Brexit and Gibraltar: May laughs off Spain ‘war’ talk Prime Minister Theresa May has laughed off journalists’ questions about going to war with Spain following the Gibraltar Brexit row. Mrs May said her approach to negotiations was “definitely jaw jaw”. On Sunday ex-Tory leader Lord Howard said the PM would defend Gibraltar in the same way as Margaret Thatcher defended the Falklands in the 1982 war. Spain’s foreign minister said his government was “surprised by the tone of comments coming out of Britain”. “It seems someone is losing their cool,” Alfonso Dastis told a conference in Madrid. The current row was sparked by draft Brexit negotiating guidelines published by the EU last Friday saying any decisions affecting Gibraltar would be run past Spain. – BBC Downing Street intended to hand Spain a “cheap win” over Gibraltar at the start of Brexit talks but miscalculated the scale of the domestic backlash, senior officials claimed yesterday. Olly Robbins, Theresa May’s chief Brexit negotiator, is said to have been instrumental in ensuring that the Rock was not explicitly mentioned in her letter triggering Article 50 last week. The Department for Exiting the EU’s permanent secretary, backed by senior figures in No 10, is said to have anticipated that Gibraltar would be included in the EU’s draft response but argued that it was strategically preferable that Spain made the first move. – The Times (£) Brussels insisted that Spain has its “full support” over its shameless attempt to use the people of Gibraltar as a bargaining chip in the upcoming Brexit negotiations. The EU broke its silence as the diplomatic crisis between Madrid, London and Brussels over the future of the Rock deepens. In a statement EU Commission chief spokesman Margaritis Schinas said eurocrats were “100 per cent behind” Spain over the inclusion of Gibraltar’s future in the bloc’s negotiating guidelines. And in a move likely to inflame tensions with Westminster he refused to answer questions on whether or not Brussels now officially recognises the Rock as a disputed territory… now that the UK is leaving Brussels appears to have rowed in firmly behind Madrid’s claim to the overseas territory. – Daily Express Why Gibraltar is British – in 60 secs – BBC The EU is ‘behaving like a cuckolded husband taking it out on the kids’ for giving Spain veto on Gibraltar’s future, says chief minister – The Sun Downing Street defends Michael Howard’s claim UK would go to war with Spain over Gibraltar – Independent May says diplomacy will solve Gibraltar row – The Times (£) The real reasons Spain is using Gibraltar as a Brexit bargaining chip – Peter Foster for the Daily Telegraph (£) Gibraltar’s status is a bilateral issue and nothing to do with the EU – Spain must not gain a veto from it – Daily Telegraph editorial Spain needs a British Gibraltar, just as the EU needs Britain – Daniel Capurro for the Daily Telegraph Admiral Howard was on the South Coast, polishing his cutlass – Quentin Letts for the Daily Mail Brexit select committee members refuse to back Benn’s ‘pessimistic’ report MPs have warned about the risks of the UK and EU failing to reach a Brexit trading agreement, urging ministers to work out how much “no deal” would cost. The Brexit committee said Theresa May’s claim that “no deal is better than a bad deal” was “unsubstantiated” until an economic assessment was published. But the report divided the cross-party committee, with some members saying it was too pessimistic about Brexit. The government said it was “preparing for all potential outcomes”… Labour MP Hilary Benn, who chairs the committee, said the government was right to push for both negotiations on a new trade deal and separation talks to take place at the same time. However, draft EU guidelines published last week rule out starting free trade talks with the UK before “sufficient progress” is made on other issues. – BBC Dominic Raab, a Conservative MP who campaigned to leave the EU, described the report as “rushed, skewed and partisan”, claiming it was regrettable that it had divided the group. “That undermines its credibility and influence, but I hope and expect the committee will learn the right lessons, as we move forward,” he said. Raab was one of six Conservative members of the group who refused to sign up to the final report, including the former culture secretary John Whittingdale. – The Guardian Central banks cut euro exposure in favour of sterling amid bloc jitters Central banks are dumping euros amid concerns over political instability, weak growth and the European Central Bank’s negative interest rate policy — and favour sterling as a long-term, stable alternative. Despite uncertainty over Brexit — formally triggered last week by prime minister Theresa May — central bankers from around the world see the UK as a safer prospect for their reserve investments than the eurozone, a new poll reveals. According to a survey published Monday of reserve managers at 80 central banks, who together are responsible for investments worth almost €6trn, the stability of the monetary union is their greatest fear for 2017 – Financial Times (£) Donald Trump praises EU’s response to Brexit, claiming UK’s withdrawal from the bloc could be a ‘very good thing’ The US President said he now didn’t believe that other members would leave the bloc, seemingly softening his stance. “I think Brexit is very good for the UK, it is going to be very good for UK,” he said in an interview with the Financial Times. And he claimed that since our historic vote to leave, the bloc had been “getting their act together”.He now thought that other