Soros donation to halt Brexit causes storm in Britain

Business magnate George Soros arrives to speak at the Open Russia Club in London, Britain June 20, 2016.

By Guy Faulconbridge

LONDON (Reuters) – News that billionaire financier George Soros is a backer of a campaign group seeking to keep Britain in the EU added fire to Britain’s Brexit debate on Thursday, with supporters of quitting the bloc accusing opponents of plotting a “coup”.

The Best of Britain campaign group confirmed it had received 400,000 pounds from Soros. Soros, best known in Britain for earning billions betting against the pound in the early 1990s, is the target of a hostile media campaign by the nationalist government in his native Hungary and a hate figure for rightwing campaigners in eastern Europe and the United States.

Best of Britain said it had obeyed all rules on political funding in accepting the donation from Soros.

Prime Minister Theresa May’s office repeated its long-standing position that the decision to leave the EU in 2019 after a vote in 2016 was final and would not be reversed. It also defended the right of campaign groups to accept donations.

The Daily Telegraph newspaper, which first reported Soros’s involvement, said the 87-year-old former hedge fund manager was backing a “secret plot” to stop Brexit. The article was written by Nick Timothy, a former chief of staff to May.

Mark Malloch-Brown, a former British diplomat who is chair of the Best for Britain campaign group, said the group had never hidden its aims, which include staying in the EU.

“George Soros’s foundations have along with a number of other major donors also made significant contributions to our work,” Malloch-Brown said in a statement, confirming Soros had contributed 400,000 pounds through his charitable foundations.

May’s spokesman said: “There are many political and campaign groups in this country, that’s entirely right and as you would expect in a democracy.”

“The prime minister’s position on this matter is clear, the country voted to leave the European Union, that’s what we are going to deliver and there won’t be a second referendum.”

BREXIT REVERSED?

In the United Kingdom’s 2016 referendum, 51.9 percent, or 17.4 million people, voted to leave the EU while 48.1 percent, or 16.1 million people, voted to stay. Both sides accepted large donations from wealthy individuals.

Ever since the shock vote, supporters of EU membership have been exploring an array of different legal and political methods to prevent what they see as the biggest mistake in post-World War Two British history.

Brexiteers say such efforts threaten political stability as they go against the democratic will of 17.4 million people. They have vowed to fight any attempt to stop Brexit.

“The new Soros-led coalition is planning a coup in Britain, against the democratic will of the people,” Richard Tice, who chairs the Leave Means Leave campaign group, told Reuters. “They have been outed and will be defeated.”

May, whose government and party is divided over Brexit, has just eight months to strike a deal with the EU on the terms of Britain’s withdrawal.

Opponents of Brexit hope to focus their efforts on blocking British parliamentary approval for the exit deal, a step that if successful could sink May’s premiership. There is, though, little sign so far of a change in opinion among voters, and the supporters of EU membership lack a popular leader who could unite the disparate groups opposed to Brexit.

Brexiteers such as Nigel Farage say public opposition to Brexit from the likes of former Prime Minister Tony Blair and Goldman Sachs Group Inc <GS.N> Chief Executive Lloyd Blankfein are unlikely to sway British public opinion.

With no deal, Britain would face a disorderly Brexit that many investors fear would imperil Britain’s $2.7 trillion economy, disrupt trade across the world’s biggest trading bloc and undermine London’s position as the only financial centre to rival New York.

($1 = 0.7209 pounds)

(Reporting by Guy Faulconbridge; Editing by Peter Graff)

European Union leaders to host Turkey’s Erdogan, the estranged uncle they can’t shut out

Turkish President Tayyip Erdogan greets his supporters during a meeting of the ruling AK Party in Corum, Turkey January 28, 2018.

By Gabriela Baczynska and Robin Emmott

BRUSSELS (Reuters) – European Union leaders are so discomfited by their relationship with Turkey these days that they relegated their summit next month to Varna, a Bulgarian Black Sea port, rather than hold it in Brussels.

But despite their wariness over President Tayyip Erdogan, who has cracked down hard on critics at home and lashed out at the West, they need him too much to turn their backs.

Turkish and European Union officials both expect an uneasy atmosphere at the summit on March 26. But the European hosts will have little choice but to hear Erdogan out as he asks for more money for Syrian refugees, a deeper customs union and progress in talks on letting Turks visit Europe without visas.

On the one hand, European leaders have robustly criticized Turkey for what they see as rapid backsliding on democracy and human rights, especially during a crackdown in the wake of a failed coup in 2016. Some of Erdogan’s hostile rhetoric toward Europe last year, including comparing the Dutch and German governments to Nazis, has been, for EU leaders, beyond the pale.

But on the other hand, European countries still rely on Turkey as a NATO ally on Europe’s southern flank. And an EU deal with Erdogan that halted the mass influx of Syrian refugees into the bloc means the Turkish leader is like an estranged relative that you can’t disinvite from a family dinner, no matter how badly you think he has behaved.

