17/11/2017 Politics Europe

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Hello and welcome to

Politics Europe, your regular guide

to the top stories in

Brussels and Strasbourg.

On today's programme: As the EU

signs what leaders have called

an historic agreement

on defence co-operation,

are we edging closer

to the much-wanted EU army?

The European Parliament has been

debating tax avoidance

after the release of

the Paradise Papers.

Will the EU take action where member

states have struggled?

What's going on in Poland?

The European Parliament says

the Polish Government has committed

serious violations of the rule

of law and could impose sanctions.

We'll have the latest.

And: As new figures on the numbers

on EU nationals coming to the UK

to work are released,

has talk of Brexitists of EU

citizens leaving the UK

been exaggerated?

So all that to come and more

in the next half an hour.

And joining me for all

of that is Rachel Sylvester

from The Times and Toby Young

from The Spectator.

First, here is our guide

to the latest from Europe

in just 60 seconds.

As the great philosopher

David Hasselhoff once sang,

"I have been looking for freedom,

still it can't be found."

And there was similar frustrations

for the German Chancellor who today

missed a self-imposed deadline

to try to form a workable

Government coalition.

The European Parliament

named its press room in Strasbourg

after Daphne Caruana Galizia,

the Maltese journalist killed last

month after reporting

allegations of corruption.

Have reports of the Brexitists

been exaggerated?

The latest figures from the Office

for National Statistics show

the number of EU Nationals working

in the UK continues to rise.

They say a cold shower

is character-building but it's not

something MEPs are looking to try.

It was up all this week

after it was announced the hot water

in their offices would be

permanently switched off

because of health concerns.

And where did you get

that hat, Mr Juncker?

The answer: A number of academic

institutions where the EU President

has received honorary

degrees in recent weeks.

Well, let's just pick up on that

element about the ONS figures.

There is talk of 'Brexodus' ie

figures showing that nationals

fleeing the UK really

is not as great as we thought

because the figures released

by the ONS suggests that the number

of EU nationals working in the UK

has actually reached a record high

of 2.37 million migrants.

Rachel, what do you make of this?

I have to say I am confused.

I thought other figures from the ONS

showed a dramatic slowdown

in the number of EU nationals

coming here post-Brexit?

Well, the problem is we need a lot

of EU nationals working

in the economy, particularly

in low-skilled jobs.

And I think there's a real danger

of expectations not being met,

people voted for Brexit

because they were cross

about particularly low-skilled

immigration, but actually I think

a lot of it is going to continue

after Brexit and the government

is going to need a lot of it

to continue because businesses

will demand it, farmers will demand

it and it is just inevitably

the economy will mean it carries on.

Does that mean, Toby,

despite these figures that actually

there are real problems around

the corner in terms of EU

migrants going home?

Well, that's often the move made

by Remainers who predicted that

merely by voting to leave,

we would trigger this mass

Brexodus, and as I turns out,

it hasn't happened,

as you say

there's a record number of EU

nationals currently working

in the UK - over 100,000 more

there were this time last year

including more in the NHS.

So they moved to, say, "Oh,

well, yes, it hasn't yet

because we haven't left yet but it

might happen when we leave."

One thing we do learn

is that the people coming now,

mostly the biggest increases

in Bulgarians and Romanians

which rather suggests it's

low-skilled workers who are coming

here and maybe doctors,

professionals, others are thinking,

"You know what - I don't think so"?

I think there are now more doctors,

more EU nationals working as doctors

here as of June 2017

than there were in June 2016.

So that doesn't seem

to be happening either.

The way in which remainders

present their case is by talking

about the numbers leaving

without taking into account

the numbers arriving.

It's exactly the same sleight

of hand they accused Boris

of in calculating the 350

million a week figure,

it wasn't a net figure,

it was about outflows

and not inflows.

If you include inflows

in the calculation, turns out net

there are more EU nationals working

here than there ever

have been before.

Rachel, just a sleight of hand?

No, I think the issue more

is that the people who voted

for Brexit are going to be furious

because they feel they voted

to bring down immigration

and they'll feel betrayed

by the Brexiteers who promised that.

Isn't there already

upward pressure on wages?

