Endgames begin in Salzburg as PM tells EU leaders her hopes for Brexit future

So, let the endgames begin. Over dinner in Salzburg tonight Theresa May will deliver her opening pitch in the final phase of the Brexit negotiations, which have been stuck in the diplomatic mud since the summer. She will be given 10 minutes, say diplomats, to make her case to the other 27 EU leaders. They will listen in silence and, as in previous encounters, not engage directly in negotiation.

This is to preserve the authority of Michel Barnier, their frontman.

The Prime Minister’s pitch will be familiar, according to Downing Street, repeating what she and her ministers have been saying all summer: namely, that she needs flexibility if there is any hope of selling a Brexit Withdrawal Agreement back in Westminster. She will argue that the Chequers plan really is the basis of a liveable future EU-UK relationship, with its “binding commitments” to a level playing field on state aid and to maintaining current EU levels of regulation on environmental and social policies.

This, she will contend, is a “fair arrangement” that does not undermine the single market and keeps trade flowing, to the benefit of both sides.

Unfortunately, Mr Barnier has clearly rejected the fundamentals of this pitch, arguing that Chequers is “cherry-picking” and damaging to EU economic interests, so Mrs May’s continued insistence that her plan forms the basis of a deal implies two clear warnings to Europe.

First, EU leaders need to give Mr Barnier more room to manoeuvre: his current responses reflect a negotiating mandate that cannot deliver any other response than “no”, and until this position “evolves”, a deal cannot be done. Second, that failure to do this inevitably opens the door to no-deal, which in turn opens the door to economic chaos and disruptive political forces in the shape either of Boris Johnson or Jeremy Corbyn that are deeply inimical to the EU’S long-term interests.

In short, as one UK source puts it,

“Give me the ammo to clinch this deal,” because, as politicians rather than EU theocrats, you can surely see that the alternatives are much worse. British officials are not so naive they expect EU leaders to suddenly see the light and change their guidelines this week.

But they hope Salzburg will indeed mark a new phase in the negotiation, opening the door to a more flexible negotiating mandate at the formal leaders council in October, and then clinching a final deal at an “allnighter” in the week of Nov 12.

However, there are two big problems with this pitch.

The first is that the EU rejects the premise of Chequers – and not just the quirky bits, like Mrs May’s dual-tariff customs regime that solves the Irish border – but the very idea of a “single market for goods”, which they say gives the UK unfair competitive advantage. “The British should ask themselves why their traditional free-trading allies – the Danes, the Dutch, the Swedes – are not helping them sell Chequers?” says one senior EU diplomat.“it is because they see the real risks. The British are wrong to think this is something only in Mr Barnier’s imagination.”

The EU has repeatedly warned Mrs May against “staking all her political capital” on securing a future relationship that splits the four EU “freedoms” of goods, services, people and capital, and they were showing no signs of conceding yesterday.

Leo Varadkar, the Irish Taoiseach, said he did not anticipate “there will be any change to the EU’S position or any change to our negotiating guidelines”, while Donald Tusk said the EU would stand firm on its demand for an “operational” Irish backstop.

With both sides so far apart on the future relationship, the EU remains focused on closing the Withdrawal Agreement – the divorce deal – which must include a solution to the intractable question of said Irish “backstop”. The EU remains adamant that if Mrs May wants to leave the single market and customs union and preserve an “invisible” border in Ireland, then logically she must accept customs checks in the Irish Sea. But Mrs May says she cannot, will not, divide her “precious union”.

There is talk of an expansive but vague future trade declaration, with “clouds of adjectives” to help Mrs May swallow that border and backstop. But, having killed both of her preferred solutions, it is unclear why Brexiteers or Remainers alike would be convinced by such promises.

‘No other country would accept it if they were in the same situation. They wouldn’t’

With both sides digging in, the assumption that an 11th-hour deal will be clinched is predicated – on both sides – on the belief that the other will capitulate on the “backstop” question.

These are dangerous assumptions. The risk of a “no-deal” accident is so real because both sides have entirely rational, convincing and self-interested reasons for not accepting the other’s position.

Mr Barnier, promising to put checks “away from the border, at company premises, or the market”, implies that Mrs May’s objections are overstated. “We hear this plethora of arguments that ‘it can’t work, doesn’t work’, but it does work already,” adds one senior EU diplomat. But the UK side worries about just how far this misses the point. Even if British officers were trusted to do the checks, as the EU suggests, it would leave a chunk of its territory to remain in a foreign customs regime.

“Neither side can demand the ‘unacceptable’ of the other, such as an external customs border between different parts of the United Kingdom,” Mrs May will argue, according to her officials. “No other country would accept it if they were in the same situation.” They wouldn’t.

But the EU is equally clear that the British idea of an “all-uk” arrangement that leaves all of the country in the same customs territory as the EU is legally and politically impossible, since it takes the “special” deal offered on Northern Ireland and grants it to the entire UK. Cherry-picking by the back door.

And so the stand-off deepens: the issue that was fudged in December’s Joint Report must, between Salzburg and November’s “emergency” summit, be rendered into a non-fungible, “operational” legal text, that must be ratified by all sides. Mr Barnier says October will be a “moment of truth”. No one should expect this to be easy.