“You intensely dislike the person you have in front of you, but you just cannot do without him,” said Marc Pierini, a former EU ambassador to Turkey and now an analyst at Carnegie Europe think-tank.

Turkey says it is in Europe’s interest to be warm.

“If the EU gives positive signals to Turkey, the more Turkey will do in terms of reforms,” said Ankara’s envoy to the European Union, Faruk Kaymakci.

“But the more the EU isolates Turkey, the more inward-looking and nationalist it will turn,” he told reporters, calling for more “trust and confidence at the top level”.

A senior EU official said Turkey had sought to have the summit in Brussels, but the bloc decided to hold it in Varna instead to lower its profile. Bulgaria, Turkey’s neighbor, has better relations with Ankara than some other EU states and holds the rotating EU presidency for the first half of 2018.

“INCREDIBLY UNCOMFORTABLE”

The senior EU official described European Commission President Jean-Claude Juncker, who will chair the Varna meeting with European Council President Donald Tusk, as furious over Erdogan’s crackdown. Some 50,000 people, including journalists, have been arrested and 150,000, including teachers, judges and soldiers, sacked or suspended from their jobs.

“For the EU, this is incredibly uncomfortable. They are backsliding on everything,” the senior EU official said.

Juncker has warned Turkey that it cannot count on any significant rapprochement with the EU as long as it keeps journalists in jail.

The Netherlands formally withdrew its ambassador to Ankara this month, after 2017 was marked by Erdogan calling German and Dutch officials “fascists” for stopping rallies in support of a referendum in Turkey to grant Erdogan broader powers. Germany is particularly angry that some German citizens are among those arrested in Erdogan’s purge.

Turkey is still a candidate to join the EU, having applied decades ago. But after years of on-and-off progress, including under Erdogan who first took power in 2003, the EU froze the accession talks over the crackdown since the botched coup.

Brussels is deeply skeptical that Ankara would reverse the crackdown to deliver the democratic and judicial reforms that would be required to restart those negotiations.

But Kaymakci, the Turkish envoy, said he still hoped the bloc would commit another 3 billion euros ($3.7 bln) for Syrian refugees in Turkey at the Varna summit, and move forward with talks on letting Turks enter Europe without visas.

EU officials say Turkey does not meet criteria for visa-free travel. When it comes to money for refugees, the bloc is looking at how to accommodate Turkey, acknowledging its role in hosting them and committing to look into funding.

Turkey’s request to deepen its customs union, which already allows tariff-free trade with the EU for most goods, is also likely to be politely rebuffed. Germany in particular has opposed further talks on customs for now.

The price Erdogan will have to pay for being invited to Varna, EU officials say, will be listening to his hosts speak frankly. Just weeks after the summit, the European Commission will release what is certain to be a damning report on the situation in Turkey.

(Additional reporting by Dominic Evans in Ankara; Writing by Gabriela Baczynska; Editing by Peter Graff)

Abbas wins EU backing for Palestinian capital in East Jerusalem

European High Representative for Foreign Affairs Federica Mogherini shakes hands with Palestinian President Mahmoud Abbas in Brussels, Belgium, January 22,

By Robin Emmott

BRUSSELS (Reuters) – The European Union assured President Mahmoud Abbas it supported his ambition to have East Jerusalem as capital of a Palestinian state, in the bloc’s latest rejection of U.S. President Donald Trump’s decision to recognize Jerusalem as Israel’s capital.

At a meeting in Brussels with EU foreign ministers, Abbas repeated his call for East Jerusalem as capital as he urged EU governments to recognize a state of Palestine immediately, arguing that this would not disrupt negotiations with Israel on a peace settlement for the region.

While Abbas made no reference to Trump’s move on Jerusalem or U.S. Vice President Mike Pence’s visit to the city on Monday, his presence at the EU headquarters in Brussels was seized on by European officials as a chance to restate opposition to Trump’s Dec. 6 decision to move the U.S. Embassy to Jerusalem.

Mogherini, in what appeared to be a veiled reference to Trump’s recognition of Jerusalem as capital of Israel, called on those involved in the process to speak and act “wisely”, with a sense of responsibility.

“I want to reassure President Abbas of the firm commitment of the European Union to the two-state solution with Jerusalem as the shared capital of the two states,” Mogherini said.

Before Abbas’ arrival, she was more outspoken, saying: “Clearly there is a problem with Jerusalem. That is a very diplomatic euphemism,” in reference to Trump’s position.

Deputy German Foreign Minister Michael Roth told reporters that Trump’s decision had made peace talks harder but said all sides needed to resolve the Israeli-Palestinian conflict.

Abbas also struck a more diplomatic tone than in his recent public remarks, including earlier this month when he said he would only accept a broad, internationally-backed panel to broker any peace talks with Israel.

“We are keen on continuing the way of negotiations,” Abbas said. “We are determined to reunite our people and our land.”

But his call for the European Union to immediately and officially recognize the state of Palestine was unlikely to be answered, two senior EU diplomats said.

SLOVENIAN DECISION?