Aren't we seeing low-skilled jobs

better paid than they were,

because there are fewer unskilled

migrants beginning to come in..

But didn't they vote

on what they perceived to be too

many people coming?

Even though those people

were needed for the economy.

That's the argument

the Government has got to end.

We'll see where the

figures go, of course.

This week was described as historic

by one EU foreign policy chief

as the EU moved closer

to deeper defence integration

between member states.

The Permanent Structured

Co-operation pact or Pesco

for short, should come

into force next month.

23 countries have declared they'll

take part so far with Portugal

and the Irish Republic eventually

expected to also sign on.

Only Denmark, Malta and, of course,

the UK will remain unaffiliated.

The pact was originally proposed

by France and Germany,

keen to bolster the EU

after the Brexit vote.

The agreement requires countries

to increase defence budgets in real

terms and also it asks them

for providing substantial support

including personnel

for EU military missions.

Nevertheless, it falls short of full

European Defence Union that

commission President Jean-Claude

Juncker envisaged in the State

of the Union address this year.

Estonia's Defence Minister,

Juri Luik, said even with PESCO

in force, collective defence

will always remain in NATO.

Despite traditional British

scepticism about further

integration, Boris Johnson has

welcomed the move and said the UK

was supportive and would be

like a flying buttress

to support the cathedral.

Well, to discuss this

here in the studio,

we have the new UKIP leader

Henry Bolton and in Cambridge

the Labour MEP Alex Mayer.

Alex Mayer, if I could start

with you first: I mean

Labour Governments,

as well as conservative Governments,

have always been iffy about Europe

getting its act together on defence

and basically we have been

accused of blocking it.

Is Labour now actually in favour

of closer EU defence co-operation?

Yes, we are.

And I think that what's happened

over the last few months and years

is that the whole geopolitical

situation has changed.

When I talk particularly

to my eastern European colleagues

in the European Parliament,

they're particularly worried

about Russian aggression

and want to make sure that European

defence is strengthened

and I believe that working together

will enable us to do that.

And Henry Bolton, that's surely

a good thing if the EU begins

to look after itself rather

than always having to prelie

--rely on others,

above all the Americans?

There's two aspects to that.

Maybe I can start by saying that

although we didn't sign up to PESCO

on Monday, it's quite clear

that the - we are already

in principle going to be

participating in other areas of this

such as the European Defence Fund

and various other mechanisms that

govern procurement and so on.

And those in turn are all going

to be governed by Brussels-based

political and regulatory

decision-making that we won't be

fully participating in post-Brexit.

So we will be subordinating

elements of our military,

industrial and scientific

and research as well as our

military, to EU policy.

But given the threat we now know

we seem to be facing from Russia,

you think of Crimea,

you think of the Ukraine,

surely it makes sense for the EU

to start putting more oomph

behind its military capability?

Well, co-operation and EU member

states co-operating and ensuring

that their command and control can

work together so they are compatible

with each other, yes.

But centralised political direction,

policy and regulatory frameworks

is not the way to go.

NATO is the alliance that

has kept the peace up

until now, militarily.

But Jens Stoltenberg is entirely OK

with this development.

Well, I'm not, and UKIP is not.

We see a whole range of areas

in which it implies deeper political

integration with the European Union

when every - and compromise

of our own autonomous

and sovereignty, but I'll come back

to that, autonomous and sovereign

military capabilities

and our ability to deploy them,

unilaterally, the problem

here is that NATO has managed

to survive and work effectively

as a military deterrent for decades

without that regulatory framework.

OK, Alex Mayer, let me

just ask you this -

isn't the real danger

of this is a paper tiger,

at the end of the day there's a lot

of talk about Europe

getting its military act together

but basically it's a sort

of bureaucratic getting your act

together rather than real tanks

on the ground?

I mean, I just think this has been

blown out of all proportion.

This is a UKIP storm in a tea cup.

It is good news if European

countries want to co-operate

with each other on defence.

No-one is forcing anybody

to be a part of it.

As we heard in the introduction

to this report, Britain is not

a part of it, Malta

is not a part of it.

You can choose whether you want to.

So what is wrong with European

countries choosing to work

together on defence?

Just as we choose to work together

in the UN or in NATO.

