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Dangers of "race to the bottom" highlighted

June 2, 2016 9:14 AM
By Peter Morris, European Movement

If the United Kingdom left the EU and installed tougher immigration laws, European countries would respond with tit-for-tat rules for British citizens, Dutch prime minister Mark Rutte said on Wednesday (1 June), reports EUobserver. "It will immediately mean that we will get this race to the bottom, that it will move against the interests of the population," Rutte told the BBC in an interview, saying it would be "impossible" for EU countries not to retaliate: https://euobserver.com/political/133660

A UK vote to leave the European Union would trigger negative economic effects on the UK, other European countries and the rest of the world, the Organisation for Economic Co-operation and Development (OECD) warns in its latest Economic Outlook. Brexit would lead to economic uncertainty and hinder trade growth, with global effects being even stronger if the British withdrawal from the EU triggers volatility in financial markets. By 2030, post-Brexit UK GDP could be over 5% lower than if the country remained in the European Union: https://www.oecd.org/newsroom/global-economy-stuck-in-low-growth-trap-policymakers-need-to-act-to-keep-promises.htm

Standard & Poor's [the ratings agency] is sending a dire warning on the longer-term effects of a Leave vote, reports Politico Morning Exchange. "Over the longer term, we believe the biggest risks for corporates would be the impact of a likely reduction in both domestic and foreign direct investment. This would stem from an extended period, potentially running to many years, during which the terms of exit and replacement trade treaties with the U.K.'s partners are renegotiated": https://dub129.mail.live.com/?tid=cmo6XaOpQo5hGQpwAiZMF9BA2&fid=flinbox

Brexit is no longer a rational In/Out discussion, it is a political civil war, writes Giles Merritt, secretary general of Friends of Europe, in an op-ed picked up by Politico…[F]or Britain's political elite, Brexit has become a catalyst that will determine party leaderships and the country's path in the years ahead. No-holds-barred power struggles are now under way in both of Britain's main political parties. Key elements are the self-interest of the UK's most prominent politicians, and their astonishingly-divergent views on the UK's place in the world. There are in fact two parallel civil wars; the Tory and Labour parties have both split down the middle, not only on the Brexit question but also on other divisive issues: http://www.friendsofeurope.org/future-europe/brexit-is-no-longer-about-the-eu-its-a-british-civil-war/

On Wednesday (1 June), the European Commission announced that it will propose extending the Juncker Plan beyond its 2018 deadline, and will seek to replicate its model in developing countries, reports EurActiv. On its first anniversary, Commission Vice-President Jyrki Katainen proudly said that the initiative has been a "success story" thanks to its ability to finance small and medium-sized enterprises. The so-called European Fund for Strategic Investments allocated €3.5 billion to support 141,800 start-ups and small firms over the last year. In addition, the EFSI supported 64 major infrastructure projects, with €9.3 billion: http://www.euractiv.com/section/development-policy/news/commission-will-ask-for-an-extension-of-successful-juncker-plan/?nl_ref=14088649

European Union states held off agreeing to ease travel rules for Georgia yesterday (1 June), reports EurActiv. Turkey, Ukraine and Kosovo should also expect more delays in visa liberalisation, as the bloc turns more cautious amid immigration fears, EU delegation sources said. The EU is already making it easier to suspend visa-free travel before it grants such rights to more states, most notably Turkey, whose help it needs to control immigration after some 1.3 million people reached Europe last year: http://www.euractiv.com/section/justice-home-affairs/news/member-states-use-brexit-referendum-to-delay-visa-waivers/?nl_ref=14088649

South Korea has expressed interest in adding an investment chapter to the existing free trade agreement between the Asian country and the EU bloc, POLITICO has learned: https://dub129.mail.live.com/?tid=cmvsWm3n0o5hGPfgAjfeM0_g2&fid=flinbox

Today the Commission releases guidance for countries on how to build the "sharing economy" and leaked drafts indicate it's not happy about efforts to shut down the likes of Uber and Airbnb in favour of entrenched businesses, reports Politico: https://dub129.mail.live.com/?tid=cm2HyT7n4o5hGRKdidZ18lqg2&fid=flinbox

Agriculture Commissioner Phil Hogan said a deal is close with the Chinese on recognizing European geographical indications on food, a move that could help increase EU exports to the Asian giant, reports Politico Morning Agri and Food: https://dub129.mail.live.com/?tid=cmWuyhBH4o5hGPudidZ19VGg2&fid=flinbox

The food industry needs to work with the European Union and other groups to curb the marketing of unhealthy food to children, European Commissioner for Health and Food Safety Vytenis Andriukaitis said this morning, reports Politico: https://dub129.mail.live.com/?tid=cmZfA53ZQo5hG2wQAiZMGX7g2&fid=flinbox

The Council of EU ministers has endorsed a Commission proposal, approved by the Parliament's International Trade Committee last week, to provide a maximum of €500 million in macro-financial assistance to Tunisia, reports Politico Trade Pro. The EU is an important trading partner of Tunisia, with total trade amounting to €20 billion in 2014…Through the assistance, the EU wants to support the economic stabilization of Tunisia and push structural reforms that need to address the country's external financing gap: https://dub129.mail.live.com/?tid=cmmV-WgAMo5hGLHgAjfdoZIg2&fid=flinbox