy GDP (2017): €217 billion (GDP per head: €20,200) GDP average growth 2014-2018: 0.7% GDP growth 2019 (interim forecast, Feb 2019): 2.2% Net contribution to EU budget per head 2017: -€346 Currency: euro 3. Trade with UK Trade with UK as % of GDP: 3.6%

UK trade with Greece, 2017 £ millions Exports Imports Balance Goods 887 816 71 Services 1,079 3,114 -2,035 Total 1,966 3,930 -1,964 Source: ONS Pink Book

4. Views on EU 25% of Greeks have a positive view of the EU (net positive: -10%) 19% of Greeks agree that their voice counts in the EU (net voice counts: - 60%) 26% of Greeks trust the EU (net trust: -44%) 87% of Greeks are in favour of free movement 52% of Greeks feel like EU citizens 5. Greek nationals in the UK 70,000 (ONS estimate for Jan to Dec 2017)

12.2 Background209 In 1967 Greece’s constitutional monarchy was overthrown by army officers. The new regime under Colonel Georgios Papadopoulos banned all political

209 Greece, Europa World online. London, Routledge. Retrieved 13 October 2018 104 The EU27: Internal Politics and Views on Brexit

activity. In 1973 Papadopoulos became President of a newly declared republic but was overthrown in a coup. Civilian rule resumed in 1974. Under the new Constitution for the Hellenic Republic, which came into force on 11 June 1975, Greece is a parliamentary democracy with a president as Head of State. The president is elected by the Vouli (Parliament) for five years; re-election is permitted only once. The president appoints the prime minister and, on his/her recommendation, the other members of the government. The prime minister is the leader of the party with an absolute majority in Parliament or, if no such party exists, the leader of the party with a relative majority. Greece signed a Treaty of Accession in 1979 and became a full member of the European Community in 1981. 12.3 Current Government and recent political developments210 Amid a deep financial crisis and years of stringent austerity measures, legislative elections were held in January 2015, at which Synaspismos Rizospastikis Aristeras ( — the Coalition of the Radical Left) was elected to government. A SYRIZA-led Government was re-elected in September 2015. The subject of debt relief, repeatedly broached by Prime Minister Alexis Tsipras and hitherto categorically rejected by the EU (but considered essential by the IMF), entered discussions in 2017. Shortly before Greece’s anticipated exit from the third bailout programme in August 2018, a substantive debt-relief agreement was announced (in late June) under which maturities on major parts of Greece’s debt obligations would be extended for 10 years. Results of the most recent Greek elections House of Representatives211 General Election, 20 September 2015 Party Votes % of votes Seats Coalition of the Radical Left (SYRIZA) 1,926,526 35.46 145 (ND) 1,526,400 28.09 75 (XA) 379,722 6.99 18 Democratic Coalition (PASOK-DIMAR) 341,732 6.29 17 Communist Party of Greece (KKE) 301,684 5.55 15 The River (Potami) 222,349 4.09 11 – National Patriotic 200,532 3.69 10 Alliance (ANEL) Union of Centrists (EK) 186,644 3.44 9 Others 347,787 6.40 0

210 Ibid 211 Parliament (Vouli) (Greece), Europa World online. London, Routledge. Retrieved 5 October 2018 105 Commons Library Briefing, 2 May 2019

Total (incl. others)* 351,389 100.00 300

12.4 Views on Brexit Prime Minister Tsipras blames EU Following the UK referendum, Prime Minister Tsipras, blamed the UK electorate’s decision on “chronic deficiencies” of EU leaders and their policies on austerity. In a statement to his party’s central committee on 26 June 2016, Mr Tsipras contended: “We must not put the blame on the British people […] when the borders remain open on austerity policies but stay closed for people”.212 Europe Minister upholds EU unity and need for compromise In an interview with the BBC Today Programme on 19 September 2018, coinciding with the Salzburg EU Leaders’ meeting, Europe Minister George Katrougkalos reaffirmed that the EU27 were united behind the position taken by Michel Barnier. He said the UK’s Chequers proposals were not feasible, and asked if he wanted to see Mr Barnier shift his position on the Irish backstop, he defended the EU negotiator, saying it was “the collective will of the 27”. A compromise was needed on both sides. Mr Katrougkalos emphasised that a no-deal outcome “would be a very, very bad conclusion of the negotiations” and must be avoided. He also referred to comparisons between the UK’s position in the Brexit negotiations and that between Greece and the EU in relation to the Greek bail-out in 2015: You know from the beginning we have said, being ourselves victims of a very asymmetric negotiation, that we would not want the negotiation to be either punitive or a punishment for the UK, but it was much easier for us to conserve our unity during the negotiations than for the British government to keep its internal cohesion … We had our problems too, but at least we knew very well what we wanted and what we didn’t and it was not very clear, at least until Chequers, what exactly was the kind of Brexit wanted by the UK. Asked about the UK’s large contribution to the EU budget being used as leverage in the negotiations, Mr Katrougkalos said: … it depends on how you see it, because the UK itself has profited a lot from its membership of the EU, not just what Britain was receiving from the budget but from the general economic atmosphere. I don’t think however that the budget is the main issue. For instance, for the future partnership Ireland is a much hotter issue. Brexit priorities The Whitehouse Consultancy profile of the EU27’s positions on Brexit summarised Greece’s priorities as follows: With a fragile economy, Greece is mostly concerned with what the economic impact of Brexit will be. Fluctuations of both the euro and the pound can have great consequences for foreign investment in Greece. Tourism is the country’s most important industry and with

212 Reuters, Tsipras blames Brexit on austerity, deficiencies in EU leadership, 26 June 2016 106 The EU27: Internal Politics and Views on Brexit

two million British tourists visiting the country yearly, it will be vital for Greece to maintain steady currencies and good relations with the UK. Greece also wants to maintain tuition costs for Greek students studying in Britain. The Bank of Greece has estimated that the cost of Brexit for Greece ranges from 0.4% to 0.8% of Greek GDP. The UK and Greece also have common interest in getting an agreement on the unification of Cyprus, an EU country with three guarantor powers: the UK, Greece and Turkey. Brexit preparations In July 2018 Georgios Katrougkalos said the Government was studying the “improbable” scenario of no deal, was trying to estimate the possible consequences and taking the necessary measures.213 A Greek Government working paper has warned that in the event of a no-deal Brexit, the financial fallout from a shortfall in the EU budget up to 2020 could leave Greece facing “increased financial and political instability”. The paper proposed that in the event of no deal, Greece should seek a special agreement with the EU, as it would be unable to finance a budgetary shortfall through national funding.214 Article 50 extension Following the EU General Affairs Council on 19 March 2019, Alternate Minister of Foreign Affairs, Sia Anagnostopoulou, said that Greece had agreed that it was important for the UK to avoid a disorderly withdrawal because being such a small country, a no deal Brexit would cause great economic harm to Greece. The Minister thought that a long extension seemed more plausible although Greece agreed with the rest of the EU 27 that “Prime Minister Theresa May must provide substantial grounds and the reasons for which she is requesting this extension, as well as what is going to happen during the extension period.”215 At the European Council meeting of 10 April deciding on a second Article 50 extension, Prime Minister Tsipras was reportedly in favour of being flexible and said the UK’s participation in EP elections would be “the greatest defeat of Brexiteers and maybe even the beginning of the end for Brexit”. Brexit shows flaws of “nationalist approach” In an interview with the Financial Times published on 23 April 2019, Prime Minister Tsipras said that the UK’s Brexit deadlock illustrated the flaws of a “nationalistic approach” and “chauvinist rhetoric” in addressing a country’s political, economic and social problems. Mr Tsipras said:

213 Bloomberg, How Europe Is Bracing for Messy Brexit: Dogs, Drones, Do Nothing, 19 July 2018 214 Daily Telegraph, Greece warns 'no-deal' Brexit would plunge country into 'financial and political instability, 17 August 2018 215 Hellenic Republic - Ministry of Foreign Affairs, Statement by Alternate Minister of Foreign Affair Sia Anagnostopoulou following the proceedings of the EU General Affairs Council, 20 March 2019 107 Commons Library Briefing, 2 May 2019

Brexit was a very bad development for Europe, and very bad for Britain as well Whatever we are watching now is the result of a chauvinist rhetoric that promised a breakthrough with a nationalistic approach, not with finding collective solutions. Mr Tsipras said that Greece had learnt from hard experience that it was in the national interest to stay in the eurozone and EU. He said: If the UK, which is a very significant power, has so many difficulties in finding a way forward for Brexit, then just imagine, what about Greece? The developments with Brexit prove that this path, the nationalistic path, is not a path that offers an easy way for a breakthrough in solving real problems.

108 The EU27: Internal Politics and Views on Brexit

13. Hungary

13.1 Key Facts 1. Government and Politics Head of State: President János Áder Head of Government: Prime Minister Viktor Orbán Last election: Legislative, 8 April 2018 Next election: Legislative, due in 2022 2. Finance and Economy GDP (2017): €199 billion (GDP per head: €20,300) GDP average growth 2014-2018: 3.7% GDP growth 2019 (interim forecast, Feb 2019): 3.4% Net contribution to EU budget per head 2017: -€314 Currency: forint 3. Trade with UK Trade with UK as % of GDP: 5.5%

UK trade with Hungary, 2017 £ millions Exports Imports Balance Goods 1,348 2,714 -1,366 Services 770 770 0 Total 2,118 3,484 -1,366 Source: ONS Pink Book

4. Views on EU 43% of Hungarians have a positive image of the EU (net positive: +24%) 50% of Hungarians agree that their voice counts in the EU (net voice counts: +3%) 48% of Hungarians trust the EU (net trust: 0%) 81% of Hungarians are in favour of free movement 80% of Hungarians feel like EU citizens 5. Hungarian nationals in the UK 98,000 (ONS estimate for Jan to Dec 2017) 13.2 Background The Communist state structure was abandoned in Hungary in 1989, with major constitutional reforms leading to the first multi-party elections in 1990. Under a new Constitution a unicameral legislature, the Országgyülés (National Assembly), would be elected via a mixed (two-round) majoritarian-proportional electoral system. It also provided for a president with limited powers, elected by Parliament. 109 Commons Library Briefing, 2 May 2019

The first multi-party elections resulted in a centre-right coalition government led by the Hungarian Democratic Forum from 1990 to 1994. This was followed from 1994 to 1998 by a centre-left government led by the Hungarian Socialist Party (MSzP), which had evolved out of the former ruling Communist party. In 1998 Viktor Orbán came to power for the first time at the head of a centre-right coalition. Orbán’s party (Alliance of Young Democrats – Hungarian Civil Alliance) was originally a liberal party, but has shifted to a conservative nationalist position under his leadership since the 1990s. Under the first Orbán government, the ‘Status Law’ was adopted in 2001, causing consternation in neighbouring states by providing for travel and health care benefits and work permits for ethnic Hungarians in these states. The centre-left coalition led by the MSzP then won two successive general elections in 2002 and 2006 before Fidesz returned to power following the 2010 election.216 The Orbán Government then pushed through extensive changes to the Hungarian Constitution. A new electoral law was also adopted in 2011, reducing the number of members of the National Assembly from 386 to 199. A new electoral system was introduced which retained a mix of majoritarian and proportional elements but with a first-past-the-post system without a second round for just over half of seats. Voting rights were also given to ethnic Hungarians living abroad. Hungary joined NATO in 1999 and the EU in 2004 after in favour. 13.3 Current Government and recent political developments Hungary has been led by Prime Minister Viktor Orbán since 2010. His Fidesz party has won three successive general elections, most recently in April 2018. Following the 2010 election, together with its coalition partners, the Christian Democratic People’s Party (KDNP), Fidesz commanded a majority of over two-thirds in the National Assembly, enabling it to make wide- ranging changes to the Hungarian Constitution. A new Hungarian Constitution came into effect from January 2012, with further amendments made since. The new constitution limited the powers of the Constitutional Court, placed restrictions on political campaigning outside of state media and emphasised traditional Christian values, giving preference to traditional family (heterosexual) relationships. In 2012 the European Commission launched infringement proceedings against Hungary in relation to legislation adopted under the Constitution which it viewed as

216 Cox, Terry. History (Hungary), Europa World online. London, Routledge. Retrieved 18 September 2018 110 The EU27: Internal Politics and Views on Brexit

compromising the independence of the national central bank, the judiciary and the data protection supervision authority. Under the new electoral system introduced in 2012, Fidesz and its allies have secured two-thirds majorities in the National Assembly at both the 2014 and 2018 general elections, enabling the Government to make further constitutional changes. During the international refugee crisis in 2015, the Government erected a barbed wire fence on Hungary’s border with to prevent refugees and migrants from entering the country. The Orbán Government has strongly opposed EU attempts to establish mandatory quotas for the resettlement of refugees. In October 2016, it held a referendum on whether the EU should be able to impose such quotas. 98.4% of the votes cast supported the Government’s view, although the turn-out in the referendum was only 44% after opposition parties urged a boycott. This meant the results were not legally binding. In January 2017, the Government announced plans to ban the activities of the Open Society Foundation owned by the Hungarian-born business magnate George Soros (believed to finance some 60 Hungarian non- governmental organisations). In April 2017 the National Assembly adopted amendments to higher education legislation, imposing conditions on the operation of foreign universities in Hungary, including the requirement to maintain a campus in their home country. This was believed to target the Central European University (CEU) established and partially funded by Soros.217 In December 2018, the CEU announced it was moving its US- accredited degree programmes to Vienna. In June 2017, the European Commission launched infringement procedures against Hungary (and the Czech Republic and Poland), in response to their refusal to accept refugees under the EU’s relocation plan. This was followed up by a referral in December to the Court of Justice of the EU (CJEU) for non-compliance with the scheme. The Commission also referred Hungary to the CJEU over its higher education law and restrictions on foreign-funded NGOs, after the Government had failed to comply with Commission deadlines to amend these measures. In the April 2018 National Assembly elections, Fidesz and its KDNP allies won 49.3% of the vote and 133 of the 199 parliamentary seats. The second- placed party was the far right (Movement for a Better Hungary). In June 2018, the National Assembly passed new legislation described as a ‘Stop Soros’ law by Orbán, under which individuals or groups who help undocumented migrants to gain status to stay in Hungary can be imprisoned. This was condemned by the United Nations High Commissioner for Refugees. The National Assembly also passed a constitutional amendment stating that an ‘alien population’ cannot be settled in Hungary. In July 2018, the National Assembly passed legislation

217 Recent developments: EU infringement proceedings (Hungary), Europa World online. London, Routledge. Retrieved 18 September 2018 111 Commons Library Briefing, 2 May 2019

imposing a 25% tax on NGOs that engage in “propaganda activity that portrays immigration in a positive light”. In July 2018 the European Commission sent a letter of notice as a first step towards further infringement proceedings in relation to the law outlawing assistance to those wishing to apply for asylum or for a residence permit in Hungary. The Commission said it had concluded that Hungary is failing to fulfil its obligations under the EU Treaties, EU laws and the EU’s Charter of Fundamental Rights. In January 2019, these proceedings reached a second stage and the Commission gave Hungary two months to respond to its concerns and said it would refer the case to the Court of Justice of the EU otherwise. In September 2018, the European Parliament adopted a resolution calling on the Council of the EU to trigger Article 7 of the Treaty on European Union (TEU) determining the existence of a clear risk of a breach by Hungary of EU values (this could ultimately lead to the suspension of its EU membership rights). The EP referred to concerns related to the following: the functioning of the constitutional and electoral system, the independence of the judiciary and of other institutions, the rights of judges, corruption and conflicts of interest, privacy and data protection, freedom of expression, academic freedom, freedom of religion, freedom of association, the right to equal treatment, the rights of persons belonging to minorities, including Roma and Jews, and protection against hateful statements against such minorities, the fundamental rights of migrants, asylum seekers and refugees, and economic and social rights. The Council of the EU has not however as yet taken forward this process. European Commission Vice President told the European Parliament in a debate on Hungary on 28 January 2019 that the Commission shared its concerns regarding fundamental rights, corruption, the treatment of Roma, and the independence of the judiciary. A few days prior to the debate Orban referred to Timmermans as “Soros’s man”. Timmermans also raised concerns about a merger of more than 400 pro-government media outlets into one holding controlled by a board close to the government, and said that the Commission had asked Hungary for more information on a new overtime law passed in December 2018. This allows employers to ask employees to work up to 400 hours overtime a year, and delay payments for up to three years. Several thousand Hungarians protested in against the law. The Hungarian Government launched an information campaign in February 2019 targeting the EU for what it described as “migration incentivising plans . . . which fundamentally threaten Hungary’s security. Posters bearing images of both Soros and European Commission President Jean-Claude Juncker referred to what it said were EU plans to “introduce mandatory resettlement quotas . . . weaken member states' right to border protection and . . . ease immigration with migrant visas”. The European Commission published a response describing the campaign as distorting the truth and “at worst downright misleading”. On 20 March, Fidesz was suspended from the main EU-level centre-right party grouping, the European People’s Party (EPP), pending an inquiry to 112 The EU27: Internal Politics and Views on Brexit

evaluate its respect for the rule of law and EPP values. The EPP also placed conditions on Fidesz to regain full membership, including ending the anti- Juncker campaign and resolving the dispute over the status of the CEU. Results of the most recent Hungarian elections National Assembly (Országgyülés)218 General Election, 8 April 2018 Parties and blocs Seats A* B* Total Federation of Young Democrats – Christian Democratic People’s Party 91 42 133 (Fidesz-KDNP coalition) Movement for a Better Hungary (Jobbik) 1 25 26 Hungarian Socialist Party – (MSzP-PM) 8 12 20 Democratic Coalition (DK) 3 6 9 Politics Can Be Different! (LMP!) 1 7 8 Together (Együtt) 1 0 1 Independent 1 0 1 National Authority of Germans—Hungary (MNOÖ) 0 1 1 Total 106 93 199 * The 199 seats comprise 106 (A) elected in single-member constituencies and 93 (B) elected on the basis of national lists 13.4 Views on Brexit Hungary tries to persuade UK electorate to vote remain In the run-up to the UK referendum in 2016, the Hungarian Government placed an advert in the Daily Mail with a personal message from Prime Minister Viktor Orbán in an attempt to persuade the UK to vote to remain. The message stated: “The decision is yours, but I would like you to know that Hungary is proud to stand with you as a member of the European Union”. In an interview with in November 2016, Mr Orbán wished the British success and said “one of the countries who will lose most from the British departure from the EU is Hungary”. He continued: The British were strategic partners on many issues inside the EU, so we are weaker now [post Brexit] than we were. So we're sad about that, but at the same time I think there is obviously a life outside the European Union and if a sovereign nation is so brave as to make that decision, then we wish them good luck. We see that you have a better than even chance of being successful outside, so we are not looking for a relationship with the British where it's good for us, but you suffer, because you 'deserve it' - which is the general approach of many countries - we want a relationship that is good for us, and makes a success of Britain. Victor Orbán sets out his Brexit priorities

218 National Assembly (Országgyülés) (Hungary), Europa World online. London, Routledge. Retrieved 15 October 2018 113 Commons Library Briefing, 2 May 2019

Mr Orbán referred to the size of the UK economy, the UK army and its role as a nuclear power, said the UK had ”everything that could create a well- founded self-confidence”, and further: And you are a brave nation. It's a great move. I said already, we lost a strategic partner inside the European Union, but we respect your decision. Not just accept it, but we say 'no', that's a great nation, making its own decision.219 Mr Orbán referred to the need to maintain the existing rights of Hungarians living in the UK post-Brexit, and said these arrangements should be reciprocal: “If it is reciprocal, then it can work […] if British citizens get the same treatment, then there is no reason to raise question of acquired rights”.220 Orbán also stressed the importance of free trade between the UK and Hungary, referring to around 50,000 workers employed by British companies in Hungary, and improving trade between the two countries: So we're not just interested on the side of the coin that relates to free movement but on free trade also. We are interested in finding an equilibrium. That could be the basis of the [future] partnership. My concept on this whole thing is that we don't need a 'soft' or 'hard' Brexit, but a 'fair' Brexit. We Hungarians are in favour of a 'fair' Brexit.221 On the Single Market, Mr Orbán referred to the “equilibrium” of the four freedoms, but said “the level of that equilibrium must be decided by the British, not by us”.222 Hungary’s main concerns: citizens’ rights and business stability In December 2016, the website of the Prime Minister reported on a meeting between Prime Minister Orbán and Michel Barnier, at which Mr Orbán said Hungary had a vested interest in a Brexit which was fair and not punitive. He outlined the Hungarian position, the essence of which was ”to ensure that the rights acquired by Hungarians studying and working in the United Kingdom are not curtailed in the future”. He also stressed the importance of continued stability for Hungarian employees of British businesses in Hungary. But Mr Orbán also emphasised that ”the EU’s four fundamental freedoms must be enforced equitably on both sides after the UK’s withdrawal”. A more detailed discussion of Hungary’s position on the Brexit negotiations can be found in the chapter on Hungary in the report on EU27 positions published in October 2017 by the Negotiating Brexit project. It explains that Hungary has seen the UK as an ally in its push to reassert the powers of Member States within the EU and resist interference from the EU. However, while strongly opposing migration from outside the EU, Mr Orbán did not support UK attempts to restrict freedom of movement within the

219 Daily Telegraph, Viktor Orban interview: Full transcript, 11 November 2016 220 Ibid 221 Ibid 222 Ibid 114 The EU27: Internal Politics and Views on Brexit

EU or to curtail the rights of EU citizens in the UK. Following the referendum, the chapter explains how the Hungarian Government interpreted the result: It was argued that the Leave vote won because of the migration issue. Orbán claimed that the results were a clear indication that the British people wanted to take back control, that they had had enough of the uncertainty caused by the migrant crisis, which the EU seemed unable to manage, and that the UK was fed up with endless lecturing from Brussels. Orbán claimed that the EU lost a major player with the UK and therefore, needed to reevaluate the rules, which could only come in the form of institutional and procedural changes of European politics and policy-making. The government argued that the Commission should consider the position of member states much more. Hungary justifies anti-Soros stand In February 2018, a blog by Hungarian Cabinet Office spokesman Zoltán Kovács was published on the pro-Government ‘About Hungary’ website. It sought to justify the Government’s anti-George Soros policies by referring to Mr Soros’s alleged interference in the Brexit referendum. The blog referred to a Daily Telegraph report claiming that Soros was backing a plot to thwart Brexit (referring to Soros’s financial backing for the ‘Best for Britain’ anti-Brexit campaign group). Soros, Kovács said, was “funding groups that are working to overturn Brexit, to reverse a decision taken at the request of UK voters, and to possibly topple the democratically elected government of Theresa May in the process”. He pointed to perceived UK support for the Hungarian position on George Soros: Soros is not a philanthropist and his Open Society network is not a charity. He is a brazen political actor who uses his foundation to drive a radical political agenda around the world, often opposing the will of local citizens if they don’t agree with his open society ideology. Yet, he has no democratic mandate. He represents nobody. Why do we say “Stop Soros”? Just ask the people of the United Kingdom. Support for a comprehensive free trade agreement with UK In June 2018, the same website also reported comments from Hungary’s Minister for Foreign Affairs and Trade, Péter Szijjártó, that Hungary supported a “thorough and comprehensive free trade agreement” with the UK. The minister thought it was especially important to maintain security cooperation with the UK, that the EU was facing serious security challenges and Britain’s intelligence-defence capacities should not be disregarded in this respect”. Szijjártó said Europe could “not afford to not utilize these capacities”. He referred to direct UK participation in 12 of the 15 foreign EU missions carried out under the auspices of the Common Security and Defence Policy (CSDP) and said that if the UK withdrew from these, the missions would either discontinue or their capacities would drop drastically. Szijjártó added that the British are present in a number of international missions that are important for Hungary, including in the Western Balkans; that British and Hungarian soldiers had participated in several joint exercises and Hungary would like to continue this cooperation. 115 Commons Library Briefing, 2 May 2019

A fair Brexit, Szijjártó emphasised, would also involve the protection of the rights of Hungarian citizens living, working and studying in Britain. Hungary calls for a ‘special status’ for UK after Brexit In July 2018, the Hungarian Government’s ‘About Hungary’ website stated that the Government waned the UK to enjoy a special status in the EU after Brexit “as it has common roots and historical, economic and social ties with the European Union”. It cited the State Secretary for EU affairs, Szabolcs Takács, who said that the UK will not be “a simple non-EU state” after Brexit. But Takács also said “special solutions” for the UK could not set a precedent for other Member States. Takács reiterated the view that the acquired rights of EU citizens in the UK should be preserved after Brexit, and Hungary wanted the “strongest possible cooperation” with the UK in defence, the economy, security, innovation and cultural affairs. He thought that although it was reasonable to prepare for several scenarios, the talks should strive for a “good, rational, progressive agreement that is in line with the interests of Hungary”. He also commented that preserving Ireland’s political and economic stability was in the interests of both Hungary and the EU, adding that strict checks on the inter-Irish border should be avoided. Orbán: don’t punish the UK At the Salzburg summit on 19-20 September 2018, Prime Minister Orbán told reporters that he was close to building a majority of Member States who were opposed to “a camp of prime ministers” who believed the “British must suffer” because they voted to leave. He did not support those who thought the UK “must be punished”; what was needed was “a fair Brexit and a good cooperation between the UK and the European Union in the future”. Orbán’s comments following Withdrawal Agreement Prime Minister Orbán described the European Council’s endorsement of the UK-EU Withdrawal Agreement on 25 November 2018 “a real Black Sunday” and “a sad day for the European Union”. He described the UK’s departure from the EU as a “great loss”. He referred to Brexit as not only a great political and economic loss for the EU, but also a financial loss given that Hungary was likely to have received more money from the EU budget if the UK had stayed. Prime Minister Orbán said the EU’s current leadership bore responsibility for Brexit in that it had elected a European Commission President to whom the British public were opposed and “letting in migrants” (reported on the ‘About Hungary’ website). Prime Minster Orbán said that the Government’s goal of protecting its citizens in the UK had been achieved: “Those Hungarians who are in England today, they’re safe, their situation has not worsened”.

116 The EU27: Internal Politics and Views on Brexit

14. Ireland 14.1 Key Facts 1. Government and Politics Head of State: President Michael D. Higgins Head of Government: Prime Minister Leo Varadkar Last election: Legislative, 26 February 2016 Next election: Legislative, by April 2021 2. Finance and the Economy GDP (2017): €261 billion (GDP per head: €54,300) GDP average growth 2014-2018: 10.7% GDP growth 2019 (interim forecast, Feb 2019): 4.1% Net contribution to EU budget per head 2017: +€51 Currency: euro 3. Trade with UK Trade with UK as % of GDP: 23.5% (the highest of the EU27)

UK trade with Ireland, 2017 £ millions Exports Imports Balance Goods 20,309 14,488 5,821 Services 13,725 7,300 6,425 Total 34,034 21,788 12,246 Source: ONS Pink Book

4. Views on EU 64% of Irish citizens have a positive view of the EU (net positive: +56%) 60% of Irish citizens agree that their voice counts in the EU (net voice counts: +25%) 50% of Irish citizens trust the EU (net trust: +12%) 89% of Irish citizens are in favour of free movement 85% of Irish citizens feel like a citizen of the EU 5. Irish nationals in the UK 350,000 (ONS estimate for Jan to Dec 2017) 117 Commons Library Briefing, 2 May 2019

14.2 Background223 The Irish Constitution took effect in 1937. Legislative power is vested in the bicameral Oireachtas (National Parliament), comprising the Seanad Éireann (Senate) and the Dáil Éireann (House of Representatives). The Uachtarán (President) is the constitutional head of state, elected by direct popular vote for seven years, with re-election permitted once. Ireland acceded to the EEC in 1973. In referendums since, Irish citizens initially rejected the Nice Treaty (2001) and the Lisbon Treaty (2008), but these outcomes were later reversed. Ireland was an original member of the single currency, adopting the Euro from its launch on 1 January 1999. 14.3 Current Government and recent political developments Michael D Higgins, a veteran left-wing politician, university lecturer, Irish speaker, poet and human rights activist, was elected President on 11 November 2011 and re-elected for a second term on 26 October 2018. He has dedicated his four-decade political career to championing Irish culture and left-wing causes worldwide. The president wields little power beyond the ability to refer potentially unconstitutional legislation to the , but has an important symbolic role in representing Ireland at the national and international level. The Taoiseach (prime minister), Leo Varadkar, a doctor of part-Indian parentage, was elected leader of the centre-right party in June 2017, on the resignation of Enda Kenny. He succeeded Mr Kenny as head of a minority government later that month. Mr Varadkar, born in 1979, is Ireland's youngest prime minister, and is also the country's first openly gay party leader and the first of Indian . Results of the most recent Irish elections Legislature – Dáil Éireann (House of Representatives)224 General Election, 26 February 2016 % of Party Votes* Seats votes* Fine Gael 544,230 25.52 50** Fianna Fáil 519,353 24.35 44 Sinn Féin 295,313 13.85 23 Independents 334,814 15.7 19 Labour Party 140,893 6.61 7 Anti-Austerity Alliance-People Before Profit 84,168 3.95 6 Independents 4 Change*** 31,365 1.47 4 Social Democrats 64,094 3.01 3

223 See Ireland, Europa World online. London, Routledge. Retrieved 4 September 2018 224 Dáil Éireann (Ireland), Europa World online. London, Routledge. Retrieved 3 October 2018 118 The EU27: Internal Politics and Views on Brexit

Green Party 57,997 2.72 2 Total (incl. others) 2,132,895 100 158 The election was conducted by means of the single transferable vote. Figures refer to first- preference votes. ** Including the outgoing Ceann Comhairle (Chairman), who is automatically re-elected. *** Independent grouping.

The next elections to the Dáil are next to be held no later than 2021.