And as you rightly said,

the Secretary-General of NATO has

welcomed this move.

We don't want to do anything

to duplicate NATO, but European

countries choosing to work together,

I think, is a good thing

and will help

strengthen our defence.

And where is your leader

on this, Jeremy Corbyn,

because he traditionally

is very iffy about NATO

and military alliances?

But he's very much in favour

in making sure that people

collaborate with each other

and making sure we have successful

missions to try and keep a more

peaceful and stable world.

Yes.

I mean, Donald Trump has always

argued that Europe cannot keep

relying on the Americans.

So surely this is just a natural

political development that

at the end of the day

Europe is going to have

to turn its attention to defence.

His concern is the amount that

people are spending on defence.

And the problem with the - the -

the whole PESCO concept is that

member states will not,

certainly not to any great extent,

we cannot expect them

to increase their...

That's part of the deal, isn't it,

they have to increase it

in real terms?

But part of the deal is for NATO

is 2% and they don't maintain that.

They're not going to increase

their national capabilities

to support PESCO.

What they will do is they will say,

"Hang on a minute, we can pool

assets and thereby save costs."

This is one of the

things driving it.

Now what concerns me

is at the moment member states,

who are also members of NATO,

pledge assets, military assets

and capabilities, to NATO.

Now, they're going to be

pledging those same assets

to the European Union.

You can't do both.

OK.

Let me bring our guests in, Toby,

how do you read this?

Is this a serious move by Europe

to get its act together on defence?

Or actually just talk?

Well, it seems like part

of the ground clearance they need

to do in order to create

an EU-wide army.

And is this a good thing?

Well interestingly it was one

of things which those of us

on the leave side flagged up

as a risk if we remained in the EU

and that was always dismissed

by remainders as being in the same

category of fake news,

as saying Turkey might imminently

join the EU.

Why is a problem if

NATO is OK with it?

The difference is if we remain

in the EU and EU army does

eventually get created,

it's not clear that we

would

have a choice if our troops

were called up to fight

in an EU war.

Whereas in NATO we do at least

have a right to street yes.

--Veto.

Every NATO country has

to unanimously endorse a military

action before it commits its troop.

And Rachel, is this move

by Europe actually maybe one

of the consequences of Brexit?

Because obviously we are with

France, the big player

in European defence.

Now we are out.

Is that perhaps what's driven

the Europeans to think,

"Crikey, we better

get our act together"?

I think also, yes, exactly,

Britain's been a sort of a block

on further integration.

If it leaves, then the rest

of the EU is going to more and more

gather together and I think -

I don't see we can complain

about that.

I think if we choose to leave,

that's their right to do so.

Brexit is actually led to this?

Brexit has taken away an obstacle

to achieving it but that's

exactly the point.

Jean-Claude Juncker's point

that this is about a full -

full European Union military union,

that's what he wants and that's

what the direction of travel is,

that's absolutely where we're going.

Let me just ask Alex Mayer there.

Is that where you would

like Europe to go?

I don't think that there's any -

I don't think there's likely to be

a European army.

I don't think that's the end goal

and I don't think anyone's ever

going to be forced into it.

This is a union of countries

of Europe who want to get together

and share ideas and

resources on dependence.

That's what's happening.

No-one is being forced into it,

no troops are going to be called up

from different countries

without their say so.

This is just people collaborating

together to try to get the best

from the resources that they have.

Henry Bolton, entirely voluntary

arrangement which people can

take or leave.

Well, that's what NATO

is and this is not.

This will be regulated as was made

clear in the Government paper issued

in September that this will be

regulated by the European Union.

And we won't be part of that.

Now, to Boris Johnson's bit

about flying buttress,

to an extent I would agree with that

analogy, but a buttress is outside

the building, supporting

it from the outside.

If we are able to maintain our own

full spectrum military capabilities,

we will always want to co-operate

and support our friends and allies

abroad, including EU member states.

We just do not believe,

and UKIP certainly doesn't believe,

that we need to be subordinate to EU

decision-making either

within the commission or politically

in order to do that.

We are far, far better able to do

that if we are that -

if we're outside the building

but supporting it.

OK, people, thanks very much.

Henry Bolton, Alex Mayer,

thanks very much for your time.

