Brexit in chaos as Tory MPs trigger vote of no confidence in Theresa May

Germany urges EU to DITCH backstop - Huge pressure over Brussels’ 'red lines' BRUSSELS should ditch the Irish backstop and show more flexibility over it stance on Brexit, according to an influential group of German economists.

By SIMON OSBORNE

PUBLISHED: 07:51, Fri, Feb 1, 2019 | UPDATED: 10:27, Fri, Feb 1, 2019 

A report by the Ifo Institute warned the EU was wrong to presume it had the upper hand over Britain in the run-up March 29 and called for it to “abandon its indivisibility dogma” on the four freedoms and come up with a creative formula. It said the current approach risked a disastrous showdown with London that could spin dangerously out of control. The report asks: “In a standard game of chicken, the actor who loses the most will dodge first. Can the EU really be sure that losses are sufficiently asymmetrically distributed that it ‘wins’ this game?

“This is a very dangerous game, both for the UK and for EU. It is wiser to take the threat of a hard Brexit at face value and react accordingly.

“Recognising that a hard Brexit is in no one’s interest and that it would cause irreparable political as well as economic damage, we call both on the UK government and the EU Commission to rethink their ‘red lines’ and return to the negotiation table.”

The report rapped the European Commission for mishandling Brexit talks and for trying to use the legal advantage of the Article 50 process to dictate punish the UK.

It said: “Since 2000, the United Kingdom paid a net contribution to the EU budget of €76bn. One may argue that this fact alone merits a fair treatment of the second-largest European economy.”

The report was led by Clemens Fuest and Gabriel Felbermayr from the Ifo in Munich but includes input from the chairmen of the advisory boards of both the German finance and economics ministries.

10.08am update: EU agrees to give Britons visa-free travel

Britons will be given visa-free access across the EU even in the event of a no-deal Brexit.

9.25am update: Simon Coveney insists EU solidarity over backstop remains strong

The decision was made at a meeting of EU ambassadors in Brussels.

EU citizens travelling to the UK will be given the same visa-free travel rights as part of the agreement.

9.45am update: Hunt in Romania to discuss post-Brexit relations

Foreign Secretary Jeremy Hunt is in Romania where he will meet President Klaus Iohannis and Prime Minister Viorica Dancila to discuss post-Brexit relations between the two countries. Mr Hunt said: “The UK and Romania are close allies on many issues, and that will continue when we leave the EU. “I’m looking forward to discussing, with President Iohannis and Prime Minister Dancila, how we develop our Strategic Partnership to help tackle security and hybrid threats. “While in Bucharest, I will also see an example of excellent UK-Romania economic co-operation with the opening of the London Stock Exchange office, making use of Romania’s productive services sector.”
Irish Foreign Minister Simon Coveney has insisted the EU remains firmly united over the backstop.

Mr Coveney was in Romanian capital Bucharest form informal talks talk with fellow foreign ministers.

He tweeted: “Solidarity with Ireland on #Brexit remains so strong.”

9.08am update: Grayling: Norway Plus options would be a betrayal

Transport Secretary Chris Grayling has insisted a trade arrangement with the EU would be “much easier” than other trade deal negotiations because “we start form a level playing field”.

He told The House magazine: “If you are looking at a trade deal, for example, the Canada/EU discussions which took seven years, you start with two different systems that are a way apart and you have to find the common ground.

“We’re in a position where the common ground already exists. What we have to establish is how we manage divergence. So, it’s a different set of negotiations when the time comes.”

Mr Grayling warned the so-called Norway Plus Brexit option – which would see the UK remain inside the single market and the customs union – would be a “betrayal” of Leave voters.

He said: “My view is we need to leave the single market, we need to leave the customs union, but we need to make sure that the basis of our future partnership is one that keeps us good friends and neighbours.

“What we can’t do, in my view, is to betray the result of the referendum.”

8.58am update: Britain ‘must set out Brexit goals’

Ireland’s Europe minister, Helen McEntee, said Britain must set out its goals if it wants to get an extension to the Brexit timescale to try to reach a deal to leave the EU.

Ms McEntee said: "If they were to ask for an extension I think it would be approved

“But there is no point in looking for an extension if we end up back to the same place as we are now in three months' time.”

8.32am update: Brussels stands firm on Irish backstop

Brussels does not see any solution to resolving the issue of Irish border arrangements after Brexit other than having a backstop, according to German justice minister Katarina Barley.

Ms Barley said. “We definitely will not accept a border in the normal sense between Ireland and Northern Ireland, that is something that we've been very clear about from the very beginning. The problem is we don't see any other proposition by the British government.”

MPs voted on last Tuesday to send Theresa May to reopen her Brexit treaty with the EU to replace the backstop - an insurance policy to prevent the return of a hard border in Ireland - but promptly received a rejection from Brussels.

8.04am update: Companies consider quitting Britain over Brexit

Almost a third of British businesses could be forced to shift operations abroad because of Brexit, according to research among company directors.

A survey of 1,200 senior businessmen and women by the Institute of Directors found that 16 percent already had relocation plans while a further 13 percent were actively considering doing so.

More large companies had already moved operations, but small firms were almost twice as likely to be actively considering the prospect, the study suggested.

Edwin Morgan, interim director general of the Institute of Directors, said: "It brings no pleasure to reveal these worrying signs, but we can no more ignore the real consequences of delay and confusion than business leaders can ignore the hard choices that they face in protecting their companies.”

7.30am update: Ministers predict Article 50 delay

A third of Theresa May’s Cabinet believe Article 50 may have to be extended beyond March 29, according to reports.

The Daily Telegraph said Home Secretary Sajid Javid was the latest member of the Government to predict a delay in the process.

It quotes sources saying Mr Javid raised concerns with another minister during the last fortnight that Mrs May will run out of time to pass legislation needed for Brexit and questioned her strategy of publicly insisting the UK will leave on March 29.

Nine Cabinet ministers are now thought to believe Brexit may be delayed if extra time is needed to finalise the terms of a deal.

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