EU’s own ‘Preliminary Assessment’ of the Brexit is daunting a soft break of ties!

EU UK Flags

The Brexit and the questions running on the triggering of Article 50 has been up-in-the-air since the referendum election in 2016. The sudden win in Britain and United Kingdom has not yet arrived into negotiations with the European Union, as the Tories government under Prime Minister Theresa May has tried to keep her cars at bay, while hoping for mercy from the counter-parts in Brussels. As the EU Parliament and EU MEPs might think otherwise, with the knowledge of the sleek ‘White Paper’ from the Tories Government, the legal committee of the European Union has done more preparation or delivered are more detailed document, that can tell what the British government and negotiation team has to assess. They will not have a job or getting off easy.

This document is addressing the matter with fierce tone and with clarity that hasn’t been seen from the British counter-parts. They have been more secretive or less visions on how to fix the questions of the economic and legal problems that arrives with United Kingdom leaving the EU as a Member State. That opens a lot of doors, but closes also some. The EU certainly has some bargain chips and can be it horrible for the UK government as they want to leave with something worthwhile for their electorate.

As been said in the report: “The principal of acquired rights may well apply to the continuance of specific entitlements acquired validity in the past – for example, the right to a pension or the right to be considered the owner of real property. However, the principal of acquired rights cannot logically be extended in a such way as to confer an unrestricted ongoing entitlement to specific advantages in cases where the legal framework for those advantages has fallen away, as is the case when a Member State leaves the European Union. It cannot, therefore, be considered that a person who is no longer a Union citizen will continue to have unrestricted rights such as that to live, work and study in the European Union, or to benefit from social security arrangements such as reciprocal healthcare entitlement’s unless, of course, as may be hoped, special provisions are made for the continuance of such rights. As far as the conditions under which UK nationals may reside in other Members States are concerned, it is submitted that these are matter of national laws” (EP CLA, P:2, 2017).

This specifically says if nothing special issued between the Tories and the ones in Brussels, there might be harder for UK nationals to live and work in EU Member States, which isn’t an issue today as the free movement and such has graced the opportunities for British people to reside in Spain, Italy or France for that matter instead of living in Brighton or in Swindon. This is something that will be hard question and not easy bargain for either EU or the UK government.

“The most important legislation in the area of civil justice cooperation is the Brussels I regulation (Regulation (EU) No 2012/1215) on jurisdiction, recognition and enforcement of judgements in civil and commercial matters, which would no longer apply between the UK and the Member States, meaning judgements will no longer be recognised or enforced in other jurisdictions automatically. Older bilateral agreements such as the existing between Germany and Britain may go some way to bridging the gap, but will not suffice completely. Brussel I could be replaced by the Lugano Convention (as is the case for Switzerland and others) or by ad hoc convention (as is the case for Denmark, which is excluded from civil justice cooperation). That being said, as it currently stands, the Lugano Convention was signed by the EU and not individual Member States. According to Art. 70, the United Kingdom is not one of the states entitled to join the convention” (EP CLA, P: 3, 2017).

That United Kingdom leaving the Union seems to not only have implications for the UK citizens who live and works inside the Union, but legal authorities and co-operations like the Brussels I regulation. So the civil lawsuits and the legal breaches between the nations might be altered with the restriction of UK from the Union. That will make it harder for the UK government and businesses to get legal authority or even solve legal matters on the continent, as they are not involved like they are today. So they need even to apply to Lugano Convention and follow procedures to have another way in, like the Danish government has done in the past. That means for a fixed amount of time, there will be issues between the EU Member States and UK government.

When it comes to UK businesses this is scenarios and such that will affect the state and their operations: “The Shareholder Rights Directive: The European Parliament reached an agreement with the Council on 7 December 2016 on a final text on the proposal for a Directive amending Directive 2007/36/EC as regards the encouragement of the long-term shareholder engagement. A vote in plenary is planned for March” (…) “In case of Brexit it takes effect before the time-limit for its transportation (for the most part, 2 years after publication), the UK will not be obliged to implement this directive. Even if the Brexit takes place after the date nothing guarantees that the UK will transpose it. In any case, after Brexit becomes effective, shareholders of UK companies will not enjoy rights under this directive” (EP CLA, P: 5, 2017).

