Impact & implications of ‘Brexit’ for Regions

By the CPMR Secretariat

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Triggering of Article 50

Tomorrow, nine months after the UK voted to leave the European Union (EU), the Prime Minister Theresa May will formally notify the European Council of the UK’s intention  to withdraw from the EU, in line with the requirements of Article 50 of the Treaty of the European Union.

Thus begins a two-year timeframe for negotiations, which should mean that by the end of March 2019 the UK will cease to be a part of the European Union, unless both sides (the UK on the one side, the other 27 EU Member States (EU27) on the other) agree unanimously to extend the negotiations beyond two years. The road ahead is uncertain as no State has left the EU before and the rules for exit included in the Treaty are brief.

On 29 April a Special Summit of the EU27 will be held on Article 50 where Guidelines for the negotiations will be formally agreed. The European Commission, which through Michel Barnier, will lead the negotiations, will then draw up detailed negotiating texts in the weeks following this Special Summit, and these texts will be agreed by EU affairs ministers in the Council (acting on qualified majority voting) in May or June. Once these texts have been agreed the formal negotiations will begin.

Following up the Brexit process: specific task forces in CPMR Geographical Commissions

The CPMR will closely follow the process as part of our work on the future of Europe in direct collaboration with the most affected CPMR geographical commissions: the Atlantic Arc Commission (AAC) and the North Sea Commission. Both of them have established new Brexit task forces/working groups.

The Brexit Task force of the Atlantic Arc Commission will be led by Galicia and will meet tomorrow in Brussels for the first time, and the working group of the North Sea Commission will be led by Groningen. Our focus will be on the potential impact of Brexit on the relationships, links and co-operation activities between regions, and the financial impact of losing the UK’s contribution to the EU on policies and priorities that matter to our member regions.

In tomorrow’s meeting, Galicia will present the main goals to be achieved by the AAC working group, including the overall objective of making Atlantic Arc Regions concerns on Brexit an issue on the agenda of the political sphere by preparing a joint declaration of our members.

Territorial impact of Brexit

It is clear from initial analysis (see for example Brittany, Cornwall, Flanders, Wales, Scotland, Ireland, the CPMR’s Atlantic Arc Commission and in parts of Northern Ireland) that Brexit will have a disproportionate impact on many regions. The implications of Brexit will be extensive, cutting across many areas:  regional trade of goods and services with the UK, which will be particularly acute within certain sectors and industries including of course the maritime economy and tourism broadly. More specific sectors will also be affected depending on the regions concerned; impact on housing markets, the health and social care or research and education.

Concrete examples can illustrate this implications:

Galicia, for instance, is the biggest fishing region in Europe. The withdrawal of the UK may create an unfair situation affecting its fleet if fisheries are not adequately taken into consideration during the negotiations. In this regard, it is crucial to ensure from the very beginning that the access to fishing grounds is linked to the access to the market.

– For Normandy the UK is the number one client for tourism and for ownership of second residences, and the 3rd largest market for its exports – which is also the case for Brittany.

– For Andalucía the UK accounts for 2 million tourist visits (25% of the total of foreign visitors per annum) and 10% of total tourism to this region.

– Ireland has 3 million UK tourist visitors per annum with an estimated economic value of over 800m euros. For the Basque Country, the UK is the fourth largest destination for exports, and the third largest for imports, with strong economic links within the steel, energy, aeronautics and car industries, and the story is similar for many other Spanish regions.

– And we are as equally concerned for our members in the UK. For example two thirds of exports from Wales, one of our member regions, currently go to the EU – therefore, any changes to the nature of the relationship between Wales and the EU could potentially hit the Welsh economy very hard.

It is important that the ‘territorial impact’ of Brexit is not lost in the negotiations between the EU27 and the UK Government. In our work on Brexit we will be looking to draw together the different analysis and reports on the regional impact of Brexit, posting links on this Web-Forum. We ask for your help in this: if you are aware of studies, reports or ongoing research into the territorial impact please let us know so that we can include references to this here.

Continuing co-operation at regional level post-Brexit

Another theme in our work on Brexit will be the framework for future co-operation between regions pot-Brexit. There is a clear commitment from CPMR to maintain strong links with the UK’s nations and regions post-Brexit, and continued support for co-operation, partnerships, and exchanges in the future. The UK doesn’t disappear as a result of Brexit; and the historic cultural, social, and economic links binding us together will continue, including an important joint responsibility for the maritime spaces that we share in the Channel, North Sea, Atlantic, and Irish Sea. The CPMR and our Geographical Commissions will be making these points forcibly during the next two years.

Implications of Brexit to current and future EU Budget

The departure of the UK potentially impacts on the EU Budget in two ways. The first concerns the current Multi-annual Financial Framework for the period 2014-2020, and the commitments that the UK has already signed up to. If the UK walks away from the negotiations without delivering on its agreed commitments that will create a hole within the MFF and could place in jeopardy the completion of Operational Programmes and projects supported within the current round of EU programmes. Clearly this is a scenario that the CPMR will be hoping is avoided, and will be backing calls for fairness in the negotiations: that the UK delivers on agreed commitments and that the negotiations don’t undermine this.

The second concerns the future EU Budgets and financial frameworks for the post-Brexit period, and the implications of losing the UKs net contribution (estimated at around 10bn euros annually). This loss will be significant and will mean re-thinking how the EU27 finances EU policies in the future, including questions over the role of ‘new own resources’. The CPMR has made clear its support and commitment to maintaining a strong EU-wide Cohesion Policy that involves all regions, and will be adopting a formal policy position on the future of the policy in June this year. Europe has seen growing inequalities and disparities since the financial and economic crisis, making the Cohesion Policy more essential than ever as the EU’s investment policy, as a complement and balancing mechanism to address the market failures associated with the Single Market.

