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Yanis Varoufakis unpicked Michel Barnier’s argument around one of the key stumbling blocks in the Brexit negotiations. State aid, along with fishing rights, has become one of the main barriers to a Brexit trade deal with the EU, with Brussels’ chief negoigator refusing to budge. However, Mr Varoufakis told the BBC that London “is in a strong position” in the talks.
He pointed out that “Barnier and the bureaucracy in Brussels” can’t even get France and Germany to follow EU state aid rules.
Speaking to BBC Radio 4’s Today programme, Mr Varoufakis said: “The main issue at the moment is not fishing, it’s not ideology, it is state aid.
“State aid is going to shape the future of our economies, both in the EU and in Britain.
“I have no doubt that Boris Johnson prefers a deal to come out of this process, to eliminate the cost of a sudden rupture. He is not seeking a no-deal outcome.”
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The former Greek finance minister continued: “If the EU moves on state aid, I believe there will be a breakthrough.
“But, Johnson will not allow the EU to set the parameters to decide the UK’s future state aid regime, which will be crucial.”
The BBC’s Mishal Husain said: “It’s interesting that you say state aid is the crucial stumbling block.
“I say it’s curious because it’s not as if the EU is against state aid. It happens all the time in different industries and different countries.
“There are versions of it going on across the EU right now because of the coronavirus.”
Mr Varoufakis responded: “Absolutely. I think this is where London is in a strong position and has the argument on their side.
“Mr Barnier and the bureaucracy in Brussels are pretending that we are in 2019, but we are not in 2019.
“COVID-19 has completely upended the whole state aid regime, and Brussels is no longer capable of directing state aid rules to France and Germany.
“France and Germany are providing state aid to companies that a year ago would have been ruled out of court by the EU
“So for Barnier to be insisting that the UK stick to rules that France and Germany are no longer bound by is a bit rich.”
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During the coronavirus outbreak, EU state aid rules were eased to allow emergency bailouts and job-protection subsidies.
While Germany makes up a quarter of the EU’s total GDP, Angela Merkel used a whopping 52 percent of the total value of the EU’s emergency coronavirus state aid.
France and Italy shared joint second place, each with 17 percent of the total state aid fund.
The Prime Minister’s most senior aide, Dominic Cummings, is understood to believe that freedom on state aid is potentially one of the biggest benefits of Brexit.
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