This will show the aftermath of the businesses and how they will have to implement it to make sure they still are following guidelines for businesses inside the EU. That shows that even as a sovereign nation or state, they have to be parts of some long-term engagements that is evident with this one.

brexit-united-kingdom-uk-and-european-union-eu-export-and-import-total

As continued with: “European  Company (SE): Council Regulation (EC) No 2157/2001 of 8 October 2001 on the Statute for a European Company (SE) allows for the creation of a European public liability company, known as the Societas Europaea (‘SE’)” (…) “When Brexit becomes effective it is likely that any UK companies that have adopted SE status would lose that status. If they want to maintain it, they may need to relocate their registered office if the UK becomes a non-EEA state following a Brexit” (…) “With Brexit, this regulation will no longer apply unless the UK incorporates its contents into domestic law or makes other arrangements to maintain it. Cross-border insolvencies will become more complex as there will be jurisdictional issues to determine. Further, UK insolvency professional (notably liquidators) will not be automatically recognised as competent in other Members State” (EP CLA, P: 6, 2017).

So this is initially saying that with the loss of the EU Member State will implicate the companies’ legal status and their rights to markets that they have through the SE status in the European Union. So the UK companies have to either flee their headquarters in the United Kingdom or use time to reregister their businesses as the companies turn into new territory when their state turn into a non-EEA state, which indicates the taxation and regulatory means of their transactions and their portfolios will be changed or has to adapt to the new regime. This can be costly for the international businesses and financial markets like this can hurt the City of London.

By just these measures the UK companies and EU companies will be registered differently, if not their headquarters has to be moved to Belgium, Luxembourg or Poland to be sufficient for the regulatory bodies in the EU as their businesses will be seen as non-EEA state corporations. That affects a dozens of corporations, their employees and the financials flows in and out of the United Kingdom.

There we’re many other factors who we’re in play in the report, but they’re on the copyrights and staff regulation in the EU Organization. These are important to, but deserve to be taken on own accord and questioned by somebody who feels like it.

All the issues here brings to the clarity and must be hard read for the ones that thinks Brexit will be easy and soft for the United Kingdom when they becomes a Non-EEA State. This is a proof of the inner workings and preparations done by the diligent civil servants in the European Parliament in the Brussels. This paper sheds more light than before and also the indications of the future for political and transactions between the United Kingdom and the European Union; as the negotiation starts after the triggering of the Article 50! Peace.

Reference:

European Parliament – Committee on Legal Affairs: ‘Report on the Consequence of Brexit’ (13.01.2017)

#ThisFlag: Interview with Dr. Edgar Munatsi before their strike (Youtube-Clip)

https://www.youtube.com/watch?v=9sTVGkW_OE8

Ethiopia: La Nina and Indian Ocean Negative Dipole-Induced Drought (13.02.2017)

act-13-02-2017-p1

act-13-02-2017-p2

Burundi: Message du PARTI FNL adresse a la faciliation dirigee par Son Excellence le President Benjamin William Mpaka (12.02.2017)

burundi-fnl-mpaka

Zimbabwe: Urgent Notice- “To: Zimbabwe Hosptial Doctors Association Members” (10.02.2017)

zim-doc-10-02-2017-p1zim-doc-10-02-2017-p2

Revealed: H.E. Mpaka asks for clearance by President Nkuruziza to usher in next meetings of the Inclusive-Burundian dialogue!

nkurunziza-press-conference-30-12-2016

The African Union and East African Community leader and facilitator and former Tanzanian President His Excellency Benjamin William Mpaka are apparently waiting for Burundian President Pierre Nkurunziza to be sure that the delegation and the members of the peaceful dialogue are agreed upon before the actual meeting. That means the impartial and impertinent meeting of dialogue has already been scrutinized by the military and the executive of Burundian authorities, that means from the set-up the opposition has been side-lined.

