EU’S rigid nature is main threat to any deal

There has been a significant evolution in the UK’S position on Brexit in recent weeks. The Cabinet now appears united behind Philip Hammond’s view that a smooth Brexit requires a transition period of years, rather than months, between the UK’S formal withdrawal and a final deal coming into force. On Wednesday, the Chancellor expressed his hope that UK and EU negotiators begin discussing a transitional deal by autumn.

Ministers’ new stance on a transition, which broadly respects the EU’S position on the need for some role for supranational judicial supervision and a continuation of free movement and budget payments, should make it easier to conclude a deal. It is now the EU’S inflexibility that poses the bigger risk of a breakdown in the talks.

On Thursday we learnt that the European Commission’s Brexit negotiator, Michel Barnier, has briefed ambassadors of the other 27 EU states that the start of the second phase of Brexit talks could be delayed by two months to December, which would further eat into the limited time available before Brexit day in March 2019. Barnier reportedly noted that it is “very unlikely” that the somewhat vague threshold set by EU ministers of “sufficient progress” in the first phase of talks will be met by October, which would allow discussions to advance from the issues of citizens’ rights, the Northern Irish border and the “Brexit bill” to the future UK-EU relationship.

The obvious and most politically presentable way of settling the budget dispute, at least in the UK, is to tie the issue to that of the transitional period. The current EU budget formally expires in 2020 but, due to long-term commitments, requires funding up to around 2022-23. Both sides agree a transition is required and continued UK participation in the EU single market and programmes could run alongside its continued contribution to, and receipts from, the EU budget.

The number is a political negotiation, not easily defined by the EU’S legal texts. Despite Jean-claude Juncker telling The Financial Times it will be at least €60bn (£53.7bn), we still don’t have an official figure from the Commission. The various numbers being bandied around were always going to be reduced in net terms because, if the UK must honour its commitments to EU spending schemes, the EU must honour its commitments to UK farmers, universities and so on. After this transitional period, reduced UK contributions could follow the Norway model whereby it contributes to any schemes it continues to participate in.

It is important to remember Barnier’s role is that of technocrat. He must rigidly stick to the political negotiating mandate set by EU ministers back in May, which outlined the EU’S stance on the sequencing of the talks and is where the phrase “sufficient progress” comes from. This was intended to send a message to the UK that the EU would not talk about the future trading relationship until it was confident the UK would act reasonably over the issues thrown up by withdrawal, such as the potential hole in the budget.

However, while the UK position has developed rapidly in the space of just a few days, the EU position has not been updated to reflect the emerging consensus on the need for a transition.

The other major issue being negotiated, the protection of citizens’ rights in the UK and the rest of the EU, has reached an impasse over Brussels’ demand the ECJ supervise these rights in the UK. This is despite the fact that Sigmar Gabriel, the German foreign minister, last month said that instead of extra-territorial ECJ jurisdiction over the UK, he would welcome “a joint court that is staffed by Europeans and Britons, which in principle follows the decisions of the ECJ”.

For all the EU’S talk of transparency in the negotiations, and its publication of various technical position papers, there has been hardly any public debate in, or between, EU member states about the kind of long-term or even transitional deal they would like with the UK. This is why it is so difficult to compromise. The EU does not actually know what it wants to have achieved at the end of the process.

Stephen Booth is director of policy and research at Open Europe

‘Barnier must rigidly stick to the political negotiating mandate set by the EU’