While nine EU governments including Sweden and Poland already recognize Palestine, the 28-nation bloc says such recognition must come as part of a peace settlement.

Only Slovenia has recently raised the possibility of recognizing the state of Palestine. A parliamentary committee there is due to consider the issue on Jan. 31, but it remains unclear when the parliament could recognize Palestine.

That reflects the European Union’s dual role as the Palestinians’ biggest aid donor and Israel’s biggest trade partner, even if EU governments reject Israeli settlements on land Israel has occupied since a 1967 war – including the West Bank, East Jerusalem and the Golan Heights.

The European Union also wants the Palestinians to remain open to a U.S.-led peace plan, expected to be presented soon by Jason Greenblatt, Trump’s Middle East envoy and Trump’s son-in-law and senior adviser, Jared Kushner.

Abbas said there was “no contradiction between recognition (of Palestine) and the resumption of (peace) negotiations.”

Instead, France wants to push the European Union to offer closer trade ties through a so-called EU association agreement, an EU treaty covering unfettered access to the bloc’s 500 million consumers, aid and closer political and cultural ties.

“We want to say to Mahmoud Abbas that we want to move … towards an association agreement and to start the process already,” said France’s Foreign Minister Jean-Yves Le Drian.

But offering an EU association agreement to the Palestinians was also fraught with difficulties, diplomats said.

Under EU rules, the agreements need to be agreed with sovereign states. France argues that the EU has an association agreement with Kosovo, whose independence is not recognized by all countries, including EU member Spain.

(Additional reporting by Alastair Macdonald in Brussels and Marja Novak in Ljubljana, Editing by William Maclean)

Social media companies accelerate removals of online hate speech

A man reads tweets on his phone in front of a displayed Twitter logo in Bordeaux, southwestern France, March 10, 2016. REUTERS/Regis

By Julia Fioretti

BRUSSELS (Reuters) – Social media companies Facebook, Twitter and Google’s YouTube have accelerated removals of online hate speech in the face of a potential European Union crackdown.

The EU has gone as far as to threaten social media companies with new legislation unless they increase efforts to fight the proliferation of extremist content and hate speech on their platforms.

Microsoft, Twitter, Facebook and YouTube signed a code of conduct with the EU in May 2016 to review most complaints within a 24-hour timeframe. Instagram and Google+ will also sign up to the code, the European Commission said.

The companies managed to review complaints within a day in 81 percent of cases during monitoring of a six-week period towards the end of last year, EU figures released on Friday show, compared with 51 percent in May 2017 when the Commission last examined compliance with the code of conduct.

On average, the companies removed 70 percent of the content flagged to them, up from 59.2 percent in May last year.

EU Justice Commissioner Vera Jourova has said that she does not want to see a 100 percent removal rate because that could impinge on free speech.

She has also said she is not in favor of legislating as Germany has done. A law providing for fines of up to 50 million euros ($61.4 million) for social media companies that do not remove hate speech quickly enough went into force in Germany this year.

Jourova said the results unveiled on Friday made it less likely that she would push for legislation on the removal of illegal hate speech.

‘NO FREE PASS’

“The fact that our collaborative approach on illegal hate speech brings good results does not mean I want to give a free pass to the tech giants,” she told a news conference.

Facebook reviewed complaints in less than 24 hours in 89.3 percent of cases, YouTube in 62.7 percent of cases and Twitter in 80.2 percent of cases.

“These latest results and the success of the code of conduct are further evidence that the Commission’s current self-regulatory approach is effective and the correct path forward.” said Stephen Turner, Twitter’s head of public policy.

Of the hate speech flagged to the companies, almost half of it was found on Facebook, the figures show, while 24 percent was on YouTube and 26 percent on Twitter.

The most common ground for hatred identified by the Commission was ethnic origin, followed by anti-Muslim hatred and xenophobia, including expressions of hatred against migrants and refugees.

Pressure from several European governments has prompted social media companies to step up efforts to tackle extremist online content, including through the use of artificial intelligence.

YouTube said it was training machine learning models to flag hateful content at scale.

“Over the last two years we’ve consistently improved our review and action times for this type of content on YouTube, showing that our policies and processes are effective, and getting better over time,” said Nicklas Lundblad, Google’s vice president of public policy in EMEA.

“We’ve learned valuable lessons from the process, but there is still more we can do.”

The Commission is likely to issue a recommendation at the end of February on how companies should take down extremist content related to militant groups, an EU official said.

(Reporting by Julia Fioretti; Additional reporting by Foo Yun Chee; Editing by Grant McCool and David Goodman)

Syrian opposition calls on Trump and EU to put pressure on Russia and Iran

Nasr Hariri, chief negotiator for Syria's main opposition, poses for a photograph in central London, Britain January 16, 2018.

By Guy Faulconbridge

LONDON (Reuters) – U.S. President Donald Trump and European Union leaders should increase pressure on President Bashar al-Assad and his allies Russia and Iran to return to talks to end Syria’s civil war, Syria’s chief opposition negotiator said on Monday.