This is not really news since Secretary General of the Supreme Court Agries Bangirienge who order that a dozens of individual and political activists not allowed joining in the Inclusive Dialogue as of 2nd February 2017. These are the lucky who are exiled and on a now non-exhaustive list: Moise Bucumi, Bernand Busokoza, rtd. Maj.Gen. Godefroid Niyombare, rtd. Brig. Gen.Philbert Habarugira, Leonard Ngerdakumana, Leonidas Hatungimana, Onesime Nduwimana, Liboire Bakundukize, Edouard Nibigira, Pacifique Nininahazwe, Patrick Ndikumana, Vital Nshimirimana, rtd. Maj. Gen. Pontien Gaciyubwenge and many more; the list in total contains of 34 individuals and many former high ranking officials in Burundi. So the Burundi authorities have already set the standard of who is allowed and who is banned.

Therefore with the list coming today from Mpaka, the chief negotiator is captivated by the government regime that shields itself with their strict regulation on people and who to speak too. So if Mpaka even wants to have anything to show for, he has to trade his scalps and be humble abode to the President Nkurunziza. This is shown with the list of today.

A list which states this on the bottom: “The Participation is subject to conclusion of discussion with President Nkurunziza to grant personal immunity”. Which translated meaning that President Nkurunziza allowed and set the standard for who to show-up and attend the negotiations, and also who was not allowed to attend. Like the sanctioned list of 2nd February shows the intent of Burundian authorities under Nkurunziza rule.

What the list also contains as the source is claiming that certain parties are not existing in the party register even, the likes of CNDD-FDD-Frondeur, FNL-Amizero or even the UPRONA-Amizero. If this is true, than there more capable evident that the CNDD-FDD are trying to look more multi-party friendly than they are, since they have already put sanctions on so many opposition who is in exile. Even as the news of Ex-Fab soldiers and former leaders are assassinated during the 2015 and 2016. I am just saying so if you didn’t know!

Maybe there would be viable opposition if the fear of oppression, militant behaviour and even free movement would help, since that is not existing and that certain former leaders of opposition leaders have been killed since 2015, the real opposition is either banned or sanctioned against. Therefore Nkurunziza prefers a discussion with himself and his loyal living allies instead of trying to offer a token of peace to the ones questioning his illegitimate government. Peace.

Confidential reports stern warnings about the Italian national bank debt ratio and possible damaging scenarios when restructuring it!

italianbank

The Astellon Capital Partners report on the Italian nation debt is troublesome, as the reports are indicating troubled waters ahead for controlling the debt and repayment on the defaulted loans. This will create other higher issues than only the Greek debt and interest-rates from Brussels and Berlin. The Italian and Rome problem will cause monetary effects for all of Europe, as the debt are like his:

“1980 –1995: Debt / GDP increased by 64%, due to high interest rates levied by Bank of Italy to fight inflation and promote exchange rate stability of Lira within European Monetary System, precursor to the Eurozone” (…)”1995 –2015: Debt / GDP increased by 11%, due entirely to debt servicing costs as Italy ran a primary fiscal surplus over this period” (Astellon Capital Partners, P: 2, 2017).

The continued pressure of the Italian debt is showed with the average primary balance since 1995 have been 2, 1% and the average interest costs of the GDP have been 5, 5%. “Italy among the most fiscally sound member states in the Eurozone, yet also among the most burdened by interest costs” (Astellon Capital Partners, P: 3, 2017).

These numbers are not really positive at all, as the high interest rate by the Bank of Italy together with the rise of debt servicing that increased 11% alone in a decade. That the Italian state have the amount of costs of interests amounting to 5,5% says lots of the economic pressure on the budgets and fiscal policies within the government structures. This does not like a prosperous and strong economic situation.

The report continues with more worrying numbers that the Italian labour costs are 11% higher than rest of the EU average. Certainly also that the average productivity of the labour are 12% lower than the Eurozone average. So you got higher paid workers that work less, which also isn’t strengthening the economy.