Now, could we soon see the EU

impose sanctions on one

of its own member states?

Well, MEPs voted this week to start

official proceedings against Poland

over concerns that the Nationalist

Government in Warsaw is clamping

down on the independence

of the judiciary.

In a resolution adopted

by 438 votes to 152,

the European Parliament voted

to launch the so-called Article 7

process which could lead

to the suspension of Poland's voting

rights in the Council of the EU.

In a debate in Strasbourg,

MEPs said the country had conducted

serious violations

of the rule of law.

But the vote didn't go down very

well with one Polish MEP.

Why are you leaving?

No, because I have to

say something to you.

I have to say something to you.

Your attack to Mr Lewandowski,

I find it outrageous.

If there is one...

APPLAUSE.

..sensible - if there is one

sensible reasonable colleague of us,

sometimes even a little bit boring,

then it is Mr Lewandowski and to say

that he lose his senses,

I think it's the Polish Government

that has lost its senses

and not Mr Lewandowski.

APPLAUSE.

It's interesting, isn't it, Rachel?

There is a sort of, it seems to me,

tension between the old western

European countries and the new

eastern European countries.

This kind of symbolises

I, doesn't it?

-- This kind of symbolises

it, doesn't it?

Exactly.

But I do think it's interesting

that the EU has to uphold the rule

of law, liberal democracy,

that sense of...

But sanctions is a big step.

It's a big step and

there is definitely -

and we're going to see that

in the Brexit negotiations as well,

the old EU, the new EU.

But I think ultimately,

the EU does have to uphold those

values which is what it stands for.

Toby, the counter-argument

which the Poles make is,

"Look, we are a democratically

elected government, what we choose

to do in our country

is none of your business,

leave us alone".

I think it's for someone on my side

of the Brexit debate who both

believes in the rule of law,

believes in universal human rights

and so forth but also believes

in national self-determination,

this is a really tricky one.

But I think the EU would certainly

have a lot more credibility

as the upholders of the rule of law

and universal human rights

if they hadn't supported

the Spanish Government

in its absolutely brutal

crackdown of the independence

movement in Catalonia.

Is that, Rachel, the sort of divide

between east and west?

I mean, is it possible that down

the line we could see eastern

European countries maybe looking

to Britain and thinking,

"I think we want out

of this club too"?

Or becoming a bloc

within a bloc, perhaps.

I don't know, that is a possibility.

There's definitely a different

culture, isn't there,

that sort of Franco-German access

of closer integration,

you know, the EU, the sort of faith,

the true faith, definitely driven

from that side of the bloc

and you could - you could easily see

a sort of a different culture

of a bloc within a bloc developing,

I think.

Because one of the interesting

things, Toby, it always seems to me

as much of this sort of argument

around Brexit is that we're

going to have to teach the Brits

a lesson so no one else dares do it.

And yet there hasn't really, so far,

been any sign of anyone looking

to do a sort of Pexit or whatever.

Well, I always thought

there was a slight red herring

on the part of the EU.

I mean, I think one of the reasons

I'm optimistic that the EU

will eventually compromise

and strike a deal and there will be

movement in December

is because if we are actually forced

by the EU through their

intransigence to crash out

without a deal and end up trading

with the rest of Europe via WTO

rules and we make a success of that,

then there might be a stampede

for the exit.

OK.

So earlier this week,

the European Parliament called

an urgent debate on the so-called

Paradise Papers - a leak of 13

million documents reportedly tying

major companies and political

figures to secretive overseas

financial arrangements.

MEPs call for a step-up in the fight

against tax avoidance.

Adam Fleming has the details.

Papers, papers everywhere.

But the documents MEPs cared

about this week were the ones that

revealed how the rich pay less tax.

The so-called Paradise Papers.

TRANSLATION:

When I consider

that this cup of tea,

when I bought it, I paid more tax

than an international sporting

company pays on its entire turnover,

then it's really outrageous.

It's not just an individual case,

from the Queen, to Facebook,

to George Soros, to Uber,

to Shakira, to eBay -

all of them are mentioned

in the Paradise Papers.

More than 60 billion euros a year

are being lost to the EU.

The leader of the centre left group

called tax avoidance a cancer

on the European economy.

