Category: European Union

EUROPEAN PARLIAMENT

Context:

  • The EU Parliament is taking steps to debate and vote on a resolution asking India to repeal the Citizenship Amendment Act. The Indian government, on its part, says the CAA is an internal Indian matter and a law adopted through democratic means.

The European Union has Seven Institutions:

  1. 1.The European Parliament,
  2. 2.The Council of the European Union,
  3. 3.The European Commission,
  4. 4.The European Council,
  5. 5.The European Central Bank,
  6. 6.The Court of Justice of the European Union
  7. 7.The European Court of Auditors.

European Parliament:

  • The European Parliament is an important forum for political debate and decision-making at the EU level.
  • It is the EU’s law-making body, and shares its power with the EU Council.
  • It is directly elected by EU voters every 5 years.
  • The European Parliament allows the citizens of the EU to participate directly in European political affairs.

What does the Parliament do?

  • The Parliament has 3 Main Roles:
  • Legislative :
      • Passing EU laws, together with the Council of the EU, based on European Commission proposals
      • Deciding on international agreements
      • Deciding on enlargements
      • Reviewing the Commission’s work programme and asking it to propose legislation.
  • Supervisory –
    • Democratic scrutiny of all EU institutions
    • Electing the Commission President and approving the Commission as a body. Possibility of voting a motion of censure, obliging the Commission to resign
    • Granting discharge, i.e. approving the way EU budgets have been spent
    • Examining citizens’ petitions and setting up inquiries
    • Discussing monetary policy with the European Central Bank
    • Questioning Commission and Council
    • Election observations
  • Budgetary:
    • Establishing the EU budget, together with the Council
    • Approving the EU’s long-term budget, the “Multiannual Financial Framework”

MAY TO MAKE ‘NEW, BOLD’ BREXIT OFFER

Why in News:

  • British Prime Minister Theresa May said she will present a “new, bold offer” to lawmakers with “an improved package of measures” in a final attempt to get the Brexit divorce deal through Parliament before she leaves office.

Details:

  • After failing three times to get Parliament’s approval for her deal, the government will now put the Withdrawal Agreement Bill, legislation which will enact that deal, before Parliament.
  • When the Withdrawal Agreement Bill comes before MPs, it will represent a new, bold offer to MPs across the House of Commons, with an improved package of measures

BREXIT

  • Brexit is a term used to define United Kingdom coming out of EU
  • Negotiations are undergoing currently between United Kingdom and European Parliament to negotiate the terms of the exit deal.

Constitutional Provision of Brexit:

  • Lisbon Treaty (Article 50) provides for exit of member countries from European Union. For any country to come out of European Union, it has to negotiate a deal with EU. The deal will provide for a settlement between EU and UK

On India

  • While on the positive side, Brexit has driven away fears of a US Fed rate hike and could lead to lower commodity prices. Brexit has become a new worry for commodity producers, coming on top of concerns about China’s slowing economic growth.
  • If news flows from both these sources continue to cloud the outlook for commodities, then prices may turn weak. Brexit’s impact will then be a fateful one for commodity producers and producing nations. Devaluation of rupee might enhance India’s export competitiveness

BREXIT BILL TO BE TABLED BEFORE MPS IN JUNE

Why in News?

  • British Prime Minister Theresa May is set for a new political showdown in Parliament as MPs across the political spectrum expressed their intention to oppose her Brexit plans, when she attempts to gain their support through legislation set to be put to MPs in early June.

Details:

  • On Tuesday evening, following the latest instalment of cross-party talks with the Labour Party, The Prime Minister plans to bring forward the Withdrawal Agreement Bill in the week commencing June 3, thereby setting a tangible deadline for the talks that have continued with little outcome so far.
  • The date of early June has been set to enable the U.K. to leave the European Union (EU) before the start of the summer recess were the legislation to pass.

What is Brexit?

  • It is the abbreviation of “British Exit” from the European Union (EU).
  • Brexit mirrors the term Grexit — a term which was coined and used by two Citigroup’s economists in February 2012 to refer to the possible exit of Greece from the EU.
  • Britain has had a troubled relationship with the EU since the beginning and has made various attempts in the past to break away from it.

Why the ‘Leave EU’ campaign?

  • The Leave Campaign argues that Britain is losing out a big deal by staying in the EU.
  • It has to pay millions of pounds each week as a contribution to the European budget.
  • The extremely bureaucratic nature of the European parliament is hurting British exporters
  • Migration from the European Union into Britain (mainly PIGS economies) is creating an imbalance in the welfare schemes of the UK government.
  • But those who oppose the campaign say that Britain is a net gainer if She stays in the EU.

Negative Impacts of the Brexit referendum on India

  • India will have to adjust to changing world order.
  • There may be foreign fund outflow and dollar rise.
  • Rupee may depreciate because of the double effect of foreign fund outflow and dollar rise.
  • This may increase petrol and diesel prices to an extent.
  • The government then may want to reduce additional excise duty imposed on fuel when it was on a downward trajectory. This may increase fiscal deficit unless revenue increased.
  • Prices of gold, electronic goods, among others may also increase.

Positive Impacts of the Brexit referendum on India

  • There are many who think a weakening British currency might be good news.
  • India being more of an importing country than an exporting nation, the overall effect may turn out positive for India (if the dollar doesn’t’t appreciate much against rupee).
  • With lower pound value, Indian companies may be able to acquire many hi-tech assets.
  • As investors look around the world for safe havens in these turbulent times, India stands out both in terms of stability and of growth.
  • Brexit might give a boost to trade ties between India and the UK. Britain will now be free to discuss a bilateral trade pact with India.
  • Due to the fall in the value of Pound sterling, those who import from the UK will gain. Indian export companies operating in the UK may also gain.

India ready to handle the Brexit?

  • The finance ministry said that the country has sufficient foreign exchange reserves to handle any impact. RBI Governor Raghuram Rajan said the central bank will infuse whatever liquidity is needed into the Indian market to keep it “well behaved”. SEBI and stock exchanges have beefed up their surveillance mechanism to deal with any excessive volatility. If exports to the UK are costly and imports are cheaper, India can think of utilizing the import-advantage by reversing the present trade scenario. Once the dust settles, India may be seen to be a net gainer and inflows would continue to gravitate towards the Indian shores.

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