Posts Tagged ‘European Union’

Theresa May arrives at Europa Building, the main headquarters of European Council, in Brussels — EU officials have warned could be a “humiliating” encounter

June 22, 2017

Theresa May arrives at the Europa Building, the main headquarters of European Council, in Brussels ahead of the EU leaders summit

Theresa May arrives at the Europa Building, the main headquarters of European Council, in Brussels ahead of the EU leaders summit CREDIT: JOHN THYS/AFP

 

Theresa May has arrived in Brussels for what EU officials have warned could be a “humiliating” encounter as she holds talks on Brexit with EU leaders for the first time since losing her majority at the general election.

The Prime Minister will set out plans to give EU citizens legal rights in the UK after Brexit to help curry favour with her European…..

Read the entire report:

http://www.telegraph.co.uk/news/2017/06/22/theresa-may-set-humiliating-trip-brussels-makes-eu-citizens/

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Brexit: Theresa May arrives at European Council to lay out plans for EU citizens’ rights

It is her first meeting with European leaders since the general election in the UK

By Joe Watts Political Editor
The Independent

Theresa May repeats same comment three times as she ignores questions at EU summit

Theresa May has arrived at her first European Council summit since her election gamble saw her stripped of a Commons majority in the UK.

The Prime Minister spoke as she entered the Council building, choosing to ignore the thrust of reporters’ questions in favour of repeating three times how she intends to table proposals on EU citizens’ rights.

She also argued that the start of withdrawal talks earlier in the week had been “constructive”, despite her Brexit Secretary David Davis being forced into an embarrassing U-turn.

Ms May had called her election while promising to strengthen her hand so that she could better negotiate Brexit, and then caused outrage by accusing European leaders of trying to swing the vote.

But with talks under way she is due to use a dinner event on Thursday evening to outline how she intends to ensure the rights of EU and British citizens are protected after Brexit.

Asked how talks would go with her new weakened Government, she said it had been a “very constructive start”, adding: “But it’s also about how we will build a future special and deep partnership with our friends and allies in Europe.

“Today, I’m going to be setting out some of the UK’s plans, particularly on how we propose to protect the rights of EU citizens and UK citizens as we leave the European Union.”

After referencing an intention to work on counter-terrorism, she was asked whether the UK would compromise with EU negotiators, responding: “We will be going into negotiations. Those have started constructively.

“What I’m going to be setting out today is clearly how the United Kingdom proposes to protect the rights of EU citizens living in the UK, and see the rights of UK citizens living in Europe protected.

“That’s been an important issue. We’ve wanted it to be one of the early issues that’s considered in the negotiations, that is now the case, that work is starting. We will be setting out how we propose that EU citizens living in the UK have their rights protected in the United Kingdom.”

http://www.independent.co.uk/news/uk/politics/brexit-latest-news-theresa-may-european-council-summit-eu-citizens-rights-brussels-a7802961.html

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Reuters

In Brussels, weakened May to offer EU citizens rights

British Prime Minister Theresa May arrives at the EU summit in Brussels, Belgium, June 22, 2017. REUTERS/Gonzalo Fuentes TPX IMAGES OF THE DAY
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By Elizabeth Piper and Alastair Macdonald | BRUSSELS

British Prime Minister Theresa May said at the start of a European Union summit on Thursday that she would reassure fellow leaders that her government will protect the rights of their citizens living in Britain after its departure from the bloc.

But other leaders, including German Chancellor Angela Merkel and French President Emmanuel Macron, made clear that they did not want to get drawn into Brexit discussions and instead preferred to focus on the future of the EU without Britain.

At her first EU summit since a June 8 election sapped her authority to set the terms of Brexit, May said: “I’m going to be setting out some of the UK’s plans, particularly on how we propose to protect the rights of EU citizens and UK citizens as we leave the European Union.”

She seemed keen to calm the mood with the continentals after weeks of sniping during her election campaign, describing the first formal meeting of Brexit negotiators on Monday as “very constructive” and stressing that London wanted a “special and deep partnership with our friends and allies in Europe”.

Merkel also expressed a desire for constructive talks with Britain, but made clear that the EU’s priority now was its own future.

“I want to state clearly that the shaping of the future of the 27 has priority over the negotiations with Britain over its exit,” Europe’s leading power broker said on arrival.

“We will conduct these talks in a good spirit,” she added. “But the clear focus has to be on the future of the 27.”