Legislature – Seanad Éireann (Senate)225 Elections to the Seanad Éireann were held in April 2016 and the strength of the parties was as follows: Party Elected Appointed Seats Fine Gael 13 6 19 Fianna Fáil 14 0 14 Sinn Féin 7 0 7 Labour Party 5 0 5 Green Party 1 0 1 Independents 9 5 14 Total 49 11 60

The next elections to the Seanad are to be held no later than 2021. 14.4 Views on Brexit Enda Kenny outlines Irish concerns about Brexit Ahead of the UK referendum in June 2016, the then Taoiseach Enda Kenny wrote an article for the Guardian in which he outlined why Ireland was fearful of the UK leaving the EU: While I respect that the referendum on 23 June is one to be decided by the UK electorate alone, many Irish citizens living and working in Britain form part of that electorate. Ireland is also the UK’s nearest neighbour and our relationship with Britain is closer than with any other EU member state. Ireland has a unique perspective on the outcome of the referendum, given the close and multi-layered nature of our relationship with the UK. These ties find their political expression in the relationship between the two governments, and between the Irish government and the Northern Ireland executive, including through the north/south ministerial council and the British-Irish council. Crucially, for more than 40 years they have also been expressed through our common membership of the European Union.226 He outlined the four main reasons why Ireland wanted the UK to stay in the EU:

225 Seanad Éireann (Ireland), Europa World online. London, Routledge. Retrieved 3 October 2018 226 The Guardian, Why Ireland is so fearful of our closest neighbour leaving the EU, Enda Kenny, 20 June 2016. 119 Commons Library Briefing, 2 May 2019

There are four main reasons why we want Britain to remain in the EU. There’s the economy – we want to sustain our mutual economic growth. We trade around €1.2bn (£900m) of goods and services each week between our two countries. Anything that gets in the way of that flow of trade will add costs and be damaging. There are 200,000 jobs in Ireland and another 200,000 jobs in the UK that are directly supported by our trade. More people work in the UK for Irish food companies than work for Nissan in Sunderland. World-leading Irish employers such as Greencore, Kerry, Glanbia and ABP all employ more local UK workers today because they have the EU rights of free movement of labour, raw materials and their finished products, without the costs of tariffs or barriers. There’s the EU itself. The EU needs renewal and we need a strong UK at the table to help to drive the reform agenda that can help the union regain competitiveness and growth. The UK and Ireland are like-minded on EU matters, and the process of working together in Brussels has built an immense store of knowledge, personal relationships and trust between our governments. The prospect of this resource being diminished by the absence of the UK in Brussels is not welcomed by me or my government. There is the relationship between Britain and Ireland. Preserving that strong relationship would be more challenging if the UK left the EU, including with regard to the common travel area, which allows for the passport-free movement of people between these islands. And there’s Northern Ireland. Our common membership of the EU provided an important backdrop to the Irish and UK governments working together to secure peace in Northern Ireland. The peace process was built by the people of this island coming together, and that will of course continue. When the Good Friday agreement was concluded 18 years ago, the detail of the negotiations and the agreement itself were brought about as a result of intensive engagement by the British and Irish governments in conjunction with the Northern Irish political parties. But often underestimated was the international support for the process, not least that of the European Union. The EU directly provides, and will continue to provide, much- needed funding to Northern Ireland – almost €3bn in the six years to 2020, helping the Northern Irish economy and supporting new sustainable jobs. We share the UK’s only land border with another EU member state. Those many thousands of UK visitors to Ireland in recent years know that the border between both parts of Ireland is barely visible. There is a seamless flow of people crossing that border. If the UK’s decision is to leave the EU, this will no longer be a border between two countries. It will be a border between the UK and the remaining 27 member states of the EU. It will be the EU’s western boundary running from Derry to Dundalk. New administrative arrangements could be worked out, but there is no possible version of such a development that would avoid extra costs to governments, to business, to consumers and to the convenience of tourists and citizens travelling between our two countries. What is not easy to quantify and mitigate is the psychological effect of a hardening border on the island. My fear is that it would play into an old narrative – one of division, isolation and difference. 120 The EU27: Internal Politics and Views on Brexit

Our two governments and the great majority of people across these islands have worked in partnership to promote peace and reconciliation in Northern Ireland. In the process, British-Irish relations have been transformed. This was marked by the historic visit of Queen Elizabeth to Ireland in 2011 and the reciprocal first ever state visit to the UK by our head of state, President Michael D Higgins in 2014. The re-establishment of a hard border on the island of Ireland would be a step backwards and present an opportunity for others, with malign agendas, to exploit for destructive purposes. In stating the Irish government’s position, we do so as a close neighbour of the UK, a European partner and a co-guarantor of peace in Northern Ireland. And as a friend. Our common membership of the EU provided an important external context to the Irish and UK governments working together for peace. It should not be discounted lightly. Voters have many issues to weigh up and the Irish perspective may not be foremost in their calculations. I hope, however, that some consideration will be given to that perspective, and that everyone who has an interest in Ireland will reflect on how best to use their vote. The Irish border issue On 9 February 2017, Ireland’s then Foreign Affairs Minister, Charlie Flanagan, met with Michel Barnier and the EP Brexit representative, . Flanagan said they had recognised the unique nature and special status of the UK-Ireland border – the EU’s only land border with the UK. He also hit back at suggestions that Ireland’s close relationship and shared history with Britain made it a weak link in EU27 unity, commenting: “We are firmly on the side of the EU-27”.227 He also pointed out that Northern Ireland had largely voted to remain and that its citizens qualified for Irish and therefore EU citizenship. He added: “We don’t subscribe to the view that punishment should be exacted [on the UK]”, but conceded: “I don’t see any positives in the withdrawal from the EU of the UK, for the EU or for the UK”.228 In a interview on 6 April 2017, Mr Flanagan said Brexit had been “a bad decision”, but that the will and wishes of the British people had to be respected. The outcome of the Article 50 process should be “as close as possible a relationship between the European Union and the United Kingdom, albeit with the UK gone”.229 Both Enda Kenny and his successor as Taoiseach Leo Varadkar have been adamant that there should be no hard Irish border. After he had talks with Theresa May on 19 June 2017, Mr Varadkar said that while there would be a “political border” between the two countries, “there should not be an economic one and any border that does exist should be invisible”.230 But a

227 EurActiv, Ireland tells EU Brexit bosses ‘we are firmly on your side’ 10 February 2017 228 Ibid 229 BBC News Online, Brexit vote a 'bad decision', says Irish minister, 6 April 2017 230 BBC News Online, Leo Varadkar 'reassured' about DUP-Tory deal, 19 June 2017 121 Commons Library Briefing, 2 May 2019

week later, Varadkar said it would be practically and legally “extremely difficult” to find ways to maintain an open border with Northern Ireland after Brexit, even with the sympathy and goodwill of the EU behind it. He told a conference: From my meetings in Brussels and elsewhere, there is a real understanding of the issues that are unique to Ireland, a sympathy for us and a lot of goodwill. But turning those into practical solutions that will be written in law is going to be extremely difficult ... The Irish issues, including avoiding an economic border, will not be easy to solve. The level of uncertainty as to the outcome of the negotiations remains very high, and it’s clear that Brexit is a fundamental economic risk for Ireland if it results in a permanent change to the rules of trade between our two countries. We will make a strong case at the EU level that Ireland will require support that recognises Brexit as a serious disturbance to our economy, once we’ve a better understanding of what that disturbance is going to be.231 In September 2017, at the third meeting between May and Varadkar, he praised Mrs May’s commitment on the border, adding that the best way to achieve that was for the UK, including Northern Ireland, “to stay in some form of customs union and some form of single market with the European Union”.232 Varadkar: frustration at lack of progress and fears of no deal The Taoiseach has been frustrated by the failure of the two sides to find a solution to the Irish border issue. After a summit in Sweden in November 2017, in an interview with Sky News, Leo Varadkar’s earlier rhetoric on the UK commitment was much less generous; he laid the blame for the impasse firmly on the UK Government: I can't say in any honesty that it's close, either on the Irish issue of the financial settlement. Brexit is a British policy, it's also one that Britain has imposed on the rest of Europe. It's causing enormous difficulties for the whole of Europe and Ireland in particular and to me it seems that after 40 years of marriage, most of them good, Britain wants a divorce and wants an open relationship that day after.233 In May 2018 at an EU summit in Bulgaria, Mr Varadkar raised the prospect of the UK crashing out of the EU without a deal if “substantial progress” had not been made by June. The ‘backstop’ assurance was essential for any withdrawal agreement, but he had yet to see anything in writing from the UK Government. He continued:

231 Reuters, Turning goodwill into EU/UK border solution "extremely difficult" - Irish PM, 28 June 2017 232 The Irish Times, Taoiseach welcomes Theresa May’s promise on Border, 25 September 2017 233 Sky News, Irish PM Leo Varadkar throws a spanner in Brexit works, 18 November 2017

122 The EU27: Internal Politics and Views on Brexit

If the UK wants to put forward alternatives … we’re willing to examine that. But we need to see it written down in black and white and know that its workable and legally operable. And we’ve yet to see anything that remotely approaches that.234 Mr Varadkar’s mounting pessimism was evident in July 2018, ahead of a visit to Northern Ireland by Theresa May, when he commented that assumptions could not be made that a withdrawal agreement would get through Westminster.235 On 3 September 2018, before a visit to Ireland by US President Donald Trump, Leo Varadkar said he would use the opportunity to counter Mr Trump’s initial reaction that Brexit was right for the UK, to explain why Brexit was bad for Europe and the US.236 Brexit preparations Ireland will be affected more than most others in the EU27 and its preparations have been extensive. The cost to the Irish economy of a no- deal Brexit, according to a Government commissioned report, would be around €18 billion.237 After the UK vote the Irish Government announced a range of contingency plans to address the potential impacts of the withdrawal process.238 These included prioritising British-Irish relations (but not at the expense of relations with the EU), Northern Ireland, trade, investment, North-South border impacts, competitiveness and macro–economic issues, research/innovation funding and energy. In January 2017, the Irish Government said it was “acutely” aware of the possible risks to the Irish economy, but also of potential “economic opportunities”, including in mobile investment: Bids for the EU agencies currently located in London—the European Medicines Board and the European Banking Authority have already been announced and the State enterprise agencies are actively pursuing opportunities for increased investment, business and job creation in Ireland.239 On 23 January 2017, the Guardian reported comments from Enda Kenny that Ireland wanted a special provision in any Brexit deal to allow Northern Ireland “ease of access” to rejoining the EU should the North be united with the Republic of Ireland.240

234 The Guardian, Irish PM warns UK could crash out of EU without Brexit deal if no progress soon, 17 May 2018 235 The Guardian, Varadkar says Ireland is stepping up plans for no-deal Brexit, 18 July 2018 236 Daily Express, Varadkar vows to TEACH Trump about Brexit - ‘I’ll explain why he SHOULDN’T support it!’, 3 September 2018 237 See also House of Lords European Union Committee 6th Report, 2016–17, HL Paper 76, Brexit: UK-Irish relations, 12 December 2016. 238 Department of the Taoiseach, Irish Government Brexit Contingency Plans Announced”, 24 June 2016 239 Department of the Taoiseach, Government Statement on Brexit, 17 January 2017 240 The Guardian, Irish Leader Calls for United Ireland Provision in Brexit Deal, 23 February 2017

123 Commons Library Briefing, 2 May 2019

The Irish Government’s 2018 National Risk Assessment – Overview of Strategic Risks analysed a range of Brexit-related risks for Ireland and concluded: While the Irish Government will continue to do all in its power on both a domestic and European front to work for a Brexit agreement in line with Irish interests, the risks to our interests, our trade, our economy at both the macro and micro level8 , and our relationship with Northern Ireland, and the UK which could emerge from potential Brexits are manifold and significant, and it is likely that Brexit will remain one of the most significant risks facing this country over the coming years. The Government is making contingency plans for a no-deal Brexit, including 1,000 customs and veterinary/agricultural inspectors by 2021.241 Ireland has also been considering whether to relocate part of the emergency oil stocks that it stores at UK refineries back to Ireland or to other EU countries.242 The Government was also reported to be drawing up plans to stockpile insulin, vaccinations and other medical supplies.243 Simon Coveney, Foreign Affairs Minister since June 2017 (and deputy-Prime Minister since November 2017), presented Brexit contingency plans to the Cabinet on 18 July 2018.244 Speaking after the Cabinet meeting, Leo Varadkar said: The key decisions are particularly focused on areas where the Government has direct responsibility and on measures that need to be taken on an East-West basis, such as customs and veterinary controls at ports and airports. The Government also reiterated its position today that it would not countenance a return of a border on the island under any circumstances, including in the event of a hard Brexit.245 Coveney confirmed that a “huge amount of work has been underway across Government and its agencies for many months”, and the Government would also be carrying out preparations “on an EU-wide basis, in cooperation with our EU partners”.246 The Government is holding public events and roadshows on Brexit. The Department for Foreign Affairs and Trade has a dedicated website called ‘Getting Ireland Brexit Ready’, which provides advice to citizens on travel, study and work in the UK after Brexit, and to businesses on loans and grants that are available to help with Brexit preparations. Finance Minister made several announcements in the Budget, “including investing 300m euros (£260m) in training schemes for

241 See The Telegraph, Brussels warns EU countries: get ready for a no-deal Brexit, 19 July 2018; RTÉ, 1,000 new customs and veterinary inspectors to be hired, 20 July 2018. 242 Sunday Independent, Ireland set to remove oil reserves from Britain as Brexit deadline looms closer, 15 July 2018, and Cabinet to move Irish oil reserve from UK, 15 July 2018 243 Irish World, ‘No deal’ will mean ‘no drugs’, 1 August 2018 244 See RTÉ, 1,000 new customs and veterinary inspectors to be hired, 20 July 2018 245 Irish Government News Service, Cabinet Agrees Brexit Preparedness Measures, 18 July 2018 246 Ibid

124 The EU27: Internal Politics and Views on Brexit

sectors that could be hit by Brexit”.247 Open Europe reported in August 2018: Other measures include setting up a new system on the Irish stock exchange to settle shares and securities, lobby the EU Commission to relax state aid rules, offer businesses a ‘Be Prepared’ grant of up to €5,000 and making sure Irish pensioners with a UK pension continue to receive it.248 In the Oireachtas on 4 October 2018 Deputy Maurice Quinlivan (Sinn Féin) asked the Minister for Foreign Affairs and Trade about contingency plans “for businesses for a situation in which the landbridge through Britain becomes unusable for Irish lorries travelling to and from the Continent”[30826/18]. Simon Coveney replied in some detail about the work of the Government’s Landbridge Project Group, concluding. Our work on the landbridge must also include the possibility of a no- deal or worse-case outcome. To this end, relevant Departments have now been tasked by the Government to roll out detailed Action Plans with a view to advancing, as appropriate, the mitigating measures which have been identified in the areas of their responsibility from the planning to the implementation phase. In line with this approach, the Government has already approved a number of key Brexit preparedness measures focused on East-West trade which will also take account of the continued use of the landbridge. The Government’s latest Brexit Contingency and Preparedness Update was published on 15 January 2019: Today Government agreed that, aside from the European Parliament Elections (Amendment) Bill 2018 and the Regulated Professions (Health and Social Care) (Amendment) Bill, legislation across different sectors be grouped into one omnibus Bill, in order to assist with the speed of passage through the Houses. The Bill, comprising 17 Parts, will focus on the broad themes of protecting the citizen, and supporting the economy, enterprise and jobs. Amendments to the Interpretation Act 2005, which would be required in the event of an orderly Brexit with a transition period, will also be included. The work on primary legislation will be complemented by responses in secondary legislation through the adoption of a range of Statutory Instruments. Proposed Miscellaneous Provisions (Withdrawal of the United Kingdom from the European Union on 29 March 2019) Bill Omnibus Bill with 17 parts focused on the broad theme of protecting the citizen, and supporting the economy, enterprise and jobs.

Part Department Legislation

247 BBC News, Reality Check: What are EU countries doing to prepare for a no-deal Brexit? 6 November 2018 248 Open Europe, The view from Brussels: How are the EU27 preparing for a ‘No Deal’ Brexit? Pieter Cleppe, 30 August 2018 125 Commons Library Briefing, 2 May 2019

1 Health Healthcare Arrangements

2 Business, Enterprise and Amending Industrial Innovation Development Acts

3 Communications, Climate Action Single Electricity Market and Environment

4 Communications, Climate Action Energy and Environment

5 Education and Skills Student Support

6 Finance Taxation

7 Finance Financial Services

8 Finance Amendments to EU regulations

9 Transport, Tourism and Sport Railway Safety

10 Transport, Tourism and Sport Public Transport Regulation

11 Employment Affairs and Social Social Welfare Protection

12 Employment Affairs and Social Amendment of Protection of Protection Employees (Employers’ Insolvency) Act

13 Taoiseach Amendment to the Interpretation Act

14 Justice and Equality Amendments to the Extradition Act

15 Justice and Equality Amendments to the Immigration Acts

16 Justice and Equality Amendments to the International Protection Act

17 Justice and Equality Amendments to the Data Protection Act

There will also be 20 Statutory Instruments covering a range of matters to mitigate a no deal Brexit. Extending Article 50 The Independent reported on 8 January 2019 that Ireland’s foreign minister Simon Coveney had said: If it is the case that in some point in the future the British government seeks an extension of Article 50, that will have to have EU approval, but that is not something we would stand in the way of. On 25 February, Irish Prime Minister Leo Varadkar said that a long extension of Article 50 would be preferable to a no deal Brexit. He said: 126 The EU27: Internal Politics and Views on Brexit

I’d certainly rather see an extension than seeing the UK leave without a deal. A long extension creates a complication in relation to the European elections, but that’s a small complication relative to the impact on our economy. On 11 March Mr Varadkar said that an Article 50 extension needed to be for a specific purpose: If there is going to be an extension, it has to be an extension with a purpose. Nobody across the European Union wants to see a rolling cliff edge where tough decisions just get put off until the end of April, then to the end of May and then maybe till the end of July. On 14 March, prior to the Commons debate on extending Article 50, Mr Coveney said: If you have a long extension of article 50, that opens up the debate in a much broader way to the overall approach that the United Kingdom takes to Brexit. That may facilitate a fundamental rethink, it may not, we just don’t know. If you have a long extension of, say 21 months to the end of 2020 – whatever the period would be – then Britain has a legal entitlement to have representation in the European parliament. On 20 March, following Theresa May’s letter to the President of the European Council seeking an Article 50 extension Mr Varadkar said it was time to “cut the British Government some slack”. Mr Varadkar said: There’s a lot of political instability in London at the moment, as people can see. And there is a real risk, that we wish to avoid, of no- deal happening by accident, despite people’s best intentions. So I think it’s time now to cut them some slack - to cut the British government some slack when it comes to their request for an extension and when it comes to their request that the Strasbourg agreement be ratified formally by the European Council over the next two days. So we’re willing to support both of those requests, but obviously we’re not entertaining any change to the withdrawal agreement or the backstop. Mr Varadkar said he did not have “a definitive view on how long the extension should be” and referred to the complications of a long extension, especially with regard to the EP elections at the end of May. He later added that the extension “has to be for the purpose of securing a deal not deferring decisions too far into the future”. Mr Varadkar said: We would prefer to see this resolved sooner rather than later. I think it will be important for EU heads of state and government to hear from Mrs May tomorrow, to hear what her plan is. Asked about European Council President Donald Tusk’s statement that the UK should only have an extension if the British parliament votes to ratify the treaty the following week, Mr Varadkar said: There are some people who would take a much more hardline view that we shouldn’t agree to an extension and there are others who would take a view that an extension should be granted unconditionally. 127 Commons Library Briefing, 2 May 2019

The view I’m taking and the view of the Irish Government is taking is that we want to avoid no-deal on March 29th. We believe that is what everyone in Europe and certainly the UK wants as well and in that context we’re willing to cut the British Government some slack in terms of their request for an extension. But when it comes to the Withdrawal Agreement, the Irish protocol and the backstop, those cannot be changed. Mr Varadkar acknowledged frustration in the EU at the monopolisation of the agenda by Brexit but said: “That frustration can’t allow us to end up in a no-deal scenario by accident.” On 2 April, Mr Coveney said that he agreed with Michel Barnier and others “when they say that, when the days pass, a no-deal Brexit looks like a very real possibility”. Following a meeting with German Chancellor Merkel on 4 April, and with the UK poised to request a second Article 50 extension Mr Varadkar said that the EU needed to be patient with the UK but that any new request from the UK needed to involve “a credible and realistic way forward”. Following the UK’s request for a further extension the next day, Mr Varadkar said: Perhaps a longer extension might make more sense but that’s something I’d have to talk about with other heads of government and also prime minister May. We’ll make a decision next Wednesday [10 April 2019].249 Varadkar also suggested that if any of the EU27 leaders vetoed an extension, they would not be forgiven, saying: They would know that they would find themselves on the end of that particular veto power in future. It is extremely unlikely that I could see any country vetoing it. The likelihood is a further extension, but we want to avoid an extension which allows for more indecision and uncertainty. I would prefer to see a longer extension so the UK could have time to decide what future relationship it would have with the European Union rather than the alternative which could be rolling extensions.250 Following a meeting with Michel Barnier on 8 April, Mr Varadkar tweeted that they had discussed developments in the UK, including the cross-party talks underway and that "Ireland is open to a further extension to allow these talks to come to a conclusion”. However “due to the ongoing uncertainty” Ireland was also intensifying no deal preparations. No-deal preparations If the UK was to leave the EU without a deal, the border between Northern Ireland and the Republic of Ireland will become the only land frontier between the UK and the EU.

249 The Irish Times, EU leaders divided over length of Brexit extension, Pat Leahy and Patrick Smyth, 5 April 2019 250 The Irish Times, Taoiseach expects checks at Northern Ireland ports in no-deal Brexit scenario, 6 April 2019 128 The EU27: Internal Politics and Views on Brexit

Leo Varadkar has said he expects the provision of the backstop – including customs checks at Northern Ireland ports – will be put in place in the event of a no-deal Brexit. He said it was the “logical” way to ensure a free-flowing border. Speaking on RTE, Varadkar said: “Even in the event of no-deal, we will still be saying to the British that you still have obligations under the Good Friday Agreement. You committed to full regulatory alignment back in December 2017 and we still want the arrangements in the backstop to apply.”251 On 2 April 2019, Mr Coveney said that Ireland was not going to allow a situation where the UK leaving the EU without a deal “drags Ireland out of the single market with it”. He said: Checks in EU ports on all Irish products - that is not a runner, and will cause significant damage to our economy, so we will not allow it. Mr Coveney said Ireland and the European Commission were trying to work out how best to respond to a no-deal scenario to ensure the Good Friday Agreement was protected, but also that physical infrastructure on the border was avoided. At a joint press conference with German Chancellor Merkel on 4 April, Mr Varadkar said that Ireland would not become a “back door” for third- country goods into the EU. In response to a question about where Ireland would impose checks if not on the border in the event of a no deal Brexit he said that it was “not possible quite frankly to have a clear plan because there are so many different possibilities and hypotheticals”. Support for a UK-EU customs union. Speaking in Brussels ahead of the European Council on 10 April 2019, Mr Varadkar said that he would like a UK-EU customs union to be considered. He said the EU would be able to develop a unique customs union arrangement enabling the EU and the UK to “get the best deals for all of us”. He said: If the UK were to decide to stay in a customs union, we would be able to develop something 'sui generis' so that they would have a say around things in terms of future trade deals, and a level playing field around labour rights and environmental rights. Mr Varadkar also said that the UK would not be a “silent partner” in such an arrangement: I think we’d be generous in negotiating that, understanding that the UK couldn’t be a silent partner in such an arrangement, it would have to have a say in decisions being made.

251 Ibid 129 Commons Library Briefing, 2 May 2019

15. Italy 15.1 Key Facts 1. Government and Politics Head of State: President Head of Government: Prime Minister Last election: Legislative, 4 March 2018 Next election: Legislative, 2023 2. Finance and Economy GDP (2017): €1,748 billion (GDP per head: €28,900) GDP average growth 2014-2018: 1.1% GDP growth 2019 (interim forecast, Feb 2019): 0.2% Net contribution to EU budget per head 2017: +€67 Currency: euro 3. Trade with UK Trade with UK as % of GDP: 3.1% UK trade with Italy, 2017 £ millions Exports Imports Balance Goods 10,365 18,562 -8,197 Services 8,504 5,448 3,056 Total 18,869 24,010 -5,141 Source: ONS Pink Book

4. Views on EU 35% of Italians have a positive view of the EU (net positive: +8%) 31% of Italians agree that their voice counts in the EU (net voice counts: - 35%) 36% of Italians trust the EU (net trust: -19%) 72% of Italians are in favour of free movement 59% of Italians feel like EU citizens 5. Italian nationals in the UK 297,000 (ONS estimate for Jan to Dec 2017) 15.2 Background The Italian Constitution, established in 1948, provides for a system of perfect bicameralism in which the two houses of Parliament, the Chamber of Deputies and the Senate have identical legislative powers. Both are directly elected, although eligibility to vote and stand for the Senate is set at a higher age threshold. The Senate also includes a small number of senators for life, comprising former Presidents of the Republic and up to five life senators appointed by the President. 130 The EU27: Internal Politics and Views on Brexit

The President of the Republic is a constitutional head of state elected for seven years by an electoral college comprising both houses of Parliament and 58 regional representatives. Executive power is exercised by the Council of Ministers (Government). The head of state appoints the President of the Council (Prime Minister) and, on the latter’s recommendation, other ministers (enabling the President of the Republic to occasionally veto ministerial nominations). The Council is responsible to Parliament and needs majority support in both Houses.252 Both Houses of Parliament were initially elected by a system of proportional representation. There has been a series of changes to the electoral system since 1993 involving an initial move to a predominantly first-past-the-post system (with a proportional top up), and then changes to more proportional systems. The first change coincided with a corruption scandal that brought down the leading post-war party, the Christian Democrats (DC) and its government allies, leading to talk of a “Second Republic”. The DC had held government office continuously, usually in coalition with smaller parties, since 1947, while the second largest party, the Italian Communist party (PCI), had been excluded from government. From 1994 to 2013 Italy experienced a degree of alternation in government between a -right bloc led by (incorporating his own , the regionalist-populist Northern League and the “post- fascist” National Alliance), and a centre- grouped around the (DS) party (which emerged out of the PCI), and then the Democratic Party (PD - a merger of the DS and centrist forces). Italy was a founder member of NATO and the European Community. It has also been a member of the Eurozone since its launch. Italy has been strongly affected by the global slowdown of 2008–09 and the ensuing sovereign debt crisis, following which it suffered a triple dip recession. Between 1999 and 2016 the average annual growth rate in Italy was zero. The current growth rate remains low and is predicted to be the lowest in the EU in 2018. According to the OECD data, Italy’s economy grew by 0.8% in 2018 and is predicted to contract by 0.2% in 2019. Italian Government debt stands at 132% of GDP, the highest in absolute terms within the EU. Italy was the main port of entry for irregular migration to the EU in 2016- 2017. Around 630,000 migrants and refugees arrived via the precarious crossing from North (and with many perishing at sea) between 2014 and 2017. Italian political leaders have complained about the lack of EU attention to and assistance in dealing with these arrivals. There has been a marked reduction in the number of arrivals since 2017, following an agreement which provides for Italian assistance to the Libyan authorities to prevent migrants making the crossing. Previously one of the most Europhile countries in the EU, Euro-scepticism has increased in Italy, with analysts attributing this to the perceived impact

252 See Constitution and Government (Italy), Europa World online. London, Routledge. Retrieved 13 September 2018 131 Commons Library Briefing, 2 May 2019

of Euro membership and associated Eurozone rules, and a perception that Italy has been left to bear the brunt of the migration crisis without adequate assistance from its EU partners. Although Italian opinion polls show low levels of confidence in the EU, there is still majority support for remaining in the EU and for continued participation in the Eurozone. 15.3 Current Government and recent political developments253 In 2013 the populist anti-establishment became a leading electoral force at the national level (winning over 25% of the vote at its first general election). Its emergence has meant that neither the centre- left nor the centre-right coalitions have subsequently been able to command a parliamentary majority. Following the 2013 election a grand coalition was initially formed, led by of the centre-left PD and with the support of part of the centre- right (not including the Northern League). Although Silvio Berlusconi later withdrew support, a smaller centre-right grouping continued to support the government, enabling it to retain its majority. Letta was replaced by , the new leader of the PD, in February 2014 but Renzi was forced to resign at the end of 2016 after his proposed constitutional reform254 was defeated in a popular referendum. His replacement, (previously Foreign Minister), remained as Prime Minister until June 2018. In the general election in March 2018, the centre-right emerged as the leading coalition with 37% of the vote, and the Five Star Movement the leading party. The vote share for the DS fell from 27.4% to 18.8%. The League finished ahead of Forza Italia for the first time since the latter’s foundation. The League was formerly known as the Northern League, a regionalist movement calling for greater autonomy (sometimes independence) for the North of Italy. It has been rebranded as a national force by its leader since 2013, , stressing its anti-immigrant and anti-EU positions and using the slogan “Italians first”. Under Salvini’s leadership the League has joined the far-right Europe of Nations and Freedoms group in the European Parliament. Salvini has called the Euro a “crime against humanity”, said that Islam is incompatible with European values, and referred to a migrant “invasion” of Italy. He has blamed violence against migrants in Italy “on those who have filled it with illegal immigrants”. Among the League’s election campaign pledges, Salvini

253 For a more detailed and referenced examination of the Italian government and recent political developments see House of Commons Briefing Paper 8357, The New Italian Government, 29 June 2018. 254 The reform would have increased the executive powers of the government and reduced the powers of the Senate (ending the current model of perfect bicameralism). 132 The EU27: Internal Politics and Views on Brexit

said that the League would implement a plan to deport 100,000 undocumented migrants a year over five years. However, the League’s previous calls to take Italy out of the Euro were played down. The M5S has campaigned against political corruption and has made strong attacks against Italian and EU ruling elites. It espouses direct democracy and has previously called for a referendum on Italy’s membership of the Eurozone. However, this pledged was dropped prior to the election. Unlike in 2013, the Five Star Movement (M5S) indicated it was willing to enter into coalition negotiations with other forces, and after a period of deadlock the League broke from its centre-right allies and, in May 2018, a coalition agreement was announced for a M5S-League government, with Giuseppe Conte as Prime Minister (a M5S nominee who had not been a candidate in the election). The M5S-League Government The coalition agreement indicated a more critical approach towards the EU, a tougher approach on migration involving the repatriation of failed asylum seekers and undocumented migrants, and an ‘opening’ to Russia (calling for Russia to be treated as a “partner” rather than a “threat”). On EU policy it called for a revision of Eurozone governance rules to give greater attention to the wider social and economic impact of policies, and a revision of the EU ‘Dublin regulation’ currently providing for asylum seekers to be returned to their first country of entry to the EU. This would involve a quota system reallocating asylum-seekers across the EU with all Member States obliged to host them. Since taking office Prime Minister Conte and Finance Minister Giovanni Tria have asserted that an Italian exit from the Euro is not on the agenda. Conte has called for EU sanctions against Russia to be reviewed and supported President Trump’s call (rejected by other G7 members) for Russia to be readmitted to the bloc. Salvini, who combines the role of deputy Prime Minister with that of Interior Minister, has refused to allow a number of boats bringing migrants and refugees rescued in the Mediterranean to dock at Italian ports. Since taking government office he has stated that undocumented migrants should get ready to “pack their bags” and has also proposed a census of all Roma present in Italy, with those found to have irregular status expelled from Italy. At the European Council on 28-29 June 2018, the new Government proposed a new EU system requiring each Member State to take a share of asylum-seekers, and docking EU funds from countries that refuse to do so. It was reported that Prime Minister Conte had initially blocked the adoption of the Council’s conclusions until Italian concerns were addressed. However, agreement was eventually reached on a plan which would involve some Member States voluntarily taking asylum-seekers arriving in Italy. The Government has however continued to threaten to withhold EU budget contributions without a shift in EU migration policy. It has also indicated that it will ask Parliament not to ratify the EU-Canada (CETA) trade 133 Commons Library Briefing, 2 May 2019

agreement and similar treaties because they provide insufficient protection for Italian food products. In October 2018, the European Commission requested that the Italian Government revise its draft budgetary plan for 2019 (involving a budget deficit of 2.4%) as it did not comply with a previous fiscal recommendation by the Council of the EU and deviated from budgetary objectives set down within the EU Stability and Growth Pact. Prime Minister Conte said the plan would boost economic growth in Italy and there was no alternative to it. Salvini said that “Italy no longer wants to be a servant to silly rules” and would not subtract “one single euro” from the budget. In December 2018, the Italian Government reached agreement with the European Commission on a revised budget plan that would bring the proposed deficit to 2.04%. In March 2019, the Italian Government signed a co-operation agreement with China, bringing Italian involvement in China’s “One Belt, One Road” programme developing infrastructure across Asia and Europe. The European Commission has expressed concern about the involvement of EU countries in this programme. Italy is the first G7 country to endorse it. The US Government has also said that Italy should not get involved. Salvini has made a number of disparaging remarks about French President Macron (who has been critical of Italy’s approach to migration). In a joint press conference with Hungarian Prime Minister Victor Orbán in August 2018, Salvini accused Macron of hypocrisy for “giving lessons” to other countries when France was preventing undocumented migrants from entering at the Italian border. Salvini also said he wanted to work with Orbán on a common agenda ahead of the 2019 European elections. However, M5S leader (also deputy Prime Minister) criticised Orbán for rejecting EU migrant quotas, suggesting that Hungary and other countries that refuse an allocation of migrants should be denied EU funding. In January 2019, Salvini met with representatives of the Polish Party, including the Polish interior minister, and suggested that Italy and Poland could trigger a “European spring” that could break the dominant “Germany-France axis”. In February 2019, Di Maio met with leaders of the French gilets jaunes protest movement in Paris. He said that the M5S and the gilets jaunes shared “many common positions”. The meeting was described as an unacceptable provocation by a French foreign ministry spokesperson. On 7 February, the French foreign ministry recalled its ambassador to Italy for consultations after what it referred to as “repeated, baseless attacks” from the ruling Italian parties. On 8 April 2019, Salvini hosted a meeting in Milan with representatives of the Alternative for Germany party, the Finns Party (from Finland) and the Danish People’s Party, where the formation of a new political alliance to fight the European Parliament elections was announced. As news reports pointed out, there were no representatives from the Polish Law and Justice party or Orbán’s Fidesz party present. The Law and Justice Party in particular rejects the League’s pro-Russia stance, and has declined Salvini’s overtures. 134 The EU27: Internal Politics and Views on Brexit

Results of the most recent Italian elections President To be elected President, a candidate must receive the support of at least two-thirds of the votes cast in the first three rounds of voting of the electoral college (the two chambers of parliament and 58 regional representatives), or a simple majority thereafter. Sergio Mattarella, a former Christian Democrat Minister and member of the PD, was elected President in a fourth round of voting in January 2015. General Election, 4 March 2018 Chamber of Deputies (Camera dei Deputati)255 Constituency Party list Total Vote Parties/Alliances seats seats seats Share Centre-right coalition 111 154 265 37.0% Northern League () 49 75 124 17.4% Go Italy (Forza Italia) 46 60 106 14.0% (FdI) 13 19 32 4.3% Us with Italy (UdC) 3 — 3 1.3% Five Star Movement (M5S) 93 134 227 32.7% Centre-left coalition 28 94 122 22.8% Democratic Party (PD) 21 91 112 18.8% South Tyrolean People's Party (SVP) 2 2 4 0.4% More Europe (+E) 2 1 3 2.6% Popular Civic List (CP) 2 0 2 0.5% Italy Europe Together (Insieme) 1 0 1 0.6% Free and Equal (LeU) 0 14 14 3.4% Others** 0 2 2 Total 232 398* 630 * Including 12 seats reserved for overseas constituencies. ** Overseas party lists

Senate (Senato)256 Parties/Alliances Elective seats Centre-right coalition 137 Northern League (Lega) 58 Go Italy (Forza Italy) 58 Brothers of Italy (FdI) 16 Us with Italy (UdC) 5 Five Star Movement (M5S) 112 Centre-left coalition 60 Democratic Party (PD) 54

255 Chamber of Deputies (Camera dei Deputati) (Italy), Europa World online. London, Routledge (retrieved 13 October 2018) and Italian Interior Ministry data. There are discrepancies in seat allocations according to different sources consulted. 256 Senate (Senato) (Italy), Europa World online. London, Routledge. Retrieved 13 October 2018 135 Commons Library Briefing, 2 May 2019

South Tyrolean People's Party (SVP) 3 More Europe (+E) 1 Popular Civic List (CP) 1 Italy Europe Together (Insieme) 1 Free and Equal (LeU) 4 Associate Movement Italians Abroad (MAIE) 1 South American Union Italian Emigrants (USEI) 1 Total* 315 * In addition to the 315 elected members, there were, as at April 2018, six life members. 15.4 Views on Brexit Praise for the UK referendum Matteo Salvini initially praised the Brexit vote and indicated that he wanted Italy to follow suit. In the hours following the confirmation of the UK referendum result in 2016, Salvini wrote on Facebook: Hooray for the courage of free citizens!!!. Heart, head and pride beat lies, threats and blackmail. Thank you UK. Now Europe will finally change. Now it is our turn. Salvini said on the radio that it was a “beautiful day”, that it was time for Europe to free itself from an EU of bankers, and that it was a shame Italy’s “undemocratic” constitution forbade referendums on international treaties. In another interview he said the League was working to ensure that Italians were “not the last to abandon the sinking ship”, and that the League was proposing to change the Italian Constitution so that Italians could take a decision on EU membership. Five Star was less celebratory in its response. However, M5S leader Luigi Di Maio said that the EU needed “to change, or otherwise die”. He was critical of the EU institutions: The EU institutions and in particular the Troika (the IMF, ECB and European Commission) need to ask themselves how they have failed and how they can resolve the enormous problems they have created. Five star founder Beppe Grillo stressed the importance of allowing the people to decide on such matters, referring to the signatures Five Star had collected in favour of a referendum on Italian membership of the Euro. In the days before the UK referendum Grillo had said: “The mere fact that a country like Great Britain is holding a referendum on whether to leave the EU signals the failure of the European Union”. Position of centre-left governments The chapter on Italy in the report on EU27 positions published in October 2017 by the Negotiating Brexit” project257 provides an overview of the positions taken by the Italian governments of Matteo Renzi and Paolo Gentiloni in the aftermath of the UK decision to leave the EU.

