Brexit Bulletin: Security Matters

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He leads a successful European institution and is hailed as a “visionary” who has transformed his organization into a leading global player. And he's British.

Rob Wainwright, the executive director of Europol, has won the trust of colleagues in Europe and in the U.S., Suzi Ring and Franz Wild report today. Since taking the reins in 2009, Wainwright has focused on transforming an often-overlooked European law-enforcement agency into a transnational clearing house for information on terrorism, trafficking, laundering and hacking.

Europol, which has a staff of about 1,200 and a budget of €123 million ($151 million), investigated the Manchester suicide bombing in May 2017 and is currently helping with probes into the Wannacry ransomware attack that crippled parts of the National Health Service and NotPetya, which caused two companies losses of about $300 million.

That's noted this week by the Brexit Select Committee, which produced its latest report on the future U.K.-EU relationship yesterday. The committee of lawmakers – which is divided over Brexit and has a Remain-backing majority – included in its findings 15 “tests” that any final deal should pass before becoming law. The second of them calls for the U.K. to “replicate what currently exists” in cross-border cooperation in the fight against crime and terrorism. The U.K. “must retain involvement with Europol and the European Arrest Warrant and continue to participate in the EU's information-sharing systems,” the committee said.

Wainwright steps down in May, so it will be for his successor to shape a post-Brexit security relationship with the U.K. As the debate continues over Russia's alleged involvement in the nerve-agent poisoning of ex-spy Sergei Skripal, Wainwright sounds a cautious note. 

In the last year or 18 months, there's been “a perceptible trend towards a blending of state-actor capability with the criminal community,” Wainwright said without elaboration. “It's therefore becoming a more dangerous game.”

Brexit Latest

Off .EU Go | U.K. companies or individuals will not be allowed to hold or renew .eu web domains after Brexit, the European Commission says, raising the prospect of top-level .eu domains being revoked by the commission when the U.K. leaves the bloc. That could affect more than 300,000 domains, tech news site The Register reported, and may make life difficult for pro-Brexit campaign group Leave.EU.

Hopes for Gibraltar | Spain will not try to use the Brexit negotiations to force through its claim to Gibraltar, the country's foreign minister said. Alfonso Dastis told Reuters he expects to strike a bilateral accord over the territory before a final Brexit deal, and hopes to expand cooperation on areas such as access to Gibraltar's airport.

Weak Brexit | PSA Group, the French company that makes Peugeot and Citroën cars and acquired Vauxhall last year from General Motors, committed to raising capacity at its Luton factory to 100,000 vehicles annually. “We are hearing many remarks from the U.K. government that make us think that they are negotiating with the European Union to limit, as much as possible, future trade barriers,” PSA CEO Carlos Tavares said on Wednesday. “Among all the uncertainties we're facing right now, Brexit isn't the strongest.”

Miliband's Return | One day after being hailed as a potential savior of Britain's leaderless centrists by a Times columnist, former Foreign Secretary David Miliband popped up with a view on Brexit. Writing for the New Statesman, the International Rescue Committee chief threw his lot in with those calling for a second referendum. Leaving the EU puts at risk “the foundations of our security and our place in the world,” Miliband wrote, saying that the “end game” must be “in the hands of the people.”

Trade Troubles | For the first time in years, the U.K. is being outperformed by its trading partners, according to Bloomberg Economics, although a favorable global backdrop is likely to help offset some domestic weakness during 2018. Further ahead, the boost from stronger global growth is likely to fade as many of Britain's trading partners – particularly in the euro area – experience a slowdown as they reach the end of their cyclical recoveries.

Deconstructed | U.K. construction activity shrank the most since 2016 in February, mainly because of disruption from the “Beast from the East” storm. Snow and bad weather dragged IHS Markit's construction Purchasing Managers Index down to 47 from 51.4. The reading was the weakest since just after the Brexit vote and came in below 50, the level that divides expansion from contraction.

On the Markets | The pound has had a rough ride since June 2016, but one of the the most accurate traders in the business sees it ending 2018 some 8 percent higher. Sterling will hit $1.46, according to John Goldie at London-based broker Argentex LLP, a prediction based on receding fears of a hard Brexit and the expectations of rate rises in the months to come.

And Finally…

The Commonwealth Games are under way in Australia. The competition might be a welcome distraction for the locals after the recent exploits of their national cricket team, yet comes with a dash of Brexit for the British, who are on the hunt for possible future trading relationships among the ex-colonies. 

But any delegates hoping to use the event to gain a little intel on how to strike a deal with London should probably steer clear of the official souvenir program. Thanks to a printing mix-up, England was confused with Gambia, its capital listed as Banjul, and its population put at two million. 

Organizers apologized, blaming the mistake on a “formatting error.”

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To contact the author of this story: Adam Blenford in London at ablenford@bloomberg.net.

To contact the editor responsible for this story: Jones Hayden at jhayden1@bloomberg.net, Andy Reinhardt

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