EU eyes softening key state aid demand in Brexit talks — sources

Both sides still say they hope to avoid the most economically damaging “no-deal” rupture. (File/AFP)
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Updated 03 August 2020

EU eyes softening key state aid demand in Brexit talks — sources

  • The 27 EU countries have long demanded so-called “level playing field” guarantees from Britain
  • Prime Minister Boris Johnson’s government refuses to be bound by EU state aid rules

BRUSSELS: The European Union is willing to compromise to help break a deadlock in Brexit talks by softening its demand that Britain heed EU rules on state aid in the future, diplomatic sources told Reuters.
They said Brussels could go for a compromise entailing a dispute-settling mechanism on any state aid granted by the UK to its companies in the future, rather than obliging London to follow the bloc’s own rules from the outset.
Provisions to ensure fair competition pose the biggest stumbling block in the troubled talks aimed at sealing a new trade accord from 2021 following Britain’s exit from the EU in January after 46 years of membership.
The 27 EU countries have long demanded so-called “level playing field” guarantees from Britain if it wants to continue selling goods freely in the bloc’s lucrative single market of 450 million people — after Britain’s standstill transition period following Brexit expires at the end of this year.
Without an agreement, trade and financial ties between the world’s fifth largest economy and its biggest trading bloc would collapse overnight, likely spreading havoc among markets, businesses and people.
But Prime Minister Boris Johnson’s government refuses to be bound by EU state aid rules, environmental standards or labor laws, saying the essence of Brexit was to let Britain decide alone on its own regulations.
Both sides still say they hope to avoid the most economically damaging “no-deal” rupture.

Dispute-settling mechanism
“The room for compromise lies in something that will let the UK decide on its own since ‘regaining sovereignty’ is such a big Brexit thing,” said a EU diplomat close to the Brexit talks.
“We would reserve the right to decide on any consequences vis-à-vis access to the single market for UK companies as a result.”
Another diplomatic source said such a dispute resolution mechanism could be a way to overcome the impasse.
A third diplomat, also speaking on condition of anonymity, acknowledged the EU was ready to ease its earlier demands that Britain agree to a “dynamic alignment” of its competition rules in the future with the bloc’s own.
The person said, however, Britain would still need to agree with the EU on a broad outline of company subsidies policy — rather than specific laws or cases — to allow the bloc to go for such a fix. EU Brexit negotiator Michel Barnier has repeatedly urged London to make its future plans on that known to the bloc.
“There must be a solid framework with independent oversight. If they agree to settle on broad rules for granting state aid and to have this independent institution, then we have a deal,” said the diplomat.


Afghan lawmakers urge unmasking, punishment of embezzlers of $19bn US aid

Updated 29 min 4 sec ago

Afghan lawmakers urge unmasking, punishment of embezzlers of $19bn US aid

  • Audit report reveals almost one-third of American funding toward Afghanistan’s reconstruction ‘lost to waste, fraud, abuse’

KABUL: Afghan legislators on Wednesday called on the US to unmask and punish those involved in the embezzlement of at least $19 billion of American aid earmarked for the war-torn country’s reconstruction.

The US Congress had approved nearly $134 billion for redevelopment programs in Afghanistan since 2002, following the American invasion that ousted the Taliban.

However, in its latest audit report released on Tuesday, the Special Inspector General for Afghanistan Reconstruction (SIGAR) said it had reviewed $63 billion of the amount and discovered that about $19 billion of it had been “lost to waste, fraud, and abuse.”

Some $1.8 billion had been squandered between January 2018 and December 2019 alone.

“Those behind this squandering, fraud, and corruption must be identified, should be tried and punished because they were involved in a big historical treason against our people,” Raihana Azad, a lawmaker from the central Afghan province of Dai Kundi, told Arab News.

“They have stolen the money which was earmarked for Afghanistan’s reconstruction and projects and what has happened has been a big blow for the poor people here.”

While it remains unclear if those involved in the misappropriation of funds were Afghan nationals or donors, Seddiq Ahmad Usmani, a lawmaker from northern Parwan province, said foreign aid had been handled by representatives chosen by the donors themselves.

“Foreigners have to respond as they were mostly behind such embezzlement with some (Afghan) government leaders.

“It will be very fair to see those people behind bars. We ask the American government to focus now on finding the culprits, whether Afghans or foreigners, and punish them,” he added.

Numerous complaints have been raised in Afghanistan over years about the efficiency of foreign aid and its links to corruption and SIGAR itself has routinely criticized the Afghan government’s insufficient efforts to curb graft.

In a report released earlier this year, the agency said that Afghan President Ashraf Ghani’s administration was “more interested in checking off boxes for the international community than in actually uprooting its corruption problem.”

Abdul Qadir Qalatwal, a parliament member from southern Zabul province, said: “It is clear that foreigners were behind this squandering because they approved the projects, funded them, and conducted the works.”

He added that the Afghan government was ready “to give accountability for any aid money that has been provided by donors for development projects.”

Another lawmaker, Keramuddin Reza Zada from central Ghor province, said that SIGAR had been operating since 2010 and had investigated a series of fraud cases, so it was high time that it exposed those behind the corruption to stop further misuse.

“It (SIGAR) has had plenty of time to reveal former culprits. Now is the time to do so too, so future embezzlement is prevented,” the lawyer added. 

Jamshid Rasooli, spokesman for Afghanistan’s attorney general, was unable to comment on SIGAR’s latest report. However, the finance ministry’s public affairs officer, Shamrooz Khan Masjidi, said the projects where the fraud took place were those “that were funded and handled by donors.”

Torek Farhadi, a former Afghan government adviser, told Arab News: “With SIGAR having been around since 2010, it shows that those who make war decisions are more interested in reaching outcomes than reading audit reports.

“This SIGAR report shows that for a superpower, there is no way to conduct a war thousands of kilometers ...  from home, without wasting its own resources.”