257 Co-ordinated by Professor Hussein Kassim of the University of East Anglia, and Dr Simon Usherwood of the University of Surrey. 136 The EU27: Internal Politics and Views on Brexit

Professor Marco Brunazzo and Professor Vincent Della Sala of the University of Trento explain that the Renzi government presented the UK decision as an opportunity to push for major changes in EU institutions and policies, in order to convince the Italian public that EU policies could change “to meet Italian demands for greater solidarity in dealing with migration and stimulating economic demand; and that it can change with Italy playing a leading role”. At the same time, the Italian Government position was also to remain united behind the line agreed by the European Council “even if this means a hard Brexit”, while hoping “that the divorce will be amicable and beneficial for everyone”. Both the Renzi and Gentiloni governments took the position that “a constructive rather than a punitive approach” should be taken in the negotiations. Brunazzo and Della Sala explain that the Gentiloni government identified the most important area where Italian interests needed to be protected in the Brexit negotiations as protecting the rights of Italian nationals in the UK post-Brexit. Another important and related issue was ensuring respect for the rules of the Single Market if any State wanted to enjoy its benefits. In a joint press conference with Theresa May following a meeting at Downing Street in February 2017, Prime Minister Gentiloni said the UK decision to leave the EU was one that Italy respected fully, although “we are aware of the fact that negotiations will not be easy”. He underlined that he did not favour a punitive approach towards the UK, but also stressed the importance of unity among the EU27 and reiterated the need to guarantee the rights of Italians in the UK: There is absolutely no point at having a destructive negotiation between the EU and the UK. So, obviously, we will do this in the hope of fostering the unity of the 27 countries, because, without the unity of the 27 countries it will be difficult to come to some agreement. We must ensure this unity will result in the best possible agreement with the UK. We also have a very specific interest in reassuring our citizens, I’m thinking about the Italians that live in the UK and the British citizens that live in Italy, about the fact that their acquired rights will be respected and there will be reciprocity, so there will be very fair treatment. Gentiloni also emphasised the importance of continued UK-Italian cooperation on international issues, including with regard to NATO, and issues such as and the migration crisis in the Mediterranean. The EU should not punish the UK In February 2018, Five Star Movement leader Luigi Di Maio said the EU should stop punishing the UK for choosing Brexit. However, he also spoke of the need to “protect the hundreds of thousands of Italians currently living in the UK” and referred to the “advantages of being in the Single Market”: Di Maio wanted the EU to “safeguard” its investments and “give continuity to the economic relationships”, which “must also be the case for the UK”. Referring to Theresa May's speech in Florence in September 2017, Di Maio said he was pleased Mrs May had sought to reassure the Italian community 137 Commons Library Briefing, 2 May 2019

in the UK and that the UK hoped to have future economic relations “that are increasingly advantageous”. The new Italian Government Following the March 2018 elections, a report in The Daily Telegraph suggested that both the League and Five Star would take a sympathetic approach to the UK in the Brexit negotiations, carrying quotes from both their leaders. Matteo Salvini told The Daily Telegraph: Great Britain is a friendly country with a long tradition of trading with Italy . . . You made a free choice with Brexit and I very much hope that it will be possible to maintain completely open trade with the EU without any penalties. The Telegraph also reported that the League’s economics chief, Claudio Borghi (a strong opponent of the Euro), had said that a League government would promote an open trade deal with the UK: There will be no blind trust in what Germany wants. Punishment or anything of the kind would be sheer stupidity. We export more to the UK than we import back and we certainly don’t want to hurt our own client. In a speech to the Chamber of Deputies on 27 June outlining the Government’s position on the European Council meeting the following day, Prime Minister Conte said that in Brexit talks Italy would seek to defend the rights of its citizens in the UK, but was also striving for “continuity” both in security policy and commercial ties. In an interview with The Sunday Times in July 2018, Matteo Salvini reportedly advised Theresa May to adopt a tougher stance in the Brexit negotiations, warned her that the EU may try to “swindle” the UK, and said she should be prepared to walk away without a deal: “Because on some principles there is no need to be flexible and you should not go backwards”. He has continued to be critical of the EU in the Brexit negotiations, saying there was “no objectivity or good faith from the European side”. The Sunday Times reported him as saying Italy would be a friend to the UK in the Brexit talks and “definitely” wanted the UK Prime Minister to come away with a good deal “to serve as an example of the people coming out on top of the EU”. Salvini said the UK referendum had been “an example of participation and freedom” and he hoped it could be “an opportunity for the British”. He added that the Italian government would welcome one-to-one talks with Mrs May. More eurosceptic undertones came out in an interview with the BBC’s Today programme on 19 September 2018, coinciding with the Salzburg EU Leaders’ meeting, when Guglielmo Pichi, Under for Foreign Affairs, said the Italian Government thought the Chequers proposal was “a good one” and that it “would like to see more willingness on the EU side”. Asked about the warning previously issued by Matteo Salvini to Theresa May that the UK would need to stand firm with the EU “if not they will swindle you”, Mr Pichi agreed, stating: 138 The EU27: Internal Politics and Views on Brexit

Well it is exactly what happened to our government on migration, so yes it is the position that some governments have to take in the EU Council and in the EU in general that either you speak with a very loud voice or they will ignore you. But Mr Pichi also made clear that any agreement on the future UK- EU relationship must be clear about the precise form this would take: We should not allow to have a blind Brexit. We should have a clear path ahead so that the two-year transition period, even a 3 year transition period could be something necessary. I always remember that the EU is the biggest trading partner of the UK so it is in the interests of not only the governments but of the people of both side of the channel to have a clear way ahead. Asked about the prospect of a no-deal Brexit, Mr Pichi thought there would be a deal “because it is the interest of both parties”. In their chapter in an updated report from the Negotiating Brexit project published in October 2018258, Professors Brunazzo and Della Sala note that the new Italian Government has “not produced any cracks” in the united EU27 front, and has not taken any concrete measures “to be seen as standing alone in defence of Brexit”. They suggest that: “As with many other issues, there is always a distance between what leading ministers and party leaders say and what the government does”. The primary reason for this, they explain, is that the Italian Government is focused on “high stakes negotiation” with the EU on two issues that figure prominently on their domestic political agenda: migration and Eurozone rules on fiscal discipline. Italy’s commercial ties with the UK are therefore “not important enough to risk losing political capital on other issues”. While coverage of the September 2018 Salzburg summit in the UK was focused on the EU27’s rejection of the UK’s Chequers proposals, in Italy it was focused on a failure to reach agreement on the migration question. Brunazzo and Della Sala also refer to concerns about Italian isolation within the EU and the undesirability for the Conte Government of “losing the little influence it has on an issue such as Brexit that is not politically salient nor a priority for its electoral base”. In this regard they point out that support for the EU and the Euro has actually increased in Italy since June 2016, “so Eurosceptics have to tread lightly and have little to gain in seeing negotiations with London end badly”. Furthermore, the economic costs of Brexit for Italian exporters and industry have crept into public discussion in Italy, meaning that the Five Star-League Government “has tried to ensure that those interests, along with the costs to the EU budget and protection of Italian nationals, have priority over any ideological affinity towards what Brexit represents to Eurosceptics”. Citizens’ rights guarantees On 21 December 2018 the Italian Government confirmed that even if there is no deal, UK nationals legally resident in Italy on 29 March 2019 will

258 Negotiating Brexit: Where Now, 23 October 2018

139 Commons Library Briefing, 2 May 2019

continue to have their existing rights to work as long as they comply with the formalities.259 The UK Government Guidance on living in Italy summarises the situation: The Government will apply a ‘declaratory procedure’ that will recognise the rights of all UK nationals legally resident in Italy before the end of the transition period (31 December 2020). If the UK leaves without a deal, the Italian Government said it was preparing legislation that will ensure UK nationals legally resident in Italy before 29 March 2019 will have the right and necessary time to obtain long- term residency status under EU Directive 2003/109. UK nationals will continue to enjoy rights such as access to healthcare, social benefits, employment, education and family reunification after the UK leaves the EU. Giuseppe Conte speech to European Parliament, 12 February 2019 In a speech to the European Parliament on 12 February 2019, Prime Minister Conte praised the EU’s handling of the Brexit process. He said that: Faced with this challenge, the EU has shown that it can react with a unitary and united spirit and is able to protect the results of over sixty years of European integration, without giving in to punitive attitudes towards a family member who no longer intends to be part of it. This is an epochal and unprecedented process, which must be managed in an orderly manner, always having the primary objective of guaranteeing citizens' rights and protecting the social and economic fabric from the negative consequences of "Brexit. Mr Conte called for progress in developing a common European defence structure and said this would be a useful complement to NATO and show that the EU “remains effective and capable of progressing, also to give more security to its citizens”. However, he said this should be done “without forgetting that a European Union that aspires to be a global player cannot do this by leaving aside the maintenance of close ties in the defence and security area with the United Kingdom, even after Brexit”. Mr Conte also said there was a need for a common EU seat in the UN Security Council, strengthened relations with the USA, and a strong dialogue with Russia and China. Mr Conte called for the European Parliament to have greater powers, including the right of inquiry and the right to initiate legislation, and that the other EU institutions needed to be more accountable to the Parliament as the only EU institution to have direct democratic legitimacy. Conte said that the EU was facing “a fork in the road” and there was a need to “reverse the process of detachment between rulers and governed, which if fed could lead to the European project imploding”. Mr Conte said that overcoming austerity requires “balancing growth and stability” and committing to the values of social solidarity and .” He also stressed the need for a solution to manage migration flows, based on real solidarity between Member States.

259 See The Italian Government continues its preparation for Brexit, 21 December 2018.

140 The EU27: Internal Politics and Views on Brexit

Extending Article 50 and possible no deal On 14 March 2019, Italian Foreign Minister told the that he was in favour of granting an Article 50 extension but that it would need to be discussed in Government. He said: We have to talk about it at the government level . . . I personally think that, if there were a request for a delay by the United Kingdom... we should say yes . . . No postponement would mean immediately going into a no-deal scenario, which, unfortunately, is on the table . . . Arriving at the European Council on 21 March 2019, Prime Minister Conte said: The Italian position is that to agree a short term delay could be useful, but we will have to wait for the umpteenth vote of the British parliament. We are always for a deal, we do not welcome the prospect of a no deal but it is not our decision. Following a meeting with European Commission President Jean-Claude Juncker on 2 April, Prime Minister Conte said Italy was preparing for a no- deal scenario. He said: We still have no clarity from the UK’s position on how to manage such a complex process . . . For this reason, Italy is preparing for the unwelcome prospect of a no-deal. Arriving at the European Council on 10 April 2019, Prime Minister Conte said that Italy was in favour of extension and that it “obviously” would need to be longer than one or two months. 141 Commons Library Briefing, 2 May 2019

16. Latvia 16.1 Key Facts 1. Government and Politics Head of State: President Raimonds Vējonis Head of Government: Prime Minister Māris Kučinskis Last election: Legislative, 6 October 2018 Next election: Legislative, October 2022 2. Finance and the Economy GDP (2017): €39 billion (GDP per head: €20,000) GDP average growth 2014-2018: 3.6% GDP growth 2019 (interim forecast, Feb 2019): 3.1% Net contribution to EU budget per head 2017: -€266 Currency: euro 3. Trade with UK Trade with UK as % of GDP: 5.6%

UK trade with Latvia, 2017 £ millions Exports Imports Balance Goods 247 557 -310 Services 161 146 15 Total 408 703 -295 Source: ONS Pink Book

4. Views on EU 42% of Latvians have a positive view of the EU (net positive: +33%) 26% of Latvians agree that their voice counts in the EU (net voice counts: - 37%) 49% of Latvians trust the EU (net trust: +17%) 96% of Latvians are in favour of free movement 75% of Latvians feel like a citizen of the EU 5. Latvian nationals in the UK 117,000 (ONS estimate for Jan to Dec 2017)

16.2 Background260 Under the terms of the 1922 Constitution, which was restored in July 1993 and subsequently amended, Latvia is an independent democratic

260 See Latvia, Europa World online. London, Routledge. Retrieved 25 September 2018 142 The EU27: Internal Politics and Views on Brexit

parliamentary republic. Latvia’s President is the head of state and the legislature is the unicameral (Parliament). The Saeima consists of 100 members, directly elected in multi-seat constituencies by proportional representation. Members serve four-year terms. The is elected by a secret ballot of Parliament, also for a period of four years. On 20 September 2003, Latvia held a referendum on joining the EU. Voter turnout was 72% with two-thirds of Latvians voting in favour of joining.261 Latvia acceded to the EU on 1 May 2004 and adopted the Euro on 1 January 2014. 16.3 Current Government and recent political developments In both the 2011 and 2014 legislative elections, the pro-Russian Saskana (Harmony – Social Democratic Party) emerged as the largest party (winning 28.4% of the vote in 2011 and 23% in 2014). It is the main party of Latvia’s Russian-speaking minority (26% of Latvian population are ethnic Russian). Harmony has however been excluded from power, with governments in Latvia being formed of coalitions of conservative and liberal parties from the ethnic Latvian majority. The 2011 election was held just a year after the previous legislative election. This followed a referendum on the dissolution of the previous Parliament amidst allegations that it was obstructing anti- corruption investigations. served as Prime Minister from 2009 until the end of 2013 and was appointed as a European Commissioner the following year. He was succeeded as Prime Minister by . Following the October 2014 election, Straujuma formed a new coalition government bringing together her own Unity grouping, the Union of Greens and Farmers and the conservative National Alliance. Raimonds Vejonis of the Green Party was elected President on 3 June 2015 after five rounds of voting in the Saeima. Maris Kucinskis of the Union of Greens and Farmers took over as Prime Minister in February 2016, following Straujuma’s resignation. In the October 2018 election, Harmony was the leading party again, winning 19.8% of the vote despite a fall in its vote share. A new anti- establishment populist party, ‘Who Owns the State’? (KPV LV) came second with 14.25%. Another new populist party, the New Conservative Party (JKP), led by a former member of the National Alliance, came third with 13.59%. An alliance of three liberal parties, ‘Development/For!’, came fourth with 12.04%. The three governing parties won less than 28% of the vote between them.

261 Election Guide, Republic of Latvia referendum, 20 September 2003

143 Commons Library Briefing, 2 May 2019

Following the election, President Vejonis held government formation talks with the leaders of KPV, JKP and Development/For!262. In November 2018, talks on the formation of a new government to be led by JKP leader Janis Bordans broke down after three of the four other parties (For Development/For, NA and ) involved withdrew. KPV LV was also involved in the discussions. An attempt by Aldis Gobzems from KPV LV to form a government also failed in December. A new government eventually won approval from the Latvian parliament on 23 January 2019 headed by Latvian-American dual citizen Krišjānis Kariņš. Mr Kariņš was the candidate of the smallest party in Parliament, New Unity, and until then a Member of the European Parliament. The coalition also includes the New Conservatives, the Development/For! alliance, the National Alliance plus most of the KPV LV party. The largest party in Parliament, Harmony, remains excluded from government. Some KPV LV Members of Parliament (and former Prime Ministerial candidate Aldis Gobzems who was expelled from KPV LV in February) continue to oppose the government and supported a parliamentary petition calling for the Prime Minister’s resignation in April. Results of the most recent Latvian elections Parliament (Saeima)263 General Election, 6 October 2018 Parties/Coalitions Votes % of votes Seats “Harmony” Social Democratic Party (SPDS) 167,117 19.80 23 Who Owns The State? (KPV LV) 120,264 14.25 16 New Conservative Party (JKP) 114,694 13.59 16 Development–For (LA-Par!)* 101,685 12.04 13 National Alliance (NA) 92,963 11.01 13 Union of Greens and Farmers Union (ZZS)** 83,675 9.91 11 Unity (Vienotība) 56,542 6.69 8 Others 102,060 12.71 0 Total*** 839,000 100.00 100 * Comprising Kustība Par! (Movement For!), Latvijas Attīstībai (Latvia’s Development) and (Growth). ** Primarily comprising the Latvijas Zaļā Partija () and the Centriskā Partija Latvijas Zemnieku Savienība (Centre Party Latvian Farmers’ Union). *** Excluding invalid votes.

262 Politico, Pro-Russian, populist parties garner most votes in Latvian election, 8 October 2018. See also See Foreign Policy Research Institute, Why Latvian elections matter for Europe, 26 September 2018. 263 Parliament (Saeima) (Latvia), Europa World online. London, Routledge. Retrieved 15 October 2018

144 The EU27: Internal Politics and Views on Brexit

16.4 Views on Brexit Brexit priorities A section on Latvia in ‘Europe’s Brexit’,264 highlights concerns about the status of Latvian nationals in the UK and the significant contribution their remittances make to Latvian GDP, as well as Latvia’s trading relationship with the UK (the UK being Latvia’s eight largest trading partner and investor). But this is set against Latvia’s links with the rest of the EU and the importance it attaches to EU membership. The unity of the EU27 has therefore been a primary concern for the Latvian government while Latvia’s strong demographic links to the UK “mean that took a hard line on citizens’ rights as the Brexit negotiations approached”. There was also a similar stance with regards to the UK’s financial settlement with the EU, given the significant levels of funding Latvia receives from the EU budget. Nevertheless, Latvia’s desire to retain a UK commitment to the defence of the Baltic states means that the Latvian Government is more open to a continuing UK involvement in EU foreign, security and defence matters. Prime Minister optimistic On 3 February 2017, in an interview with Sky News, Latvia’s Prime Minister Māris Kučinskis said the EU was looking for the best possible trade deal with the UK and that differences could be overcome: What is most important is to think about a beneficial partnership (and) find an amicable solution to all of this. There are negotiators who are taking care of the best possible deal for both sides so that’s the top priority at the moment. Every member state is looking to build the best possible trading relationship with the UK and I think that the whole union will also benefit from a strong trading relationship with the UK.265 Later that month Mr Kučinskis met with David Davis. A Latvian Government press release stated that Latvia hoped for further good relations with the UK by strengthening bilateral cooperation and continuing to cooperate in multilateral formats. The statement added that Latvia was also interested “in close cooperation between the Baltic, Nordic countries and the United Kingdom, including within the framework of the Northern Future Forum”.266 With regard to the rights of citizens, they had “agreed that interests of the people who have left to work in the United Kingdom cannot be affected [by Brexit]”.267 The press release concluded by highlighting the importance of trade between the UK and Latvia. Foreign Minister emphasises citizens’ rights

264 James Dennison, Ieva Grumbinaité and Tim Oliver, “Baltic Member States: Estonia, Latvia and Lithuania” in Tim Oliver (ed), Europe’s Brexit – EU Perspectives on Britain’s Vote to leave, Agenda Publishing, 2018 265 Sky News, UK-EU trade deal 'is possible' by end of Brexit negotiations, 4 February 2017 266 Latvian Cabinet of Ministers, M. Kučinskis and Brexit Minister agree on inviolability of interests of Latvia's residents working in UK, 21 February 2017 267 Ibid

145 Commons Library Briefing, 2 May 2019

In an interview with the Irish Times in June 2017, Latvia’s Foreign Minister, Edgars Rinkevics, expressed his hopes for an amicable resolution to the Brexit talks, emphasising the importance of citizens’ rights: “We want a deal that is fair to both sides... and the status of EU nationals in the UK and UK nationals in the EU is very important to us, and it would be very sad if it became hostage to political games”.268 Rinkevics added there was “still a temptation to punish Britain in some quarters of the EU”, and that there were signs of possible “naiveté” from the UK in imagining how good a deal it could get: Some seem to think they can live as they did in the EU, taking all the benefits but not doing what they don’t like – choosing op-outs – which is not the case. We hope for a very pragmatic approach but the risks are increasing and, the more we get into the nitty-gritty, the more pessimism there is. The negotiations may change a lot, but Brexit is more complex and difficult than it seemed.269 Brexit high on the agenda In February 2018 the Latvian Ministry of Foreign Affairs set out the EU issues of priority for Latvia in 2018. A section on “Other issues on the EU agenda that are important for Latvia in 2018” featured just one subject: Brexit. The policy stated: Although sufficient progress was achieved in December 2017 in the first phase of talks on the withdrawal of the United Kingdom from the EU, complicated negotiations are expected in 2018 on several outstanding issues concerning the withdrawal, the possible transition period, and the framework for future relationship. No effort should be spared to ensure that the political agreements achieved are correctly reflected in Withdrawal Agreement between the UK and the EU in order to ensure legal certainty for citizens. It is vital for the 27 EU Member States to also maintain unity in the next phases of negotiations. The United Kingdom is an important ally and international partner to Latvia: it is still in Latvia’s interests to also ensure close cooperation with the United Kingdom in the future, notably in trade, foreign policy, security and defence, as well as home affairs and justice.270 Later that month Latvia joined its fellow Baltic states in backing a proposal for EU Member States to pay more into the EU budget from 2020, to fill the gap left by Brexit.

Latvia worried about no deal Ahead of talks with Jeremy Hunt in August 2018, Latvia’s Foreign Minister said the chances of the UK leaving the EU with a deal was only ‘50-50’,

268 Irish Times, Eastern Europe seeks soft Brexit to safeguard citizens, economies and security, 22 June 2017 269 Ibid 270 Ministry of Foreign Affairs of Latvia, European Union issues of priority for Latvia in 2018, 6 February 2018 146 The EU27: Internal Politics and Views on Brexit

warning of a “very considerable risk” of Britain crashing out without an agreement. Foreign Minister Rinkevics said: We are at a very critical point. I believe that both the EU and UK need to have extra effort to reach some kind of deal by October because I believe it is in the best interests of both the EU and UK. I think it is only now the British public and British government understand how complex, how difficult this kind of Brexit is, and that it is very difficult to build the future relationship.271 He too confirmed Latvia’s solidarity with the EU27: From our point of view the EU is united as 27 [countries]. We are also satisfied to see that there is a more detailed position of the British government that constitutes good ground for really trying hard to reach a deal. So having said 50:50, I would say I am remaining optimistic.272 Withdrawal Agreement In an interview with the BBC in February 2019, Baiba Braze – the Latvian Ambassador to the UK – was asked about the Withdrawal Agreement and whether the EU would risk a no-deal Brexit. The Ambassador said: Your people did a great job, the EU thinks you have achieved more than you ever should have. It's a good deal for Britain. Whether that can be replaced with something that is now not yet there. The Parliament’s will was very clear, what to do with it, how to proceed with it, we don’t know. As ambassador here, I cannot explain to my Government that will also ultimately have to make a decision, what is that it will be willing to do. That’s why now very clearly the EU has said the Withdrawal Agreement is there. The backstop is part of the Withdrawal Agreement. Where do we come out with regard to future arrangements? That is a totally different issue.273 Article 50 extension and no deal Arriving at the European Council on 21 March, Prime Minister Krišjānis Kariņš said the UK would have to leave the EU without a deal or revoke Article 50 if the WA is rejected again by the House of Commons. He said. If the UK is leaving we would want that to be an orderly process so there has been a withdrawal agreement agreed over a two-year period - I don’t see any chance of changing that.

271 The Independent, Brexit: Chances of UK leaving EU with a deal only '50:50', says Latvian foreign minister, 15 August 2018 272 Ibid 273 Daily Express, Latvian ambassador says UK ‘achieved more than it should’ in Brexit deal and EU WON’T move, Darren Hunt, 4 February 2019. 147 Commons Library Briefing, 2 May 2019

So the question is will the UK accept this agreement and then it will be an orderly withdrawal? No-one wants a chaotic withdrawal. Asked what would happen if the WA is rejected again Mr Kariņš replied: There are then two alternatives: either Great Britain withdraws article 50 and stays in the European Union or there is a disorderly withdrawal. Arriving at the European Council on 10 April Mr Kariņš told reporters that it was up to the British to decide what they wanted. He said: If the Brits are asking for a little more time to decide, it’s really up to the British parliament, the British government, the British people to decide. It seems that there are really three choices: a no-deal Brexit, that’s always an option if the Brits were to decide that; a withdrawal with an agreement is an option because it has been negotiated; and I guess there’s a third possibility, of revoking article 50, if the Brits were to decide. So it’s up to the Brits to decide. Today we will be speaking about it but it’s not our decision. We already have an offer on the table in terms of the withdrawal agreement. It’s up for the Brits to decide what it is that they want. If they need a little more time, I think it’s reasonable to discuss what that would be. When it was put to him that EU leaders would decide the fate of the UK at the European Council, Mr Kariņš rejected this and said it would be up to Britain to decide its future. No-deal preparations Latvia has been preparing for a no-deal Brexit and recently adopted a political declaration that sets out the protections of the rights of UK citizens living in Latvia. On 21 March 2019, the Latvian Parliament adopted a new law to ensure judicial cooperation and protection of citizen’s rights during the transition period after Brexit.

148 The EU27: Internal Politics and Views on Brexit

17. Lithuania 17.1 Key Facts 1. Government and Politics Head of State: President Dalia Grybauskaitė Head of Government: Prime Minister Saulius Skvernelis Last election: Legislative, 9 and 23 October 2016 Next election: Presidential, 12 May 2019 2. Finance and the Economy GDP (2017): €66 billion (GDP per head: €23,500) GDP average growth 2014-2018: 3.0% GDP growth 2019 (interim forecast, Feb 2019): 2.7% Net contribution to EU budget per head 2017: -€429 Currency: euro 3. Trade with UK Trade with UK as % of GDP: 5.0%

UK trade with Lithuania, 2017 £ millions Exports Imports Balance Goods 465 675 -210 Services 212 227 -15 Total 677 902 -225 Source: ONS Pink Book

4. Views on EU 48% of Lithuanians have a positive view of the EU (net positive: +42%) 35% of Lithuanians agree that their voice counts in the EU (net voice counts: -19%) 65% of Lithuanians trust the EU (net trust: +44%) 94% of Lithuanians are in favour of free movement 77% of Lithuanians feel like a citizen of the EU 5. Lithuanian nationals in the UK 199,000 (ONS estimate for Jan to Dec 2017)

17.2 Background274 Lithuania’s Constitution was approved in a national referendum on 25 October 1992. Supreme legislative authority resides with the unicameral

274 See Lithuania, Europa World online. London, Routledge. Retrieved 25 September 2018 149 Commons Library Briefing, 2 May 2019

Seimas (Parliament), which has 141 members elected to serve a four-year term. The President is the head of state. Executive power is vested in the Council of Ministers, headed by the Prime Minister, who is appointed by the President with the approval of Parliament. On 10-11 May 2003, Lithuania held a referendum on joining the EU. Voter turnout was 63%, and 91% voted in favour of joining.275 Lithuania acceded to the EU on 1 May 2004 and adopted the Euro on 1 January 2015. 17.3 Current Government and recent political developments President Dalia Grybauskaite, Lithuania’s head of state, was voted in as its first female President in May 2009. She was re-elected in May 2014 in a presidential run-off held amid widespread fears of a resurgent Russia. Ms Grybauskaite, sometimes referred to as the ‘Iron Lady’, is a forthright free- marketeer who describes former UK Prime Minister as one of her political models. Former national police chief Saulius Skvernelis became Prime Minister after his centrist Peasant and Green Union (LVZS) party won parliamentary elections in 2016. Mr Skvernelis formed a coalition with the Social Democrats of outgoing Prime Minister Algirdas Butkevicius, and promised to reduce social inequality, boost slow growth, limit emigration to Western Europe, and boost defence spending. The LVZS had been a minor led by farming tycoon Ramunas Karbauskis. It promoted Mr Skvernelis's reputation as a fighter against corruption and promised a more interventionist economic policy. Results of the most recent Lithuanian elections President276 Presidential Election, First Ballot, 11 May 2014 Candidates Votes % of votes Dalia Grybauskaitė (Independent) 612,485 46.64 Zigmantas Balčytis (LSDP) 181,659 13.83 Artūras Paulauskas (DP) 160,139 12.19 Naglis Puteikis (LCP) 124,333 9.47 Valdemar Tomaševski (LLRA) 109,659 8.35 Artūras Zuokas (TAIP) 69,677 5.31 Bronis Ropė (LVŽS) 55,263 4.21 Total 1,313,215 100

Second Ballot, 25 May 2014

275 Election Guide: Republic of Lithuania referendum, 10 May 2003 276 President (Lithuania), Europa World online. London, Routledge. Retrieved 3 October 2018 150 The EU27: Internal Politics and Views on Brexit

Candidates Votes % of votes Dalia Grybauskaitė (Independent) 700,647 59.05 Zigmantas Balčytis (LSDP) 485,968 40.95 Total 1,186,615 100

Dalia Grybauskaite was duly elected President. The next presidential elections are due to be held in May 2019. Legislative Assembly (Seimas)277 General Election, 9 and 23 October 2016 Parties and blocs Seats A* B* Total Lithuanian Farmers and Greens Union (LVŽS) 19 35 54 (TS-LKD) 20 11 31 Social Democratic Party of Lithuania (LSDP) 13 4 17 Liberal Movement (LRLS) 8 6 14 Electoral Action of Poles in Lithuania – Christian 5 3 8 Families Alliance (LLRA-KŠS) Order and Justice Party (PTT) 5 3 8 Labour Party (DP) 0 2 2 (LŽP) 0 1 1 Lithuanian List (LS) 0 1 1 Lithuanian Centre Party (LCP) 0 1 1 Independent candidates 0 4 4 Total 70 71 141 * Of the 141 seats in the Seimas, 70 (A) are awarded according to proportional representation on the basis of party lists, and 71 (B) are elected in single-mandate constituencies.