Nasr Hariri said that unless the West forced Assad and his big power allies to seek peace then Syrian civilians would continue to be killed.

“I would like to ask all those countries that promised they would support the Syrian people and their aspirations for democracy and peace: why didn’t they fulfil their promises?” Hariri, speaking in English, told Reuters in London.

The chief negotiator for Syria’s main opposition grouping, Hariri called for Trump and EU leaders such as German Chancellor Angela Merkel, French President Emmanuel Macron and British Prime Minister Theresa May to get tougher with Assad.

All diplomatic initiatives have so far failed to yield progress in ending the war, which is now entering its eighth year having killed hundreds of thousands of people and driven 11 million from their homes.

The map of Syria’s conflict has been decisively redrawn in favor of Assad and his Russian and Iranian allies during the past two years. They have recaptured major population centres in western Syria from rebels seeking to overthrow him and pushed back Islamic State in the east.

In the face of the collapse of rebel-held territory, most Western countries have quietly softened their positions that Assad must leave power as part of any peace deal. But the opposition entered the last formal talks last month without softening its demand Assad go, prompting the government to declare the talks pointless.

Nevertheless, Hariri suggested Western powers still had enough influence to push the government to negotiate.

“It is time for President Trump, Chancellor Merkel and Prime Minister May to say: ‘Stop’,” the former cardiologist said.

“It is time for Trump, Merkel and May to increase pressure and bring the international community together to get a genuine and just political situation in Syria.”

Hariri represents the Saudi-backed umbrella group of Syrian opposition groups which are opposed to Assad and supported by the West. He said the next round of the so-called “Geneva talks” on the fate of Syria would take place in late January, probably around Jan. 24-26 in Vienna.

A spokesman for Hariri said the opposition would attend those talks.

MORE TALKS?

Hariri said discussions in Washington, including with White House national security adviser H.R. McMaster, had been positive and that the Trump administration understood the situation.

“Iran and Russia are trying to deprioritise the transition,” he said. “We need the international community’s help to put pressure on the regime and their backers, Russia and Iran.

“The Americans want to test the Russians and the regime in the next round of talks. They want to move the Geneva process forward,” Hariri said.

When asked about U.S. plans to help support a 30,000-strong force dominated by the mainly Kurdish-led Syrian Democratic Forces (SDF), he said it could lead to Syria’s partition.

“What are the benefits of establishing such an army?” he asked. “It will open the door wide for a future struggle in the region. It could open the door to the future partition of Syria.”

Assad has responded to the plan by vowing to drive U.S. troops from Syria. Turkey has called the force a terrorist army and vowed to crush it. Iran said on Tuesday creation of the SDF force would “fan the flames of war”, echoing the vehement response of Syria, Turkey and Russia.

Hariri said it was very unlikely that the Syrian opposition would attend a meeting on Syria organized by Russia in the Black Sea resort of Sochi. The opposition had received no invitation so far, and no final decision on attendance had been made.

“We have not been invited yet,” he said. “The general mood is not to go to Sochi. My personal view is that in its current shape, it is unacceptable to attend Sochi.”

(Writing by Guy Faulconbridge; Editing by Michael Holden and Peter Graff)

‘Congratulations’: EU launches next phase of Brexit but warns of tough talks ahead

'Congratulations': EU launches next phase of Brexit but warns of tough talks ahead

By Philip Blenkinsop and Robin Emmott

BRUSSELS (Reuters) – The European Union agreed on Friday to move Brexit talks onto trade and a transition pact but some leaders cautioned that the final year of Britain’s divorce negotiations could be fraught with peril.

On the second day of a Brussels summit, EU leaders agreed “sufficient progress” was made after a deal on citizens’ rights, the Irish border and Britain’s outstanding payments, giving negotiators a mandate to move on to the main phase of talks.

“EU leaders agree to move on to the second phase of Brexit talks. Congratulations PM Theresa May,” European Council President Donald Tusk, who chairs EU summits, said on Twitter.

Discussion of a transition period to calm nerves among businesses is due to start in the new year, although talks on a future free trade pact will not begin until after March — a date underlined by “guidelines” that set out how to proceed as Britain seeks to unravel more than 40 years of membership.

May replied via Twitter, thanking Tusk and European Commission President Jean-Claude Juncker: “Today is an important step on the road to delivering a smooth and orderly Brexit and forging our deep and special future partnership,” May said.

“We will deliver on the will of the British people and get the best Brexit deal for our country – securing the greatest possible access to European markets, boosting free trade with countries across the world, and delivering control over our borders, laws and money,” she added.

However, the future partnership discussion is set to be difficult, leaders including German Chancellor Angela Merkel, Juncker and Italy’s Prime Minister Paolo Gentiloni warned.

Austrian Chancellor Christian Kern went further, saying even a primary school student could see that the “first phase” deal on the Irish border would come back to haunt the talks because it was impossible for Britain to leave the bloc’s single market while avoiding a hard border on the island of Ireland.

“There cannot be any border controls between Northern and southern Ireland, there cannot be border controls between Northern Ireland and the UK, but there can between UK and the EU,” he said.

