EU, Britain and the divorce bill
Theresa May doesn’t do drama. She regards order as both a political and personal virtue. And this goes a long way towards explaining why she is Prime Minister. After the Brexit vote last June and David Cameron’s resignation, the Tories had had enough excitement. They turned to the leadership contender who was best able to project a reassuring sense of calm.
It is in keeping with May’s approach that she has drained the drama from the triggering of Article 50, the start of the two-year process for leaving the EU. Other Prime Ministers might have been tempted to do it with a flourish — to feel the hand of history on their shoulder. But May has removed any sense of surprise by having her spokesman blandly declare that she’ll be sending the letter on Wednesday.
In doing this, she’ll both meet her deadline of invoking it by the end of March and avoid clashing with last weekend’s celebrations for the 60th anniversary of the Treaty of Rome. Filing divorce papers during the EU’s party would not be the right note on which to start the talks.
Those intimately involved in preparations for the Brexit talks cite two reasons for this advance announcement. First, it gives the EU time to work out when it can get its 27 member states together to discuss their response.
After press speculation that Article 50 would be triggered as soon as the Brexit bill received Royal assent, EU leaders had pencilled in a date for a summit — and were irritated when May didn’t send the letter. The government hopes that by letting Brussels know when it’s coming, they can prevent any further frustration.
The second reason is to kill off speculation about a snap election. When your party is ahead by 19 points in the polls and you are hemmed in by both a small majority and the ill-thoughtthrough manifesto promises of your predecessor, there are always going to be rumours about going to the country. But May has ruled out an early election too unequivocally to go back on her word now. Engineering an early vote would also go completely against her brand, which is all about being someone who just gets on with the job and doesn’t play political games.
I suspect that there is another reason, too: to get any currency movements out of the way early.
It wouldn’t look good to send the Article 50 letter and see the pound start falling on the foreign exchange markets.
The EU, meanwhile, has stuck by its position that there will be “no negotiation without notification”. Not even the issue of guarantees for EU citizens already living in the UK — and UK citizens in the EU — has been addressed in the nine months since Britain voted to leave. After Wednesday, it should be resolved relatively quickly.
As the Brexit bill made its way through Parliament, ministers repeatedly reassured MPs that they would try to get a deal on the issue as soon as possible, and the EU seems keen to sort it out, too. Its lead negotiator Michel Barnier has talked about how citizens must come first.
And Spain, which has the largest population of British immigrants in the EU, has made it clear that it has no problem with a reciprocal rights deal.
One reason why the EU might move quickly here is a desire to reassure Eastern European countries that their interests will be respected in the Brexit negotiations.
Brussels is worried that Britain’s defence capabilities might lead these states — understandably concerned about security given Russian revanchism and Trump’s ambiguous attitude towards Nato — to threaten the unity of the 27 by taking a softer line during the talks. By giving them an early win on the rights of their citizens here, the EU hopes to keep them bound to a common negotiating position. But it is hard to see much else that can by quickly resolved. The EU insists that the socalled “divorce bill” must be settled before anything else can be discussed.
The commission is particularly hung up on this, with its president Jean-Claude Juncker saying that “in Europe, you eat what’s in front of you or you don’t sit at the table”. But the UK government is clear that it will discuss the divorce bill only if the future trading relationship is on the menu too. This will make for a testy start to the talks.
It isn’t obvious how this impasse will be broken — partly because all the elections coming up in Europe make it hard to see who could step in to broker a compromise.
The initial meeting of the EU27 to discuss May’s Article 50 letter will take place between the first and second rounds of the French presidential elections, which means Paris will be in a holding position. Indeed, if Marine Le Pen is still in the contest, the French preoccupation will be to make Brexit — which she has celebrated — look as unappealing as possible.
After the French elections, attention will turn to Germany. Angela Merkel is facing her most serious electoral test yet this autumn. Martin Schulz, the former president of the European Parliament, has revived the Social Democrats and is running as a left-wing, pro-EU populist; he presents himself as the antidote to Trump and Brexit. Faced with such an opponent at home, Merkel will not want to do anything that could be portrayed as being soft on Britain before polling day.
It is impossible to be certain what the shape of the Brexit deal will be, given that we do not yet know who the UK will be negotiating with.
But, paradoxically, the tensions over whether the divorce bill should be discussed alone or in tandem with the future trading relationship, reveal how a mutually acceptable deal could be agreed.
The EU could grant the UK tariff-free and relatively frictionless access to the single market, which would let May say she has achieved her goal. And the UK could agree to a generous leaving payment which reduces the Brexit-sized hole in the EU budget, letting European leaders tell their voters that the British have paid a price for leaving. As the old adage has it, negotiations succeed when both sides can claim victory.
It is impossible to be certain what the shape of the Brexit deal will be... The tensions over whether the divorce bill should be discussed alone or in tandem with the future trading relationship, reveal how a mutually acceptable deal could be agreed.