member states would not vote to leave the bloc – in contrast to some of his earlier comments. Mr Trump said: “I would have thought when it happened that more would follow, but I really think the European Union is getting their act together. It could be a very good thing for both.” He added: “If you would have asked me that the day after the election… I would have said, ‘Yeah, it will start to come apart’. But they have done a very good job and – I am meeting with them very soon – they have done a very good job in bringing it back together. – The Sun Donald Trump: Without Twitter, I would not be here — Financial Times interview BBC has no duty to be even-handed over Brexit says Today’s Nick Robinson Writing in the Radio Times, Nick Robinson said: ‘The BBC’s job is not to look over its shoulder wondering whether a report, interview or discussion will provoke letters of complaint or a tide of tweets from Remainers or Leavers – who, like fighters who emerge after months of hiding in a bush, seem not to accept that the war is over. ‘Our job, instead, is to keep our eyes firmly fixed on the audience as a whole – the people we serve – who, in the main, are not members of political parties or campaigns or, indeed, people who would dream of defining themselves by how they voted in the referendum.’ – Daily Mail Remainer Vince Cable: ‘necessary & right’ to control immigration from eastern europe The former business secretary this morning increased his criticism of uncontrolled EU immigration in the wake of the Leave result. Speaking at a conference hosted by the UK in a Changing Europe thinktank in Westminster, the ex-Liberal Democrat minister said: “My views are a bit out of line with a lot of the other Remainers because I have almost taken the view that politically there is no alternative but to try and reassure the public that immigration is being managed. “You can’t sustain the present system where migration from outside the EU is quite tightly controlled – often harshly controlled – and you have completely unrestricted migration from Poland and Romania. “I just don’t see politically how you can possibly sustain that.” – Daily Express Theresa May’s timeline for EU negotiations unrealistic, warns Germany’s foreign minister Germany’s Foreign Minister has cast doubt on Theresa May’s insistence that both a Brexit divorce deal and new free trade agreement with the EU can be completed by 2019. In an exclusive interview with The Independent, Sigmar Gabriel said new trade relations would be “a laborious endeavour”, suggesting the UK may have to settle for simply getting “as far as we can” in the two years allowed for talks. Mr Gabriel, also Angela Merkel’s Vice Chancellor, then said Ms May must give “certainty” that the UK will settle its Brexit divorce bill before talks begin on any future trade deal between Britain and Europe. – The Independent UK-US trade deal would ‘send prices tumbling for consumers’ and could be agreed in six months UK shoppers would benefit from cheaper food, cars and clothes imported from America under the proposal to slash tariffs. And British export firms could also receive a massive boost in the drive to slash tariffs.The plan for a fast-track trade deal between Theresa May’s Government and President Donald Trump’s White House administration is put forward in a report published tomorrow by the Euro-sceptic pressure group Leave Means Leave. David Campbell Bannerman, a Tory MEP and author of the report, rubbished claims that a new US-UK trade deal could take years to negotiate. “Such a negotiation for an immediate short-term deal would be envisioned to last no more than 180 days,” Mr Campbell Bannerman said. – Daily Express Tim Stanley: There is nothing wrong with Britain playing Mr Nasty – negotiating Brexit will require tough talk Britain must embrace its new, nasty brand. As we enter negotiations with the EU, everything is going to be on the table. We are no longer partners in a project to create a harmonious Europe. We are a nation state bargaining for our people’s self-interest. We want the world to love us for our tea and decency. But on this occasion we’re going to have to fight – and if that means acting nasty to convince as nasty, so be it… One fact is that the EU is not negotiating with a regular European state. This isn’t “so long Portugal and thanks for all the fish”. Britain has one of the best intelligence services in the world; we have nuclear weapons; we are at the heart of Nato. This is part of the context to these talks and it would be odd if the UK did not mention it. – Tim Stanley for the Daily Telegraph (£) John Hulsman: Europe can’t handle the truth of its fundamental security weakness “I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the very blanket of freedom that I provide, and then questions the manner in which I provide it. I’d rather you just say ‘thank you’ and go on your way. Otherwise, I suggest you pick up a weapon, and stand a post.” – Colonel Nathan Jessup, A Few Good Men. For Europeans, the United States and Britain have always been a version of Jack Nicholson’s bravura character in the Oscar-nominated movie A Few Good Men in terms of their security: unwanted, undiscussed, and utterly necessary. In the nearly 20 years I have been involved in transatlantic relations, I have heard every risible excuse under the sun as to why Europe thinks it is alright to free ride on security matters: the EU provides internal security for the continent while the Anglo-Saxon Colonel Jessups take care of external worries – John Hulsman for City A.M. Christopher Howarth: Beneath the rhetoric, the EU27 