17.4 Views on Brexit Limited impact of Brexit? Shortly after the UK referendum Intelligence Unit (EIU) reported that the impact on Lithuania (and other Baltic countries) would be limited. The EIU noted: The governments of the three Baltic states of Estonia, Latvia and Lithuania are united in their regret at Britain's vote to leave the EU. The UK has long been seen as a close partner in managing EU-Russia relations as well as promoting an economically liberal agenda. The immediate reaction was one of disbelief, followed by fears that Brexit would have a negative economic effect on the region while also removing a prominent Russia hawk from the EU negotiating table. However, the Baltic states are now increasingly focused on the economic and political opportunities of Brexit.278

277 Parliament (Seimas) (Lithuania), Europa World online. London, Routledge. Retrieved 3 October 2018 278 Economist Intelligence Unit, Impact of Brexit on Baltics will be limited, 1 July 2016 151 Commons Library Briefing, 2 May 2019

The report explained that Lithuania could benefit from the return of its migrants living in the UK, post-Brexit, and that there might also be further opportunities for Lithuanian representation in the EU institutions, possibly to fill high-level positions vacated by the UK. Fears about the economy Lithuania’s main fears are of a negative economic effect on the region and the loss of the UK as an important Russia ‘hawk’. The EIU stated: Brexit touches upon both Baltic security fears and concerns about the future of European integration. The Baltic states fear that Brexit could set off a wave of potential "exits from the EU", votes that would strengthen Russia's hand in dealing with a more fragmented Europe. There are also concerns about the fact that the departure of the UK will mean the loss of a prominent hawk on policy towards Russia, which may give the more dovish states, such as France and Germany, increased influence in foreign and security policy- making.279 On 15 December 2016, President Grybauskaitė referred to the UK as a very important economic and security partner. In light of this, and a shared approach on “a number of key foreign policy issues”, a press release from the President’s office stated that a model of cooperation between the EU and the UK had to be developed which would meet the interests of nationals of both parties.280 Dalia Grybauskaitė also said that Lithuania would act to protect the interests of its citizens: The most important thing is to ensure fundamental freedoms and guarantees: the free movement of persons, the right to work and health care, social guarantees, and a possibility to study and work in the UK.281 Optimism about a trade deal Arriving for the December 2016 European Council summit, President Grybauskaitė was optimistic about prospects for a trade deal: 10 years? I hope it will be a lot less. I understand how difficult it will be for her [Theresa May] to negotiate because, of course, she will be negotiating practically against 27. But having in mind that Britain is important from an economic and security point of view. I don’t expect it [the negotiations] will be rivals, it will be… partners talking about British and EU relations for future.282 When David Davis met Saulius Skvernelis in Vilnius in February 2017, the Prime Minister had misplaced optimism that the Brexit process would run smoothly, because, unlike the EU-Canada free trade negotiations, “many

279 Ibid 280 President of Lithuania, Lithuania will defend the interests of its people in Brexit negotiations, 15 December 2016 281 Ibid 282 Daily Express, 'It's in Europe's interests' to WORK with Britain: Theresa May shrugs off EU dinner snub, 15 December 2016.

152 The EU27: Internal Politics and Views on Brexit

things are already harmonized” and after Brexit, the “main things should remain as they are now”.283 Brexit priorities Ahead of an EU27 meeting on 29 April 2017, President Grybauskaitė’s office issued a press release on Lithuania’s objectives for the Brexit negotiations. A priority was “to ensure that Lithuanian nationals living in the UK continue to enjoy non-discriminatory rights after Brexit”.284 As Lithuania woke up to the slow pace of negotiations, before a meeting in Tallinn in September 2017 the President warned that the negotiations were “a little bit behind schedule” and that EU leaders needed to acknowledge they were probably “already facing the need for a transitional or additional period for Brexit”.285 On 4 July 2018, after a meeting with Michel Barnier, President Grybauskaitė issued a press release on Brexit: Everybody would lose in case of uncontrolled Brexit. Therefore, faster progress is needed in Brexit negotiations in addressing the remaining issues of the U.K.’s withdrawal and establishing a model of future relations that is favorable for both parties. For Lithuania, it is paramount to preserve defense and trade relations with the United Kingdom in the future. Despite Brexit, the United Kingdom will remain our NATO ally with which we will continue enhancing regional and transatlantic security. Nevertheless, it is important to preserve cooperation on security at the EU level as well. High-principled United Kingdom’s position on sanctions to Russia, accumulated experience in fighting against propaganda, cyber- attacks and other hybrid threats is necessary for the entire Europe. With the risk of transatlantic trade wars ongoing, it is topical for both parties to achieve the most extensive free trade agreement. The United Kingdom is the seventh largest export market of Lithuania; therefore, avoiding trade barriers with the United Kingdom is in the economic interests of Lithuania.286 After the Salzburg summit in September 2018 the President commented on the negotiations: “At this stage, it’s a standstill. There is no progress”.287 Extending Article 50 In January 2019 President Grybauskaitė said it would be “better” for the UK to leave the EU without a deal, rather than extend the Article 50 process, as a clean Brexit would put an end to months of uncertainty.

283 Algirdas Acus, Brexit minister in Vilnius, Lithuanian National Radio and Television (LRT), 22 February 2017 284 President of the Republic of Lithuania, Lithuania's interests included in Brexit negotiation guidelines, 29 April 2017 285 Financial Times, Lithuania president says Brexit talks ‘a little bit behind’, 29 September 2017 286 President of Lithuania, Brexit negotiations need faster progress, 4 July 2018 287 Reuters, No progress seen after May speech on Brexit - Lithuania, Slovakia, 19 September 2018

153 Commons Library Briefing, 2 May 2019

Speaking to Euronews, President Grybauskaitė said: The more we try to extend this chaos, the worse it will be for both sides. But if Britain will ask, of course, we will try to be supportive and helpful. But the more we will be trying to extend any kind of uncertainty, the worse it will be for both sides. And in that case, even it's better to finish this chaos sooner even with no deal or with any kind of deal.288 Arriving at the European Council meeting on 21 March, President Grybauskaite said EU leaders would be “supportive” of Mrs May but this would be conditional. She said: We have European elections and that means probably conditionality will be an extension only [to] May or a longer extension. In that case the UK will need to organise an election ... We are still optimistic. We need to support the UK. The UK for us is important and we are hoping for a solution, but the timing is still in the hands of the UK parliament. Arriving at the European Council meeting on 10 April, President Grybauskaite said she was “confident” that the EU would be supportive of the UK’s second extension request, and that it was “highly probable” that it would be longer than the one requested by Mrs May. The President said that she was “flexible” and there was not much sense in debating at length. No-deal preparations On 29 March 2019 the Lithuanian parliament approved a package of bills in preparation for a no-deal Brexit.289 Lithuania’s government said the draft legislation would help to mitigate negative consequences should the UK leave the EU without a deal. The package of almost 20 bills covers education, social security, health, taxation, consular services and other areas. The bills were being fast-tracked and were expected to return to the full Seimas (Parliament) on 9 April 2019.

288 Daily Express, EU mask SLIPS as Lithuanian leader claims no deal Brexit BETTER than Article 50 extension, Aurora Bosotti, 25 January 2019 289 Baltic Times, Lithuanian parlt's committee approves bills to prepare for no-deal Brexit, 29 March 2019. 154 The EU27: Internal Politics and Views on Brexit

18. Luxembourg 18.1 Key Facts 1. Government and Politics Head of State: HRH Grand Duke Henri Head of Government: Prime Minister Last election: Legislative, 14 October 2018 Next election: Legislative, October 2023 2. Finance and the Economy GDP (2017): €45 billion (GDP per head: €75,900) GDP average growth 2014-2018: 2.6% GDP growth 2019 (interim forecast, Feb 2019): 2.5% Net contribution to EU budget per head 2017: -€2,536 Currency: euro 3. Trade with UK Trade with UK as % of GDP: 13.1%

UK trade with Luxembourg, 2017 £ millions Exports Imports Balance Goods 187 339 -152 Services 2,774 2,320 454 Total 2,961 2,659 302 Source: ONS Pink Book

4. Views on EU 56% of Luxembourgish have a positive view of the EU (net positive: +38%) 57% of Luxembourgish agree that their voice counts in the EU (net voice counts: +20%) 52% of Luxembourgish trust the EU (net trust: +19%) 91% of Luxembourgish are in favour of free movement 89% of Luxembourgish feel like a citizen of the EU 5. Luxembourgish nationals in the UK 1,000 (ONS estimate for Jan to Dec 2017) 18.2 Background Luxembourg’s independence was affirmed under the First Treaty of London in 1839, when it joined the German Customs Union (Zollverein), to counter French and Belgian influence. To prevent war between Prussia and France over the political status of Luxembourg, its independence and neutrality were reaffirmed under the Second Treaty of London in 1867. Luxembourg remained a member of the German Customs Union until 1919. The King of 155 Commons Library Briefing, 2 May 2019

the Netherlands continued as head of state of Luxembourg until 1890, when the Dutch throne passed to his daughter, while he was succeeded as Grand Duke of Luxembourg by Adolphe I, the last Duke of Nassau. The Constitution dates back to 1868, but in 1919 a constituent assembly introduced some important changes, declaring that sovereign power resided in the nation, that all secret treaties were denounced and that deputies were to be elected by a list system by proportional representation on the basis of universal adult suffrage. Luxembourg is a hereditary and constitutional monarchy. Legislative power is exercised by the unicameral Chambre des Députés (Chamber of Deputies), with 60 members elected by universal adult suffrage for five years (subject to dissolution). Some legislative functions are also entrusted to the advisory Conseil d’Etat (State Council), with 21 members appointed for life by the Grand Duke; however, decisions made by this body can be overruled by the legislature. Executive power is vested in the Grand Duke, but is normally exercised by the Council of Ministers, led by the President of the Government (Prime Minister). The Grand Duke appoints ministers, who are responsible to the legislature. Luxembourg is divided into 12 cantons and 102 communes; the district level of government (comprising the three former districts of Luxembourg, Diekirch and Grevenmacher) was abolished in October 2015. City status is held by 12 of the communes, the largest of which is the city of Luxembourg. Luxembourg has the highest GDP per capita in the EU (253% of the EU average). After the Second World War Luxembourg became a founder member of the United Nations in 1946, NATO in 1949, the European Community in 1957, and later Schengen and the Euro. 18.3 Current Government and recent political developments In the wake of the revelation in July 2013 of a scandal involving illegal telephone recordings made by the Service de Renseignement de l’Etat Luxembourgeois (SREL- the State Intelligence Service), the LSAP (Socialist Workers’ Party of Luxembourg) withdrew its support for Prime Minister Jean-Claude Juncker. A parliamentary inquiry found that he had failed adequately to supervise the SREL and inform the Chamber of Deputies of the Service’s alleged past misdeeds. The inquiry demanded a fresh election. Juncker, while denying any wrongdoing on his part, submitted his resignation on 11 July after more than 18 years in office. An early general election (the first such since the 1960s) was called for 20 October. Following the election, which attracted a turnout of 85%, the CSV (Christian Social People’s Party) representation in the legislature declined to 23 seats, while the LSAP retained 13 seats, the DP (Democratic Party) tally rose to 13 and Déi Gréng (the Greens) secured six. 156 The EU27: Internal Politics and Views on Brexit

Luxembourg’s first liberal administration for decades was appointed in early December 2013 in the form of a coalition led by the DP, supported by the LSAP and the Greens. The new Government was headed by the leader of the DP and mayor of the city of Luxembourg, Xavier Bettel. The LSAP’s Étienne Schneider became Deputy Prime Minister (as well as taking on the economy, internal security and defence portfolios).290 Bettel’s coalition remained in power following the general election on 14 October 2018. The three governing parties together won 31 of the 60 seats in the Chamber of Deputies, compared to 32 in 2013. The CSV remained the largest party, although its vote share fell to 28.31% (from 33.7% in 2013). Of the governing parties, the DP and LSAP also saw their vote share decline, while the Greens increased their vote share from 10.1% to 15.1%.291 The renewed DP-LSAP-Green coalition government was sworn in in December 2018. Results of the most recent elections Chamber of Deputies292 General Election, 14 October 2018 Party Vote share Seats Christian Social People’s Party (CSV) 28.31% 21 Luxembourg Socialist Workers’ Party (LSAP) 17.60% 10 Democratic Party (DP) 16.91% 12 The Greens (Déi gréng) 15.12% 9 Alternative Democratic Reform Party (ADR) 8.28% 4 Pirate Party Luxembourg (Piratepartei 6.45% 2 Lëtzebuerg) The Left (Déi Lénk) 5.48% 2 Communist Party of Luxembourg (KPL) 1.27% 0 Party for Complete Democracy (PID) 0.29% 0 Total 60

18.4 Views on Brexit Finance Minister Gramegna: good relations with UK essential One of the most vocal members of the Luxembourg Government on Brexit is Finance Minister . At a lecture at the LSE on 22 October 2017, he said: I think that it is key for Europe – and I mean Europe with the UK – that the number one financial centre in the world remains in Europe. And in order to achieve that, we must make sure that we harness the City of London to Europe, to the continent. … And by doing so we will make sure that London can continue to perform well. … We want a

290 Domestic Political Affairs (Luxembourg), Europa World online. London, Routledge. Retrieved 4 July 2018 291 Politico, Xavier Bettel: His government ‘confirmed’ after Luxembourg vote, 15 October 2018. 292 Chamber of Deputies (Luxembourg), Europa World online. London, Routledge. Retrieved 5 November 2018 157 Commons Library Briefing, 2 May 2019

co-operative approach with London as a financial centre… My guess is that in many areas we might be able with no deal to weaken London. But it is not the European financial centres that are going to benefit from it. It is going to be others outside the EU and what we are going to see London drift away into the Atlantic. After an interview on CNBC on 2 May 2018 he said: We’ve been discussing the issue of Brexit and concurring on the fact that it is good and it is also high time that we address the future relationship between the United Kingdom and the EU27 and these discussions have started now. It’s a good sign that the and the Bank of England announced that they’re going to have a technical group coming together to really look into the impact of Brexit on financial services. On markets, there’s a lot to discuss and it’s in the interest of both sides that we ensure financial stability and we protect the customers, so this is a good evolution. I think the British side and in fact, Minister Hammond himself has put alignment on the table as a possibility. On the EU side we are exploring the possibility of an enhanced equivalence and as another way of reaching smart results in the end and avoid a cliff edge that would be bad for both sides. So I think a lot of work needs to be done, also at a technical level. And we must also avoid that after Brexit or because of Brexit we’re going to ring-fence the EU single market. We need to have a relationship that has some openness. Prime Minister Bettel: Brexit is ‘damage limitation’ Prime Minister Xavier Bettel has also been outspoken on Brexit. In November 2016 Mr Bettel questioned the idea of an interim or transitional deal: What would interim mean? […] That we are going make a hybrid status now? Either you’re a member or you’re not a member of the European Union … There is no in-between status, there is no hybrid status between the two.293 In January 2018 he was reported as being more flexible than other governments on offering the UK a bespoke deal. While he supported the principle of ‘no cherry-picking’, he thought the EU “should refrain from an orthodox or binary thinking”. His “top priority would be to limit the negative impact for both sides. Pragmatism will be needed in these negotiations on both sides”.294 More recently, on 7 March 2018, he referred to Brexit as a “damage- limitation exercise … Both sides will be losing. Minimizing the losses and limiting the negative impacts as much as possible … is the challenge we all face around the table”.

293 Whitehouse Consultancy, Project Brexit study, 2017 294 Ibid 158 The EU27: Internal Politics and Views on Brexit

On 29 June 2018 at the June European Council Summit, Mr Bettel said no deal would be worse for the UK than for the EU, but that “We shouldn’t have escalation on who will be the biggest loser in this”. In advance of the December 2018 European Council Summit, Mr Bettel emphasised that the Withdrawal Agreement concluded in November 2018 was not open to renegotiation. He also stressed that he hoped the ‘backstop’ Protocol would never be used, but it nonetheless was not open to interpretation. Asked if he was prepared to risk a ‘no-deal’ outcome, his response was, “Brexit is your choice, not mine.” This position was reiterated in a 12 February 2019 news conference held with German Chancellor Angela Merkel, where Mr Bettel stated, “It is not possible to find a better result. The priority is to protect the integrity of the EU internal market and minimise the effect of Brexit for citizens.” Brexit priorities The Whitehouse Consultancy, as part of its Project Brexit study, identified the following as Luxembourg’s Brexit priorities: As a founding father of the European Union, Luxembourg is known to be a pro-European country, which in the negotiations will seek a united European approach and avoid other countries leaving the bloc. Due to its favourable tax system, Luxembourg in the past has attracted many companies to make the move to Luxembourg. As the UK wants to leave the single market, it might seek to become the EU’s new financial hub, which could prompt companies to leave London to move to a more stable economic environment in Luxembourg. To protect its own financial centre – which manages over $400 bn in assets – one of Luxembourg’s main priorities will be to ensure that there are mutually agreed regulatory standards that maintain competitiveness among businesses and guarantee financial services can continue to access the EU market. In terms of domestic preparations for a no-deal Brexit, the Luxembourgian Chamber of Deputies published a draft law on 31 January 2019 that aims to prevent instability in the financial services sector in the event of a ‘no-deal’ Brexit. The draft law ‘grandfathers’ the so-called ‘passporting’ rights currently held by UK financial and insurance institutions to operate in Luxembourg for a period 21 months, known as the ‘grandfathering period’, in order to protect consumers and companies. The alternative, in the absence of a Withdrawal Agreement, would be for UK institutions to be treated as ‘third country’ institutions with fewer rights to operate in Luxembourg, as explained by Simmons & Simmons: By withdrawing from the EU, UK credit institutions and investment firms will no longer benefit from the mutual recognition licensing regime laid down by the various sectoral European legislation which allow a credit institution, or an investment firm authorised in the UK to carry out its activities in the territory of another Member State. By no longer being entitled to the European passport, UK credit institutions and investment firms dealing in the EU may be forced to abruptly terminate contractual relationships if they are unable to transfer those contractual relationships to appropriate EU hubs. 159 Commons Library Briefing, 2 May 2019

For a more in-depth analysis, the University of East Anglia – in conjunction with other organisations – published a report in 2017 on what the UK’s partners want from the Brexit negotiations. This includes a section on Luxembourg: Brexit through the Eyes of Luxembourg. Extending Article 50 At the Sharm el-Sheikh summit in February 2019, when asked about a possibility to extend the Article 50 negotiating period, Mr Bettel said that “it was up to [the UK Prime Minister] to inform the European Council if she wants an extension. … I read about two months, two years... Bah!” On 15 March 2019 Luxembourg’s Prime Minister Xavier Bettel tweeted: Keep calm and drink tea” is not an option for #Brexit and the following days. We need a very clear and comprehensive reason for a delay extending Article 50. Arriving at the European Council meeting on 21 March (which agreed an Article 50 extension), Mr Bettel said: If next week we are not able to find agreement in the House of Commons we are going in the direction of no deal. Arriving at the European Council meeting on 10 April (which agreed a second extension), Mr Bettel said: I would support an intelligent extension. If it’s long or short, the main point for me is that we have European elections. You can’t be a member and have no elections ... If there is a longer extension, there is no lunch for free. So we need to know why, the reason they need a longer extension. Mr Bettel disagreed with suggestions that while the UK would need to participate in the EP elections it could be barred from other EU decision- making, such as electing the Commission president. He said: You cannot be half in, half out . . . You can't say they are a member but have no say. In or out, there's nothing in between. He said he hoped for a constructive discussion and said that it was “true that [the UK] was never the easiest of partners … the easiest thing would be if they just left quickly.” He said that he hoped for a “good divorce” but that the best Brexit outcome “would be a new referendum and with a 'yes' [to remaining in the EU].” He added that: If politicians would be less politicians sometimes and think of the future of their country more, the [WA] would be passed tomorrow. During the meeting, Luxembourg reportedly leaned towards the French view that the extension should be limited to a short period295.

295 See The Times, Fright night ends in leaders subduing Macron monster, 12 April 2019 160 The EU27: Internal Politics and Views on Brexit

19. Malta

19.1 Key facts 1. Government and Politics Head of State: President Marie-Louise Coleiro Preca Head of Government: Prime Minister Dr Last election: Legislative, 3 June 2017 Next election: Legislative, due 2022 2. Finance and the Economy GDP (2017): €14 billion (GDP per head: €29,300) GDP average growth 2014-2018: 7.4% GDP growth 2019 (interim forecast, Feb 2019): 5.2% Net contribution to EU budget per head 2017: -€233 Currency: euro 3. Trade with UK Trade with UK as % of GDP: 21.3%

UK trade with Malta, 2017 £ millions Exports Imports Balance Goods 403 111 292 Services 394 874 -480 Total 797 985 -188 Source: ONS Pink Book

4. Views on EU 43% of Maltese have a positive view of the EU (net positive: +33%) 46% of Maltese agree that their voice counts in the EU (net voice counts: +6%) 56% of Maltese trust the EU (net trust: +34%) 83% of Maltese are in favour of free movement 82% of Maltese feel like a citizen of the EU 5. Malta nationals in the UK 9,000 (ONS estimate for Jan to Dec 2017)

19.2 Background296 Malta, a UK Crown Colony since 1814, became an independent sovereign state within the Commonwealth in 1964. On 13 December 1974, the Independence Constitution of 1964 was substantially amended to bring into

296 See Malta, Europa World online. London, Routledge. Retrieved 5 October 2018 161 Commons Library Briefing, 2 May 2019

effect a republican constitution under the terms of which Malta became a democratic republic within the Commonwealth. The new Constitution replaced the office of Governor-General with that of President, to be appointed by resolution of the Parliament, the House of Representatives, for a five-year term. The President appoints the Prime Minister and on his/her advice the other ministers, the Chief Justice, the judges and the Attorney-General. The normal term of the House of Representatives is five years. The Labour Party and the Nationalist Party are the dominant political parties. Malta acceded to the EU in May 2004 and adopted the Euro in January 2008. 19.3 Current Government and recent political developments297 On 1 May 2017, Prime Minister Muscat called an early general election, claiming that recent financial allegations linked to the ‘Panama Papers’ risked undermining the economy. At the elections on 3 June, the ruling Partit Laburista lost one seat to secure a total of 37 and the Partit Nazzjonalista won 30. Muscat described the result as a vindication for his administration. Results of the most recent Maltese elections House of Representatives298 General Election, 3 June 2017 Party Votes % of votes Seats Partit Laburista (Labour Party) 170,976 55.04 37 Partit Nazzjonalista (Nationalist Party)* 135,696 43.68 30 Alternattiva Demokratika (Green Party) 2,564 0.83 0 Others 1,429 0.46 0 Total 310,665 100 67** * Including the Partit Demokratiku, which won two seats. ** There are 65 constituency seats. A variable number of seats are subsequently allocated to ensure proportionality with the first-preference votes cast in the election. Two seats were awarded to the Partit Nazzjonalista following the 2017 election.

19.4 Views on Brexit Brexit - good and bad for Malta The Whitehouse Consultancy profile of EU27 positions on Brexit summarised Malta’s priorities as follows: As a member of the Commonwealth Malta has a long history with the UK. Therefore, the countries’ ties are strong and Malta will be losing

297 Ibid 298 House of Representatives (Malta), Europa World online. London, Routledge. Retrieved 5 October 2018 162 The EU27: Internal Politics and Views on Brexit

a strong ally in the EU when the UK leaves. However, Malta also sees opportunities in Brexit. As English is widely spoken and the country has a favourable business climate, Malta will be looking to attract companies that are currently based in London and want to move to an EU country to open subsidiaries. Firms dealing with financial services are of particular interest to Malta, as these could really boost its economy.299 Malta’s Minister for European Affairs Louis Grech said in September 2016 that while Malta regretted the UK’s decision, it was determined to continue to have “excellent bilateral relations on many fronts”; also that “both countries knew that there would be consequences to the exit of the UK from the European Union, but the UK will always have a strong relationship with the EU”.300 In October 2016 the Minister for Home Affairs and National Security, Carmelo Abela, stated that the “excellent relations” between Malta and the UK in home affairs and defence would be further strengthened “irrespective of the decision taken by the British people to relinquish their EU membership”.301 Maltese EU Presidency warning to UK In January 2017, at the beginning of Malta’s Presidency of the EU, Prime Minister Joseph Muscat emphasised the EU position that the UK could not expect a better deal outside the EU than inside: We are saying two things: that we want a fair deal, but that fair deal needs to be inferior to membership. Honestly, I cannot see a situation where someone gets out of a club and then expects that the new relationship is even better than being a member. The new relationship might be better for that country on the global aspect, because it might be freer to have different relationships with other parts of the word, and more flexibility, but you cannot imagine a situation where you leave a club, you leave Europe and you expect Europe to give you a better deal than the one you had. Muscat compared the EU to a sports club in terms of the benefits which an ex-member might expect to be granted, referring to such membership as “an inferior type of relationship”. He stressed the unity of the EU27 on this point, stating: “We need to stick together. I see an extremely united front”. More recently, Prime Minister Muscat has also said that the EU is almost unanimous in wanting the UK to hold a second referendum.302 He expressed concerns about the ratification of an eventual UK-EU agreement, particularly the need to keep the European Parliament on board:

299 The Whitehouse Consultancy, Project Brexit: What do other countries think? – Malta 300 press release, Ministry for European Affairs and Implementation of the Electoral Manifesto, 28 September 2016. 301 Government of Malta press release, Ministry for Home Affairs and National Security, 1 October 2016. 302 Times of Malta, Muscat: Almost all EU leaders would like a second Brexit referendum, 20 September 2018 163 Commons Library Briefing, 2 May 2019

People are focusing too much on divisions between member states which at this point I don’t see. My main concern is the role of the European parliament. It has to have a role which does not underestimate it. If we keep to the ambitious timetable and all goes according to plan it will still need parliament to endorse this in the runup to the next European parliament election in May 2019. And I think this is the worst time. For different reasons there might be a cross-party alliance some members of which would want to punish the UK, some who would just want to trip up Europe, and others who think this deal is not European enough. I fear an unholy alliance that could be tempted to scupper it.303 The EU would welcome another UK referendum? In an interview with the BBC Today Programme on 20 September 2018, the second day of the Salzburg meeting, Mr Muscat said EU leaders would probably welcome another referendum in the UK: My experience so far within the context of the European Council is that irrespective of one’s political allegiances, there is a lot of respect [for the UK’s decision]. Having said that there is a unanimous or almost unanimous point of view around the table that we would like the almost impossible to happen that the UK has another referendum. I think most of us would welcome a situation where there is the possibility of the British people putting things into perspective, seeing what has been negotiated, seeing the options and then deciding once and for all.304 Brexit preparations The Government has set up a Brexit task force which includes the Opposition to coordinate Malta’s Brexit preparations. The Times of Malta reported in October 2018: Dr Muscat said the government did not want to be fatalistic about Brexit, but was already preparing for worst case scenarios. “Even in the worst possible case, our health agreement with the UK will remain,” he said, adding that Malta was not only an EU member state, but also a member of the Commonwealth. The Customs Department, Dr Muscat said, was among the most prepared to deal with a Brexit, and so he was confident in its ability to manage such a transition.305

303 The Guardian, No special favours for UK in Brexit deal says Malta Prime Minister, 29 January 2017 304 The Independent, EU leaders call for UK public to have final say on Brexit outcome with new referendum, 20 September 2018 305 Times of Malta, Muscat confident of post-Brexit agreement between Malta and the UK, 23 October 2018

164 The EU27: Internal Politics and Views on Brexit

Extending Article 50 In an interview with Politico in February 2019, Joseph Muscat supported extending the deadline and giving Britain more time if requested. However, he ruled out a reopening of the Withdrawal Agreement saying: It's not an issue of whether we lose a couple of millions [of euros] here or there ... I don't think we can fudge on principles.306 Following the European Council of 10 April which agreed a second Article 50 extension, Mr Muscat tweeted: A #Brexit extension until 31 October is sensible since it gives time to UK to finally choose its way. The review in June will allow #EUCO [the European Council] to take stock of the situation During the meeting, Malta reportedly leaned towards the French view that the extension should be limited to a short period307.

306 Politico, Joseph Muscat: May’s Sharm offensive won’t change EU’s Brexit course, 24 February 2019 307 See The Times, Fright night ends in leaders subduing Macron monster, 12 April 2019 165 Commons Library Briefing, 2 May 2019

20. Netherlands 20.1 Key facts 1. Government and Politics Head of State: HM King Willem-Alexander Head of Government: Prime Minister Last election: Legislative, 15 March 2017 Next election: Legislative, March or May 2021 2. Finance and Economy GDP (2017): €658 billion (GDP per head: €38,400) GDP average growth 2014-2018: 2.4% GDP growth 2019 (interim forecast, Feb 2019): 1.7% Net contribution to EU budget per head 2017: +€201 Currency: euro 3. Trade with UK Trade with UK as % of GDP: 14.1%

UK trade with the Netherlands, 2017 £ millions Exports Imports Balance Goods 22,043 40,680 -18,637 Services 17,003 6,251 10,752 Total 39,046 46,931 -7,885 Source: ONS Pink Book

4. Views on EU 46% of Dutch citizens have a positive view of the EU (net positive: +30%) 62% of Dutch citizens agree that their voice counts in the EU (net voice counts: +28%) 57% of Dutch citizens trust the EU (net trust: +20%) 86% of Dutch citizens are in favour of free movement 75% of Dutch citizens feel like EU citizens 5. Dutch nationals in the UK 97,000 (ONS estimate for Jan to Dec 2017) 20.2 Background The Netherlands is a constitutional and hereditary monarchy. In April 2013, King Willem-Alexander succeeded his mother Beatrix as monarch after she abdicated, ending a 33-year reign. Executive power is exercised by the Council of Ministers, which is led by the Prime Minister and is responsible to the Staten-Generaal (States-General - Parliament). 166 The EU27: Internal Politics and Views on Brexit

Legislative power is held by the bicameral Staten-Generaal . The Eerste Kamer (First Chamber) or Senaat (Senate) has 75 members and is indirectly elected for four years by members of the 12 Provincial Councils. The Tweede Kamer (Second Chamber) or House of Representatives comprises 150 members and is directly elected by universal adult suffrage for four years (subject to dissolution) on the basis of proportional representation.308 The Netherlands was a founder member of the European Community, Schengen and the Eurozone. 20.3 Current Government and recent political developments In the March 2017 elections Mark Rutte's conservative Volkspartij voor Vrijheid en Democratie (VVD, People’s Party for Freedom and Democracy) was the leading party with 21% of the votes, followed by Geert Wilders’ right-wing populist Partij voor de Vrijheid (PVV, Party for Freedom) with 13%. The other leading parties had declared they would not enter a coalition with the PVV. A new centre-right four-party coalition was sworn in in October 2017, 225 days after the election. This comprised the VVD, Christen Democratisch Appèl (CDA, Christian Democratic Appeal), ChristenUnie (CU, Christian Union) and Democraten 66 (D66, Democrats 66). Provincial elections were held in the Netherlands on 20 March 2019. Eligible voters elected the members of the Provincial States in the twelve provinces of the Netherlands. They resulted in an overall victory for a relatively young party, namely the -wing populist Forum voor Democratie (FvD, ): it won 86 seats spread across the 12 provinces of the Netherlands. In South Holland, North Holland and Flevoland, FvD became the largest party, winning 11, 9 and 8 seats respectively. This will have significant consequences for the composition of the First Chamber of the Dutch legislature (see below): the members of the twelve provincial states will elect the Senate's 75 members in the First Chamber election on 27 May 2019, and while the current coalition government holds a majority of 1 in the Senate, it is expected to lose this given the results in the provincial elections.309

308 Constitution and Government (The Netherlands), Europa World online. London, Routledge. Retrieved 5 September 2018 309 Far-right populists score stunning win in Dutch provincial vote, politico.eu. Retrieved 9 April 2019.

