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28th Feb 2024

EUobserved

Brexit, the EU Medicines Agency and Orbán's think-tank

  • A document circulated to the European Parliament's budget committee said WeWork would stop paying rent for the EMA's pre-Brexit premises in Canary Wharf (Photo: George Rex)
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The accomodation of the European Medicines Agency (EMA) — and who will pay for it — was back in the headlines this week, less than five years after a bitter battle that left the EU saddled with an avoidable legacy bill from Brexit.

A document circulated to the European Parliament's budget committee ahead of its meeting this week said the UK branch of WeWork would stop paying rent to the bloc for the EMA's pre-Brexit HQ at 30 Churchill Place in Canary Wharf.

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WeWork, the US-based start-up providing co-working space, boomed in the 2010s but filed for bankruptcy last October, after a spectacular collapse in revenue and share value.

The EMA has denied that the London office is empty, saying that WeWork had been in contact to re-negotiate the lease in light of the bankruptcy of their US wing.

"As part of our previously-announced process, we continue to work constructively and collaboratively with our landlord partner at this flagship location to craft a solution that mutually benefits both parties for the long term," a WeWork spokesperson stated.

Olivier Chastel, vice-president of the parliament's budget committee, led discussions on the options facing the EU in a behind-closed-doors meeting on Thursday (11 January).

It's an embarrassing story for the EU and a legacy of Brexit and, in particular, of the EMA's failure to negotiate an exit clause from a 25-year lease agreement in 2014 for the property worth €500m.

Ultimately, the EU is on the hook for about €30m per year in annual rental costs, though it is unclear whether EU lawmakers will demand that the EMA absorb at least some of the costs through operational savings.

But more curious is the role of MCC Brussels, an arm of the Mathias Corvinus Collegium (MCC) in Budapest, a think-tank closely linked to Viktor Orbán's Fidesz government in Hungary, and which claims to have "helped to uncover this story," according to a statement sent to reporters earlier this week.

"The European Medicines Agency obviously believes that it has a lot of spare cash and therefore need not take responsibility for the money that comes out of taxpayers' pockets," said MCC Brussels director Frank Furedi in a statement.

"Paying millions in rent for an empty building is not only a waste of precious resources but an insult to the European taxpayer. It demonstrates that irresponsibility and lack of accountability have become integral to the operation of some of the EU's agencies," he added.

The case is more complex than that.

The question of what to do about the medicines agency and its expensive lease was one of the more awkward in the negotiations on the UK's liabilities after leaving the EU.

The EU treaties prevent a non-member state from hosting an EU agency and, in any case, Theresa May's government had made it clear to European Commission counterpart Michel Barnier by early 2017 that the UK did not want to retain associate member status with the EMA.

Nor were EU member states keen for the EMA to stay in London, with 20 countries making bids to host the agency, a race which eventually came down to a battle between Amsterdam and Milan.

A tied vote meant that lots had to be drawn between Amsterdam and Milan, with Italian hackles raised further when the Dutch health ministry conceded that the EMA's shiny new home in Amsterdam's red light district would not be ready until 2020.

The question of whether the UK or EU taxpayer would be financially liable for the lease was eventually decided in London's favour by the UK High Court in 2019, prompting the EMA to sublet the Canary Wharf offices to WeWork.

Since opening an office in 2022 in downtown Brussels — well away from most EU-related think-tanks around the EU institutions — MCC Brussels, which is headed by Furedi, co-founder of the Revolutionary Communist Party, has focused much of its work on identity politics and the so-called 'war on woke'.

Furedi has also emerged as a prominent voice in the 'National Conservatism' movement that is seeking to export the model of nationalism and cultural conservatism minted by the likes of Orbán and Italy's Giorgia Meloni across Europe.

That might play well on social media but it is not a message that is going to convert many new voters.

In contrast, stories about EU waste and bureaucratic incompetence, especially in a European election year, have a much stronger shelf-life. For a think-tank that says it wants to capture the — largely vacant — space for euroscepticism in Brussels, the EMA's building woes offer far more fertile ground.

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