Regional voice in the negotiations

As CPMR President Cordeiro stated in the CPMR’s Political Bureau in Gozo on 10 March “It is crucial that regions are active in the debate on the Future of Europe”. Brexit is one of the biggest developments in recent EU history and CPMR has an important role to play in highlighting the differential territorial impact that Brexit will have.

We encourage member regions to participate on this section by sending their contributions on the impact of Brexit on their regions or any other relevant information related to the negotiation process. We are keen to hear from you.

Please contact: andrew.kennedy@crpm.org

Cornwall reflects on challenges & opportunities of Brexit

By Katie Cavell, Cornwall Brussels Representative

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A Catalyst for Change is Cornwall and the Isles of Scilly’s reflection on the challenges and opportunities of Brexit for the county. 

It comes out of a series of Brexit roundtables conducted during November and December 2016 and coordinated by the Cornwall and Isles of Scilly (CIoS) Futures Group.  The roundtables gathered the views of local businesses and policy practitioners on the potential impact of Brexit for a number of CIoS’ key sectors.

The resulting document A Catalyst for Change: Implications, Risks and Opportunities of Brexit for Cornwall and the Isles of Scilly recognises that while there are risks in all sectors, there may be opportunities as well that must not be missed.

A common thread throughout the discussions was the future of economic funding criteria (based on value for money or outputs, rather than economic need) that could have a detrimental impact on the economy of CIoS, which will struggle to compete with urban areas.

There were also concerns regarding environmental regulations, the free movement of labour which would impact on a number of sectors, and the future trade agreement between the UK and the EU.

One of the main opportunities was the potential to repatriate some EU regulations to the local government level, and to explore potential reforms with the UK Government that may support the future economy of CIoS.

‘. . .many participants saw Brexit not as a cause of change, but as a catalyst – a catalyst that gives us fresh impetus to deliver changes that we had already been proposing in order to fulfil our long term ambitions to create a more sustainable and prosperous CIoS with strong and resilient communities.’ Kate Kennally, Chair of the CIoS Futures Group

CPMR debate on Future of Europe

By the CPMR Secretariat

2017 marks the 60th anniversary of the signing of the Treaty of Rome, the precursor of course to the current EU treaties, and 2018 marks the 70th anniversary of the Council of Europe. Both provide a fitting context in which the CPMR is undertaking its own reflection on the future of Europe.

Over the next 18 months we will be carrying analysis, discussion and debate, aimed at setting out the priorities and visions of our member regions for the future of Europe.

Our end goal: the adoption of a political Manifesto in the autumn of 2018, ahead of what will be a year of change at European level in 2019, with European Parliament elections, a new European Commission and the likely Brexit of the UK from the EU.

We aim to draw some initial conclusions and political messages at our Annual General Assembly in Helsinki October this year, ahead of the December EU Summit discussions on the European Commission White Paper.

The White Paper on the Future of Europe, published on 1 March, sets out a number of scenarios for reform. However, it’s clear that President Juncker’s audience is the national governments, and it will be up to us to demonstrate the central place for regions, islands and outermost regions in the future vision of the EU.

Events of recent years have shown that Europe’s peripheral regions are very much at the heart of the key challenges facing Europe, including the migration/refugee crisis, the EUs external borders, their role in ‘regional diplomacy’, the move towards sustainable and renewable energy sources, and the unbalanced and uneven economic development across Europe.

The CPMR since its creation has stood for three core principles:
• Balanced Territorial Development and Territorial Cohesion
• Championing the position of regions in European policy-making
• Promoting solidarity within Europe and between its regions

These principles remain valid and particularly pertinent in the context of the wide-ranging challenges facing Europe presently, and will provide the foundation on which the CPMR’s reflection on the future of Europe takes place.

We will focus our work around three key pillars of activity, where we can make a forceful and persuasive contribution to the reform debate:

• Investment, competitiveness and territorial cohesion: how Europe reforms to tackle the ongoing social, economic and environmental challenges, including addressing social inequalities, as well as investing in competitiveness at the regional level;
• Democratic participation: addressing growing populism, anti-politics, including distrust of political institutions and structures, anti-Europe sentiment and a rise in protectionism;
• Relations between the EU and its neighbours: the impact of Brexit in the north west of Europe (Channel, Atlantic and North Sea) and what new relationships could emerge from this; addressing the migrant/refugee crisis; and the growing geo-political threats on the EUs southern and eastern borders.

Regions play a central role in promoting and engaging in partnership, through networks like the CPMR, and through projects and other initiatives that promote co-operation in its various forms: economic, cultural, political and in many other ways.

Such activities provide the ‘glue’ that brings Europe closer together, and such co-operation activities are even more essential given the social, economic and political instability across Europe. They should be supported and reinforced in the future.

Many of our regions have competence for education and training, therefore, they have a clear stake and responsibility for investing in the skills and employability of young people across Europe. We hope very much to gather through our members the views of young people in this crucial debate.

We encourage contributions to our reflections, particularly from politicians, academics and experts within CPMRs member regions. If you have thoughts to share, ideas on how the EU can better engage citizens, and promote effective partnership we would like to hear from you.

Please contact: Andrew.Kennedy@crpm.org