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Results of the most recent Dutch elections Elections to the bicameral legislature, the Staten Generaal. President310 Presidential Election, First Ballot, 10 May 2015 Candidate Votes % of valid votes (PiS) 5,179,092 34.76 Bronisław Komorowski (Ind.) 5,031,060 33.77 Paweł Kukiz (Ind.) 3,099,079 20.80 Janusz Korwin-Mikke (Wolność) 486,084 3.26 Magdalena Ogórek (Ind.) 353,883 2.38 (PSL) 238,761 1.60 Janusz Palikot (TR) 211,242 1.42 Others 299,733 2.01 Total 14,898,934 100.00

Second Ballot, 24 May 2015 Candidate Votes % of valid votes Andrzej Duda (PiS) 8,630,627 51.55 Bronisław Komorowski (Ind.) 8,112,311 48.45 Total 16,742,938 100.00

Andrzej Duda was duly elected President.

First Chamber / Senate (Eerste Kamer)311 Election, 26 May 2015 Party Seats People’s Party for Freedom and Democracy (VVD) 13 Christian Democratic Appeal (CDA) 12 Democrats 66 (D66) 10 Socialist Party (SP) 9 Party for Freedom (PVV) 9 Labour Party (PvdA) 8 (GL) 4 Christian Union (CU) 3 Party for the Animals (PvdD) 2 Reformed (SGP) 2 50Plus (50+) 2 Independent 1 Total 75

310 President (Poland), Europa World online. London, Routledge. Retrieved 16 October 2018. 311 First Chamber (Eerste Kamer) (The Netherlands), in Europa World online. London, Routledge. Retrieved 22 March 2019

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Second Chamber / House of Representatives (Tweede Kamer)312 General Election, 15 March 2017 Party Votes % Seats People’s Party for Freedom and Democracy (VVD) 2,238,351 21.29 33 Party for Freedom (PVV) 1,372,941 13.06 20 Christian Democratic Appeal (CDA) 1,301,796 12.38 19 Democrats 66 (D66) 1,285,819 12.23 19 Green Left (GL) 959,600 9.13 14 Socialist Party (SP) 955,633 9.09 14 Labour Party (PvdA) 599,699 5.7 9 Christian Union (CU) 356,271 3.39 5 Party for the Animals (PvdD) 335,214 3.19 5 50Plus (50+) 327,131 3.11 4 Reformed Political Party (SGP) 218,950 2.08 3 Think (Denk) 216,147 2.06 3 Forum voor Democratie (FvD) 187,162 1.78 2 Others 161,327 1.53 0 Total 10,516,041 100 150

20.4 Views on Brexit Brexit – a shock for the EU and a great cost to the Netherlands On 5 July 2016 Prime Minister Mark Rutte was shocked and pessimistic about Brexit in a speech to the European Parliament: Brexit has created a shockwave, and we don't yet know exactly what the consequences will be. We are in uncharted territory. And we must be honest: even if we find the perfect way to handle this 'divorce', our problems won't simply melt away.313 In April 2017 David Davis met with Dutch Foreign Minister , who stressed that although the UK had decided to leave of its own accord, the Netherlands “wishes to continue working closely with the UK, in so far as its departure from the EU allows”.314 The UK is one of the Netherlands’ biggest trading partners and a report by CPB Netherlands Bureau for Economic Policy Analysis calculated that Brexit could cost the Netherlands €10 billion.315 The Netherlands are committed

312 Second Chamber (Tweede Kamer) (The Netherlands), in Europa World online. London, Routledge. Retrieved 22 March 2019 313 Government of the Netherlands, Address by Prime Minister Mark Rutte of the Netherlands to the European Parliament in Strasbourg, 5 July 2016 314 Government of the Netherlands, Koenders promotes interests of Dutch nationals living in UK in Brexit meeting with David Davis, 28 April 2017 315 CPB Netherlands Bureau for Economic Policy Analysis, Brexit costs for the Netherlands arise from reduced trade, June 2016

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to the principle that there can be no ‘cherry picking’ on the UK’s part when it comes to access to the Single Market.316 A speech by Foreign Affairs Minister Stef Blok to EU Ambassadors on 16 May 2017 reiterated the Dutch Government’s view that Brexit was not to be welcomed and it should not disadvantage the EU27: …it’s a decision I regret deeply. I believe it’s bad for the UK, bad for the EU and bad for the Netherlands. But we must respect it. The focus now must be on minimising the pain. Because there will be pain, for all of us. So we need to ensure the exit process is as civilised, orderly and fair as possible. But if I may: there is also a silver lining to this unlucky event. The realisation, in 27 other capitals: ‘let’s not try this at home.’ Coupled with a sense of urgency: we need to make it work for the remaining 27. Recommit, in solidarity. But above all: responsibly.317 British expats in the Netherlands appeal to court In January 2018 a case was taken to the Amsterdam District Court by five British nationals living in the Netherlands and supported by the group Brexpats – hear our voice (BHOV). The group argued that their EU citizenship should not be removed after the UK leaves the EU. On 19 June 2018 the Amsterdam Appeal Court decided not to refer the case to the CJEU as the questions were declared “insufficiently concrete”.318 UK and Netherlands remain friends On 3 July 2018 Theresa May met Mark Rutte at the Catshuis (the Prime Minister’s ) in The Hague. They discussed the importance of the trading relationship and the need to ensure that UK-Netherlands trade remained as frictionless as possible after Brexit. Rutte later tweeted: “Had a good meeting with @theresa_may in The Hague about #Brexit state of play. The UK continues to be a valued friend”.319 Dutch view of Chequers Speaking after the September 2018 Salzburg meeting, Mr Rutte called the Chequers White Paper a “positive development” and stressed the need to avoid a no-deal Brexit: The UK’s white paper on exiting the EU and our future relationship is a positive development. But much remains to be done. The challenge ahead of us will be to reach an as ambitious an agreement as possible without infringing the conditions set by the EU, including the integrity of the single market. It’s in everyone’s interest that we reach an

316 Government of the Netherlands, Koenders responds to Brexit notification: ‘Keep calm, be realistic and negotiate’, 29 March 2017 317 Government of the Netherlands, Speech by foreign minister Stef Blok to EU ambassadors, 16 May 2018 318 EU Law Analysis, Does Member State Withdrawal from the European Union Extinguish EU Citizenship? C/13/640244 / KG ZA 17-1327 of the Rechtbank Amsterdam (‘The Amsterdam Case’), 19 June 2018 319 Mark Rutte’s Twitter account, @MinPres, 3 July 2018

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agreement and that we avoid a no-deal Brexit. Mr Barnier has our full backing in that regard.320 The King regrets Brexit Addressing in October 2018 ahead of his State Visit to the UK, King Willem-Alexander said he and his Government regretted Brexit and would have liked the EU referendum result to have gone the other way.321 The King expected to see an impact on trade between the two nations and he said his royal household supported Michel Barnier. 322 Prime Minister Rutte “cautiously optimistic” Following the European Council meeting of 17 October 2018 at which Theresa May addressed EU27 leaders on the Brexit negotiations, Prime Minister Rutte told reporters: The mood was good, we are cordial and respect each other and Theresa May is a formidable politician. I am still cautiously optimistic [about the deal]. But the problem is we cannot have a border in Ireland between the Republic and the province [of Northern Ireland]. Nobody wants that and the UK doesn't want a border in the Irish sea. Mr Rutte also reiterated that the EU wants a close relationship with the UK, but not at the expense of the Single Market.323 Brexit chaos Prime Minister Rutte has deemed Brexit a chaotic situation: “Because if the chaos of Brexit teaches us anything, it’s that there’s no such thing as splendid isolation“324. Foreign Minister Stef Blok has warned other Member States of the consequesnces of leaving the EU: As recent events have shown, the costs of leaving the EU – economically, socially and politically, but above all for citizens – are unacceptably high. I think the dynamics of Brexit have made this clear to everyone, even the most critical voices and member states. Those still arguing for a Frexit or a Nexit, claiming there will only be benefits and no costs, live in a fantasy world. They are dangerous demagogues with no real interest in the fate of the people they claim to protect and represent.325 In December 2018, The Guardian reported Prime Minister Rutte’s open letter to a Dutch newspaper again referencing Brexit chaos.326

320 Government of the Netherlands, Statement Prime Minister Rutte after the informal European Council in Salzburg, 20 September 2018 321 BBC News, Dutch King Willem-Alexander regrets Brexit turbulence, 9 October 2018 322 The Guardian, Dutch king bemoans Brexit before UK state visit, 8 October 2018 323 EUObserver, No progress at Brexit summit, talks continue, 17 October 2018 324 Government of the Netherlands, Churchill Lecture by Prime Minister Mark Rutte, Europa Institut at the University of Zurich, 13 February 2019 325 Government of the Netherlands, Speech by the Minister of Foreign Affairs, Stef Blok, at a meeting of EU Ambassadors in the Netherlands, 20 February 2019 326 The Guardian, Netherlands PM uses Britain's Brexit 'chaos' as cautionary tale, 17 December 2019

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Both sides want to prevent a hard border in Ireland Speaking to ITV in January 2019, Prime Minister Rutte said he did not want a No Deal situation to happen and that he had confidence in Theresa May and the Govenment to find a way out and prevent this scenario: I have full confidence in Theresa May and her Government. It’s a difficult situation but she will find a way out. What concessions would you want? What will happen when the backstop is gone? A hard border and what does a hard border mean? The end of the Good Friday Agreement, potentially going back to the Troubles we have seen in Ireland and nobody wants that327. Addressing journalists during a visit to Switzerland in February Mr Rutte commented that: The backstop is not there because Europe wants it, or because Britain wants it, it’s there because both sides want to prevent a hard border in Ireland...If at the same time, England refuses to think about engagement in a customs union, then there is no alternative to the backstop. That’s where the discussion is stuck at the moment328. Responding to the vote on the withdrawal agreement on 12 March 2019 Mr Rutte tweeted: The EU continues to stand by the Withdrawal Agreement, including the backstop, which serves to prevent a hard border in Ireland and preserve the integrity of the single market unless and until alternative arrangements can be found329. Only deal on the table Commenting on the agreement made on 11 March 2019 Rutte tweeted that he was pleased and that there would be no alternative: Pleased with the agreement between @JunckerEU and @theresa_may. An orderly #Brexit is crucial for both the EU and the UK. I hope that the House of Commons will support the agreement reached by Theresa May. There is no alternative330. Article 50 extension Speaking from the Sharm el-Sheikh summit on 25 February, Dutch Prime Minister Mark Rutte said the UK would need to set out the purpose of an Article 50 extension: It’s up to UK. If UK ask for delay, the EU will ask what do you want with it? We don’t want to go round in circles for the next couple of months. What will be achieved by it? Following the Government’s defeat in the second ‘meaningful vote’ on 12 March, Mr Rutte tweeted:

327 ITV News, Dutch PM Mark Rutte tells ITV News Theresa May will 'find a way out' on Brexit despite ruling out backstop concession, 24 January 2019 328 Reuters, Irish backstop issue must be resolved, says Dutch Prime Minister, 13 February 2019 329 Mark Rutte’s Twitter account, @MinPres, 12 March 2019 330 Mark Rutte’s Twitter account, @MinPres, 11 March 2019 172 The EU27: Internal Politics and Views on Brexit

I regret the outcome of tonight's #Brexitvote. It is disappointing that the UK government has been unable to ensure a majority for the Withdrawal Agreement agreed by both parties in November, even after multiple additional assurances from the EU. A solution must come from London. The EU continues to stand by the Withdrawal Agreement, including the backstop, which serves to prevent a hard border in Ireland and preserve the integrity of the single market unless and until alternative arrangements can be found. Should the UK hand in a reasoned request for an extension, I expect a credible and convincing justification. The #EU27 will consider the request and decide by unanimity. The smooth functioning of the EU institutions needs to be ensured. Following the Commons vote to seek an Article 50 extension on 14 March, Mr Rutte said: You will get a situation in which we continue to talk for months, as we have been doing for months. What good is it to continue whining at each other for months, while you’ve been spinning in that circle for two years. . . They have decided to leave. If they want to postpone, they must also say why. Arriving at the European Council on 21 March, Mr Rutte said an extension would be conditional on the House of Commons approving the WA. The ball has to be in the court of the British Parliament. They first have to say ‘yes’. I think the signal today might be that if the British parliament would say a ‘yes’ lock, stock and barrel to everything on the table, then Europe understands that technically that you need time to implement everything in law. In response to the UK’s second Article 50 extension request on 5 April Mr Rutte said that the Mrs May’s letter to Donald Tusk did not provide enough clarity about UK plans and did not answer the EU’s key questions. He told reporters that: The plan was that the British would explain what they wanted from the EU. A letter was sent today which, as far as I am concerned, doesn’t answer this request [from the EU for more information]. I hope it will be possible to give the answers to these questions. Mr Rutte said the letter had “no full plan, there was only part of a plan” and that he hoped that the UK Government would provide more clarity before the European Council on 10 April. He said: “The ball is not here in the Netherlands, or in Paris or Berlin. The ball really is in London”. On 8 April, Mr Rutte tweeted that he spoken to Mrs May that day. He said that in discussing the UK request on 10 April, it would be crucial for the European Council to know “when and on what basis” the UK would ratify the WA and that a positive decision “hinges also on assurances from UK on sincere cooperation”. He added, that it was “in all our interest to have an orderly Brexit”. Prior to the European Council on 10 April he said there was a need “to make sure that the EU can function, that all member states cooperate loyally.” 173 Commons Library Briefing, 2 May 2019

Brexit preparations The Dutch Government has carried out several assessments of the impact of Brexit on the Netherlands, including the rights of Dutch citizens, the economy and the medical sector.331 In the State Opening of Parliament in September 2017, Bert Koenders emphasised that in the negotiations, “the main priority should be to clarify the rights of EU citizens, eliminate uncertainty for businesses and ensure that existing financial obligations are met”.332 The Government has planned for extra officials, mostly in the port of Rotterdam, “to prepare for the extra bureaucracy required for British goods to go through customs before entering the EU after Brexit”. 333 As the UK is the Netherlands’ third largest trading partner, the Dutch customs authorities are expecting an increase in the number of customs operations by a third and are expanding the staff capacity by 20%.334 According to (19 July 2018), the Government “is hiring nearly 1,000 customs officials”. It is also recruiting up to 90 veterinarians for animal and food inspections, and warehouses for inspection are being considered.335 The Government’s web-based 'Brexit impact scanner' can be used by SMEs to assess their exposure to potential Brexit-related problems, and it offers €2,500 ’vouchers’ for small companies to obtain independent advice about the Brexit implications for their business. MLex reported (4 September 2018) on research for the Dutch Government by Kantar Public which concluded that around 18% of Dutch companies doing business with the UK are “actively preparing for Brexit”, up from 10% in 2017. The study was carried out in the period 28 June – 3 July among 245 companies doing business with the UK.336 A letter from the Minister of Foreign Affairs to the House of Representatives, 7 September 2018, set out the state of preparation for Brexit (contingency planning and preparedness at national and EU level). The Government website provides information for citizens and businesses on how to prepare for Brexit. On a visit to DFDS ferry terminal in Vlaardingen an important hub for trade with the United Kingdom, Foreign Minister Blok and Foreign Trade Minister

331 Government of the Netherlands, What impact will Brexit have? [accessed 2 October 2018] 332 Government of the Netherlands ,Foreign Affairs Budget 2018 [accessed 2 October 2018] 333 Reuters, Dutch cabinet drafting 'playbook' for chaotic Brexit: parliament, 9 July 2018 334 ‘Nederlandse Douane nog niet klaar voor Brexit, honderden extra mensen nodig: 'Het effect is echt groot', (The Netherlands Customs administration not yet ready for Brexit, need more people: ‘The effects are major’), De Volkskrant, 16 February 2018 335 New York Times, How E.U. Is Getting Ready for Chaos in a Worst-Case Brexit,19 July 2018 336 See also DutchNews, Just one in five Dutch firms are ready for Brexit, ministry says, 4 September 2018

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Sigrid Kaag stressed the importance of “carriers and forwarders” continuing their Brexit preparations.337 Citizens’ rights guaranteed In a survey comissioned by the Ministry of Foreign Affairs and carried out by Kantar Public 89% of British people living in the Netherlands surveryed were worried about the effects of Brexit on their situation. In response to the survey Foreign Minister Stef Blok commented that: It’s understandable that Brexit is creating great uncertainty for these people...So I keep on stressing that the draft withdrawal agreement offers the best solution for everyone. But if it comes to a no-deal Brexit, British citizens in the Netherlands need to know where they stand. I’ll be providing more information about this very soon338. The Netherlands has joined other EU Member States in saying that in the event of a no-deal Brexit, UK citizens living in Belgium will be able to continue to live and work there. The Dutch Immigration and Naturalisation Service (IND) explains that UK nationals will have 15 months in which to apply for a residence permit at a cost of €57.339 The IND sets out on its website (updated 14 January 2019) conditions for UK residents to maintain their rights with and without a deal. It said that it also sent a no-deal information letter to all UK residents in the Netherlands in the week of 14 January 2019.

337 Government of the Netherlands, Minister Blok and Minister Kaag visit ferry terminal to discuss post-Brexit logistical solutions, 14 March 2019 338 Government of the Netherlands, British people in the Netherlands greatly concerned about effects of Brexit, 8 January 2019 339 Dutch Government, News item, Right of residence transition scheme for British citizens in the Netherlands, 7 January 2019 175 Commons Library Briefing, 2 May 2019

21. Poland 21.1 Key Facts 1. Government and Politics Head of State: President Andrzej Duda Head of Government: Prime Minister Last election: Legislative, 25 October 2015 Next election: Legislative, due by November 2019 2. Finance and the Economy GDP (2017): €802 billion (GDP per head: €20,900) GDP average growth 2014-2018: 4.2% GDP growth 2019 (interim forecast, Feb 2019): 3.5% Net contribution to EU budget per head 2017: -€216 Currency: new złoty 3. Trade with UK Trade with UK as % of GDP: 5.0%

UK trade with Poland, 2017 £ millions Exports Imports Balance Goods 4,991 10,457 -5,466 Services 1,880 2,342 -462 Total 6,871 12,799 -5,928 Source: ONS Pink Book

4. Views on the EU 54% of Poles have a positive view of the EU (net positive: +44%) 60% of Poles agree that their voice counts in the EU (net voice counts: +26%) 47% of Poles trust the EU (net trust: +6%) 87% of Poles are in favour of free movement 79% of Poles feel like a citizen of the EU 5. Polish nationals in the UK 1.021 million (ONS estimate for Jan to Dec 2017) 21.2 Background The Communist system was abandoned in Poland following partially free democratic elections to the new bicameral National Assembly in 1989. The head of the Solidarity trade union, Lech Walesa, won the first direct presidential election in 1990, which was followed by fully democratic elections to the National Assembly in 1991. 176 The EU27: Internal Politics and Views on Brexit

A new Polish Constitution was adopted in 1997 and implemented following endorsement in a popular referendum. Under the Constitution, which came into force in October 1997, legislative power is vested in the bicameral Zgromadzenie Narodowe (National Assembly), which is elected for a four- year term and comprises the 100-member Senat (Senate, upper chamber) and the 460-member (Assembly, lower chamber). The Senate reviews legislation adopted by the Assembly and may propose its rejection. Senators and deputies are elected by universal, direct suffrage. In the Assembly, deputies are elected by a system of proportional representation. Executive power is vested in the President of the Republic, who is directly elected for a five-year term and may be re-elected once, and in the appointed Council of Ministers, led by the Prime Minister. The Council of Ministers is responsible to the Assembly.340 The President appoints the Prime Minister, and the Prime Minister appoints cabinet members, who must be approved by the Sejm. Poland joined NATO in 1999 and the EU in 2004. 21.3 Current Government and recent political developments The national conservative Law and Justice party (Prawo i Sprawiedliwość - PiS) has led the Polish Government since winning a majority of seats (with 37% of the vote) at the 2015 National Assembly elections. The PiS candidate, Andrzej Duda, also won the 2015 presidential election. PiS was founded in 2001 by the Kaczyński twins. Lech Kaczyński was elected as President in 2005 but was killed in an air crash in Russia in April 2010. His identical twin brother, Jarosław Kaczyński, was Prime Minister between 2006 and 2007, in a PiS-led coalition government. He has been the chair of PiS since 2003 and was the defeated PiS candidate in the 2010 presidential election. PiS was defeated in the 2007 National Assembly election by the liberal conservative . Civic Platform’s leader Donald Tusk was Prime Minister from 2007 until the end of 2014 (when he became European Council President). Tusk’s replacement as Prime Minister, Ewa Kopacz, remained in office until PiS was returned to power in the October 2015 elections. The new Government annulled the appointment of five judges by the outgoing government and declined to comply with a Constitutional Court ruling on the reinstatement of some of the judges. The National Assembly subsequently approved changes increasing the quorum for Constitutional Court decisions, requiring a two-thirds majority rather than a simple majority vote. This and other legislation affecting the judiciary and media led to human rights objections from the European Commission.

340 Constitution and Government (Poland), Europa World online. London, Routledge. Retrieved 11 October 2018 177 Commons Library Briefing, 2 May 2019

Prime Minister Beata Szydło resigned in December 2017, even though she had survived a no-confidence motion, and she was replaced by Mateusz Morawiecki. Also in December 2017, the European Commission referred Poland (as well as the Czech Republic and Hungary) to the CJEU over non- compliance with the EU’s refugee reallocation scheme. Later in December the Commission invoked the Article 7 TEU procedure, seeking a decision from the Council of the EU as to whether there had been a clear risk of a serious breach of the rule of law by Poland. The Commission asked Poland to abandon plans to introduce a lower retirement age for judges, to remove from the President the discretionary power to extend the mandate of judges at the Supreme Court, and restore the independence of the Constitutional Court. Although there have been subsequent discussions in the General Affairs Council, the Council of the EU has not taken a decision on the matter. In September 2018, the Commission made a further referral to the CJEU over the lowering of the retirement age for Supreme Court judges (to 65), meaning that around a third of judges would be required to retire. The Commission said Poland was “creating a risk of serious and irreparable damage to judicial independence in Poland, and therefore of the EU legal order”.341 In December 2018, the CJEU ruled that Poland must immediately suspend these reforms. Legislation to comply with the ruling was subsequently adopted by the Polish Parliament. On 3 April 2019, the Commission launched another infringement procedure over the introduction of a new disciplinary regime for judges in Poland. The Commission said the process did not enshrine a right to an effective remedy before an independent and impartial court, allowed judges to be disciplined on account of their judicial decisions, and did not guarantee an independent and impartial review of proceedings. European Commission Vice President said the EU was concerned about the Polish authorities' decision to open investigations against judges who have participated in public debates deemed unfriendly to the government and said that the main objective of the disciplinary regime was “as with the rest of the judiciary reform, to systematically subject judges to the political control of the executive". Results of the most recent Polish elections Legislature Poland has a bicameral legislature, comprising the Assembly and the Senate.

341 See Recent developments: New Government (Poland), Europa World online. London, Routledge. Retrieved 11 October 2018; European Commission press release, Rule of Law: European Commission takes next step in infringement procedure to protect the independence of the Polish Supreme Court, 14 August 2018; BBC News, Poland referred to European court over judges' forced retirement, 24 September 2018

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Sejm (Assembly)342 General Election, 25 October 2015 % of Party Votes Seats votes Law and Justice (PiS) 5,711,687 37.58 235 Civic Platform (PO) 3,661,474 24.09 138 Kukiz'15 (K’15) 1,339,094 8.81 42 (.N) 1,155,370 7.60 28 Polish People’s Party (PSL) 779,875 5.13 16 German Minority (MN) 27,530 0.18 1 Others 2,525,641 16.61 0 Total 15,200,671 100.00 460

Senat (Senate)343 Election, 25 October 2015 Party Members Law and Justice (PiS) 61 Civic Platform (PO) 34 Polish People’s Party (PSL) 1 Independent 4 Total 100

21.4 Views on Brexit The day after the UK referendum the BBC cited President Andrzej Duda as saying: “everything possible must be done to prevent other countries leaving”.344 Brexit priorities In November 2016 the then Prime Minister, Beata Szydło, met Theresa May for bilateral talks. Commenting afterwards, Mrs Szydło said the “most important” matter from Poland’s perspective was guaranteeing rights for Polish citizens who live and work in the UK. She added that Poland saw the UK as a strategic partner, and regardless of the UK leaving the EU, bilateral relations between the two countries would “flourish”; Poland would seek to “broaden and deepen these relations in the future”.345 In a Daily Telegraph article on 27 November 2016, Prime Minister Szydło regretted the loss of the UK’s pragmatic influence in the EU: … Poland was saddened, probably more than any other country, with the result of the British referendum. For us, Brexit means that

342 Sejm (Assembly) (Poland), Europa World online. London, Routledge. Retrieved 16 October 2018 343 Senat (Senate) (Poland), Europa World online. London, Routledge. Retrieved 16 October 2018 344 BBC News, EU Brexit referendum: UK 'must not delay leaving', 24 June 2016 345 Prime Minister’s Office, PM and Prime Minister Beata Szydło Statements: 28 November 2016, 28 November 2016. Accessed 26 July 2018

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supporters of reforming the EU into a more economically pragmatic organisation will soon lose an important strategic partner. But we understand and respect this decision.346 She said Poland’s approach to the Brexit negotiations would be “constructive and down-to-earth” and would focus on the UK’s future relationship with Europe after Brexit: In our understanding, the United Kingdom is leaving the EU, but it is not leaving Europe. Regardless of Brexit, our political fates as well as our security and economic interests are intertwined. We hope that this approach will be the cornerstone of the future relationship between the EU and Britain.347 She again emphasised the importance of citizens’ rights guarantees: One thing is certain: millions of UK citizens living across the EU, and millions of EU-27 citizens living in the United Kingdom, should not be made to feel like hostages. Our common duty should be to ensure their maximum security and prosperity, wherever they have chosen to live. That means we have to guarantee not only their right of residence but also the proper coordination of social security systems on both sides of the English Channel.348 In an interview with the Daily Telegraph in February 2017, PiS chair Jarosław Kaczyński’s summarised Poland’s position on Brexit: Officially everyone loves the United Kingdom and doesn't want to give them a hard time, but some people really want to make it as tough as possible for the United Kingdom. Meanwhile some of us would like to sustain a kind of partnership with the United Kingdom. Not within Europe - since you do not wish to remain inside - but very close and friendly relations from outside the European Union. Poland belongs to the second category of voices.349 In its Project Brexit study of the positions of the EU27, the Whitehouse Consultancy identified Poland’s Brexit priorities as follows: Poland has urged London to protect its 831,000 nationals in the UK following the murder of a 40-year-old Polish man. The country’s priority will be to secure the rights of those citizens currently residing in the UK. Furthermore, Poland sees the UK as its key ally in pushing a tough line on Russia over its conflict with Ukraine and in defence cooperation. Poland wants to maintain its relationship with the UK as a powerful NATO partner.