France’s new president, Emmanuel Macron, spoke of working with Germany to revive European integration and did not refer at all to Britain during his remarks before talks got under way.

Over after-dinner coffee, May will outline her plan to provide early guarantees for some three million people living in Britain from other countries in the bloc, a British source said.

But her wings have been clipped – not only in Britain where voters denied her a majority in parliament, but also in Brussels where EU leaders will try to stop her from discussing Brexit beyond a quick briefing. One EU official said too much detail from May would be unhelpful, as it could provoke reactions.

Instead, once she has left the room, they will continue their own discussion of Britain’s departure from the European Union, notably on which city gets to host two EU agencies being pulled out of London – a potentially divisive issue for the 27.

“NOT THE ONLY DREAMER”

Weakened by an election she did not need to call, May has watered down her government’s program to try to get it through parliament and set a softer tone in her approach to Brexit.

Yet her aims have held – she wants a clean break from the bloc, leaving the lucrative single market and customs union and so reducing immigration and ending EU courts’ jurisdiction.

On Thursday, her finance minister, Philip Hammond called for an early agreement on transitional arrangements to ease uncertainty that he said was hurting business.

Reflecting, confusion on the continent about what kind of Brexit she will ask for, summit chair Donald Tusk said ahead of a separate meeting with May: “We can hear different predictions, coming from different people, about the possible outcome of these negotiations: hard Brexit, soft Brexit or no deal.”

Some Britons had asked him if he could imagine Britain not leaving after all: “The European Union was built on dreams that seemed impossible to achieve. So, who knows?,” the former Polish prime minister said before quoting John Lennon’s song “Imagine”:

“You may say I’m a dreamer, but I am not the only one.”

Other leaders took up the late Beatle’s theme. President Dalia Grybauskaite of Lithuania, which has over 100,000 citizens in Britain, insisted relations would remain close and tweeted the Motown lyric: “#Brexit: ain’t no mountain high enough”.

But Belgium Prime Minister Charles Michel, who argues for a need to protect EU integration from British ambivalence toward the project, tweeted: “It’s time for action and certainty. Not for dreams and uncertainty #Brexit #FutureofEurope”

Speaking to reporters at the summit, Michel said: “Theresa May is in a very difficult situation in terms of leadership so we will have to see what position Great Britain will defend.

“We can speculate, but it is a waste of time.”

SECURITY DISCUSSION

A British official said May would offer “new elements” in a paper on citizens’ rights to be published next week. There may be sticking points with Brussels, such as the cut-off date for EU citizens in Britain to retain rights under the bloc’s free movement rules and EU demands to preserve a panoply of rights in the future that may irk those keen to reduce immigrant numbers.

May will also aim to show that while still a member of the EU, Britain will contribute to other summit discussions, pressing for more action to encourage social media companies to clamp down on internet extremism and for the EU to roll over sanctions against Russia over the Ukraine crisis.

Driven by Germany and France’s new pro-EU president Macron, some EU states are keen to set up new defense cooperation of a kind that Britain has long resisted as a member. British officials say London, with little power to block them, now accepts the current EU proposals.

British strengths in the intelligence and security fields, as well as its military clout, are key elements in a future relationship with the EU that May wants to emphasize.

(Additional reporting by Alastair Macdonald, Robin Emmott, Jan Strupczewski, Elizabeth Miles and Alissa de Carbonnel in Brussels; Editing by Noah Barkin)

London Mayor Calls on UK to Retain Single Market Membership After Brexit

June 22, 2017

“The Brexit goalposts have been moved,” Khan said in a statement, adding that single market access should be ensured at least for the transition period during which Britain extracts itself from the EU.

“The government must now listen to the will of the people by putting aside ideology and negotiating a sensible Brexit that ensures continuing UK membership of the Single Market,” Khan said.

May has said she wants a clean break from the EU bloc, leaving the single market.

(Reporting by Guy Faulconbridge, editing by James Davey)

Tusk Holds Out Hope That Brexit Can Be Reversed

June 22, 2017

BRUSSELS — The Latest on the European Union summit (all times local):

11:20 a.m.

European Council President Donald Tusk says that he still holds out hope that Brexit can be reversed even though the negotiations on Britain’s departure from the European Union officially started this week.

