Bad-tempered Brexit talks loom
>> LONDON: UK Prime Minister Theresa May’s vision for Brexit is antagonising European Union governments, raising the risk that negotiations deteriorate into a bust-up even worse than first expected.
Ms May’s initial demands — and warnings over what she will do with taxes or security if she doesn’t get her way — are elevating the likelihood that the UK leaves the bloc in 2019 without an exit deal, let alone the sweeping trade pact it seeks, according to five Brussels-based diplomats who spoke on condition of anonymity.
The decline in sentiment comes less than two months before Ms May plans to open discussions by invoking Article 50 of the Lisbon Treaty and suggests she may need to modify her approach to ensure the breakup doesn’t end up hurting both economies.
“It’s going to be very complicated, very messy,” former Finnish prime minister Alexander Stubb said. “When you’re negotiating Article 50, you’re talking about 200,000 pages of secondary legislation. It’s not going to be easy to just get out.”
The messages from the diplomats are that EU governments are preparing to enforce their line that the UK can’t be better off outside the bloc than inside it and that they value safeguarding their own interests and regional stability above the need to maintain good relations with the UK.
While the diplomats acknowledged there is likely to be a long back-and-forth and that Ms May has merely made an opening gambit, they said officials have been surprised by how combative the UK has been so far.
“The EU faces an existential crisis,” said Malcolm Barr, an economist at JPMorgan Chase & Co. “It will prioritise a deal which fosters coherence among the 27 and which demonstrates to all the disadvantages of leaving, even if that comes at a short-run economic cost to itself.”
Ms May outlined her strategy in a January speech and formally published it last week. She aims to leave the single market for goods and services, quit sending large sums of money to Brussels, clamp down on immigration and recapture law-making powers. As for trade, she wants a “bold and ambitious’’ commercial relationship with the EU but also the freedom to negotiate accords with other countries.
She argues the relationship she envisages would benefit the EU too by ensuring easy trade across the English Channel and warns both economies would suffer if a pact can’t be struck. “It is in everybody’s interest to find an arrangement, to find a partnership between us that actually meets the needs on both sides,’’ Ms May told the New Statesman magazine last week. “I don’t feel I have a weak hand.’’
Still, governments couldn’t avoid noticing that Ms May’s pitch was laced with menace, the diplomats said. She suggested failure to land a deal could prompt the UK to cut taxes to maintain competitiveness and also hinted it could withhold security cooperation from its neighbours. Her willingness to engage with US President Donald Trump also raised eyebrows.
“She’s taken this huge strategic decision to ally herself with Donald Trump which has ruffled a lot of feathers,” former UK deputy prime minister Nick Clegg said on Friday. Diplomats across the EU “are mystified as to why she hasn’t tried to create more space to come to a more workable, a more moderate accommodation”.
British efforts to find allies among the other 27 EU states and undercut the European Commission in Brussels would risk hardening positions, the diplomats said.
The UK has already started bulking up the status of embassies in central and eastern Europe. It has also yet to guarantee the rights of EU citizens currently living in the UK, which outnumber Britons on the continent.
How the talks will actually fare may be evident early on. An immediate flashpoint is set to be the haggling over Britain’s exit bill.
Running to an estimated €60 billion euros, it comprises various financial commitments, such as pension obligations to EU officials and past pledges to the bloc’s budget and projects.
UK Trade Secretary Liam Fox last week called the idea of such a bill “absurd” and the government has said it won’t pay for any EU projects signed after last November unless they “provide strong value for money and are in line with domestic strategic priorities”.
The European Commission this week reiterated that Britain’s financial commitments “should be honoured in full’’.