346 Daily Telegraph, Poland stands ready to help its old friend Britain reach the best possible Brexit deal, 27 November 2016 347 Ibid. 348 Ibid. 349 Daily Telegraph, Warsaw will make pact against EU states that seek to punish Britain over Brexit, says Polish leader, 7 February 2017

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As a recipient of EU funds, Poland’s concern will also be what happens to the EU budget after the UK – a large contributor – leaves. The UK and Poland have been close allies in the EU for many years and very often saw eye to eye on issues related to the EU’s competences and the transition of powers from Member States to Brussels.350 In a Chancellery press release in December 2017 Prime Minister Morawiecki welcomed agreement on the first phase of negotiations “in a form which is very favourable to us”. He said Polish interests in the UK and the rights of Poles in the UK had been secured.351 Prime Minister Morawiecki: UK can’t have cake and eat it Speaking to the BBC at the Davos World Economic Forum on 24 January 2018, Morawiecki stressed that the UK would need to fulfil certain obligations if it wished to retain “privileged access to the single market”: There has to be some price for full access and to what extent this access is going to be available has to be made dependent on some other contributions, potentially including this financial contribution. He reminded the UK that it could not “have … and eat the same cake”. He thought “there was a small chance that Britain could remain in the EU” and that although he respected the referendum decision, “maybe there will be other ways for the UK [to remain] as part of the EU”. However, if this was not the case, he hoped “the deal between the UK and EU will be as positive for both parties as possible, because I don't want to punish anybody”. The future relationship On the future UK-EU relationship, Mr Morawiecki referred to the relationships Norway and Switzerland have with the EU as possible models to follow: I would like to indicate two other nations and countries which are [in a different position] - one of them is part of the EEA [the European Economic Area] like Norway, and they do have some financial contribution for the whole of the EU. The other one is where we are today, Switzerland, which has a series of bilateral agreements. So I think there are examples of how the new agreement can be shaped so that there is a real convergence, a real integration between the UK and the EU, despite Brexit. Mr Morawiecki concluded that there were examples of how a new agreement could be “shaped so that there is a real convergence, a real integration between the UK and the EU, despite Brexit”.352 In September 2018, The Times reported that Poland was among a group of countries (including Hungary, Sweden, Denmark, the Netherlands and

350 Whitehouse Consultancy – Project Brexit Poland web. Accessed 17 July 2018 351 Prime Minister/s website (English version), Prime Minister Morawiecki: on Brexit, Polish interests have been secured, and the voice of Polish government on migration has become to be heard better, 15 December 2017. 352 BBC News, Polish PM says UK must pay for EU access, 24 January 2018

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Belgium) at the Salzburg summit pushing for the EU to engage with the UK’s Chequers proposals.353 Call for more EU flexibility in negotiations On 20 September 2018, Politico reported that Poland had broken ranks with the rest of the EU27 at a meeting of the General Affairs Council on on Brexit strategy, suggesting that the EU’s negotiating guidelines might need to be rewritten in October if a Brexit deal was still out of reach. Polish Minister for EU Affairs Konrad Szymański reportedly called for “flexibility” and proposed amending the Council's guidelines “if the need arises in October” but did not receive support from other ministers at the meeting. A diplomat present at the meeting reportedly said that the Polish view “was in total isolation”. Brexit preparations Several ministries have been analysing the potential impact of no deal: “The government is determining how many additional customs agents will be required and is investigating measures to limit the risks to business”.354 Deputy Foreign Minister Szymański said in July 2018 that Poland had been “making preparations to assess a ‘no deal’ Brexit both from a financial point of view, as well as with regard to business, administration and citizens’ rights”.355

The Visegrad Group website reported on the Government’s preparations for business: Poland's Ministry of Entrepreneurship and Technology (MPiT) wants to prepare companies, accountants and tax advisors for the UK's departure from the EU. It has started a mailing campaign to help them adapt to Brexit-related changes. “The results of the negotiations concerning the exit of Great Britain from the EU are still unknown”, the ministry noted. “Polish businesspeople should therefore prepare for several possible scenarios. Each of the variants means great changes for businesses that import and export goods and services to and from Great Britain or are part of the production- delivery chain which ends there”, it added.356 UK citizens in Poland The Polish Government published a draft law in January 2019 to give the estimated 6,000 UK citizens in Poland residency status without having to change their status to immigrants from a third country. Those who have been in Poland for more than five years would be given permanent residence and those who have been in Poland for fewer than five years would be given a three-year temporary residence permit. The card will have

353 The Times, Discord in Salzburg after Theresa May hits all the wrong Brexit notes, 21 September 2018 354 Bloomberg, How Europe Is Bracing for Messy Brexit: Dogs, Drones, Do Nothing, 19 July 2018 355 Poland in English, Poland preparing for ‘no deal’ Brexit: deputy minister, 20 July 2018 356 Visegrad Group, Ministry aims to ready firms, accountants and tax advisors for Brexit, 25 October 2018 182 The EU27: Internal Politics and Views on Brexit

the word Brexit on it, making it distinguishable from the normal residency permit, and would give holders the right to work in Poland. It will also protect the rights of non-EU spouses of Britons. UK citizens would have until 30 March 2020 to confirm their rights by obtaining a temporary residence permit or permanent residence in the country. Applications registered later would not be considered. Allow UK to exit backstop after five years On 20 January 2019 Poland’s Foreign Minister Jacek Czaputowicz suggested that, if Ireland agreed, the backstop could be limited to a five year period. He told a Polish newspaper that “courageous actions” were now needed to find an agreement to avoid no deal and said: If Ireland turned to the EU about changing the agreement with Britain with regard to the provisions on the backstop so that it would only apply temporarily — let’s say five years — the matter would be resolved. It would obviously be less favorable for Ireland than an unlimited backstop, but much more favorable than a no-deal Brexit, which is inevitably approaching. Mr Czaputowicz said London and Dublin were “playing chicken” over the Border and risked a “head-on collision” in which Ireland stood to “lose the most” Mr Czaputowicz said he had raised the suggestion in December with his UK and Irish counterparts, Jeremy Hunt and Simon Coveney. The suggestion was rejected by Mr Coveney and Mr Coveney was supported in this by the German Foreign Minister Heiko Maas. In a BBC interview on 24 January, Prime Minister Morawiecki, said his minister's comments were an attempt to be more creative in the fight for any compromise that avoided a hard Brexit. Prime Minister Morawiecki said that the negotiation was now over and the ball was now in Mrs May's court. He said a no deal Brexit would be damaging for the UK, Poland and the whole EU. Prime Minister Morawiecki also called for Polish nationals in the UK to return to Poland. He said: “more and more are coming back and I'm pleased about that because there is a low level of unemployment... Give us our people back". But he said people who want to stay in the UK should be allowed to “and be treated exactly as they are now” and that Mrs May had given him that commitment. Article 50 extension On 13 March Mr Czaputowicz was supportive of extending Article 50 and steps to avoid the UK leaving the EU without a deal, telling the Polish parliament: We take the position that Brexit without a deal is the worst scenario, which is why we are going to seek solutions which will allow for the acceptance of the negotiated agreement. He later told reporters: 183 Commons Library Briefing, 2 May 2019

We are observing what is happening in Great Britain, the voting. There is a certain expectation when they conclude. Maybe we will have to meet the needs of the British authorities and the public and extend that period a little bit, maybe a little more time is needed for reflection. Arriving at the European Council meeting on 10 April to discuss the second UK extension request, Prime Minister Morawiecki said he supported possibly a “long extension” because of the dangers of a no-deal Brexit. He said: From the very beginning of Brexit negotiations, Poland has been stressing that we have to do everything to avoid Brexit without the Withdrawal Agreement in place . . . Hard Brexit means chaos for citizens, businesses which needs to be avoided. That is why we support possibly long extension, significant postponement of Brexit so that the U.K. could overcome the ratification crisis. Earlier in the day, Poland’s EU Affairs Minister Konrad Szymański told Politico that awareness of the “political and economic damage of no deal” was growing among the EU27 and that the European Council would “have to find a proper way to avoid no-deal Brexit”. At the same time, he said “we have to secure our own future free from unnecessary turbulences. It is possible”. 184 The EU27: Internal Politics and Views on Brexit

22. Portugal 22.1 Key facts 1. Government and Politics Head of State: President Head of Government: Prime Minister António Costa Last election: Presidential, 24 January 2016 Next election: Legislative, by October 2019 2. Finance and the Economy GDP (2017): €237 billion (GDP per head: €23,000) GDP average growth 2014-2018: 2.2% GDP growth 2019 (interim forecast, Feb 2019): 1.7% Net contribution to EU budget per head 2017: -€237 Currency: euro 3. Trade with UK Trade with UK as % of GDP: 5.3%

UK trade with Portugal, 2017 £ millions Exports Imports Balance Goods 1,430 2,971 -1,541 Services 940 2,941 -2,001 Total 2,370 5,912 -3,542 Source: ONS Pink Book

4. Views on EU 53% of Portuguese have a positive view of the EU (net positive: +41%) 45% of Portuguese agree that their voice counts in the EU (net voice counts: -6%) 55% of Portuguese trust the EU (net trust: +19%) 87% of Portuguese are in favour of free movement 78% of Portuguese feel like a citizen of the EU 5. Portuguese nationals in the UK 235,000 (ONS estimate for Jan to Dec 2017)

22.2 Background357 The authoritarian regime established by António de Oliveira Salazar was overthrown in 1974 in a coup initiated by military officers in the Armed Forces Movement, deposing Salazar’s successor Marcello Caetano. In 1975

357 Portugal, Europa World online. London, Routledge. Retrieved 15 October 2018 185 Commons Library Briefing, 2 May 2019

a transition to civilian government commenced and in 1986 the first civilian President, Mário Lopes Soares, was elected. The President is elected by popular vote for a five-year term. The President appoints the Prime Minister and, on the latter’s proposal, other members of the Government in the Council of Ministers. Portugal has a unicameral Parliament, the Assembleia da República (Assembly of the Republic), which has a minimum of 180 and a maximum of 230 members, elected under a system of proportional representation by the electoral constituencies for four years. Portugal joined the EC on 1 January 1986 and adopted the Euro in 1999. 22.3 Current Government and recent political developments358 The Socialist Party (Partido Socialista - PS), led by José Sócrates, won legislative elections in February 2005; it was re-elected as a minority Government in September 2009, but Sócrates resigned in March 2011. At the general election in June 2011, the centre-right Social Democratic Party (Partido Social Democrata - PSD) led by won the largest number of seats and formed a government with the conservative Social Democratic Centre- People’s Party (Centro Democrático Social- Partido Popular - CDS-PP). Following elections in October 2015, Passos Coelho was reappointed Prime Minister at the head of a minority PSD/CDS-PP Government which collapsed less than two weeks after its formation. At the end of November 2015, a coalition of the PS and independents took office under António Luís Santos da Costa (PS). Results of the most recent Portuguese elections President359 Presidential Election, 24 January 2016 Candidate Votes % of votes Marcelo Rebelo de Sousa (PSD) 2,411,925 52.00 António Sampaio da Nóvoa (Ind.) 1,061,390 22.88 Marisa Matias (BE) 469,582 10.12 Maria de Belém (PS) 196,720 4.24 Edgar Silva (PCP) 183,009 3.95 Vitorino Silva (Ind.) 152,094 3.28 Paulo de Morais (Ind.) 100,008 2.16 Henrique Neto (PS) 38,982 0.84 Jorge Sequeira (Ind.) 13,771 0.30 Cândido Ferreira (Ind.) 10,585 0.23

358 Ibid 359 President (Portugal), Europa World online. London, Routledge. Retrieved 15 October 2018

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Candidate Votes % of votes Total* 4,638,066 100.00 * Excluding 58,714 blank and 43,778 spoiled votes.

Legislature Assembly of the Republic (Assembleia da República)360 General Election, 4 October 2015 % of Party Votes Seats votes Portugal Ahead alliance* 1,993,921 36.86 102 Social Party (PS) 1,747,685 32.31 86 Left Bloc (BE) 550,892 10.19 19 Unity Democratic Coalition (PCP-PEV) 445,980 8.25 17 Social Democatic Party (PSD)** 81,054 1.50 5 People-Animals-Nature (PAN) 75,140 1.39 1 Others 514,133 9.52 0 Total*** 5,408,805 100.00 230 * An alliance of the Social Democratic Party (PSD) and the People’s Party CDS-PP). ** and the , where the PSD/CDS-PP alliance does not operate. *** Including 112,851 blank and 89,544 spoiled votes. 22.4 Views on Brexit Portugal wants a close relationship with its old ally361 In October 2016, the Portuguese Prime Minister said Portugal wanted a close relationship with the UK both bilaterally and in terms of the UK’s relations with the EU. But Mr Costa warned that restricting freedom of movement would mean the UK not being granted access to the Single Market. Portugal hoped for a “separation [which] is amicable” but was looking to attract companies because of its geographic location, English- speaking talent pool and proximity to London.362 Brexit priorities The Whitehouse Consultancy profile of the EU27’s positions on Brexit summed up Portugal’s priorities as follows: The Prime Minister is confident Portugal will maintain a good relationship with the UK after Brexit. However, as a pro-European country, the main priority for the Portuguese is to ensure unity among the EU27.

360 Assembly of the Republic (Assembleia da República) (Portugal), Europa World online. London, Routledge. Retrieved 15 October 2018 361 The Anglo-Portuguese Treaty of Windsor between King Richard II of England and King John I of Portugal was ratified at Windsor on 9 May 1386. It is often described as the oldest alliance in the world that is still in force. 362 Bloomberg, Portuguese Prime Minister says U.K. ties will weather Brexit,11 October 2016

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For Portugal it will be important to protect the rights of British citizens in the country as many Brits own properties (in) Portugal and yearly provide an economic boost to the tourism industry. The Portuguese Government insists the UK will have to pay a Brexit bill that reflects the commitments the UK has made until 2020. With a vulnerable economy, Portugal wants to avoid any economic setbacks as a result of Brexit.363 In the closing speech of the Portugal-UK business forum at Bloomberg’s London headquarters in April 2018, Prime Minister Costa said: We need to make Brexit an opportunity for our two countries to deepen our special relationships, both politically and economically. What is important now is to minimise the negative consequences [of Brexit] and develop a relationship as close as possible to the United Kingdom.364 Brexit preparations According to Bloomberg, Portugal is not expecting major changes or increases in staff at the ports of Sines and Lisbon from any kind of Brexit: “Almost three-quarters of goods trading at the port of Sines -- the nation’s largest -- is with countries outside the EU, so it’s already well equipped to deal with shipments to and from non-EU nations”.365 Reuters reported: “Portugal is actively courting wealthy British to move and invest there in the run up to Brexit”.366 There have also been bilateral initiatives, such as consolidating an Anglo-Portuguese science partnership involving Imperial College.367 A report by the Confederation of Portuguese Business (CIP) estimated that Portuguese exports to the UK could fall by more than 25%. It recommended that the Government and industry “step up efforts to promote Portugal in the British market, particularly for sectors most at risk such as tourism, electronics and the auto industry”.368 It is not clear to what extent efforts have increased in these industries. Extending Article 50 On 31 January, Portugal’s Foreign Minister, Augusto Santos Silva indicated support for an extension of Article 50 to prolong discussions around alternatives to the Northern Ireland backstop. He said: We have negotiated an agreement and the British parliament now says: we do not like this backstop clause, we have a better one. . . What we are saying is: show us a better one. Still more preferable

363 Whitehouse Consultancy, Project Brexit: What do other countries think? – Portugal 364 Portugal News Online, Brexit an opportunity for Portugal, 12 April 2018 365 Bloomberg, How Europe Is Bracing for Messy Brexit: Dogs, Drones, Do Nothing, 19 July 2018 366 Reuters, Portugal wants Britain to welcome all EU migrants after Brexit, 26 July 2018 367 Portugal resident.com, Portugal and UK “prepare to reinforce scientific collaboration” ahead of Brexit, 24 April 2018 368 Politico, Portuguese business pushes for Brexit deal, 31 October 2018

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would be to prolong, to delay the moment of departure, to have time to rationally revisit all this369. A Portuguese Foreign Ministry statement on 14 March said: Allowing an extension by just some weeks we would create an illusion that the current problem is of a technical nature, when what we've got is a political issue. Arriving at the European Council on 10 April, to decide on the second UK extension request, Prime Minister António Costa said he was not suffering from any Brexit fatigue. Asked whether he was tired of Brexit, he answered he is “never tired about Europe.” Mr Costa also said he believed that EU leaders “should agree on an extension as long as necessary for the United Kingdom” with a “clear and consistent position about the future of the relationship with the UK”. Mr Costa said the EU's primary responsibility was to give citizens and businesses confidence that a no-deal Brexit will be avoided.

369 The Guardian, EU fears short article 50 extension will mean no-deal Brexit in June, 31 January 2019 189 Commons Library Briefing, 2 May 2019

23. Romania 23.1 Key Facts 1. Government and Politics Head of State: President Head of Government: Prime Minister Vasilica-Viorica Dăncilă Last election: Legislative, 11 December 2016 Next election: Presidential, due in 2019 2. Finance and the Economy GDP (2017): €368 billion (GDP per head: €18,800) GDP average growth 2014-2018: 4.9% GDP growth 2019 (interim forecast, Feb 2019): 3.8% Net contribution to EU budget per head 2017: -€171 Currency: leu 3. Trade with UK Trade with UK as % of GDP: 3.4%

UK trade with Romania, 2017 £ millions Exports Imports Balance Goods 1,146 1,910 -764 Services 894 827 67 Total 2,040 2,737 -697 Source: ONS Pink Book

4. Views on EU 52% of Romanians have a positive view of the EU (net positive: +42%) 51% of Romanians agree that their voice counts in the EU (net voice counts: +5%) 50% of Romanians trust the EU (net trust: +9%) 69% of Romanians are in favour of free movement 68% of Romanians feel like a citizen of the EU 5. Romanian nationals in the UK 411,000 (ONS estimate for Jan to Dec 2017) 23.2 Background Following the overthrow of the Communist regime in December 1989, a new Parliament was elected in 1990 with the combined legislatures acting as a constituent assembly to draft a new constitution approved by referendum in December 1991. Under the 1991 Constitution (as amended in 2003), legislative power is vested in the bicameral Parliament, comprising the Chamber of Deputies 190 The EU27: Internal Politics and Views on Brexit

(the lower house), which has 329 seats, and the Senate (the upper house), which has 136 seats. Parliament is elected by universal adult suffrage using a system of proportional representation and party lists for both chambers. Both chambers are elected for four-year terms.370 Executive power is vested in the President of the Republic, who may serve a maximum of two five-year terms and who is directly elected by universal adult suffrage. The President appoints the Prime Minister, who in turn appoints the Council of Ministers.371 Romania joined NATO in 2004 and the EU in 2007. 23.3 Current Government and recent political developments Romania has undergone a period of political turmoil in recent years. Mass demonstrations after the deaths of 32 people in a nightclub fire led to the resignation of the coalition government of Prime Minister (comprising Social Democrats, the Conservative Party and the Liberal Reformist Party) at the end of 2015. The President then appointed former European Commissioner Dacian Cioloș to lead a non-party government supported by the Social Democrats and National Liberal party, which remained in place until legislative elections in December 2016. The Social Democratic Party then formed a government coalition with the Alliance of Liberals and Democrats (a merger of the Conservative Party and the Liberal Reformist Party). Since then tensions over allegations of government corruption have led to the resignation of another two Prime Ministers (both Social Democrats), Sorin Grindeanu in June 2017 and Mihai Tudose in January 2018. Both had clashed with Social Democrat Party leader Liviu Dragnea and then lost the support of the party. In January 2018 Viorica Dăncilă (Social Democrat) became Romania’s first woman Prime Minister. The political tensions stem from divisions between two camps. One supports the anti-corruption investigations led until recently by Laura Codruta Kovesi. This camp includes Klaus Iohannis (then leader of the National Liberal Party), who was elected President in November 2014 after defeating Victor Ponta in the second-round run-off. The other camp is led by Liviu Dragnea, who was convicted of electoral fraud in 2016 and is under investigation for other offences. The 2016 conviction bars him from holding the office of Prime Minister, but he still has substantial influence in the ruling party and is reported to be behind

370 Economist Intelligence Unit, Romania: Political structure, 17 October 2017 371 Constitution and Government (Romania), Europa World online. London, Routledge. Retrieved 15 October 2018

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the Government’s efforts to hamper the anti-corruption investigations and reform the judiciary.372 The EU has become involved in the dispute under the Co-operation and Verification Mechanism, which both Romania and Bulgaria had to sign up to when they joined the EU in 2007. A European Commission report in November 2017 raised concerns about proposed judicial reforms in Romania and Prime Minister Dăncilă has criticised Commission requests which she says are “inappropriate and not in line” with the verification mechanism.373 The Council of Europe’s anti-corruption body also heavily criticised the planned judicial reforms in a report published in April 2018.374 Laura Kovesi was sacked from her role as chief anti-corruption prosecutor in July 2018, after the Constitutional Court ruled that the President did not have the power to prevent her dismissal. Kovesi had previously secured the convictions of several dozen ministers, former ministers and members of parliament.375 There have been several protests against government corruption, as well as pro-Government rallies. In August 2018 over 400 people were reported injured in Bucharest by police using tear gas and water cannon. Former Prime Minister Victor Ponta launched the Pro Romania party in May 2018, leading to the loss of the Government’s majority in Parliament after a number of Social Democrat deputies joined the new party. The Government is now reliant on the support of other minor parties in Parliament, notably the Democratic Alliance of Hungarians. In October 2018, a referendum backed by the Social Democrats to establish a constitutional ban on same-sex marriage failed after failing to reach the 30% turn-out threshold to validate it. On 13 November 2018, the European Commission’s Co-operation and Verification Mechanism progress report for Romania said that recent developments on judicial independence, judicial reform and tackling high- level corruption had “reversed the course of progress” and set out recommendations to remedy the situation. Commission Vice-President Frans Timmermans said that Romania had “re-opened and backtracked on issues where progress was made over the past 10 years” and it was “essential that Romania gets back on track immediately in the fight against corruption and also ensures an independent judiciary”. The European Parliament also adopted a resolution on the same day setting out its deep concerns about the reform of Romania’s judicial and criminal laws.

372 Financial Times, Romania anti-corruption chief hits out at critics, 15 February 2018 373 Politico, Commission chiefs warn Romania against justice law changes, 24 January 2018, and Politico, Commission chiefs warn Romania against justice law changes, 21 March 2018 374 Group of States against Corruption, Ad Hoc Report on Romania (Rule 34), Council of Europe, adopted 23 March 2018, published 11 April 2018 375 Financial Times, Spectre of corruption heightens EU fears over rule of law in Romania, 16 August 2018 192 The EU27: Internal Politics and Views on Brexit

In March 2019, Kovesi was indicted on corruption charges. Earlier in the month, the European Parliament endorsed Ms Kovesi as its candidate to become the first EU chief public prosecutor. On 3 April, Romania’s Supreme Court lifted control measures placed on Ms Kovesi which prevented her from travelling abroad or speaking to the press. Also on 3 April, a joint statement was issued by 12 countries, including the USA, Canada, Germany and France, expressing concern about modifications to Romania’s justice system which carried the risk of “slowing the fight against corruption and undermining judicial independence”. Proposed amendments to the Romania’s penal code would reduce the statute of limitations for several offences, bringing an end to a number of corruption cases. A government decree would also allow retroactive challenges to verdicts of the Supreme Court. On the same day, Vice President of the European Commission Frans Timmermans said the EU needed to see results “urgently” after raising more than 40 areas of rule-of-law concerns with Romania. Mr Timmermans warned against “any governmental action that would disrupt the Romanian judicial system by creating a systemic de facto impunity for high office holders who were sentenced for corruption” and said that “such a move would compel the Commission to act swiftly”. Results of the most recent Romanian elections President376 Presidential Election, First Ballot, 2 November 2014 Candidate Votes % of votes Victor Ponta (PSD*) 3,836,093 40.44 Klaus Iohannis (ACL**) 2,881,406 30.38 Călin Popescu-Tăriceanu (Independent) 508,572 5.36 (PMP) 493,376 5.20 Monica Macovei (Independent) 421,648 4.45 Cristian Dan Diaconescu (PP-DD) 382,526 4.03 Corneliu Vadim Tudor (PRM) 349,416 3.68 Hunor Kelemen (RMDSZ) 329,727 3.48 Others 282,576 2.98 Total 9,485,340 100.00 * In coalition with the Conservative Party (PC) and the for the Progress of Romania Party (UNPR). ** An electoral alliance of the Democratic Liberal Party (PDL) and the National Liberal Party (PNL). Second Ballot, 16 November 2014 % of valid Candidate Votes votes Klaus Iohannis (ACL) 6,288,769 54.43

376 President (Romania), Europa World online. London, Routledge. Retrieved 15 October 2018 193 Commons Library Briefing, 2 May 2019

Victor Ponta (PSD) 5,264,383 45.56 Total 11,553,152 100.00

Klaus Iohannis was duly elected President.

Legislature Romania has a bicameral Parliament, comprising the Chamber of Deputies and the Senate. Chamber of Deputies (Camera Deputaţilor)377 General Election, 11 December 2016 % of Party Votes Seats votes Social Democratic Party (PSD) 3,204,864 45.48 154 National Liberal Party (PNL) 1,412,377 20.04 69 Save Romania Union (USR) 625,154 8387 30 Democratic Alliance of 435,969 6.19 21 (RMDSZ) Alliance of Liberals and Democrats (ALDE) 396,386 5.62 20 People’s Movement Party (PMP) 376,891 5.35 18 Others 595,743 8.45 17 Total 7,047,384 100.00 329

Senate (Senatul)378 % of Party Votes Seats votes Social Democratic Party (PSD) 3,221,786 45.68 67 National Liberal Party (PNL) 1,440,193 20.42 30 Save Romania Union (USR) 629,375 8.92 13 Democratic Alliance of Hungarians in Romania 440,409 6.24 9 (RMDSZ) Alliance of Liberals and Democrats (ALDE) 423,728 6.01 9 People’s Movement Party (PMP) 398,791 5.65 8 Others 498,684 7.08 0 Total 7,052,966 100.00 136

23.4 Views on Brexit The EU’s four freedoms In a speech at the Romanian Embassy in November 2016, Ambassador to the UK Dan Mihalache said that Romania “promotes the importance of maintaining the integral and inseparable four main principles on which the EU is based”. Assuring the rights of Romanian citizens in the UK remained

377 Chamber of Deputies (Camera Deputaţilor) (Romania), Europa World online. London, Routledge. Retrieved 15 October 2018 378 The Senate (Senatul) (Romania), Europa World online. London, Routledge. Retrieved 15 October 2018 194 The EU27: Internal Politics and Views on Brexit

“an unconditional priority” for the Government and “any sort of collaboration with London will not be done to their detriment”. Economic and security concerns In May 2017 Foreign Minister Teodor Melescanu said Romania wanted “a post-Brexit accord with UK that keeps them as close as possible to the European Union”. A Brexit deal was important for Romania for financial reasons but also because of the UK’s potential contribution to European security and defence.379 In July 2018 President Iohannis was confident the probability of not reaching a Brexit agreement was “very low” and that the EU27 all wanted to avoid a hard Brexit. Brexit priorities In October 2017 Minister Delegate for European Affairs Victor Negrescu emphasised the importance of protecting the rights of Romanian citizens and their families in the UK. Romania’s other priorities, according to a press release from the Romanian Embassy in London were: … safeguarding the European budgetary provisions for the Cohesion Policy and the Common Agricultural Policy corresponding to the current multiannual financial framework; to strengthen cooperation between the European Union and the UK after the conclusion of the Brexit process in the field of security and foreign relations. EU reform needed These principles were also set out in a statement from the then Prime Minister, Sorin Grindeanu, in March 2017. He also called for further EU reforms to bring more cohesion among Member States and greater democratic legitimacy: The European Union needs a new breath, a reform in order to cope with the current challenges, one to secure economic development, more cohesion and to bridge the gaps between the member states, which therefore would bring it more legitimacy in front of its own citizens. EU cannot continue without the support of its own citizens. Domestically, we need ourselves the support of all citizens to efficiently promote Romania’s interests in the European project. I think there is no alternative to this road. Cohesion funding must continue The Romanian Government has emphasised the need to maintain EU Cohesion Funding and strong co-operation between the UK and the EU in security and foreign relations, as well as the integrity of the Single Market. Romanian Presidency of the EU Romania holds the Presidency of the Council of the EU in the first half of 2019. On 27 February, George Ciamba, Minister for European Affairs for Romania, said that the EU was ready to respond to any UK request for an extension to

379 Reuters, East Europeans push for soft Brexit deal, say UK must not be punished, 26 May 2017 195 Commons Library Briefing, 2 May 2019

the Brexit timetable, and that problems such as the European Parliament elections could be overcome if there is the political will. Speaking from the EU General Affairs Council in Brussels on 19 March (which he was chairing), Mr Ciamba said: We were saying all the time that we need to have more clarity from London. Clearly, there is no clarity. There is less clarity today than ... yesterday. We are still looking forward to the European council and to see what is going to be the political will from London. At the end of the day, be it the speaker of the house, be it the prime minister, be it the members of parliament, I think it’s about the political will and about a little bit more clarity what Europe could do, because we know very well what Europe cannot do. Following the EU General Affairs Council on 9 April (and the day before the European Council considered the UK’s second Article 50 extension request) Mr Ciamba said that the UK would need to have a clear plan to justify the extension. He welcomed the UK decision to hold EP elections, but said that no deal was still a possibility and that EU ministers were united behind the idea that the WA was the best possible and only possible agreement. He said the EU would prepare for all options but did not want to see no deal. He said that EU leaders would take two things into account; the fact that the UK is holding European elections, and the UK Government talks with the Labour party. Arriving at the European Council meeting on 10 April, President Iohannis told reporters that “based on the conversation of the last hours, things show that generally people are open to accepting an extension and our position is that we cannot accept at this stage a no-deal Brexit.” However, he said there would need to be guarantees from the UK. He said “For sure we will need some very clear things from the UK”.

196 The EU27: Internal Politics and Views on Brexit

24. Slovakia 24.1 Key Facts 1. Government and Politics Head of State: President Head of Government: Prime Minister Last election: Presidential, March 2019 Next election: Legislative, March 2020 2. Finance and the Economy GDP (2017): €124 billion (GDP per head: €22,900) GDP average growth 2014-2018: 3.6% GDP growth 2019 (interim forecast, Feb 2019): 4.1% Net contribution to EU budget per head 2017: -€175 Currency: euro 3. Trade with UK Trade with UK as % of GDP: 4.9%

UK trade with Slovakia, 2017 £ millions Exports Imports Balance Goods 470 2,451 -1,981 Services 377 222 155 Total 847 2,673 -1,826 Source: ONS Pink Book

4. Views on EU 33% of Slovakians have a positive view of the EU (net positive: +16%) 49% of Slovakians agree that their voice counts in the EU (net voice counts: +6%) 43% of Slovakians trust the EU (net trust: -4%) 81% of Slovakians are in favour of free movement 77% of Slovakians feel like a citizen of the EU 5. Slovakian nationals in the UK 82,000 (ONS estimate for Jan to Dec 2017) 24.2 Background After the end of Communism in Czechoslovakia and the establishment of the Czech and Slovak Federative Republic (CzSFR) in 1990, pressure for Slovak secession led to a declaration of Slovak sovereignty by the Slovak National Council in 1992 and the establishment of separate Czech and Slovak Republics in 1993. 197 Commons Library Briefing, 2 May 2019

Under the 1993 Slovak Constitution, supreme legislative power is vested in the Národná rada Slovenskej republiky (National Council of the Slovak Republic), which has 150 members elected for a term of four years. The President of the Republic (head of state) was originally appointed by the National Assembly, but this became a directly-elected office following a constitutional amendment in 1999. The President appoints the Prime Minister and, on the latter’s recommendation, the other members of the Government. The Government is responsible to the National Council. Slovakia joined both NATO and the EU in 2004, adopting the Euro in 2009. 24.3 Current Government and recent political developments The centre-left Direction - (Smer-Sociálna demokracia), led by , has been the main governing party in Slovakia since 2012. It won an outright majority of seats with 44.4% of the vote in the 2012 legislative elections. Following the 2016 elections, despite its vote share falling to 28.3%, it remained the largest party and formed a governing coalition with the Slovak (SNS) and two other smaller parties. Robert Fico was Prime Minister from 2012 until March 2018. He also stood in the 2014 Presidential election but was defeated in the second round by independent candidate Andrej Kiska. National Council of the Slovak Republic (Národná Rada Slovenskej republiky)380 General Election, 5 March 2016 % of Party Votes Seats votes Direction – Social Democracy (Smer-SD) 737,481 28.28 48 (SaS) 315,558 12.10 21 Ordinary People and Independent Personalities (OL’aNO) 287,611 11.03 19 (SNS) 225,386 8.64 15 People’s Party – Our Slovakia (Kotleba) 209,779 8.04 14 We Are Family (Sme Rodina) 172,860 6.63 11 Bridge (Most/Híd) 169,593 6.50 11 Network (SIEŤ) 146,205 5.61 10 Others 343,277 13.16 0 Total valid votes 2,607,750 100.00 150

Mr Fico resigned as Prime Minister in March 2018, following the murder of a investigating links between Italian organised crime and Slovakian Government officials, which led to mass anti-government demonstrations.

380 National Council of the Slovak Republic (Národná Rada Slovenskej republiky) (Slovakia), Europa World online. London, Routledge. Retrieved 16 October 2018 198 The EU27: Internal Politics and Views on Brexit

Peter Pellegrini, previously deputy Prime Minister, was appointed Prime Minister. Pellegrini formed a new government based on the same four- party coalition. Fico has remained as leader of the Smer party. Anti- government protests have continued since the formation of the new government, with calls for fresh elections.381 Zuzana Čaputová of the liberal Progressive Slovakia party, established in 2017, won the Presidential election in March 2019 defeating European Commission Vice-President Maroš Šefčovič in the second round. Mr Šefčovič had the backing of Smer. Ms Čaputová fought on an anti- corruption platform and had not previously run for public office. She becomes Slovakia’s first female president. Further results of the recent Slovakian elections President382 Presidential Election, First Ballot, 16 March 2019 Candidate Votes % of valid votes Zuzana ČAPUTOVÁ 870,415 40.57 Maroš ŠEFČOVIČ 400,379 18.66 Štefan HARABIN 307,823 14.34 Marian KOTLEBA 222,935 10.39 František MIKLOŠKO 122,916 5.72 Béla BUGÁR 66,667 3.10 Milan KRAJNIAK 59,464 2.77 Eduard CHMELAR 58,965 2.74 Others 31,274 1.46 Total 2,145,364 100.00

Second Ballot, 30 March 2019 Candidate Votes % of valid votes Zuzana ČAPUTOVÁ 58.4 Maroš ŠEFČOVIČ 41.6

24.4 Views on Brexit Slovakian EU Presidency – recent EU Members must be involved The then Prime Minister Robert Fico said after a meeting of the leaders of France, Germany and Italy in June 2016 that “[c]rucial decisions about the future of Europe cannot be defined by two, three member states, or the founding states of the EU”, and that “[t]he future of the EU can no longer

381 Recent developments: political crisis and new Government (Slovakia), Europa World online. London, Routledge. Retrieved 12 October 2018 382 Election Guide

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be defined without active involvement of the states that joined after 2004”.383 Slovakia took over the EU Presidency on 1 July 2016. In July 2016 Robert Fico made a plea for EU reform: the EU should use the time waiting for the UK Government to trigger Article 50 to reconsider its role: “We simply have to author a new vision for our people, otherwise we will see further fragmentation and destabilisation of European political systems”.384 In September 2016, at an EU Leaders’ meeting in , Mr Fico warned that the Visegrad Group would veto a Brexit agreement unless the rights of their citizens in the UK post-Brexit were guaranteed; the V4 would be “uncompromising”.385 He supported the EU position of opposing any UK ‘cherry-picking’ in the negotiations, insisting that the EU’s founding freedoms must remain.386 Fico – the EU will make Brexit ‘painful’ In an interview with the Financial Times in September 2016, Mr Fico, in contrast to many other EU leaders, said the EU would make Brexit “very painful” and would ensure the UK is worse off outside the EU.387 Britain would not be allowed to make EU workers “second class citizens” while continuing to enjoy the benefits of the Single Market.388 He appeared to emphasise that the EU’s stance in the negotiations would be to ‘punish’ the UK to deter other potential leavers: It will be very difficult for the UK, very difficult… The EU will take this opportunity to show the public: “listen guys, now you will see why it is important to stay in the EU”. This will be the [EU] position. The Visegrad Four have also been concerned about France and Germany setting the Brexit agenda.389 Citizens’ rights a priority While expressing respect for Theresa May, Mr Fico said he “pitied” her predicament and dismissed the idea that the allure of Britain’s economy would make the EU bend to UK Brexit demands.390 He also commented on the “nervousness and fear” in eastern Europe over the UK’s free movement demands, and said the “equal treatment” of his citizens in the UK would be his “most important” demand if Britain wanted access to the Single Market:

383 Euro News, Slovakia attacks EU post-Brexit direction on eve of taking over presidency, 30 June 2016 384 Euractiv, Britain wants bespoke Brexit that deals with immigration, 28 July 2016 385 Daily Telegraph, Brexit deal threatened with veto by four countries unless Theresa May guarantees their citizens right to work in Britain, 17 September 2016 386 Ibid 387 Financial Times, Slovakia says Europe will make Brexit ‘very painful’ for UK, 18 September 2016 388 Ibid 389 Euractiv, ECR chief: EU27 Brexit unity only on the outside, 28 September 2018 390 Ibid

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All we want is to be treated the same [as British workers], he said. If that happens, then this divorce could be a success. But even then it will be more painful for the UK.391 Mr Fico said European leaders would not “send Britain to hell as soon as possible”, adding: We are patient. We are fine because we know what we want .. . The question is whether Britons know what they want? That is the mystery. Is it an issue of unpreparedness? Or tactics? It seems to me like unpreparedness. They are still in shock.392 Fico welcomed Theresa May’s Lancaster House speech At an event marking the end of the Slovak EU Presidency in January 2017 and following Theresa May’s Lancaster House speech on the UK’s approach to the Brexit negotiations, Prime Minister Fico said he welcomed the clarification of the UK position. He said: This sends a long-needed signal on the orientation of the British government’s thinking. I hope that it will calm down the markets and also bring real hope that the long uncertainty surrounding Brexit will start to dissipate soon. Of course, we acknowledge decisions on preferences of the British government and will adopt stances on them in the next phases accordingly. Prime Minister Fico also stressed that his government would put the interests of its citizens first as well as the wider EU project. He said: “If Great Britain talks about its citizens and its country, we will talk about our citizens and our country and the project we care so much about – the project of the EU”. Brexit must not weaken the EU Robert Fico again asserted that leaving the EU should not weaken the EU or strengthen Britain – this would be “the worst example set for each and every single country for EU, where public pressure to leave the EU might be felt”.393 In March 2017 the Prime Minister made this point more strongly to the Slovak state broadcaster RTVS: This 'divorce' between the United Kingdom and the European Union should result in a victory of the European Union. If the United Kingdom reaches more beneficial conditions during the talks, it will be a bad example for people, who want to leave the European Union. That's why I believe that we will secure conditions that would be more beneficial for us than for the United Kingdom. Otherwise it would be an absolute political defeat (of the EU).394 Slovak Government objectives are aligned with the EU’s Following agreement of the EU27 Guidelines for the Brexit negotiations in April 2017, Foreign Minister Miroslav Lajčák confirmed that they reflected

391 ibid 392 Ibid 393 The Slovak Spectator, Fico: EU should not emerge from Brexit talks weakened and UK strengthened, 19 January 2017. 394 Sputnik News, EU-UK 'Divorce' Should Result in Brussels' Victory - Slovak PM, 29 April 2018.