Tusk has made the comments a few hours before a bilateral meeting with British Prime Minister Theresa May. Tusk says that he had been asked by British friends if he could see a way of Britain still staying in.

Tusk said that “I told them that in fact the EU was built on dreams that seemed impossible to achieve.”

He added to that by quoting a John Lennon song: “So who knows? You may say I am a dreamer but I’m not the only one.”

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10 a.m.

European Union leaders are gathering to weigh measures to tackle terrorism, closer defense ties and migration, convinced that anti-EU sentiment and support for populist parties are waning.

Before the two-day meeting in Brussels starting Thursday, summit chairman Donald Tusk trumpeted the resurgence of the EU, even as Britain launched talks this week on leaving.

Tusk told the leaders in an invitation letter that after a series of election defeats for anti-migrant parties, notably in France, the EU is “slowly turning the corner.”

He said “we are witnessing the return of the EU rather as a solution, not a problem.”

British Prime Minister Theresa May is due to praise the good atmosphere at Monday’s Brexit talks, and explain how to protect the rights of citizens hit by Britain’s departure.

 

EU Leaders to Weigh Terrorism, Defense Ties, Migration

June 22, 2017

BRUSSELS — European Union leaders are gathering to weigh measures to tackle terrorism, closer defense ties and migration, convinced that anti-EU sentiment and support for populist parties are waning.

Before the two-day meeting in Brussels starting Thursday, summit chairman Donald Tusk trumpeted the resurgence of the EU, even as Britain launched talks this week on leaving.

Tusk told the leaders in an invitation letter that after a series of election defeats for anti-migrant parties, notably in France, the EU is “slowly turning the corner.”

He said “we are witnessing the return of the EU rather as a solution, not a problem.”

British Prime Minister Theresa May is due to praise the good atmosphere at Monday’s Brexit talks, and explain how to protect the rights of citizens hit by Britain’s departure.

Humbled PM Theresa May hopes to reassure EU leaders at Brussels summit

June 22, 2017

AFP

© Stephane De Sakutin, AFP | Britain’s Prime Minister Theresa May and French President Emmanuel Macron talk during the G7 summit in Italy on May 26, 2017.

Text by NEWS WIRES

Latest update : 2017-06-22

Embattled British Prime Minister Theresa May will try Thursday to convince European leaders she can still push through Brexit despite being badly weakened by an election bet that turned sour.

The two-day Brussels summit marks the debut of French President Emmanuel Macron, the figurehead of a renewed confidence among the remaining 27 states that Britain’s withdrawal can be a fresh start.

But talks on issues including post-Brexit defence plans risk being overshadowed by concerns that a disastrous election has left May so enfeebled that Brexit negotiations will be hampered.

“There is an enormous insecurity among the Europeans: how long will she last? Has she got the majority to deliver?” a senior EU official said.

In Brussels, security has been stepped up after Tuesday’s bombing at one of the city’s main rail stations by an Islamic State sympathiser, following attacks in Britain and France.

Over dinner, May is expected to fill in some of the blanks for the other EU leaders on Brexit.

It will be their first meeting since her Conservative party unexpectedly lost its majority in a June 8 election, leaving her in charge of a so-called “zombie government“.

Britain’s shock referendum vote to leave the EU was a year ago on Friday, and the country remains in a dark national mood after a string of terror attacks and a deadly tower block blaze.

May citizens offer

“The PM will give an update to the other member states on the UK’s Brexit plans following the beginning of the negotiations this week,” a Downing Street spokesman said.

During the dinner May will “outline some principles of the UK’s paper on citizens rights which will be published at the beginning of next week,” the spokesman said.

The EU has made a priority of the rights of three million European citizens living in Britain, plus a million Britons resident in Europe.

At the first formal Brexit negotiations Monday, Britain accepted the EU’s timetable that the exit bill, citizens’ rights and the Northern Ireland border be settled before its request for a free trade deal be considered.

EU diplomatic sources said May will try to keep it simple, with no discussion.

“We believe that the warming-up round of last Monday did create a positive atmosphere … I don’t think that May will want to shatter that understanding,” said one EU diplomatic source, who asked not to named.

After her comments, May will leave the room for the remaining 27 EU member states to discuss what she has told them, and the future relocation of key EU agencies from London.

‘Turning the corner’

EU President Donald Tusk said the bloc appeared to have survived the worst of the anti-EU sentiment which drove Britain’s shock vote to leave exactly a year to the day on Friday.

