May offers to extend transition by a year

PM plays for time as she calls on EU leaders to show ‘courage’ and work out Brexit deal

Gordon Rayner James Crisp

Steven Swinford THERESA MAY has told EU leaders she is prepared to consider extending the Brexit transition period as she called on them to show “courage” and come up with “creative” ideas to break the deadlock.

At a summit in Brussels, the Prime Minister said Britain would be open to the idea of remaining tied to the EU beyond the end of December 2020, even though that could mean paying billions of pounds more to Brussels.

Last week The Daily Telegraph disclosed that Michel Barnier, the EU’S chief negotiator, had proposed extending the transition period by another year, to the end of 2021, to allow more time for a trade deal to be worked out.

Yesterday Mr Barnier said “much more time” was needed to find a solution to the Irish border problem, and extending the transition period could help defuse the row over the backstop.

Mrs May tried to shift the onus on to her EU counterparts by saying they needed to show “trust and leadership”.

In a comment that will be interpreted as a reference to Vladimir Putin, she also reportedly said that if they did not agree a deal, “those outside the EU will claim the current world order is crumbling, they will cheer and we don’t want them to do that”.

However, the other 27 leaders tried to throw the ball back into her court, with one saying it was “very difficult” to negotiate because the British “do not know what they really want”.

Last night Nigel Farage said: “Mrs May’s acceptance of an extension to the transition period will take us to the next general election which may mean we never leave at all.”

Meanwhile, five former Cabinet ministers, including Boris Johnson and David Davis, warned the Prime Minister that she would not be forgiven by the British people if Brexit was reduced to a “choreographed show of resistance followed by surrender”.

Mrs May spent around 20 minutes addressing the other 27 EU leaders in Brussels before they shut her out of a dinner at which they discussed Brexit.

This week’s summit had been described by Donald Tusk, the president of the European Council, as a “moment of truth” for Brexit, but in reality Mrs May arrived with little or no expectation of a breakthrough being made.

With both sides entrenched in their positions over a backstop if no agreement can be reached over the Irish border, Mr Barnier said: “We need time, we need much more time and we continue the work in the next weeks calmly and patiently.”

Mrs May said: “I remain confident of a good outcome. The last stage will need courage, trust and leadership on both sides.”

A senior British official added that Mrs May’s message was: “We need to find creative ways out of this dilemma.”

Antonio Tajani, the European Parliament president, said: “There was a message of goodwill and readiness to reach an agreement, but I didn’t perceive anything substantially new.”

On the idea of a longer transition period, he added: “It was mentioned. Both sides mentioned the idea of an

MORE than two decades ago, Norway was divided by a rancorous referendum that mirrored the Brexit vote: 52 per cent rejected membership of the European Union, while 48 per cent were in favour.

Businesses, political parties and even families split into two camps: those who dreaded being ruled by Brussels and those eager to be part of Western Europe’s post-cold War success story.

“We decided on a national compromise that was both sides’ Plan B,” Espen Barth Eide, a Norwegian Labour MP and former foreign minister, told The Daily Telegraph.

“At the time, everyone on the [proeu] Yes side said it was better than nothing, while the No side said it was better than full membership.”

That compromise was staying out of the EU but signing up to the European Economic Area (EEA), a club of wealthy countries, which enjoys access to the EU’S single market at the cost of following most of its rules, including free movement.

Norway also pays the hefty sum of around £740million into the European budget each year – equivalent to £3.5billion a year if Britain followed Norway and paid on a pro-rata basis.

As it is not in the customs union, the country can also strike free trade deals beyond Europe. However, this in turn creates the need for checks on Norway’s border with EU member Sweden.

Legal issues are handled by the European Free Trade Association (EFTA) court, which in most cases follows EU case law but works independently of the European Court of Justice.

This “two pillar” EEA/EFTA system, known in the UK as the “Norwegian model”, is increasingly discussed in London as a compromise that could break the deadlock with Brussels.

Critics say EEA/EFTA membership reduces its core members – Norway, Liechtenstein and Iceland – to mere lobbyists and “ruletakers”, loitering in the corridors of power instead of sitting at the table.

But Mr Eide said the arrangement has helped to unite Norway since the 1994 vote and turn it into a success story. “I would defend it any day of the week and I expect that we will stick to it,” he added.

Beyond Oslo, however, discontent with the EEA model is growing.

Helle Hagenau, a senior member of the 23,000-strong “No to the EU” pressure group, rolled her eyes at the suggestion that Norway’s sovereignty was not being undermined by the EEA.

“It is very much a trap,” said the veteran Eurosceptic, who led the charge against EU membership in the 1994 vote. “The EEA is completely undemocratic... people say it’s important to have a seat at the table. Well, we are standing in the corridor.”

Norwegian businesses, which export more than 80 per cent of their goods to the EU single market, take a very different view.

For Tore Myhre, head of international at NHO, Norway’s largest trade body, reduced sovereignty is a price worth paying for a thriving economy that enjoys high wages and living standards, and low unemployment.

EEA members have a right to refuse to adopt any EU directive they dislike, but Norway has never taken the plunge as it would risk losing access to the affected market sector.

The country came close to a veto in 2011 during a row over postal service regulations, but a subsequent government reversed Norway’s position.

This means the consequence of rebelling against EU rules is unknown territory, which has made the Norwegian government privately anxious about Britain joining the EEA fold.

“The question is whether you want a Boris bull in the EEA china shop,” said Nick Sitter, a professor at the Norwegian Business School. EU migration to Norway is high, with most workers coming from eastern Europe. As of 2017, 97,000 Poles and 37,000 Lithuanians lived in the country.

But unlike the UK, there is muted desire for curbs on migration from the Continent; Norway’s low birth rate means there are plenty of jobs to be filled, notably in the services industry.

The government is trying to root out illegal workers with an ID card system for high-risk industries such as construction.

Meanwhile, a high minimum wage in certain sectors, such as 197 Norwegian kroner (£18) per hour for construction workers, has placated trade unions concerned about cheap labour.

Recent polls suggest Norway would narrowly vote to keep the EEA agreement if a referendum were held tomorrow.

But “No to the EU” believes that if the Theresa May was to win a “cherrypicked deal” in the Brexit talks, many Norwegians would be tempted to follow her.