“So our primary school students can see that there is a riddle to be solved.”

In more formal language, leaders used the nine-point guidelines they agreed at the summit to support May’s call for a two-year transition out of the bloc, which aims to help British business and citizens adjust to life after the European Union.

Leaders reiterated their position that Britain cannot conclude a free-trade accord with the European Union until it has left and become a “third country”.

“AMBITION, CREATIVITY”

In coded language aimed at ensuring that Britain’s departure will not set a precedent for others and further undermine the bloc, leaders also agreed to “ensure a balance of rights and obligations” during Britain’s transition period.

Ireland’s Prime Minister Leo Varadkar cautioned that there were “quite divergent opinions” on how a new relationship and transition would look. EU officials are unsure exactly how far Britain should continue to receive the full, unfettered economic benefits of EU membership during a transition after it leaves, even if it loses political representation in Brussels.

A day after she suffered a defeat in parliament over her blueprint for quitting the EU, May won applause from her peers on Thursday evening. As she left to return to London, she said she was eager to move on, once her peers give the formal green light to trade talks on Friday.

The EU is willing to start talks next month on a roughly two-year transition period to ease Britain out after March 2019, but has asked for more detail from London on what it wants before it will open trade negotiations from March of next year.

A British government official said the prime minister was approaching the next phase, which will discuss a transition period as well as the terms of the future trading relationship, “with ambition and creativity”.

German Chancellor Angela Merkel gave her stamp of approval, but cautioned time was running out.

“We made clear that Theresa May has made an offer that should allow us to say that we have seen sufficient progress,” she told reporters. “Nevertheless, there are still a lot of problems to solve. And time is of the essence.”

May, weakened after losing her Conservative Party’s majority in a June election, has so far carried her divided government and party with her as she negotiated the first phase of talks on how much Britain should pay to leave the EU, the border with Ireland and the status of EU citizens in Britain.

But the next, more decisive phase of the negotiations will further test her authority by exposing the deep rifts among her top team of ministers over what Britain should become after Brexit.

(Additional reporting by Luke Baker, Alastair Macdonald and Liz Piper in Brussels; Writing by Guy Faulconbridge and Alastair Macdonald; Editing by Mark John)

EU tells Netanyahu it rejects Trump’s Jerusalem move

Israel's Prime Minister Benjamin Netanyahu and European Union foreign policy chief Federica Mogherini brief the media at the European Council in Brussels, Belgium December 11, 2017.

By Robin Emmott

BRUSSELS (Reuters) – Prime Minister Benjamin Netanyahu took his case to Europe to ask allies to join the United States in recognizing Jerusalem as Israel’s capital, but was met by a firm rebuff from EU foreign ministers who saw the move as a blow against the peace process.

Making his first ever visit to EU headquarters in Brussels, Netanyahu said President Donald Trump’s move made peace in the Middle East possible “because recognizing reality is the substance of peace, the foundation of peace.”

Trump announced last Wednesday that the United States would recognize Jerusalem as Israel’s capital, breaking with decades of U.S. policy and international consensus that the ancient city’s status must be decided in Israeli-Palestinian talks.

Israel, which annexed East Jerusalem after capturing it in a 1967 war, considers the entire city to be its capital. Palestinians want East Jerusalem as the capital of a future independent state.

The Trump administration says it remains committed to the peace process and its decision does not affect Jerusalem’s future borders or status. It says any credible future peace deal will place the Israeli capital in Jerusalem, and ditching old policies is needed to revive a peace process frozen since 2014.

But even Israel’s closest European allies have rejected that logic and say recognizing Israel’s capital unilaterally risks inflaming violence and further wrecking the chance for peace.

After a breakfast meeting between Netanyahu and EU foreign ministers, Sweden’s top diplomat said no European at the closed-door meeting had voiced support for Trump’s decision, and no country was likely to follow the United States in announcing plans to move its embassy.

“I have a hard time seeing that any other country would do that and I don’t think any other EU country will do it,” Margot Wallstrom told reporters.

Several EU foreign ministers arriving at the meeting reiterated the bloc’s position that lands Israel has occupied since the 1967 war – including East Jerusalem as well as the West Bank and Golan Heights, are not within Israel’s borders.

Israel’s position does appear to have more support from some EU states than others. Last week, the Czech foreign ministry said it would begin considering moving the Czech Embassy from Tel Aviv to Jerusalem, while Hungary blocked a planned EU statement condemning the U.S. move.

But Prague later said it accepted Israel’s sovereignty only over West Jerusalem, and Budapest said its long-term position seeking a two-state solution in the Middle East had not changed.

On Monday, Czech Foreign Minister Lubomir Zaoralek said of Trump’s decision: “I’m afraid it can’t help us.”

“I’m convinced that it is impossible to ease tension with a unilateral solution,” Zaoralek said. “We are talking about an Israeli state but at the same time we have to speak about a Palestinian state.”