“The current developments on the continent seem to indicate that we are slowly turning the corner,” the former Polish premier wrote in his invitation letter.

His upbeat assessment follows a series of election setbacks for populist and eurosceptic parties, including French far-right leader Marine Le Pen, who lost heavily to newcomer Macron in last month’s presidential poll.

Macron has joined forces with German Chancellor Angela Merkel, pledging to put a post-Brexit EU back on track to deliver prosperity and security after years of austerity and crisis.

Macron and Merkel are expected to recommend another six-month rollover of tough economic sanctions imposed in 2014 against Russia over the conflict in eastern Ukraine, which has claimed 10,000 lives.

The French and German leaders will brief their peers on the Minsk ceasefire process, which has seen continued clashes between Kiev forces and Russian-backed rebels.

Tusk and European Commission head Jean-Claude Juncker are also expected to report on recent meetings with US President Donald Trump.

Trump’s “America First” approach and dismissive remarks about the EU and NATO have and bolstered calls for the European Union to take on an increased defence role, while his decision to pull out of the Paris climate pact infuriated Europe.

The EU leaders will also discuss plans to push internet firms to clamp down on online extremism, and Europe’s migration crisis.

In Brussels, Weakened May to Outline Guarantees for EU Expats in Britain

June 21, 2017

LONDON/BRUSSELS — Prime Minister Theresa May will outline on Thursday her approach to the “hugely important issue” of reassuring EU expatriates about their futures in Britain, at a summit that is her first Brexit test since an election sapped her authority.

Over coffee at the end of dinner on the first day of the EU summit, May will address the other 27 leaders and describe “principles” of her plan to give early guarantees to some three million people living in Britain who come from other countries in the bloc.

But her wings have been clipped – not only in Britain where voters denied her a majority in parliament, but also in Brussels where EU leaders will try to stop her from discussing Brexit beyond a quick presentation.

Instead, once she has left the room, they will continue their own discussion of Britain’s departure from the European Union.

“My understanding all along is that this is a hugely important issue for Britain and for the 27 that has been clear from the very outset of this process,” a senior British government source said of the question of EU expatriates.

“We want to provide early assurance, and it has always been our position that we want to outline our principles at this dinner and that is what we are going to do.”

The source said Britain was “perfectly content” with the arrangements. Last week, one diplomat said May had tried to “hijack” the summit taking place on Thursday and Friday by drawing other leaders into wider discussions on Brexit. [nL8N1JD4VX]

Another British official said May would offer “new elements” in a paper to be published early next week. There may be sticking points with Brussels, such as the cut-off date for EU citizens in Britain to retain rights under the bloc’s free movement rules.

To show the “goodwill” her aides often refer to, May will have a separate conversation with European Council President Donald Tusk and hopes to have other one-on-one meetings. But it is not clear whether she will make any headway on the Brexit talks, which began in Brussels on Monday.

SOFTER TONE

Weakened by an election she did not need to call, May has watered down her government’s program to try to get it through parliament and set a softer tone in her approach to Brexit.

Yet her aims have held – she wants a clean break from the bloc, leaving the lucrative single market and customs union and so reducing immigration into Britain and removing her country from the jurisdiction of EU courts.

On Monday, her Brexit minister, David Davis, described the first day of Brexit talks to unravel more than 40 years of union as setting a “solid foundation” for future discussions.

But one Western diplomat from a non-EU country said it was hard to see how some members would be open to fruitful discussions.

“Some are still grieving, some are mad and some are just sad,” the diplomat said. “They seem to spend more time complaining about what Britain says rather than cracking on with a deal that will produce a strong Britain and strong EU.”

A senior EU diplomat said the bloc was ready to listen to what May had to say.

“The EU 27 position is clear in terms of what conditions we’d like to see for our citizens there and what we can offer for UK citizens here,” the diplomat said.

May will also aim to show that while still a member of the EU, Britain will contribute to other summit discussions, pressing for more action to encourage social media companies to clamp down on internet extremism and for the EU to roll over sanctions against Russia over the Ukraine crisis.

She will announce a new 75 million-pound ($95 million) package of aid for migrants and help for them to return to their home countries, in the hope of discouraging people from making the “treacherous journey” to Europe.

