EU insists on taking back control

The signals that the EU has been sending out over the past few weeks demonstrate that it, just like UK Brexiters, is determined to “take back control” of areas of vital interest during the Brexit negotiations.

One is the entire field of security, where the UK hopes to keep close ties.

Take Galileo, the EU’s €10billion satellite navigation system. When the project was launched a decade ago, the US tried to block it. Washington, unsurprisingly, wanted to retain the monopoly provided by its high-tech Global Positioning System (GPS) because of its geo-political as well as commercial importance.

Now the EU has warned the UK that it may no longer be considered as a prime contractor for security-sensitive elements of the project. Business secretary Greg Clark retorted that the UK should remain in Galileo “as part of a strong security partnership with Europe” (our italics).

The UK government went on to indicate that it is looking to launch a British alternative. The FT’s view was that without participation in the EU system, “Britain’s industry would face major questions about its ability to become a leader in the global space race”.

The EU Commission had already announced that, thanks to Brexit, the back-up security monitoring centre for Galileo, due to come fully operational this year, would be relocated from the UK to Spain.

As if this were not bad enough, this month EU aerospace giant Airbus and French fighter-jet builder Dassault Aviation said that they would join forces to develop Europe’s Future Combat Air System (FCAS). This followed news last July that France and Germany would work together on FCAS.  

This decision implies that once our participation in the current joint Eurofighter Typhoon programme comes to an end we will be on our own. Pity poor BAE Systems and UK plc trying to finance its own new high-tech fighter. Buy (more) American looks like the only solution.

The headquarters of the EU’s anti-piracy Operation Atalanta, will also be relocated after Brexit, possibly to the town of Rota in southern Spain, where there is a big US naval base, according to Spanish daily El Pais. The operational HQ in Northwood would take just 40 weeks to move, the FT has earlier reported.

And this is not all. UK firms in the City of London would face “clear limits” to their trading opportunities after Brexit, according to Valdis Dombrovskis, the EU commissioner responsible for financial regulation. He said these opportunities would be linked to the UK’s willingness to stick to EU rules. They would be bound by the same so called “equivalence” regime as is applied in other financial centres such as the US and Singapore, dubbed “the second-best solution” by Andrew Bailey, head of the UK’s Financial Conduct Authority.

Separately the European Parliament backed the European Central Bank’s call for more powers to oversee the vast markets in euro-denominated derivatives, which are very largely traded in the City of London.

The thread which links these diverse issues is asserting control, not just over European military assets but also financial markets, an increasingly key geopolitical weapon.

The UK government’s Brexit cheerleaders, at least in public, keep comforting their supporters by claiming EU statements are just negotiating positions. They forget that in the talks the EU is defending its own interests too.