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Slovakian objectives, primarily the interests of Slovak citizens in the UK and the need for the UK to observe its financial commitments towards the EU up to 2020.395 He also said the status of Slovak citizens and entrepreneurs in the UK was likely to worsen, but that the EU was committed to minimising the changes. Lajčák, like so many other EU27 governments, stressed the unity of the EU27 in agreeing the guidelines for negotiations and the negative impact of Brexit on UK-EU relations: We all pledged our support to chief negotiator Michel Barnier and I'd like this spirit of unity to last during the Brexit negotiations. Even if a possible deal on collaboration between the EU and the UK is hammered out, mutual relations will never match those seen before the Brexit.396 The then President, Andrej Kiska, addressed the European Parliament in November 2017, stressing the importance of “solidarity and mutual trust” in the EU and rejecting “the idea that there are some fundamental flaws in the architecture of the EU that will lead us to a bleak future”. 397 Mr Kiska refused to play the “popular game of ‘Blame-it-on-Brussels’ whenever it serves to cover some pressing domestic political issue”. However, he would not “downplay dangers of populism, nationalism and extremism fuelled by dissatisfaction in our societies and amplified by professionally orchestrated propaganda” or “underestimate the consequences of Brexit or real challenges we need to address in the monetary union, border protection or elsewhere”. Kiska: the EU is a success story Kiska said the EU was not “a sinking ship” and did not have to “radically reform the way we operate” but rather there was a need “to focus on what the EU members have mastered during 60 years of integration — solving the issues together, helping each other and learning from each other”.398 President Kiska also described the enlargement of the EU “as the most successful EU policy since the fall of the Berlin wall” and “the most important contribution of European politicians of the past three decades to keep the continent peaceful, free and prosperous”.399 Brexit could bring Slovaks home In March 2018, the Central European Financial Observer reported that a meeting of the Inter-ministerial Coordination Group for Brexit and representatives of employers and the non-governmental sector had concluded that Brexit provided an opportunity for Slovakia to attract back

395 The Slovak Spectator, Lajčák: Brexit guidelines are in line with Slovak interests, 27 April 2017 396 Ibid 397 President Kiska addressed the European Parliament, President of the Slovak Republic, press release, 15 November 2017. 398 Ibid 399 Ibid

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home Slovaks living in the UK. The President of the Association of Employers Unions, Tomas Malatinsky, saw it as an opportunity to get back a “workforce of great quality”.400 Pellegrini confirms solidarity with EU except on refugee quotas At his first EU Leaders’ summit in Brussels in March 2018, new Prime Minister Peter Pellegrini reassured EU partners that his Government would “maintain a pro-European course”.401 At his first meeting with Commission President Jean-Claude Juncker in April 2018, Mr Pellegrini said Slovakia was prepared to contribute more to the EU’s budget if required after the loss of the UK contribution. However, he reiterated his Government’s rejection of the EU’s refugee quotas and said Slovakia would relocate only Christian Syrians for the time being.402 In a section on Slovakia in ‘Europe’s Brexit’,403 Vladimír Bilčík of , Bratislava, thought that despite intra-EU clashes over the refugee crisis, “Slovakia’s longstanding goal has been to solidify its place at the Union’s political core so as to help preserve the EU’s broader political cohesion against its growing problems”. The Brexit decision “was a challenge that could undermine the strength of the EU’s liberal economic unity and voice”. Pellegrini was critical of the UK’s Chequers Plan: “Britain's notion of keeping for itself only the free movement of goods is unacceptable for other EU members”; the EU, he said, wanted respect for all four key freedoms - goods, services, people and capital.404 Slovak concerns: trade, exports, economic and political damage Vladimír Bilčík explained that Slovakia’s main objective was to minimise the costs of Brexit (in terms of rights and financial position) to its 80,000 to 90,000 citizens resident in the UK. Maintaining free trade in goods was also important, with Slovak exports to the UK accounting for 5% of its exports (making the UK Slovakia’s eighth largest export market). Bilčík referred to Slovak fears “that Brexit might herald a new era for the EU marked by disintegration”, explaining that: A hard and chaotic Brexit for the UK and the EU would challenge Slovakia’s aims for the EU’s future by undermining the strength of the EU’s unity and its liberal economic voice. In anticipation of this, Slovakia approached intra-EU talks on future EU-UK relations with a strong interest in minimizing the political and economic damage to

400 Central European Financial Observer, Brexit may help alleviate increasing labor shortages in Slovakia, 14 March 2018 401 Reuters, Breathless in Brussels, new Slovak PM vows loyalty to EU, 22 March 2018 402 New Europe, Pellegrini offers more contributions to EU budget during debut meeting with Juncker, 13 April 2018 403 Tim Oliver (ed), Europe’s Brexit – EU Perspectives on Britain’s Vote to leave, Agenda Publishing, 2018 404 Slovakia supports extraordinary summit on Brexit, Visegrad Group website, 20 September 2018

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the Union from any unintended consequences of Britain’s decision to leave. Slovakia is preparing for any Brexit outcome Prime Minister Pellegrini said in November 2018 that to prepare for a potential hard Brexit, the Slovak Government would “intensify its steps [to mitigate the effects of] the UK leaving the EU without any deal”. A no-deal Brexit would be the worst-case scenario for Slovakia, but he said the country had “good economic development” and low unemployment, and should be able to cope. But he was concerned about the possible impact on industry, rail and air transport, and the situation of Slovaks living and working in the UK.405 In December 2018 Foreign Minister Miroslav Lajčák said in response to the delay in the UK Parliament’s ‘meaningful vote’ on the Withdrawal Agreement that the effects of a no-deal Brexit on the Slovak economy “are expected to be minimal”. 406 In January 2019 Mr Pellegrini committed to putting in place through a fast- track legislative procedure “all necessary legislative changes” in the event of a no-deal Brexit”. He said Slovakia would be “ready for all [Brexit] alternatives” and would “adopt sufficiently in advance … legislation that will respond in detail to what is going to happen in reality.407 Foreign and European Affairs Minister, Miroslav Lajčák, confirmed at the end of January 2019 that “measures [to mitigate] the effects of Brexit”408 would be submitted to the Slovak Parliament by mid–February, whether the UK leaves the EU with a deal or not. Slovakia aims to make all necessary legislative and administrative changes necessary to ensure that UK citizens living, working and studying in Slovakia before exit day will enjoy rights similar to those of EU citizens, on the basis of UK reciprocity.409 Slovakian lessons for the UK? The Slovak Spectator has reported on an ambivalent attitude towards the EU, suggesting there might be a lesson here for the UK: Slovaks gladly accept the financial benefits and personal freedoms that flow from membership – all the while remaining sceptical of its aims and institutions. A poll conducted by the Focus polling agency for the European Commission office in Slovakia in February found that most people wanted the EU to act in every area they were asked about – including

405 Slovak Spectator, Slovakia should prepare for hard Brexit, 7 November 2018 406 Slovak Spectator, Lajčák: Hard Brexit is the worst scenario, 20 December 2018 407 News Now (TASR), Pellegrini: Government Wants to Submit Laws Related to Brexit in Mid-February, 21 January 2019 408 News Now, Lajcak: Brexit Measures Should Be Approved by House in March, 30 January 2019 409 Slovak Spectator, Brits living in Slovakia to have the same rights as EU citizens after Brexit, 22 January 2019

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an astonishing 80 percent who thought the EU should create joint armed forces to protect the country.410 Slovakia supports a short extension of Article 50 Miroslav Lajčák said in January 2019 that the “Brexit agreement [was] very good”, the EU 27 supported it and saw “no reason to re-open [negotiations]”.411 Discussing the UK Parliament’s decision not to vote in favour of the Brexit agreement, Lajčák said “[potentially] all possibilities [were] still open in connection with Brexit”, but EU foreign ministers (who met on 21 January) wanted first to hear what the UK wanted and what Theresa May intended to do next.412 Weighing up the alternatives, Lajčák said: … a hard Brexit would be harsh and we are getting closer to it … [I’m hoping that common sense will prevail and that the Brexit] agreement [will be seen] as equally [balanced with advantages and disadvantages for both the EU and UK alike].413 He saw “the possibility of postponing the departure of the UK from the EU, [but only] if there are good reasons. If there are not, it will only prolong the agony”. He thought re-opening the negotiations would be like opening Pandora’s Box.414 Prime Minister Pellegrini supported a short delay to Brexit until the EP elections in May, but criticised the UK for voting “on something every other day but it’s leading nowhere”. Although he is against changing the negotiated Withdrawal Agreement,415 he would consider changes to the political declaration on the framework for future EU-UK relations.416 New President Čaputová is pro-EU The new Slovakian President, Zuzana Čaputová (Progressive Slovakia), who won the second round of presidential elections on 31 March, will be sworn in on 15 June. She is often described as a pro-European liberal and her platform included closer economic and defence integration with the EU. Bloomberg reported that “[t]hough her new post is largely ceremonial, her rise was hailed by liberals across the EU”.417 She is unlikely to be very sympathetic to the UK about Brexit but it is still too early to say.

410 The Slovak Spectator, What Slovakia could teach Britain, 23 March 2019 411 The Slovak Spectator, Lajčák: Brexit agreement is good, there is no reason to re-open it, 22 January 2019 412 Ibid 413 Ibid 414 Ibid 415 Reuters.com, Slovak PM says EU has no intention of reopening Brexit deal, 13 December 2018 416 AP News, The Latest: Dutch PM: Britain could walk out without deal, 22 March 2019 417 Bloomberg, Nationalists Bent on Reshaping EU Dealt Setback in Slovakia, 1 April 2019 205 Commons Library Briefing, 2 May 2019

25. Slovenia 25.1 Key Facts 1. Government and Politics Head of State: President Dr Head of Government: Prime Minister Marjan Šarec Last election: Legislative, 3 June 2018 Next election: Legislative and presidential, due in 2022 2. Finance and the Economy GDP (2017): €53 billion (GDP per head: €25,500) GDP average growth 2014-2018: 3.7% GDP growth 2019 (interim forecast, Feb 2019): 3.1% Net contribution to EU budget per head 2017: -€56 Currency: euro 3. Trade with UK Trade with UK as % of GDP: 2.3%

UK trade with Slovenia, 2017 £ millions Exports Imports Balance Goods 157 331 -174 Services 215 116 99 Total 372 447 -75 Source: ONS Pink Book

4. Views on EU 38% of Slovenians have a positive view of the EU (net positive: +20%) 50% of Slovenians agree that their voice counts in the EU (net voice counts: +5%) 37% of Slovenians trust the EU (net trust: -19%) 89% of Slovenians are in favour of free movement 72% of Slovenians feel like a citizen of the EU 5. Slovenian nationals in the UK 5,000 (ONS estimate for Jan to Dec 2017) 25.2 Background In World War II Slovenia was occupied and annexed by Germany, Italy and Hungary, and a small area was transferred to the Independent State of Croatia. Slovenia was a founding member of the Federal People’s Republic of Yugoslavia, which was later renamed the Socialist Federal Republic of Yugoslavia. It was a Communist state initially allied with the Eastern Bloc, but it later founded the Non-Aligned Movement. 206 The EU27: Internal Politics and Views on Brexit

In September 1989 constitutional amendments were adopted which introduced parliamentary democracy to Slovenia prior to independence. In March 1990 it became the ‘Republic of Slovenia’ and democratic elections took place in April 1990, which were won by the united opposition movement DEMOS, led by Jože Pučnik. In December 1990 over 88% of the electorate voted for a sovereign, independent Slovenia, and on 25 June 1991 Slovenia declared its independence. On 27 June the Yugoslav People's Army tried to stop further moves towards independence, which led to the ‘Ten-Day War’. The ‘Brijuni Agreement’ was signed on 7 July 1991, implementing a truce and a three-month halt to further measures on Slovenian independence. The Yugoslav Army withdrawal began in July and was completed by 26 October. In June 1991 Slovenia split from Yugoslavia and became an independent state. It joined NATO and the EU in 2004 and in 2007 became the first former communist country to join the Eurozone. 25.3 Current Government and recent political developments Recent political developments Slovenia is a parliamentary republic in southern central Europe and is a successor state of the former Yugoslavia. The country is divided into 212 municipalities, 11 of which are designated as city municipalities. The Prime Minister is elected by the National Assembly and nominates the Government (subject to the approval of the legislature). The 90-members of the Državni Zbor (National Assembly) serve a term of four years. 88 are elected on the basis of proportional representation and two are representatives of the Hungarian and Italian minorities. The Državni Svet (National Council) is elected for five years; it comprises 22 directly elected members and 18 members chosen by an electoral college to represent various social, economic, trade, political and local interest groups. The Council’s role is mainly advisory but it can veto decisions of the National Assembly. Prime Minister Miro Cerar announced his resignation in March 2018, but the governing coalition remained in place in a caretaker capacity pending legislative elections on 3 June 2018. In the June elections there was a swing to right-wing anti-immigrant parties. President Borut Pahor said he would invite Janez Jansa of the anti-immigrant Slovenian Democratic Party (SDS),418 and reported to be an ally of Hungary's right-wing, anti- immigration Prime Minister Viktor Orban,419 to form a government. The election results were as follows:

418 According to The Times, 10 June 2018, “while much of Europe’s 2015 migration influx passed through Slovenia, it has accepted only 200 refugees”. 419 Deutsche Welle, Anti-immigration leader Janez Jansa to form Slovenia government, 4 June 2018

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National Assembly (Državni Zbor)420 General Election, 3 June 2018 % of Party Votes cast Seats votes Slovenian Democratic Party (SDS) 222,042 24.92 25 List of Marjan Šarec (LMŠ) 112,250 12.60 13 Social Democrats (SD) 88,524 9.93 10 Modern Centre Party (SMC) 86,868 9.75 10 The Left (Levica) 83,108 9.33 9 -Christian Democrats (N.Si) 63,792 7.16 7 Party of Alenka Bratušek (SAB) 45,492 5.11 5 Democratic Party of Pensioners of Slovenia (DeSUS) 43,889 4.93 5 Slovenian National Party (SNS) 37,182 4.17 4 Total votes (incl. others)* 891,097 100.00 90 * Including two seats reserved for representatives of the Italian and Hungarian minorities. The SDS was unable to form a coalition and remained in opposition. The Economist reported (23 August 2018): Many parties refused even to talk to [the SDS]. Instead, five smaller centre-left parties banded together to form a minority government with outside support from the hard left. Other politicians justify their decision to exclude the SDS by arguing that Mr Jansa is a divisive bully. On 13 September 2018 the 13th was elected by 45 votes to 34 after nine hours of debate by the 8th National Assembly, and sworn in immediately, more than three months after the elections. With 43 of the 90 parliamentary seats, it is Slovenia’s first minority government. The governing coalition is composed of five parties: List of Marjan Šarec, Social Democrats, Modern Centre Party, Party of Alenka Bratušek and the Democratic Party of Pensioners of Slovenia, with additional parliamentary support from The Left. Prime Minister Marjan Šarec (a former comedian and twice mayor of Kamnik, a town north of the capital ) said the Government’s priorities were the economy, healthcare, defence and security.421 Further results of the recent Slovenian elections President422 Presidential Election, First Ballot, 22 October 2017 Candidate Votes % of valid votes Borut Pahor (Independent) 355,117 47.21 Marjan Šarec (LMŠ) 186,235 24.76 Romana Tomc (SDS) 102,925 13.68

420 National Assembly (Državni Zbor) (Slovenia), in Europa World online. London, Routledge. House of Commons. Retrieved 16 October 2018 from http://www.europaworld.com/entry/si.dir.7612126735135. 421 Total-Slovenia, Slovenia’s First Minority Govt. Takes Power, 14 September 2018 422 President (Slovenia), Europa World online. London, Routledge. Retrieved 16 October 2018 208 The EU27: Internal Politics and Views on Brexit

Candidate Votes % of valid votes Ljudmila Novak (N.Si) 54,437 7.24 Others 53,550 7.11 Total 752,264 100.00

Second Ballot, 12 November 2017 Candidate Votes % of valid votes Borut Pahor (Independent) 378,307 53.09 Marjan Šarec (LMŠ) 334,239 46.91 Total 712,546 100.00

Dr Borut Pahor was duly elected President. 25.4 Views on Brexit President Borut Pahor told the Bled Strategic Forum conference on 12 September 2018 that the EU had been weakened by Brexit and might need to postpone plans to expand into the Western Balkans.423 It is still early days for the new Slovenian Government, but the Prime Minister has already demonstrated his support for the majority EU27 view that the UK needs to compromise if it wants a deal.424 In Berlin on 12 October he said in a joint statement with Chancellor Merkel that all EU leaders expected “a constructive and realistic approach from Britain”.425 After the October 2018 European Council meeting, Marjan Šarec was reported as saying the problem was not the relationship between the EU and the UK but “the core of the problem [was] in the British Parliament”.426 He did not think extending the transition period would make sense and doubted it would bring a breakthrough in the already protracted negotiations. He thought there was “still time for an orderly Brexit deal, but he added that Slovenia was ready for the worst-case scenario”.427 The Slovenian Government website emphasised the need for constructive EU-UK dialogue: Regardless of whether the Withdrawal Agreement is ratified or not, there will be a need for constructive dialogue on future cooperation between the United Kingdom and the European Union. Bilateral cooperation will need to be strengthened to maintain all current areas of productive cooperation. Here, it should be noted that the

423 NI (English edition), Slovenian president says EU should postpone expansion, 12 September 2018 424 E.g. see Reuters, Slovenia PM: chance of autumn Brexit deal if Britain backs it, 19 September 2018 425 New York Times, Britain Must Take Realistic Approach to Brexit Talks: Slovenian PM, 12 October 2018 426 Total-Slovenia, Šarec in Brussels, meets Macron & talks EU, migration, populism & Euro, 19 October 2018 427 Slovenian Press Agency (STA), Šarec: Still time for Brexit deal, but plan B ready, 17 October 2018

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United Kingdom remains a central ally within NATO and that cooperation will continue within multilateral frameworks. In January 2019 Prime Minister Šarec regretted the UK Parliament’s rejection of the negotiated withdrawal agreement on 15 January and urged the UK to rethink its decision to leave. A Prime Minister’s Office statement said the withdrawal agreement was “a fair compromise, a balanced document which allowed a regulated and controlled exit for the UK”.428 STA quoted him as saying the UK should reconsider whether Brexit was really worth pursuing or whether staying in the EU was a better solution. Slovenia prepares for any Brexit outcome The Government believes a no–deal Brexit would be the “worst possible outcome”.429 In a statement in January 2019 the Government said it was focusing its efforts on “reducing the negative impacts” of any kind of Brexit and was “constructively involved in the adoption of urgent legislation for the eventuality of a no-deal withdrawal … examining the necessary adjustments in the event that EU-level measures prove insufficient”.430 On 21 March the passed legislation safeguarding the reciprocal citizens’ rights of UK citizens in the Slovenia in return for the protection of Slovenian citizens’ rights in the UK: [The legislation aims] to preserve [reciprocal rights between the UK and Slovenia] related to social security, labour market access, cross- border services mutual recognition of professional qualifications family allowances and scholarships” up until 31 December 2020. A more long-term solution, after 2020 will then be drawn up. 431 The British Ambassador to Slovenia, Sophie Honey, emphasised the work that the Embassy and the Slovenian Government were doing together “to provide continuity for the people and make it clear that they remain welcome”.432

Slovenian relations with UK are “very good” During President Pahor’s meeting with Foreign Secretary Jeremy Hunt in February 2019, they both agreed that UK - Slovenia relations are “very good”, and that Slovenia had “genuine interest” in strengthening bilateral relations after Brexit. They agreed that “[their] two countries would be bound by many joint values and tradition[s] after the UK leaves the EU.433 A Slovenian press release confirmed:

428 The Slovenia Times, Slovenia regrets UK parliament's rejection of Brexit deal, 17 January 2019 429 Slovenian Government, Response to rejection of Brexit deal in the UK parliament, 16 January 2019; Slovenia Times, Slovenia regrets UK parliament's rejection of Brexit deal, 17 January 2019 430 Slovenian Government, Response to rejection of Brexit deal in the UK parliament, 16 January 2019 431 Total Slovenia News, Brexit Reciprocal Rights Act Passed, 21 March 2019 432 Ibid 433 Slovenia Times, Pahor, Hunt praise Slovenia-UK relations, 28 February 2019

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The UK will remain Slovenia's important business partner and an ally within NATO. [Our] two countries share the awareness of the importance of multilateralism, security and stability, and progress in the world in general, especially in Europe, Slovenia and the UK are enhancing their cooperation in business, tourism, investment, science, education and culture. Trade between the countries has been rising and has exceeded EUR 1bn for the first time last year.434 Government supports a short extension After the UK Parliament’s rejection of the Withdrawal Agreement in January 2019, the Slovenian Government set out its position As a responsible Member State … Slovenia desires the government of the United Kingdom to clarify its intentions regarding the next steps as soon as possible. Equally, our efforts are focused on reducing the negative impacts being brought by the British withdrawal from the EU, including the possibility of a no-deal Brexit.435 The Government reiterated its support for the negotiated Withdrawal Agreement and its solidarity with the EU27. Foreign Minister Miro Cerar tweeted that the EU had negotiated in good faith “[wishing] to preserve constructive cooperation in the future”436 and the Foreign Affairs Committee chair, Matjaž Nemec, said the process had been “a good lesson for [Europe]”, which he hoped would “sober up the global political arena”.437 The Government statement said the Agreement represented “a fair compromise … a balanced instrument of law [to enable an orderly and controlled [Brexit], while … appropriately [observing] EU law and [protecting] the rights of its Member states.438 Despite earlier doubts about an Article 50 extension, President Pahor said in March 2019 that he “would be open” to one because nobody wanted to see “a hard Brexit in any kind of chaotic way”.439 But he echoed the majority EU27 view that there needed to be “clarity and consensus” as to what the UK wanted the extension for.440 During a three-day visit to the UK in early March, he put forward Slovenia’s position on the Irish backstop: he wanted a compromise, but said Slovenia “would not approve a deal that Ireland disagreed with”. The backstop would not be reversed, it was an “insurance […] only intended for the worst-case scenario”.441 He told TV Slovenija that: “his wish was to express support for those who are looking for solutions that benefit London as well as Brussels and Ljubljana”. 442

434 Ibid 435 Slovenian Government, Response to rejection of Brexit deal in the UK parliament, 16 January 2019 436 Ibid 437 Ibid 438 Slovenian Government, Response to rejection of Brexit deal in the UK parliament, 16 January 2019 439 City AM, President of Slovenia backs Brexit extension, adding 'a lot' more EU states would do the same, 2 March 2019 440 Sky News, President of Slovenia says EU could approve short Brexit delay, 2 March 2019 441 Sky News, President of Slovenia says EU could approve short Brexit delay, 2 March 2019. 442 Slovenia Times, Pahor received by Queen Elizabeth II, 1 March 2019

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President Pahor concluded that “it was in Slovenia's interest to find a solution that will enjoy the support of the British Parliament and Ireland, whereby it may not divide the EU”. He emphasised that he did not want a damaging “chaotic exit”.443 Arriving at the European Council meeting on 10 April to discuss the second UK extension request Prime Minister Šarec told Politico that he favoured a short extension. He said: This prolongation should be as short as possible because we don’t think it is wise to prolong it into the distant future. It can bring a lot of legal questions. Mr Šarec said that an extension to December would be too long, and that Slovenia would be “very satisfied” if the UK could leave the EU by 23 May, before the EP election. Sarec said it was incumbent on the EU27 to think about the EU’s own interests, rather than those of the U.K. The crucial circumstance here is not what will be with the U.K. The crucial circumstance is what will happen with the European Union. We mustn’t allow … that the European Union would be blocked. The most important thing is that the European Union is functioning in a normal manner because if this would be blocked, then we will have huge problems.” He said that at the previous European Council meeting he had compared the UK to someone trying to commit suicide by drowning: I was a little bit provocative because I said that somebody decided to commit suicide and now we are all saving him but he doesn’t want to be saved. So by drowning, he takes us all down. That’s what I said and that’s how I see the situation. Mr Šarec added that there are no guarantees about the UK political situation: We don’t know how long the U.K. government will last. We don’t know who will be the next prime minister. We don’t know if they will be constructive or not444. Mr Šarec warned that any promises made by the UK Government could not be taken for granted. He said: That worries us a lot . . . Theresa is very constructive. She tries to find some solution but her successor may not be so constructive. We cannot put the European Union in question.

443 Ibid 444 Politico, Theresa May warms to Brexit ‘flextension’, 10 April 2019 212 The EU27: Internal Politics and Views on Brexit

26. Spain 26.1 Key facts 1. Government and Politics Head of State: HM King Felipe VI Head of Government: Prime Minister Pedro Sánchez Pérez-Castejón Last election: Legislative, 26 June 2016 Next election: Legislative, due by July 2020 2. Finance and the Economy GDP (2017): €1,284 billion (GDP per head: €27,600) GDP average growth 2014-2018: 3.1% GDP growth 2019 (interim forecast, Feb 2019): 2.1% Net contribution to EU budget per head 2017: -€1 Currency: euro 3. Trade with UK Trade with UK as % of GDP: 4.7%

UK trade with Spain, 2017 £ millions Exports Imports Balance Goods 10,367 16,436 -6,069 Services 5,748 14,866 -9,118 Total 16,115 31,302 -15,187 Source: ONS Pink Book

4. Views on EU 43% of Spanish have a positive view of the EU (net positive: +30%) 39% of Spanish agree that their voice counts in the EU (net voice counts: - 18%) 38% of Spanish trust the EU (net trust: -16%) 89% of Spanish are in favour of free movement 83% of Spanish feel like a citizen of the EU 5. Spanish nationals in the UK 182,000 (ONS estimate for Jan to Dec 2017)

26.2 Background445 Following the civil war of 1936–39, the authoritarian regime established by General Francisco Franco y Bahamonde continued until his death in 1975.

445 See Spain in Europa World online, retrieved 3 September 2018 213 Commons Library Briefing, 2 May 2019

He was succeeded as Head of State by King Juan Carlos, after which democratic government was introduced. The bicameral legislature, the , comprises the Congreso de los Diputados ( - lower house) and the Senado (Senate - upper house). The Congress has a minimum of 300 deputies and a maximum of 400, elected by universal, free, equal, direct and secret suffrage. Each province forms one constituency, the number of deputies in each one being determined according to population and elected by proportional representation for four years; enclaves Ceuta and Melilla have one deputy each. Elections must be held between 30 and 60 days after the end of each parliamentary term and the Congress convened within 25 days of the elections. The Senate is based on territorial representation and comprises 266 members, 208 of whom are directly elected for a term of four years. The remaining 58 regional representatives are chosen by the assemblies of the Autonomous Communities (ACs) and are renewed following legislative elections in those regions. Each province elects four senators for four years. Each island or group of islands forms one constituency. Gran Canaria, Mallorca and Tenerife return three senators each, the others one each. The ACs return in addition one senator plus one more for each million inhabitants, appointed by the legislative assembly of the Autonomous Community. The Government, composed of a President proposed by the King on the Cortes’ approval, is voted into office by the Congress by an absolute majority. If no President is elected within two months, the King dissolves the Cortes and convenes new elections with the approval of the President of the Congress. Spain joined the EU on 1 January 1986 and adopted the Euro on 1 January 1999. 26.3 Current Government and recent political developments446 At an early general election in November 2011 precipitated by the economic and financial crisis, the Popular Party (Partido Popular - PP) led by Mariano Rajoy defeated the Spanish Socialist Workers’ Party Partido Socialista Obrero Españo – PSOE)). At a general election held in December 2015, the PP won the largest number of seats in the Congress of Deputies but lost its overall majority. As no viable government could be formed, fresh elections were held in June 2016 when the PP again emerged as the largest party but without an overall majority. Rajoy was re-elected Prime Minister by the Congress of Deputies in October 2016. He was replaced by PSOE leader Pedro Sánchez in June 2018 after losing a vote of confidence. On 15 February, Prime Minister Sánchez called an early general election, to be held on 28 April, after failing to secure Parliamentary support for the

446 Ibid 214 The EU27: Internal Politics and Views on Brexit

Government’s budget. Mr Sánchez had led a minority government and was reliant on support from the Catalan Republican Left and Catalan European Democratic Party, as well as the left populist Podemos party and the Basque nationalists. But the Catalan parties voted against the budget after the Government did not meet its demands over holding an independence vote and intervention in the trial of secessionist leaders.447 In the general election on 28 April 2019, PSOE increased its share of the vote and emerged as the leading party with 28.7% of the vote (compared to 22.7% in 2019). The PP’s vote share almost halved, falling to 16.7% of the vote (compared to 33% in 2016). The Citizens’ (Ciudadanos) party came third with 15.8% of the vote, with the Podemos- alliance falling back to 14.3% (it was close behind PSOE with 21.2% of the vote in 2016). The new far right party received 10.3% of the vote, winning seats in parliament for the first time448. The result put Pedro Sánchez in a stronger position to form a new government with the support of Podemos-United Left, although he would still need the support of some of the Basque or Catalan parties to win majority backing in parliament. PSOE also won a majority of seats in the Senate. Results of the most recent Spanish elections Legislature Spain has a bicameral legislature, comprising the Congress of Deputies and the Senate. Congress of Deputies (Congreso de los Diputados)449 General Election, 28 April 2019, preliminary results % of Party Votes cast Seats votes Spanish Socialist Workers’ Party (PSOE) 7,480,755 28.68 123 People’s Party (PP) 4,356,023 16.70 66 Citizens (C’s) 4,136,600 15.86 57 United We Can (Unidos Podemos) 3,118,191 11.95 35 Voice (Vox) 2,677,173 10.26 24 Republican Left of –Sovereigntists 1,015,355 3.89 15 (ERC- Sobiranistes) In Common We Can 614,738 2.36 7 Together for Catalonia (JxCat) 497,638 1.91 7 Basque Nationalist Party (EAJ-PNV) 394,627 1.51 6 Basque Country Unite (EHB) 258,840 0.99 4 Canarian Coalition (CC) 137,196 0.53 2 Sum Navarre (NA+) 107,124 0.41 2 Compromise Coalition 172,751 0.66 1 Regionalist Party of Cantabria (PRC) 52,197 0.20 1

447 El Pais, Spanish prime minister calls snap general election for April 28, 22 March 2019. 448 Politico, Spain’s Socialists score big election victory, 28 April 2019. 449 Congress of Deputies (Congreso de los Diputados) (Spain), Europa World online. London, Routledge. Retrieved 1 May 2019

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Others 866,922 4.09 0 Total (incl. others) 25,886,130 100.00 350

Senate (Senado)450 The Senate comprises 266 members, 208 of whom are directly elected for a term of four years. The remaining 58 regional representatives are chosen by the assemblies of the Autonomous Communities and are renewed after legislative elections in those regions. The most recent election to the Senate was held on 28 April 2019. The composition of the Senate by legislative grouping is as follows: Seats Directly Parties and blocs Appointed Total elected Spanish Socialist Workers’ Party (PSOE) 121 18 139 People’s Party group (PP) 56 19 75 Republican Left of Catalonia–Sovereigntists 11 2 13 (ERC- Sobiranistes) Basque Nationalist Party (EAJ-PNV) 9 1 10 Citizens (C’s) 4 6 10 United We Can (Unidos Podemos) 0 6 6 Together for Catalonia (JxCat-Junts) 2 2 4 Sum Navarre (NA+) 3 0 3 Basque Country Unite (EHB) 1 1 2 Gomera Socialist Group (ASG) 1 0 1 Voice (Vox) 0 1 1 Compromise Coalition 0 1 1 Canarian Coalition (CC) 0 1 1 Total 208 58 266

26.4 Views on Brexit Brexit priorities The Whitehouse Consultancy profile of the EU27’s positions on Brexit summed up Spain’s priorities as follows: As a pro-European country, Spain’s main priority will be to keep the EU27 united throughout and after the Brexit negotiations and avoid any further disintegration. A key issue between the two countries is immigration, with around 300,000451 British expatriates living in Spain and investing in the economy. Spain will seek to defend the interests of these citizens as well as British companies operating in Spain. It also wants to protect the tourist industry which sees around 18 million British people visit the country every year.