(Additional reporting by Alastair Macdonald, Robin Emmott, Jan Strupczewski, Elizabeth Miles and Alissa de Carbonnel in Brussels; editing by Andrew Roche)

Zombie UK government unveils Brexit laws — Jeremy Corbyn smiling

June 21, 2017

AFP

© Kirsty Wigglesworth / POOL / AFP | Britain’s Prime Minister Theresa May (L) and Britain’s opposition Labour party Leader Jeremy Corbyn (R) walk from the House of Commons to the House of Lords during the State Opening of Parliament

Text by NEWS WIRES

Latest update : 2017-06-21

Prime Minister Theresa May, leading a “zombie” government after a disastrous election, on Wednesday unveiled a diluted programme of action that included the mammoth legislation needed to take Britain out of the EU.

The state opening of parliament by Queen Elizabeth II came after a string of tragedies which have shaken the nation, and the election on June 8 in which May’s Conservatives saw their parliamentary majority wiped out.

The queen, at an occasion shorn of its usual pageantry, read out the watered-down list of proposed legislation and lawmakers will then spend the next few days debating before bringing it to a vote.

May could be forced to resign if she loses the vote, expected on June 29, just as the country embarks on highly sensitive negotiations for Britain’s withdrawal from the European Union.

After four terror attacks and a deadly tower block blaze that have darkened the national mood, anti-government protesters are also planning a “Day of Rage” in the streets that will converge outside parliament with temperatures forecast to hit 34 degrees Celsius (93 degrees Fahrenheit) — London’s hottest June day since 1976.

May humbled

The enfeebled premier, who is still locked in difficult talks with a Northern Irish party to prop up her administration, says the programme is about seizing opportunities offered by Brexit.

The queen said: “My government’s priority is to secure the best possible deal as the country leaves the European Union.”

She said her government would seek “to build the widest possible consensus on the country’s future outside the European Union”, amid divisions within May’s own cabinet over the best strategy.

The speech announced no fewer than eight bills to implement Brexit, and new legislation aimed at tackling extremist content online after the terror attacks.

But the speech was notable also for what it did not contain.

There was no mention of May’s hugely controversial invitation to US President Donald Trump to come on a state visit.

Also absent were key pledges the Conservatives had given in their manifesto for the recent election which analysts said had bombed with the electorate — such as reform of social care for the elderly and more shake-ups in schools.

There was also no mention of May’s controversial promise to allow a parliamentary vote to repeal a ban on fox hunting, which angered left-wingers.

The Times branded May’s administration the “stumbling husk of a zombie government” and said she was now “so weak that she cannot arbitrate between squabbling cabinet ministers”.

“Downing Street is a vacuum,” the newspaper said, two days after Britain and the EU formally started their Brexit negotiations.

Labour leader Jeremy Corbyn said he was ready to step in and build a rival government — although he and other opposition parties lack the collective numbers to bring down May.

“This is an unstable coalition, it’s not even a coalition, they haven’t even got an agreement with the DUP (Democratic Unionist Party),” he said.

“We’re ready to form, obviously, a minority government if this government collapses and it may well,” Corbyn said, while raising the possibility of a fresh election if parliamentary deadlock continues.

No deal yet

May called the snap general election in a bid to strengthen her mandate heading into the Brexit talks.

But the plan spectacularly backfired, leaving her with a minority government that is now trying to form a majority with Northern Ireland’s ultra-conservative DUP.

May has resisted calls to resign and is hoping for the support of the DUP’s 10 MPs to boost her tally of 317 seats in the 650-seat parliament, but a deal has proved elusive so far.

A DUP source said a deal was “certainly not imminent” as the talks “haven’t proceeded in a way that the DUP would have expected” and cautioned that the party “can’t be taken for granted”.

But even with DUP backing, the government would command only a tiny majority, and just a few rebel MPs could be enough to undermine it fatally.

The Queen’s Speech, normally a chance for a new government to show off an ambitious programme, is usually a high point of British pomp, but this year there was no horse-drawn carriage procession, crown or ceremonial robes.

The snap election plus the closeness to the monarch’s official birthday parade last weekend meant it was deemed infeasible to prepare a second major event at short notice.

The speech was initially planned for Monday but was postponed because of the turmoil following the election.

The government has said this session of parliament will last two years — meaning there would be no Queen’s Speech next year — in order to be able to pass the vast amount of Brexit-related legislation.