TRANSLATION:

States are imposing

austerity whilst at the same time,

multinationals are taking billions

out of the economy and not paying

tax, thereby depriving people

of this income and we have drawn

attention to this

repeatedly as socialists.

The Paradise Papers originated here,

Bermuda, a British overseas

territory thrusting the UK

into the spotlight.

Another day, another leak

of embarrassing documents

about the role of the city of London

as the global centre

for tax avoidance.

Successive British governments have

postured about leading

on transparency, but it's easy

to play the good guy when you have

so many post-colonial territories

to do the dirty work

at your bidding.

Avoiding civilised rules on tax

was always part of the Brexit agenda

but any attempt to turn Britain

into the Bermuda of the north

is likely to flounder,

since the EU will surely make

cleaning up

the overseas territories a condition

for any future trade deal.

But the rest of the EU

got the blame too.

Remember, it was an EU directive

in the 1980s that let multinational

companies pay tax in any European

headquarters country rather

than where their revenues

and profits were really made.

Remember, tougher action has been

taken against the LuxLeaks

whistle-blowers than

against the accountants,

corporate executives

or politicians involved.

Remember, that the commission's

own president, Mr Juncker,

was Prime Minister of Luxembourg

when his country was conniving

with big accountancy firms

to erode the tax bases

of larger EU economies.

Jean-Claude Juncker and his

commissioners decamped to Strasbourg

as usual and had their weekly

meeting in this very room

and they say they're

gripping this issue.

For example, they want every company

to publish every activity it does

in every country so they can be

taxed properly and they want

to publish a blacklist of global

tax havens at the start

of next month.

But some MEPs say the hold-up comes

from the member states.

Which countries are blocking it?

Oh, so many.

I mean, of course you have

the inner European tax -

tax paradises, like the Ireland,

the Malta, Cypress, but then

surprisingly you have a number

of big countries, and I forgot

to mention the United Kingdom

and all these crown dependencies.

But then you have big

countries like Germany.

Wolfgang Schauble when he

was Finance Minister,

not so long ago, was the key

opponent to country-by-country

reporting by multinationals,

because he wants to preserve

the reputation of the big

German multinationals.

So you know there's no holy

finance ministers there.

And this week, the Parliament

Council and Commission fails

to agree a new law on money

laundering, after eight attempts.

Looks like the murky world of tax

avoidance will stay murky

for a while.

I have to say, I have a slight sense

of deja vu in that I'm sure

David Cameron was, you know,

going to crackdown on tax avoidance,

he had summits here,

and task force there.

I mean, without being unduly

cynical, do you think anything

is actually going to

change any time soon?

Well, the EU should be the vehicle

for dealing with this.

This is something that has to be

dealt with internationally.

One country on its own is never

going to be able to sort out

a global tax problem.

But it just seems to be caught up

in the weeds yet again of,

you know, individual self-interest.

I suppose politically, though,

it's like manna from heaven

for Jeremy Corbyn, though, isn't it?

Of course, yeah.

This plays to his narrative

about the rich are doing terribly

well, it's just us poor

people on the austerity.

And the Conservatives should do

something on the Crown dependencies,

they could do more on publication

of transparency and that

sort of thing.

And it will be a brilliant way

of demonstrating they're not

the party of the rich.

Toby, is it possible,

I think we heard I mentioned

in the film there, that as part

of the Brexit negotiations,

the EU might say, "You know what,

UK, Crown dependencies,

you got to get a grip of them"?

Well, they might but it's

going to be easier for them to make

that case if they're a bit more

flexible about making a trade deal

with us because in the absence

of a trade deal we're going to have

take advantage of whatever we can.

I think MEPs would have more

credibility on this issue.

They weren't subject

to a particularly low tax rate,

lower than any of the member states

tax rates themselves.

I mean they get away

with paying very little tax.

Being an MEP is actually a form

of tax avoidance and I would say

in response to the Jeremy Corbyn

stuff around the Paradise Papers,

let's not forget that the top 1%

of earners are paying 27%

of the total income tax take,

higher than it's ever been before

and certainly higher

than under any Labour

Government.

OK.

We'll have to leave it there, folks.

Toby Young and Rachel Sylvester,

thank you very much