That the Italians bank’s they have deflated badly loans that has gone from under 5% in 2005 to the running value of close to 15% in 2016. So that the European Central Bank have bought into the government debt issuance: “2014 –2019: At current government debt net issuance rates and announced QE levels, ECB will have been responsible for financing 100% of Italy’s deficits from 2014 –2019”. This is if the debt is: “Assumes €50bn annual run-rate of government net debt issuance” (Astellon Capital Partners, P: 6, 2017). That is a hefty sum when considering all the other fiscal issues that already put forward.

“Substantial increase in non-bank net purchases of Italian debt required ECB and Italian Banks acquired 88% of government debt net issuance since 2008. Over next six years non-banks will need to increase purchase activity to 7x that of past nine years” (Astellon Capital Partners, P: 7, 2017). So a nation that struggles with high paid performance with low productivity are suddenly needed to get the workforce to 7 times higher purchase activity, meaning the production and selling has to increase seven-fold if the state should have ability to sustain the defaulted debt that has increased and the debt the ECB has bought. Together with the Italian Bank gold-reserve which is lower than the stated and needed figures to be sufficient. The bank has gold-reserves by today’s value about €100bn, but by the ECB agreement need to collateralised that needs to be up to €350bn. That the report claims to be only 25%; while the assets are dwindling too and that is also worrying!

The Assets have from 2011 gone from being around 0% or none, to 2016 when the assets of the Italian bank is now in 2016 -20%. Because this have come a German proposal to avoid an new Argentine Bank collapse case. As the Italian Bank are required independent assessments of debt sustainability.

The great risks for Italy and the Italian republic are these scenarios. Like the hedge funds can buy into with high risks and yields through BTP yields during the 2016-2017. Second scenario in 2018 is that the ECB or European Central Bank will be a marginal buyer of the government bonds and buying debts. Third scenario is that the Italian Banks becoming net-sellers and therefore losing their assets with less of profits in the 2016-2017. Last scenario is unilateral re-profiling or re-domination or some form of Greek-Haircuts by 2017-2018, that means trade-offs and cutting taxes to try to revamp the economy (Astellon Capital Partners, P: 21, 2017).

With these numbers and situation, there are certain men in ECB and in Italy that is worried. The strength and sovereign nation of Italy has to find ways of restructuring the debt and assets. What is certain is that the debtors cannot take it easy on this one. The Italian debts and reserves are worrying as the debt has to restructure and the focus on how the Italian republic has to get more productivity and create more production so the taxes and debt per GDP can go down. This will be painful for the Italian state and their government institutions, together with all the debt and bad-debt that the state has to cover, because the banks cannot afford to lose all of these fiscal funds. There have to be a revolution of something if the Italian republic and its workforce are able to 7 times higher purchase activity. That will not come easy and how they will ever achieve that must be by a unicorn arriving and spinning the Fiat wheels of Torino more than ever before; even getting the world more hooked on Milan fashion design or Illy coffee. Peace.

Reference:

Astellon Capital Partners – ‘Q1 2017 Notes No. 24 – Ciao a tutti: An orderly restructuring of Italian debt’

Ross Thomson MSP letter to Kevin Stewart MSP on Brexit (06.02.2017)

ross-thomson-10-02-2017-p1ross-thomson-10-02-2017-p2ross-thomson-10-02-2017-p3

#ThisFlag: Evan Mawarire – “I’m so glad to be back home in Zimbabwe where I belong” (Footage)

“Thank you for your support and for speaking out for Zimbabwe. None of us should ever be intimidated into silence. This is our home and we have the full right to participate in making it a better country. Like we said in the beginning, HATICHADA, HATICHATYA! ASISESABI njalo ASISAFUNI! FED UP & NOT AFRAID!” (Mawarire, 10.02.2017)

#ThisFlag: “Free at Last to the sound of lying ministers!” (09.02.2017)

thisflag-09-02-2017-p1