VIOLENCE SUBSIDES

Trump’s announcement triggered days of protests across the Muslim world and clashes between Palestinians and Israeli security forces in the West Bank, Gaza and East Jerusalem in which scores of Palestinians were wounded and several killed. By Monday morning, violence appeared to have subsided.

Netanyahu, who has been angered by the EU’s search for closer business ties with Iran, said Europeans should emulate Trump’s move and press the Palestinians to do so too.

“It’s time that the Palestinians recognize the Jewish state and also recognize the fact that it has a capital. It’s called Jerusalem,” he said.

In comments filmed later on his plane, he said he had told the Europeans to “stop pampering the Palestinians”. “I think the Palestinians need a reality check. You have to stop cutting them slack. That’s the only way to move forward towards peace.”

Trump’s announcement last week has triggered a war of words between Netanyahu and Turkey’s President Tayyip Erdogan, straining ties between the two U.S. allies which were restored only last year after a six year breach that followed the Israeli storming of a Turkish aid ship bound for Gaza.

On Sunday, Erdogan called Israel a “terror state”. Netanyahu responded by saying he would accept no moral lectures from Erdogan who he accused of bombing Kurdish villages, jailing opponents and supporting terrorists.

On Monday Erdogan took aim directly at Washington over Trump’s move: “The ones who made Jerusalem a dungeon for Muslims and members of other religions will never be able to clean the blood from their hands,” he said in a speech in Ankara. “With their decision to recognize Jerusalem as Israel’s capital, the United States has become a partner in this bloodshed.”

The decision to recognize Jerusalem could also strain Washington’s ties with its other main Muslim ally in the Middle East, Saudi Arabia, which has sought closer relations with Washington under Trump than under his predecessor Barack Obama.

Saudi Arabia shares U.S. and Israeli concerns about the increasing regional influence of Iran, and was seen as a potential broker for a comprehensive Arab-Israeli peace deal. But Saudis have suggested that unilateral decisions over Jerusalem make any such rapprochement more difficult.

Prince Turki al-Faisal, a former Saudi ambassador to the United States and veteran ex-security chief, published a strongly-worded open letter to Trump on Monday denouncing the Jerusalem move.

“Bloodshed and mayhem will definitely follow your opportunistic attempt to make electoral gain,” the prince wrote in a letter published in the Saudi newspaper al-Jazeera.

“Your action has emboldened the most extreme elements in the Israeli society … because they take your action as a license to evict the Palestinians from their lands and subject them to an apartheid state,” he added. “Your action has equally emboldened Iran and its terrorist minions to claim that they are the legitimate defenders of Palestinian rights.”

The Trump administration says it is working on a peace proposal being drawn up by Middle East envoy Jason Greenblatt and Trump’s son-in-law and senior adviser Jared Kushner.

European leaders say the decision on Israel’s capital makes the need for a broader peace move more urgent.

“We’ve been waiting already for several months for the American initiative, and if one is not forthcoming then the European Union will have to take the initiative,” French Foreign Minister Jean-Yves Le Drian said.

(Additional reporting by Alastair Macdonald and Philip Blenkinsop; Editing by Peter Graff)

Britain and EU clinch Brexit ‘breakthrough’ with move to trade talks

Britain and EU clinch Brexit 'breakthrough' with move to trade talks

By Alastair Macdonald and Gabriela Baczynska

BRUSSELS (Reuters) – Britain and the European Union struck a divorce deal on Friday that paves the way for arduous trade talks, easing immediate pressure on Prime Minister Theresa May and boosting hopes of an orderly Brexit.

May rushed to Brussels before dawn to seal European Commission agreement that “sufficient progress” had been made to begin talks about trade and a two-year Brexit transition period that will start when Britain leaves the EU on March 29, 2019.

Negotiators in London, Brussels and Dublin worked through the night before breaking an impasse over the status of the Irish border, the last major obstacle to the opening of trade talks which EU leaders are due to bless at summit on Dec. 14-15.

Speaking before sunrise at the EU’s executive headquarters in Brussels after a hurried flight on a Royal Air Force plane, May said opening up trade talks would bring certainty for citizens and businesses about Britain’s future after quitting the EU.

“The most difficult challenge is still ahead,” European Council President Donald Tusk cautioned. “We all know that breaking up is hard. But breaking up and building a new relationship is much harder.”

May, looking weary after just a couple of hours sleep, spoke after European Commission President Jean-Claude Juncker announced the breakthrough first in English and then in German and French.

The move to trade talks 18 months after the United Kingdom’s shock vote to exit the EU allayed some fears of a disorderly Brexit that could disrupt trade between the world’s biggest trading bloc and its sixth-largest national economy.

Sterling climbed to a six-month high against the euro <EURGBP=D3> on Friday before it fell back around midday to sit broadly flat, with one euro worth 87.4 pence, while bond yields across the euro zone rose. Against the U.S. dollar <GBP=D3> the pound also weakened.

BREXIT DIVORCE?

Facing 27 other members of the bloc, May largely conceded to the EU on structure, timetable and substance of the negotiations.