are being surprisingly constructive There is a hard-core EU element, mostly in the Commission, that insist that “sequential” deals are the best way to prove that leaving the EU is a difficult and painful affair. By contrast the UK has asked for “parallel” or concurrent withdrawal and trade talks achieving agreement at the same time. Sequentialism would, however, be difficult for the EU27 to uphold, given that in the absence of trade talks there would be little to keep the UK at the table. However, the EU27 text seems to include a potential solution that would allow trade talks to kick off while giving the EU27 the formal exit deal they require. The wording of the text states that “after departure”: “Any free trade agreement should be balanced, ambitious and wide-ranging. It cannot, however, amount to participation in the Single Market or parts thereof.” Far from creating a division, this wording is actually very similar to the Prime Minister’s desired trade agreement. It also, conveniently, allows those who believe the Single Market is the pinnacle of Western civilisation to mete out their punishment to the UK – we will be excluded whether we like it or not (we, of course, like it). – Christopher Howarth for ConservativeHome Ambrose Evans-Pritchard: Deflation danger over for European Central Bank but fresh debt drama looms The European Central Bank has declared victory over deflation in a watershed shift in policy, clearing the way for an end to negative rates and emergency bond purchases after years of deep economic malaise. Triple tail-winds from QE, a cheap euro, and the end of fiscal austerity have all combined with powerful effect, at last lifting the economy out of a low-growth trap, or ‘Lost Decade’ as some economists describe it. A blizzard of new figures paint a picture of accelerating growth across the region, with with unemployment falling to an eight-year low of 9.5pc – though it is still twice the level of the Anglo-Saxon and non-euro Nordic states. The eurozone’s jobless rolls have dropped by 1.24 million over the last year. – Ambrose Evans-Pritchard for the Daily Telegraph James Forsyth: Theresa May is heading for trouble over the Brexit ‘divorce’ bill ICM, who Vote Leave used for their own referendum polling, have some striking numbers on what elements of an EU exit deal British voters would find acceptable. 54 per cent of voters regard maintaining free movement as part of a transition deal – something that Theresa May wouldn’t rule out in her interview with Andrew Neil – as acceptable. However, there is clearly going to be a big problem with any exit payment. 64 per cent regard a £10 billion payment as unacceptable, with that figure rising to 70 per cent for a £20 billion payment—which is at the low end of what people in Brussels think Britain ought to pay.- James Forsyth for the Spectator Andrew Woodcock: Three cardinal negotiation rules With Article 50 triggered after due Parliamentary process, the die is now cast. We must face the fact that it is now all about a bargaining process. Including, perhaps especially, those like me who genuinely view a whole continent’s peace, stability and prosperity as one of the European project’s remarkable successes and who remain profoundly concerned about a future with Britain outside the EU. In looking forward, we must understand three cardinal negotiating rules. Firstly, the Government must not be forced to tip its hand. What its precise pay-offs and priorities are should be known only to itself. Better to keep negotiating partners guessing, and on the back foot. Discretion is needed. Or as Churchill put it, precious truths attended by a bodyguard of lies.- Andrew Woodcock for Comment Central Douglas Murray: The political dinosaurs aren’t helping matters As a type of (Platonic) gerontophile, I never expected to say this, but can the dinosaurs not shut up? In recent weeks the nation has had to suffer repeat appearances on the television by Lord Heseltine. In each interview the Remain-supporting peer appears ever more viciously angry – brimming over, indeed with a sort of concentrated, zealous fury at a nation that dared defy his imprecations on how to vote last June. – Douglas Murray for the Spectator Brexit comment in brief A Brexit deal is possible if everyone involved is rational. Good luck with that – Bruce Anderson for Reaction (£) London must take a leaf from Hong Kong’s book to thrive amid Brexit uncertainty – Simon Squibb for City A.M. Stop smearing Brexit voters as haters – Richard Littlejohn for the Daily Mail Cheaper food after Brexit? – John Redwood’s Diary When it comes to the money, we have the EU over a barrel – Cerberus for ConservativeWoman Britain should prepare for the Article 50 talks to fail – Ryan Bourne for City A.M. Stop being beastly, Germany is our friend – Edward Lucas for The Times (£) Don’t underestimate how much Britons care about blue passports – Martin Belam for The Guardian Arron Banks and The Observer have a shared interest in making Brexit all about him – ConservativeHome War threats over Gibraltar are rightwing imperial fantasies – Paul Mason for The Guardian Brexiteers cannot promise that immigration will fall – Diane Abbott for The Times (£) Brexit news in brief Open skies, no visas and free roaming: Britain’s travel industry sets out its demands for Brexit negotiations – Independent David Davis meets Portuguese minister – Daily Mail Nick Clegg: ‘Let’s join forces and beat the Brexiteers’ – The Guardian Germany’s Merkel wants to limit Brexit fallout – Daily Mail Tory voters want environmental regulations maintained after Brexit – The Guardian