But opposition parties have said it is a way for the government to avoid being voted down in a Queen’s Speech next year, when talks in Brussels are expected to get tougher ahead of Britain’s expected EU exit in March 2019.

Belgium identifies ‘terrorist’ station bomber

June 21, 2017

AFP and Reuters

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© THIERRY ROGE / AFP | Police officials and soldiers stand alert in a cordoned-off area outside Gare Centrale in Brussels on June 20, 2017, after an explosion in the Belgian capital.

Video by FRANCE 24

Text by FRANCE 24

Latest update : 2017-06-21

Belgian security forces have identified a man who set off an explosion at a Brussels train station before he was shot and killed, Interior Minister Jan Jambon said on Wednesday.

“The terrorist’s identity is known. We have been able to identify him,” Jambon told RTBF television without giving further details.

Police had earlier described the assailant as quite dark and with short hair and said he was wearing a white shirt and black jeans.

The man set off a small explosion at the city’s Central Station on Tuesday, prosecutors said, before he was shot by one of the routine military patrols active in Brussels since attacks more than a year ago.

They declined comment on witness accounts that the man had shouted Islamist slogans first.

Only hours later, after bomb disposal teams had cleared the area, was the man confirmed dead.

“We consider this a terrorist attack,” prosecutor Eric Van Der Sypt told reporters by the nearby Grand Place.

Police had cleared streets around Brussels’ landmark Renaissance town square after the blast, which occurred around 8:30 pm (1830 GMT) as tourists and locals were enjoying a hot summer’s night.

The Belgian capital, home to the headquarters of NATO and the European Union, has been on high alert since a Brussels-based Islamic State cell organised the attack that killed 130 people in Paris in November 2015. Four months later, associates of those attackers killed 32 people in their home city.

Since then, attacks in France, but also in Germany, Sweden and, most recently, in Britain, have been carried out in the name of the Syria-based Islamist group by other young men, many of them locals, raising fears of more violence in Brussels, where almost a quarter of its population of 1.2 million are Muslim.

Witnesses spoke of a man who shouted Islamist slogans, including “Allahu akbar” – God is greatest – in Arabic, in an underground area of the station still busy with commuters making their way home and seemed to set off one or two small blasts that filled parts of the building with smoke.

‘Isolated acts’

Security experts said Tuesday’s incident could have been similar to “lone wolf” assaults carried out by radicalised individuals with limited access to weapons and training.

“Such isolated acts will continue in Brussels, in Paris and elsewhere. It’s inevitable,” Brussels security consultant Claude Moniquet, a former French agent, told broadcaster RTL.

With Islamic State under pressure in Syria – where Belgium has been the most fertile European recruiting ground for foreign Islamist fighters – he said attacks in Europe could increase, though many of these would be by “amateurs” doing little harm.

He compared Tuesday’s incident to that on Paris’ Champs-Élysées avenue a day earlier, when a man was killed when he rammed his car, filled with explosives and weapons, into a French police convoy. No one else was injured.

Nicolas Van Herrewegen, an employee at the Brussels Central Station, told Reuters that he was heading downstairs toward the underground platforms of the compact, 1930s station, which serves long-distance and suburban lines running under the city centre.

“There was a man shouting, and shouting and shouting,” he said. “He was talking about the jihadists and all that and then at some point he shouted ‘Allahu akbar’ and blew up the little suitcase he had next to him. People just took off.”

Remy Bonnaffe, a 23-year-old lawyer who was waiting on the concourse for a train home to Ghent, said he was startled by an explosion as he listened to music on his headphones. He took a photograph of flames shooting up from what he thought was a briefcase.

There was a second blast further away, which he could not see, followed by what sounded like gunfire, prompting him to run.

“I think we had some luck tonight,” he told Reuters. “I’m happy that no one was injured and that this was basically a failed attempt.”

People just feet from the explosion appeared unhurt and Bonnaffe said he saw no obvious damage to the walls around.

As Prime Minister Charles Michel consulted with his security advisers, the national alert was maintained at its second highest level. Michel, who convened a National Security Council meeting for early Wednesday, tweeted his thanks to the security forces and railway staff for their professionalism and courage.