Moving to talks about trade and a Brexit transition was crucial for May’s own future after her premiership was thrown into doubt when she lost the ruling Conservative Party its majority in a snap election in June, unwisely called.

“I very much welcome the prospect of moving ahead,” said May, a 61-year-old Anglican vicar’s daughter who herself voted to stay in the EU in a referendum in June 2016 but has repeatedly insisted Britain will make a success of Brexit.

One senior British banker said the deal signaled that May would stay in power for now and that Britain was heading towards a much closer post-Brexit relationship with the EU than many had feared.

Draft guidelines showed the transition period, which would start on March 29, 2019, would last around two years. During that time, Britain will remain part of the customs union and single market but will no longer take part in EU institutions or have a vote.

It will also still be subject to EU law.

Pro-Brexit Conservative lawmakers rallied around her after the overnight deal, a possible signal that the party – which has been split over EU membership for generations – was not preparing to ditch her immediately despite the June election fiasco.

British Foreign Secretary Boris Johnson, who spearheaded the Brexit campaign, congratulated May, adding that Britain would now take back control of its laws, money and borders.

Supporters of a radical Brexit were tougher.

Brexit campaigner Nigel Farage struck a jarring note saying it was extraordinary a British premier had conceded so much in the middle of the night, agreeing to all the demands of Juncker, Tusk and EU negotiator Michel Barnier.

“The British prime minister has to fly through the middle of the night to go and meet three unelected people, who condescendingly say: ‘Now jolly well done May, you’ve met every single one of our demands, thank you very much, we can now move on to the next stage’.”

“BREAKTHROUGH”

The EU had insisted it would only move to trade talks if there was enough progress on three key issues: the money Britain must pay to the EU; rights for EU citizens in Britain and British citizens in the EU; and how to avoid a hard border with Ireland.

“I believe we have now made the breakthrough we needed,” Juncker said.

The EU’s chief Brexit negotiator Michel Barnier said it was not possible to put a concrete figure on the amount of money Britain will have to pay. Britain has said the divorce bill will cost it between 35 and 39 billion pounds.

On citizens rights, London and Brussels agreed to offer equal treatment on social security, health care, employment and education and that Britain will enable its judges to ask the European Court of Justice to weigh in when necessary for eight years after Brexit.

But the crucial breakthrough was on the future of the 310-mile (500 kms) UK-EU land border on the island of Ireland. The Northern Irish party which props up May’s minority government vetoed a draft deal on Monday.

May worked through most of the night, grabbing just a couple of hours sleep, as she worked the phones from Downing Street to secure agreement from Dublin, Brussels and the Democratic Unionist Party for her deal on the border.

They agreed to avoid a hard border which might upset the peace established after decades of violence, but said the details would be agreed as part of talks about the future relationship, according to a 15-page negotiators report.

In the text, Britain agreed that should London and Brussels fail to agree a final Brexit deal, the United Kingdom will maintain “full alignment” with those rules of the internal market and customs union that help protect north-south cooperation in Ireland.

“In all circumstances, the United Kingdom will continue to ensure the same unfettered access for Northern Ireland’s businesses to the whole of the United Kingdom internal market,” it said. .

The Democratic Unionist Party gave only a conditional endorsement of the new terms, four days after 11th-hour objections from Belfast scuppered May’s attempt to sign off on an accord over the Irish border.

“We cautioned the Prime Minister about proceeding with this agreement in its present form given the issues which still need to be resolved,” Democratic Unionist Party (DUP) leader Arlene Foster said.

“Nothing is agreed until everything is agreed and how we vote on the final deal will depend on its contents.”

(Writing by Guy Faulconbridge and Kate Holton in London; Additional reporting by Alistair Smout, William James, Costas Pitas and Andrew MacAskill in London, Padraic Halpin in Dublin, and; Editing by Richard Balmforth)

EU to sign joint defense pact in show of post-Brexit unity

EU to sign joint defense pact in show of post-Brexit unity

By Andrea Shalal and Robin Emmott

BERLIN/BRUSSELS (Reuters) – At least 20 countries in the European Union will sign up to a new defense pact next week, promoted by France and Germany, to fund and develop joint military hardware in a show of unity following Britain’s decision to quit the bloc.

After years of spending cutbacks in Europe and a heavy reliance on the United States through the NATO alliance, France and Germany hope the accord, to be signed on Nov. 13 in Brussels, will tie nations into tighter defense collaboration covering troops and weapons.

The Permanent Structured Cooperation, or PESCO, could be the biggest leap in EU defense policy in decades and may go some way to matching the bloc’s economic and trade prowess with a more powerful military.

But differences remain between Paris and Berlin over what countries legally bound by the pact should do, EU diplomats said.

France wanted a core group of governments to bring money and military assets to PESCO as well as a willingness to intervene abroad. Germany has sought to broaden the pact to make it inclusive, which some experts say could make it less effective.

“This has to bring about a higher level of commitment if it is going to work,” said a EU official, describing PESCO as a ‘defense marriage’. “The EU already has plenty of forums for discussion,” the official said.