450 Results of Spanish Senate elections, Ministry of the Interior, , 28 April 2019. Retrieved 1 May 2019 451 Recent Spanish National Institute of Statistics estimate is 240,000. 216 The EU27: Internal Politics and Views on Brexit

Concluding a trade deal between the UK and the EU will also be high on Spain’s agenda. The UK is Spain’s fourth largest trading partner and the most important recipient of Spanish foreign investments. Furthermore, the Spanish Government has a particular interest in what happens to Gibraltar after Brexit. The Spanish Government has called for joint sovereignty of the island, which is currently British territory and voted overwhelmingly to remain in the EU.452 Spain is committed to the EU After the UK referendum, then Prime Minister Rajoy said Spain would “remain committed to the EU”: The EU is the area of greatest prosperity and wellbeing; we will continue building a better future between us. We need stability. Above all we will continue defending Spaniards' interests and greater European integration. Spain now has a solid economic base in order to weather the financial turbulence which Brexit could cause. We are prepared.453 At a news conference in January 2017, Mr Rajoy said the UK withdrawal from the EU was a “serious threat” because of its direct economic impact on relations between the UK and Spain. However, he also said the Spanish Government would work to ensure that Brexit created the “fewest number of problems to British and Spanish citizens and takes place in the most orderly fashion possible”.454 In June 2018 the BBC reported that Spain's new Prime Minister, Pedro Sánchez, had made clear he intends to respect Spanish commitments to the EU and the European project in general. The report referred to other issues on his agenda, “particularly increasing numbers of migrants reaching Spanish shores and tensions in Catalonia”. Brexit was therefore not a priority for Mr Sánchez, although “he will not be able to ignore the impact the UK's exit could have on Gibraltar”.455 Gibraltar El País reported in September 2018 that the Spanish Government was seeking to include an annex/protocol/chapter on Gibraltar in the withdrawal agreement, viewing Brexit as a good moment to make progress on long-standing issues arising from Gibraltar’s special status in the EU (e.g., it is not part of the customs union, is exempted from the CAP and does not apply VAT). According to El País Spain is particularly interested in improving conditions for the area’s cross-border workers, reducing tobacco smuggling and cracking down on tax abuses. The Government also wanted to address environmental concerns over the dumping of pollutants around the territory. Perhaps most controversially, it wanted joint use of the airport, which it claims was built illegally outside the territorial limits set by the

452 The Whitehouse Consultancy, Project Brexit: What do other countries think? – Spain 453 BBC News, Brexit: World reaction as UK votes to leave EU, 24 June 2016 454 Government of Spain, Dialogue is a political imperative and an unavoidable necessity” says Mariano Rajoy, 24 January 2017 455 BBC News, What do European governments want from the EU Summit? 28 June 2018

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Treaty of Utrecht (which ceded sovereignty of Gibraltar to Britain in 1713).456 But El País reported that Spain would not be bringing up the matter of sovereignty over Gibraltar, with Foreign Minister saying: “The issue of sovereignty is not on the table”. Michel Barnier discussed Spain’s request for a protocol on Gibraltar with Prime Minister Sanchez and Foreign Minister Borrell in talks on 17 September 2018. The Financial Times reported that the proposed protocol appears to go beyond the original plans of EU negotiators. After his meeting with Mr Sanchez, Michel Barnier tweeted “full support for Spain in its negotiations w/ UK on #Gibraltar, which need to conclude asap”. According to a Financial Times report, EU and UK officials are aware of the dangers of seeking detailed, binding agreements over Gibraltar, with some EU diplomats remaining “wary of being dragged into the detail of the dispute or making Gibraltar a make-or-break topic in the UK-EU divorce negotiations”.457 The report cited one EU diplomat involved in Brexit talks as saying a protocol ultimately “may not be needed”, while another stressed that “while the London-Madrid discussions may be difficult, they did not expect Gibraltar to ‘hold up’ a general agreement on the UK's withdrawal”. The article pointed to the relatively accommodating stance taken by the Sanchez Government since coming to power in June, with ministers indicating that they do not wish to hold up the wider talks and will not use Brexit to press their claim to sovereignty over the territory.458 Brexit preparations An Elcano policy paper in May 2018 stated that in preparation for a possible no deal: … it is important for Spanish companies to design contingency plans for coping with a reduction in business, whether in terms of preparing for changes in the regulatory framework or seeking alternative customers and suppliers in other markets, both within and beyond the EU.459 It also noted the possible effects on the Spanish tourism industry (“Spain receives millions of British tourists every year, accounting for almost a quarter of visitors to the country”): it is important that the Spanish tourism industry prepares for a possible reduction in British visits and draws up contingency plans

456 El Pais, Spain wants a special chapter on Gibraltar in Brexit agreement, 17 September 2018 457 Financial Times, Spain seeks tougher legal guarantees on Gibraltar in Brexit deal, 17 September 2018 458 Financial Times, Spain seeks tougher legal guarantees on Gibraltar in Brexit deal, 17 September 2018. 459 Spain and the prospect of Brexit, Salvador Llaudes, Ignacio Molina, Miguel Otero Iglesias & Federico Steinberg, May 2018

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both with the Spanish authorities and with British tour operators, who are equally dependent on tourism to Spain. Fears about the effects on tourism have continued.460 On 6 November 2018 the Independent reported that Spanish tourism Minister Reyes Maroto was meeting UK tour operators “to discuss contingency plans to ensure millions of British tourists can still visit her country in the event of a no-deal Brexit”.461 According to BBC News, “Spain is taking the mañana approach to planning for a no-deal Brexit”. 462 Economy Minister Nadia Calvino said on 29 October in London that “for the time being, nothing was being done to prepare for no deal. There is no written plan or anything formal and […] the government was waiting another few weeks before planning for a no-deal scenario”. But the Government is alert to the need for Brexit planning, including contingency planning for a possible no-deal outcome. Open Europe reported: Spain’s government has been running an analysis of the different potential outcomes of the Brexit talks, including the ‘cliff-edge’ scenario, based on input from companies and business groups. It has also been working on a plan to shield its tourism industry from any disruption to air travel and will allow UK citizens to use their existing Spanish ID as a post-Brexit entitlement paper, which is a more flexible arrangement than the one France has in mind.463 Politico reported on 2 November 2018 that “Only 31 percent of Spanish companies have made contingency plans for Brexit, and just 19 percent have started implementing those plans, according to a survey of 2,000 executives conducted by KPMG in coordination with the CEOE, Spain’s biggest business lobby”.464 But the report went on to outline Government initiatives to help business to prepare for Brexit: Industry and Commerce Minister Reyes Maroto this week announced a series of actions aimed at “helping companies prepare contingency plans” for Brexit, including informational meetings with business leaders and a public website. “We have to inform companies that any scenario can occur,” she told reporters. “Some [companies] still convey to us hopes that nothing will happen, and the reality is that something is going to happen.” In the Spanish Parliament Prime Minister Sánchez and Foreign Minister Borrell emphasised the need for public administration and business leaders

460 See, e.g. The Express, 'UK is our main market!' Spain in Brexit PANIC as tourist boss warns of no deal DISASTER, 11 October 2018 461 The Independent, Spain seeks contingency plans with UK tour operators over fears of no- deal Brexit, 6 November 2018 462 BBC News, Reality Check: What are EU countries doing to prepare for a no-deal Brexit? 6 November 2018 463 Open Europe, The view from Brussels: How are the EU27 preparing for a ‘No Deal’ Brexit? 30 August 2018 464 Politico, Madrid tells businesses to get ready for (any) Brexit, 2 November 2018

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to make “their own contingency plans” to face “any kind of scenario that can occur after March 29, 2019”. Deputy Prime Minister Carmen Calvo has been “coordinating plans across all government departments”, preparing to hire extra customs officers and “laying out urgent regulations on trade protocols or phytosanitary standards”.465 Bilateral citizens’ rights agreement The Spanish and UK Governments have been preparing a bilateral reciprocal rights agreement to preserve local voting rights in Spain and the UK. In addition to being able to vote in local elections, the proposed agreement will allow UK citizens living in Spain and Spanish citizens in the UK to stand for election to office. El País reported that this recognised the fact that “that there are already British nationals who are working as elected councillors in several Spanish municipalities” (37 in total).466 The agreement was to be signed on 21 January 2019. No-deal contingency plans On 15 January 2019 the Spanish Government launched a new page on its Brexit website to provide information for citizens and economic operators on how to prepare for a no-deal UK exit and on the contingency measures adopted at national and international levels.467 . The Government (and later Parliament) was due to approve a decree at the beginning of February which would include regulations to be activated in the event of a no-deal Brexit. Extending Article 50 Prime Minister Pedro Sánchez told the Spanish Parliament on 27 February 2019, that Spain would not oppose an extension to Article 50 but said it would need to come with "a real chance of a solution" because it is not reasonable nor desirable to "prolong the uncertainty".468 Mr Sánchez suggested that it would not be desirable to extend Article 50 without a clear objective. Speaking to the Spanish Parliament, Mr Sánchez said: I want to make clear before this possible position of the British government, that although Spain is not going to oppose the concession of an eventual extension, it must have a certain perspective of resolution. Prolonging uncertainty by postponing deadlines is not a reasonable nor desirable alternative. Mr Sánchez also indicated that an extended Article 50 period could not be used to undermine the principles of the backstop: The position of Spain, as I have conveyed to Prime Minister Theresa May in different telephone conversations, is the same: it is not

465 Ibid 466 El País (in English), Madrid and London drafting deal to preserve voting rights after Brexit, 17 December 2018 467 Unofficial translation of Government web page on Brexit. See also El País (in English), Spanish government launches website to warn about effects of Brexit, 15 January 2019. 468 Sur.com Spanish government approves contingency plans for no-deal Brexit, 1 March 2019 220 The EU27: Internal Politics and Views on Brexit

possible to temporarily limit the backstop or to allow a unilateral exit from it. Due to its nature as a security mechanism, it is not possible to set a term for it. It is not only a matter of solidarity with one of our partners, Ireland, but also of preserving the peace that was achieved in Northern Ireland decades ago. Following the second UK extension request on 5 April it was reported that Spain was supportive of the French position that there should only be a short extension of “a couple weeks” in order to avoid an instant financial crisis and prepare in the markets if there were no significant new proposals from the UK. On 8 April, it was reported that the Spanish government had drafted a list of possible measures the UK would need to agree to for it to be convinced that an Article 50 extension could not be used by a UK Prime Minister to damage EU interests. Prior to the European Council meeting on 10 April, Mr Sánchez said: Spain is going into this with a constructive attitude, ready to listen to the plan proposed by Theresa May. We want to avoid a disorderly exit but, if that isn't possible, Spain has done its homework. We have all the tools necessary to face a no-deal Brexit. Mr Sánchez said: “We’re facing a historic situation which requires having a cool head”. Following the meeting he said that the six-month extension was the only “reasonable outcome” and said that the EU had met its obligation to safeguard EU27 unity while also working to build the best possible relationship with the UK after Brexit. He also added: The most important lesson we need to learn from what's happening in the UK is that when decision-making processes, based on lies, are put in the hands of the people, societies – in this case British society – wind up down a blind alley . . . We in the EU need to be conscious of the scale of the challenge British society is facing and we need to try to help it reach an agreement. Dates may vary, but the important thing is to give British politics the time it needs to find its way out of a situation that stems from a referendum held three years ago. During the meeting, Spain reportedly leaned towards the French view that the extension should be limited to a short period469. Northern Ireland Backstop The Daily Telegraph reported in March 2019 that Spain was attempting to block a compromise over the Irish backstop over its territorial ambitions for Gibraltar. It reported that Spain was insisting on excluding Gibraltar from all agreements between Britain and the EU after Brexit as part of its bid for shared sovereignty of the Rock.470

469 See The Times, Fright night ends in leaders subduing Macron monster, 12 April 2019 470 The Telegraph, Spain is blocking a Brexit compromise as part of a 'land grab' for Gibraltar, ministers told, 9 March 2019 221 Commons Library Briefing, 2 May 2019

27. Sweden 27.1 Key Facts 1. Government and Politics Head of State: HM King Carl XVI Gustaf Head of Government: Prime Minister Stefan Löfven Last election: Legislative, 9 September 2018 Next election: Legislative, September 2022 2. Finance and the Economy GDP (2017): €365 billion (GDP per head: €36,300) GDP average growth 2014-2018: 2.9% GDP growth 2019 (interim forecast, Feb 2019): 1.3% Net contribution to EU budget per head 2017: +€165 Currency: krona 3. Trade with UK Trade with UK as % of GDP: 5.3%

UK trade with Sweden, 2017 £ millions Exports Imports Balance Goods 5,285 7,024 -1,739 Services 5,849 2,072 3,777 Total 11,134 9,096 2,038 Source: ONS Pink Book

4. Views on EU 53% of have a positive view of the EU (net positive: +39%) 71% of Swedes agree that their voice counts in the EU (net voice counts: +46%) 59% of Swedes trust the EU (net trust: +25%) 89% of Swedes are in favour of free movement 82% of Swedes feel like a citizen of the EU 5. Swedish nationals in the UK 43,000 (ONS estimate for Jan to Dec 2017) 27.2 Background The Swedish Constitution is based on four fundamental laws and the Act of 1974. The four fundamental laws are the Instrument of Government (originally dating from 6 June 1809), the Act of Succession (1810), the Freedom of the Press Act (1949) and the Fundamental Law on Freedom of Expression (1992). 222 The EU27: Internal Politics and Views on Brexit

Sweden’s Head of State, King Carl XVI Gustaf, ascended the throne on 15 September 1973. Constitutional changes in 1974 deprived the king of all but ceremonial duties, such as opening parliament and representing Sweden at the diplomatic level. The unicameral Riksdag is Sweden’s legislature. It has 349 members, elected for four years. 310 members are directly elected in multi-seat constituencies by proportional representation, with 39 members in ‘adjustment’ seats.471 Members serve four-year terms. Traditionally, the work of the Riksdag is largely carried out in committees, which are elected by the Riksdag on a proportional basis. When the EEC was established, the then Swedish Government considered that the country’s policy of neutrality excluded EEC membership. This remained the case for three decades until Sweden reviewed its position in the early 1990s and joined the EC in 1995. In a referendum on 14 September 2003 on whether to adopt the Euro, Swedes voted against by 56% to 42%. The Krona continues to be Sweden’s currency and there are no plans to adopt the Euro. 27.3 Current Government and recent political developments Following parliamentary elections in September 2014, Stefan Löfven, a former head of the Metalworkers’ Union and leader of the Social Democrats (SAP), formed a minority centre-left coalition government also involving the Green Party. The September 2018 elections resulted in neither the centre-left nor centre-right being able to form a coalition. The far-right (SD) increased their share of the vote to 17.53% (up from 12.9% in 2014). The SD previously had links with neo-Nazi and white supremacist groups but has sought to moderate its image in line with other right-wing populist parties in Europe. The other main parties have said they will not co-operate with the SD in any future government. While it remained the leading party with 28.6% of the vote, the SAP received its lowest vote share at a general election since 2011. The centre- right Moderates, operating as part of an alliance of four centre-right parties, also lost votes. The other parties in the centre-right alliance - the Centre Party, the Christian Democrats and the Liberals - all made gains but the alliance parties between them did not win enough votes to form a majority.472 Following the election, Mr Löfven lost a vote of confidence in Parliament and subsequently, in October, both leader Ulf Kristersson

471 For detailed information on the electoral system, see Sveriges Riksdag, Elections to the Riksdag, How the seats are distributed in the Riksdag. 472 Euractiv, Sweden’s ruling Social Democrats lead election, far right make gains, 10 September 2018.

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and Mr Löfven made unsuccessful attempts at winning support in Parliament for a new government.473 A new government eventually won the backing of Parliament in January 2019, with Mr Löfven again as Prime Minister at the head of a coalition bringing together the SAP and the Green Party, and reliant on support in Parliament from the Centre Party and Liberal Party474. Results of the most recent Swedish elections Sveriges Riksdag475 General Election, 9 September 2018 % of Party Votes Seats votes Swedish Social Democratic Party (SAP)* 1,830,386 28.26 100 Moderate Party (M)** 1,284,698 19.84 70 Sweden Democrats (SD) 1,135,627 17.53 62 Centre Party (C)** 557,500 8.61 31 Left Party (V) 518,454 8.00 28 Christian Democrats (KD)** 409,478 6.32 22 Liberals (L)** 355,546 5.49 20 Green Party (MP) 285,899 4.41 16 Others 99,137 4.53 0 Total 6,476,725 100.00 349 * Contested the election under the name Arbetarepartiet-Socialdemokraterna. ** Contested the election as part of Alliansen (the Alliance).

27.4 Views on Brexit Speaking the day after the UK referendum, Prime Minister Stefan Löfven said Sweden respected the UK’s decision and the UK would remain an important partner for Sweden “in its new role outside the EU”.476 Warning to UK about negotiations In comments to Bloomberg on 23 August 2016, Mr Löfven warned Theresa May that handing a tax cut to businesses would make Brexit negotiations “more difficult”. Warning that Britain’s talks over leaving the EU “shouldn’t take longer than necessary”, he continued: But if the UK wants some time to think about the situation, this will also give EU countries some time. On the other hand, you hear about plans in the UK to, for example, lower corporate taxes considerably. If they, during this time, begin that kind of race, that will make discussions more difficult.

473 Politico, Sweden fails again to form new government, 29 October 2018. 474 The New York Times, Sweden Forms a Government After 133 Days, but It’s a Shaky One, 18 January 2019. 475 Sveriges Riksdag (Sweden), Europa World online. London, Routledge. Retrieved 16 October 2018 476 , Prime Minister Stefan Löfven on the Results of the Referendum in the United Kingdom, 24 June 2016

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Aggressiveness from Britain in those types of issues — that doesn’t improve the relationship.477 Solidarity with the EU On 29 November 2016, the Minister for EU Affairs and Trade, , said Sweden supported the EU27 in the Brexit negotiations, ending any hope that the UK would get any special favours from one of its closest EU allies. She told Reuters: For us, as close as possible relations with the UK is what we prefer. But it is more important that the EU as such is functioning at its absolute best and effective way. If the UK will ask to let go of freedom of movement of persons, not pay to the EU budget and not follow the EU court, that will not be a feasible way to conduct negotiations. We will not step outside the EU 27 and say - yes, that’s a good idea. I’ve actually been surprised that the solidarity among the 27 is so strong. It’s really strong. I think there is a common view among the 27 how we will do it. Our goal is to keep EU27 as effective as it possibly can be. That is our main goal with these negotiations.478 On the rights of EU citizens in the UK, the Swedish Prime Minister has acknowledged that “Britain does not want to complicate life for all these people”.479 Prime Minister Löfven - we want good relations with the UK At a meeting in January 2017 with Chancellor Merkel, Mr Löfven said Sweden needed to safeguard the future of the EU but also to “ensure good relations with the UK”.480 The following month, he said a UK-EU deal within two years was “optimistic”, striking a good agreement would be a struggle and the UK would have to pay its commitments: “you first negotiate on how to make the exit, and then you have the other discussions”.481 However, he felt that security cooperation remained important: “we need to look into the security issue - combating terrorism, but also military, to see what we can do to increase our security in this rather difficult times now”. On 29 March 2017, as the UK triggered the Article 50 process, Löfven issued a statement, saying: The UK has been a close and valuable partner in the EU. We regret the UK's decision to leave the EU, but it's good that the negotiation process can now begin after quite a long waiting period. I welcome the constructive approach in Prime Minister May's letter. I would like to see orderly and results-oriented negotiations, and want our

477 The Times, Swedish PM warns May tax cuts would complicate Brexit talks, 23 August 2016 478 Reuters, Britain's long-time ally Sweden sides with EU on Brexit, 29 November 2016. 479 The Whitehouse Consultancy, Project Brexit: What do other countries think?; Financial Times, May seeks ‘early’ deal to protect expats’ rights after Brexit, 16 December 2016 480 Government of Sweden, Hopes of Stronger EU Cooperation on Security, Climate and Migration, 26 January 2017 481 AP News, AP Interview: Sweden PM: Brexit Deal in 2 years ‘Very Tough’, 17 February 2017

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relationship with the UK to be as positive and mutually beneficial as possible even after the withdrawal. This is important for the UK, the EU and for Sweden. Sweden's key priorities are a good financial agreement where the UK pays for commitments made, and a good solution for the EU citizens who have exercised their right to settle in the UK, and vice versa. In the future relationship between the EU and the UK, we want trade relations to be as favourable as possible, and we want effective cooperation to continue in other areas, including security.482 Towards the end of 2017, Sweden proposed an extensive EU-UK free-trade agreement that included financial services. Ann Linde said: “I think we are looking at something like ‘Canada plus plus plus…far more reaching than the Canadian trade agreement”.483 Brexit priorities On 23 February 2018, the Swedish National Board of Trade published Recommendations for Swedish priorities in upcoming Brexit negotiations. The main conclusions were: - A first conclusion is that some businesses and sectors are more sensitive to Brexit than others. Based on a range of factors, from trade statistics to number of jobs supported by trade, we have identified the sectors that are particularly important for Sweden in the upcoming Brexit negotiations. Among others, we single out the car industry, wood and paper sectors as well as business services (a sector that stretches from licensed professionals to IT services). - With regards to these sectors, it is clear that even the most ambitious and comprehensive trade agreement or partnership will not even come close to what we have today. There is simply no magic solution to replace the EU internal market and customs union. Furthermore, we find that trade in these essential sectors is not only dependent on sector-specific rules such as those on cars, paper or business services. Horizontal issues such as the movement of goods and services, as well as the possibility to move persons or data are also crucial. - This is our main message to the Swedish Government: yes, specific sectors may be more negatively impacted than others, but in order to limit the negative effects of Brexit we need to focus on finding solutions to the broader issues. When it becomes more difficult to move people and data and to deliver services or to trust that mutually agreed rules are actually followed – trade in general, regardless of sector, is challenged.484 On 9 April 2018, Theresa May visited Sweden and met with Prime Minister Löfven, who commented after their meeting:

482 Government of Sweden, Statement by Prime Minister Stefan Löfven on the UK’s intention to withdraw from the EU, 29 March 2017 483 Bloomberg, Sweden Extends Post-Brexit Trade-Deal Olive Branch to the U.K., 1 December 2017 484 National Board of Trade Sweden, Recommendations for Swedish priorities in upcoming Brexit negotiations, 23 February 2018

226 The EU27: Internal Politics and Views on Brexit

It is positive that the negotiations between the EU and the UK so far have developed quite well. This is most welcome because it is another step towards an orderly Brexit. We should approach these talks with a positive and practical mindset.485 In late August 2018 Ann Linde commented that it was for the UK to find solutions to the UK-Ireland border issue: As it looks now, we try to find what if there is any way for a soft border. I think this is for Britain to find out. Britain is leaving and it wants to make use of the single market, that’s in the white paper. The British have been talking about the technical solutions but little detail on the backstop.486 Response to Chequers proposal In a chapter on Sweden in the Negotiating Brexit: Where Now? report487 released in October 2018, Professor Mats Braun of Södertörn University, reported that the UK’s Chequers proposal had been criticised in Sweden for its ‘cherry-picking’ approach. While the proposal was initially welcomed by the Swedish Government as a starting point for the negotiations, it was viewed as “too narrow” and “an attempt to breach the integrity of the single market”. From the Swedish perspective, it is not possible to extricate goods from other elements of the Single Market, and it is particularly important that services are covered given that the UK is Sweden’s third biggest market for services. The Swedish view is that the UK needs to come up with concrete proposals with “too much valuable time” having been lost waiting for these to emerge. Professor Braun noted that whereas Swedish diplomats previously saw their interests closely aligned with the UK, often consulting their UK counterparts before those of other Member States, the Swedish Government view is that the unity of the EU27 and the integrity of the Single Market are paramount considerations in the Brexit negotiations. Brexit preparations In 2017 the Swedish Government asked four expert agencies to analyse the consequences of Brexit in specific areas. Their conclusions are summarised on the Swedish Government website. It has established a ‘preparedness group’ to look into the potential consequences of no deal, but is hopeful of a deal.488 Sweden’s financial regulator, Finansinspektionen (FI), has called on “investors clearing derivatives through London “to prepare for their counterparties to be considered unauthorised after the UK leaves the EU in

485 The Local Sweden, Swedish PM upbeat on Brexit talks after May visit, 9 April 2018 486 The Guardian, Irish border question must be solved by UK, not EU, says Sweden, 28 August 2018 487 Negotiating Brexit: Where Now?, 23 October 2018, produced by the “Negotiating Brexit” project examining the positions of the EU27 Governments, co-ordinated by Professor Hussein Kassim of the University of East Anglia and Dr Simon Usherwood of the University of Surrey. 488 The Guardian, ibid

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March”.489 The FI analysis, Consequences of Brexit for the Swedish Financial Market (21 June 2018) recommended that investors “assess the likely consequences for liquidity and solvency, and take capital and liquidity planning into account”, and that companies should assess the possible effects of Brexit on their business models and strategies, and how to “manage potential adverse effects”.490 The Swedish Chamber of Commerce for the UK has issued guidance, Brexit – what is it, and how will it affect my business? (30 October 2018) on its website. Criticism of UK government Speaking at a foreign policy conference in at the end of January 2019, Margot Wallström – Sweden's Foreign Minister and a former European Commission vice president – was critical of the British Government’s handling of Brexit, branding the approach “dangerous” and “badly handled”.491 Wallström claimed the whole of Europe would have to pay a price for Brexit, saying: Our political project, the European Union, will suffer from this immensely and that has to be fully understood. You know what? This is because of bad political leadership since a very long time in the UK. I saw with all my years from the European Commission, there was nobody who would defend the UK’s EU membership. Referring to former Prime Minister David Cameron, she added: “You should not promise referenda if you don't prepare them properly.” Avoiding no deal and extending Article 50 Sweden’s EU Minister, Hans Dahlgren, has said the Swedish government is focusing on discussions for an organised withdrawal, but that no-deal preparations were also necessary: “We don't really want [a no-deal Brexit] to happen. But if it does, and there is a serious risk that it might, then we feel that we are pretty well prepared for that situation”492. He added: We cannot negotiate with the Brits about a situation after a hard Brexit before it has happened because we cannot have double negotiations. We are now in a discussion about an organized withdrawal and that's our main focus. If that fails, then we will deal with the problems. Discussing a possible Article 50 extension in an interview published on 18 March 2019, Mr Dahlgren said: If there is a well argued reason that the UK presents, then I don't think anyone really wants to resist such a request.

489 IPE, Swedish watchdog urges preparation for ‘hard’ Brexit, 24 October 2018 490 Ibid 491 Daily Express, Sweden’s fury at UK over Brexit: ‘I cannot forgive them for this!’, Simon Osborne, 30 January 2019 492 TheLocal.se, Sweden 'cannot guarantee Brits' future in no-deal Brexit', EU minister tells The Local, 16 March 2019 228 The EU27: Internal Politics and Views on Brexit

The decision needs to be taken by the European Council unanimously, but I think as Donald Tusk said, we should be open for a longer extension if there is an argued reason for doing so. And if they want to remain in the European Union for a longer period they also have to elect members of the European Parliament, so this must be part of the whole plan, because the elections are in May. But just to have the process going on and on and on without any plan for what the options on the table would be, that's not very attractive. On 19 March 2019, Mr Dahlgren said the EU needed to hear what the UK wants on Brexit: We are expecting to hear from London, what their line to take is. The mood is a wish to be constructive and to make sure this process comes to an end. We have quite a few other things to deal with in the EU ... Let’s do it.493 On 20 March Swedish Prime Minister Stefan Lofven indicated Sweden would support a request from Britain to extend Article 50, telling the Swedish parliament’s EU committee: Sweden should support a position where the EU shows a great deal of acceptance when it comes to an extension of the negotiation period, even a longer extension, if that were to be what is on the table.494 Arriving at the European Council meeting on 21 March, Mr Lofven said that a short Article 50 extension would depend on the WA being approved by the House of Commons. He said: An extension would also depend upon the voting in the House of Commons because we believe it is very important that the House of Commons actually agrees upon the agreement that we have and then we can talk extension. In an interview with Politico on the sidelines of the European Council meeting to decide the second Article 50 extension on 10 April, Mr Dahlgren said that Sweden was open to a long extension, as long as some conditions are met. He said that while there were different voices among the EU27, the countries were “united” in their resolve to avoid a hard Brexit. He said there were three key issues to consider: The UK must take part in the European election, the WA cannot be reopened, and there can be no negotiation regarding the future relationship during the extension period — though changes to the Political Declaration are possible. Arriving at the meeting on 10 April, Prime Minister Löfven said there was a “need to make sure that the legitimacy and the integrity of the EU institutions are not hurt. And the longer [the] extension, the more risk … That's why I see quite a long meeting here.”

493 Reuters, Sweden wants to be constructive on Brexit, awaits news from London, 19 March 2019 494 Reuters, Swedish PM says would support request for Brexit extension, 20 March 2019 229 Commons Library Briefing, 2 May 2019

He said the meeting would look into the possibility of both a long and short extension, although “an extension in itself will not solve this problem, but it gives the British side more time, space to find solution.” He said an extension was “worth trying,” adding that “at same time [it's] also frustrating that after so much time, we haven’t found a solution.” He said: We've spent a lot of time now, a lot of energy on this issue, and we have so many important issues on the agenda that we need to get on with.

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