(FRANCE 24 with REUTERS, AFP)

Bank of England Governor Says Britain Worse Off After Brexit, Mocks Boris Johnson — Expect weaker real income growth

June 20, 2017

‘Before long, we will all begin to find out the extent to which Brexit is a gentle stroll along a smooth path to a land of cake and consumption,’ the Bank of England Governor said in his Mansion House speech

  • Ben Chu Economics Editor, The Independent

The Bank of England‘s Governor, Mark Carney, has spelled out that in the Bank’s view Brexit will make Britain worse off than otherwise and also appeared to take an indirect swipe at the optimistic view of Boris Johnson and others that the UK can “have its cake and eat it” after we leave the European Union.

In his Mansion House speech on Tuesday morning Mr Carney said that “weaker real income growth [is] likely to accompany the transition to new trading arrangements with the EU”.

This assumption was embedded in the Bank’s latest official forecasts which showed the level of UK GDP in 2019 relative to its pre-June referendum forecasts lower by around 1.5 per cent, or £30bn in today’s money.

But this is the most explicit the Governor, who has been attacked by some hardline Brexiteers for supposedly “talking down” the economy, has been on the issue.

Referring to the slump in sterling since last June’s vote, Mr Carney told his audience that “markets have already anticipated some of the adjustment” and suggested that without a post-2019 transition process for the UK, which would retain single market and customs union membership for the UK for a period, the situation could deteriorate further and cause some firms to move operations out of Britain.

“Depending on whether and when any transition arrangement can be agreed, firms on either side of the channel may soon need to activate contingency plans. Before long, we will all begin to find out the extent to which Brexit is a gentle stroll along a smooth path to a land of cake and consumption,” he said.

In an interview with The Sun last September Mr Johnson, the Foreign Secretary and leading light of the Leave campaign, said of Brexit Britain: “Our policy is having our cake and eating it”.

Mr Johnson was referring to his belief that the UK could end EU freedom of movement while also keeping UK trade with the Continent, our biggest export market, as free as before.

The Governor’s references to a transition arrangement echoes the call, made earlier at the Mansion House, from the Chancellor, Philip Hammond for “mutually beneficial transitional arrangements to avoid unnecessary disruption and dangerous cliff edges”.

This represents a reassertion of the Treasury in Brexit policymaking in the wake of the shock general election result, which deprived the Conservatives of their Parliamentary majority.

Mr Hammond had been sidelined by Downing Street in the campaign and Ms May had resurrected an earlier threat to walk away from the Brexit negotiations with no deal at all – a prospect that fills most business organisations with horror due to the profound shock this would inflict on the economy.

The Governor also said that, in his view, it was not yet the right time to raise interest rates, despite inflation hitting 2.9 per cent in May.

His comments sent sterling down 0.3 per cent against the dollar to $1.2694.

Three out of eight members of the Bank’s rate-setting Monetary Policy Committee voted to increase rates from 0.25 per cent to 0.5 per cent last week, the largest vote for an increase in the cost of borrowing since 2011.

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From The Telegraph
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In a thinly veiled attack on the Foreign Secretary, he said: “Before long, we will all begin to find out the extent to which Brexit is a gentle stroll along a smooth path to a land of cake and consumption.”

During the referendum campaign Mr Johnson claimed the Britain could “have its cake and eat it” after it leaves the European Union.

It came as Philip Hammond said immigration to Britain will be managed but not “shut down” after a “jobs first” Brexit

Britain's Chancellor of the Exchequer Philip Hammond
Britain’s Chancellor of the Exchequer Philip Hammond CREDIT: PAUL ELLIS/AFP

The Chancellor also signalled the UK would seek to maintain the “frictionless” border arrangements of the European Union’s customs union for an “implementation period” after leaving the bloc.

He stressed that Britain would leave the EU “in a way that prioritises British jobs and underpins Britain’s prosperity”.

The address will be interpreted as a fresh marker in an internal Cabinet battle over Brexit.

Unite for Europe march in London
Unite for Europe march in London CREDIT: REUTERS/PETER NICHOLLS

Mr Hammond is understood to favour an approach that puts businesses first while colleagues, including Theresa May, have made immigration controls a red line for negotiations.

Read the rest:

http://www.telegraph.co.uk/news/2017/06/20/mark-carney-mocks-boris-johnson-warns-brexit-unlikely-land-cake/

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Foreign investors bet billions on China blue-chips joining MSCI index — Volumes by 56 percent in one month

June 20, 2017

Reuters

FILE PHOTO: A man looks at an electronic board at a brokerage house in Shanghai August 31, 2009. REUTERS/Aly Song/File Photo
By Samuel Shen and John Ruwitch | SHANGHAI

Foreign investors are betting U.S. index publisher MSCI will finally agree to include China-listed shares in its emerging markets benchmark this week, stepping up their buying of Chinese blue-chips that could gain from inclusion in the index.