So far France, Germany, Italy, Spain and around 16 other EU countries have pledged to join the pact, which could formally be launched when EU leaders meet in December. Some other members, including Denmark, Portugal, Malta and Ireland, have yet to commit themselves publicly.

But it was clear that Britain, which intends to leave the bloc following the Brexit referendum of June 2016, would not participate, officials said. Britain has long sought to block EU defense cooperation, fearing it could result in an EU army.

French diplomats said the pact would have several areas where EU governments would agree to work together and pledge funds, including EU military operations, investment and acquiring defense capabilities together as a group.

A German official said the initiative won momentum from French President Emmanuel Macron’s call for a European intervention force in September and U.S. President Donald Trump’s insistence that Europe do more for its security.

Proposals for PESCO include work on a European medical command and a network of logistic hubs in Europe, creation of a crisis response center, and joint training of military officers.

A key goal is to reduce the numbers of weapons systems and prevent duplication to save money and improve joint operations.

It could also serve as an umbrella for projects such as a Franco-German initiative to design a new fighter jet, and existing bilateral military cooperation agreements, such as the close ties between Germany and the Netherlands.

MILITARY “SCHENGEN”

Efforts under the pact will be closely coordinated with the U.S.-led NATO alliance to ensure transparency and avoid any redundancies, the German official said.

One area where NATO and EU officials see common ground is in the need for a military zone for free movement of troops and equipment, loosely based on the EU’s passport-free travel “Schengen” zone.

“I welcome integration to the maximum extent practical. We obviously want to avoid duplication and maximize transparency,” U.S. Air Force General Tod Wolters, NATO Allied Air Commander, told Reuters.

Under the plans, the North Atlantic Treaty Organisation would focus on collective defense, while PESCO would ensure a quicker and more efficient EU response to events like the 2014 Ebola crisis in Africa, the official said.

“This will not happen in competition with NATO,” the German official said.

(Reporting by Andrea Shalal and Robin Emmott; Editing by Richard Balmforth and Peter Graff)

EU leaders talk up Iran nuclear deal hoping to save it from Trump

EU leaders talk up Iran nuclear deal hoping to save it from Trump

By Gabriela Baczynska

BRUSSELS (Reuters) – European Union leaders on Thursday reaffirmed their full commitment to the 2015 nuclear deal between Iran and world powers, hoping that the U.S. Congress would not let it collapse despite relentless criticism by President Donald Trump.

But the bloc, reluctant to isolate itself completely from Washington, is also stepping up criticism of Iran’s ballistic missile program and its role in what the West sees as fomenting instability in the Middle East.

Trump last week adopted a harsh new approach to Iran by refusing to certify its compliance with the nuclear deal, struck with the United States and five other powers including Britain, France and Germany after more than a decade of diplomacy.

“We fully stay committed to the complete implementation by all sides of the Iranian nuclear deal. We see this as a key security interest for the European Union and the region,” said the bloc’s top diplomat, Federica Mogherini.

The EU leaders’ joint statement, agreed after talks in Brussels on Thursday, “reaffirms full commitment to the Iran nuclear deal”.

The bloc has been stepping up efforts to save the deal, saying it was crucial to regional and global security, and it has appealed to the U.S. Congress not to let it fall.

Trump has given Congress 60 days to decide whether to reimpose economic sanctions on Iran, lifted under the pact in exchange for the scaling down of a program the West fears was aimed at building a nuclear bomb, something Tehran denies.

The EU leaders also highlighted the need to protect their companies and investors dealing with Iran from any adverse effects should Washington reinstate the sanctions, officials said.

Should Trump walk away from the deal, Supreme Leader Ayatollah Ali Khamenei said on Wednesday that Iran would “shred” it.

The bloc sees the agreement as a chief international success of recent years, and fears tearing it apart would hurt its credibility as well as harming diplomatic efforts to defuse tensions around a nuclear stand-off with North Korea.

In outlining his tougher stance, Trump said Tehran must also be held accountable for advancing its ballistic missile program and its regional political role.

“We will defend the nuclear deal and stand by the nuclear deal and implement the nuclear deal. But we also don’t want to be standing on a completely opposing side to the U.S.,” an EU official said.

“If they withdraw, we would be left in a rather interesting company with China and Russia. So there may be an issue of separating the nuclear deal from the ballistic program and Iran’s regional role, sending signals on the latter two.”

Iran’s elite Islamic Revolutionary Guards (IRGC) said on Thursday the ballistic missile program would accelerate despite U.S. and EU pressure to suspend it, the semi-official Tasnim news agency reported.

The EU, which has expressed “concerns related to ballistic missiles and increasing tensions” in the Middle East, has said these issues should be discussed without direct links to the nuclear deal.

“They were never very fond of the nuclear deal in the first place but now the situation has changed a lot. Both many Democrats as well as some Republicans feel like they need to play a more active role on foreign policy to restrain the president,” the official said.

(Reporting by Gabriela Baczynska; Editing by John Stonestreet, Toni Reinhold)