In May, overseas investors bought a net 19.8 billion yuan ($2.90 billion) of mainland shares via the “Connect” schemes that link the Hong Kong and China markets, pushing up volumes by 56 percent from the previous month.

 A Chinese national flag flies in front of the China Construction Bank (CCB) Tower at Hong Kong’s Central business district Dec 26, 2014. (Reuters file photo)

“We believe this was due to foreign investors’ expectation that MSCI will announce the inclusion of A-shares this week,” said UBS strategist Gao Ting, noting that northbound investors have mostly chosen shares in the consumer and pharmaceutical sectors over the past month. Net inflows so far this month have reached nearly 15 billion yuan.

The flows into Chinese firms such as Midea Group (000333.SZ) and Gree Electric Appliances (000651.SZ) came ahead of MSCI’s decision on whether to open up its Emerging Markets Index (EMI) MSCIEF to mainland-listed China shares. The announcement is due shortly after 4.30 pm New York time on Tuesday, June 20 (4.30am Wednesday in Hong Kong).

If China A shares were to be included, consumer and real estate stocks in particular would see their weighting increase – at the expense of financials – under MSCI’s new methodology unveiled in March, which will cut the number of constituents to 169 from 448.

MSCI has previously declined to include China in the EMI three times amid investor complaints about curbs on repatriating capital from China and concerns over the country’s large number of suspended stocks. The newly adopted methodology is designed to address these issues and make inclusion more likely, analysts said.

China’s securities regulator said on Friday that it hopes MSCI can open its index to China shares, but if not, Chinese capital market reform will not be derailed.

All the Chinese stocks set to be included are big-caps and can be easily accessed by foreigners through the “Connect” trading link between mainland and Hong Kong markets.

Morgan Stanley sees a more than 50 percent chance of a “Yes” decision, expecting a 0.5-1 percent rise in the Shanghai Composite Index on a positive result, although it noted that actual implementation would not take place until June, 2018.

Eligible Chinese stocks would represent a weighting of only 0.5 percent in the MSCI EM index.

“In the case of a ‘No’ decision: The A-share market might first react with a minor decline of 1.0 percent,” Morgan Stanley said in a recent report.

Asset managers have noted that inclusion in the index after the three previous rejections is likely this time, with the weight of money flowing into Chinese A shares evidence of that conviction.

Over the past two weeks, an average of 1.2 billion yuan has flowed into Chinese shares via the Connect each day, nearly 30 percent more than the average during the Jan-May period.

Shenzhen-listed Chinese home appliance maker Midea Group Co (000333.SZ) – potentially a heavyweight in the EMI – has witnessed a surge in foreign interest since MSCI in March unveiled its new methodology for China inclusion.

Overseas holdings in Midea via the Shenzhen-Hong Kong Stock Connect doubled to 4.16 percent, from 1.94 percent three months ago, with about 230 million shares acquired by foreign investors during the period.

Founder Securities (601901.SS), another potential EMI constituent, has seen foreign holdings in the brokerage under the Shanghai-Hong Kong Stock Connect surge to 17.2 percent, from just 10 percent three months ago.

In another sign of rising foreign interest in Chinese big-caps ahead of the MSCI decision, qualified foreign institutional investors have visited a total of 29 Chinese listed companies so far this month, 23 of which have stocks in the Connect schemes, the Shanghai Securities News reported on Tuesday.

However, some investors appear retreating just ahead of the MSCI announcement, exchange-traded fund (ETF) data suggests.

ETFs tracking China stock indices saw 14.5 million euro ($16.17 million) of outflows on Friday, reversing a trend of steady inflows seen since the beginning of this month, according to independent ETF selection platform TrackInsight.

That suggests some investors are thinking again about the likelihood of inclusion in the index, TrackInsight said.

($1 = 6.8338 Chinese yuan)

($1 = 0.8967 euros)

(The story corrects unit of ETF outflows from yuan to euro in 2nd to last paragraph)

(Reporting by Samuel Shen and John Ruwitch; Additional reporting by Michelle Price and Liu Luoyan; Editing by Eric Meijer)

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