At stake is the critical question of whether second-phase Brexit talks on the future UK-EU relationship can begin after the mid-December European Council meeting, the final big calendar event of the EU political year. If not, the UK could potentially be kicked out several months into 2018.
This crucial decision — on whether sufficient progress has been made in the first phase of divorce talks — is one for EU 27 decision-makers alone to make, underlining the in-built strengths of the bloc’s position in the two-year Article 50 process. If a breakthrough does not happen soon, prospects increase of no final deal and a hard, potentially disorderly Brexit.
This is because any eventual second-phase discussions on the future UK-EU relationship may be reduced to a matter of a handful of months. Chief EU negotiator Michel Barnier, who is also attending Monday afternoon’s meeting, wants talks wrapped up by October 2018 to allow for any finalized agreement to be ratified before March 2019 when the two years of the Article 50 period end.
Despite half a dozen rounds of UK-EU negotiations since the summer, progress has been slow on two of the key first-phase divorce issues. That is, the UK’s financial exit bill, and the future status of the border between the Republic of Ireland (which will remain in the EU) and Northern Ireland (which will leave the Brussels-based club along with the rest of the UK).
European Parliament Chief Negotiator Guy Verhofstadt several weeks ago described London’s positions on several Brexit issues, including the Irish border, as a “fantasy.” More diplomatically, Barnier recently asserted that London is still not fully recognizing that fundamental issues such as “frictionless trade is not possible outside the Single Market and Customs Union” given the EU’s commitment to the four freedoms of goods, capital, services and labor.
Some of the rhetoric from Verhofstadt and Barnier is aimed at turning the screws on London in the negotiations, and EU decision-makers need also to engage much more constructively. Yet, public infighting in the UK Cabinet has definitely sent signals this autumn that its Brexit plans are in disarray, and that it has still not reconciled many key negotiating “trade-offs” by apparently wanting close, favorable post-Brexit ties without the costs.
To counteract EU accusations of UK unpreparedness and failure to set out a clear enough vision for its planned exit, May has sought to seize back the initiative, including with her September Florence speech. This has brought progress, including over the future of EU and UK citizen rights.
However, movement forward has been much trickier in other areas despite the flurry of Brexit negotiating position papers released in recent weeks on a wide array of issues. And May acknowledged recently that there is therefore still “a lot to be done,” especially over the Irish border issue.
At stake is the critical question of whether second-phase talks on the future UK-EU relationship can begin after the mid-December European Council meeting.
On the divorce bill, it is reported that negotiators could be on the cusp of a deal after May made clear last week that she is willing to lay down extra money to try to meet the EU’s demands, but only if the bloc’s leaders can guarantee moving on to stage two by widening talks to trade and the terms of a transition period. Highlighting the fraught nature of the process, May apparently feels she had been misled believing that Barnier’s team had made an agreement that movement forward could come here if she pledged, as she did in Florence, simply to honor future UK financial commitments made in the past.
However, this has ultimately solved little and forced the UK Cabinet last week to agree to move further on money on the proviso that the EU-27 in mid-December guarantee progress to a second round of talks. Despite even this, though, there is still some uncertainty whether agreement can be reached as numerous other EU member state leaders, including Angela Merkel, need to consult their national parliaments.
On the Irish issue, which has emerged as the key remaining blockage, the big question Dublin wants answered is how London will avoid a hard border being re-imposed between the Republic of Ireland and Northern Ireland. This is a major political headache which could yet see an Irish veto, with Dublin favoring that Belfast remains in the European customs union, which London appears to have dismissed as an option.
Despite the political complexity and sensitivity of this and other issues, intensive constructive dialogue and pragmatism could yet deliver a breakthrough by mid-December. Here there is some encouragement from the fact that the UK Government appears slowly, but surely, to be opening the doors for compromise, and the EU must now seek to do the same, otherwise it remains possible that London could ultimately walk away from the talks.
Taken overall, significant distance still needs to be bridged if UK-EU negotiations are not to go off track in December. With UK ministers doubling down on efforts to start second-phase talks after the mid-month European Council meeting, a big breakthrough could now be on the horizon. Yet this is by no means certain and failure to move forward in the coming days will delay already tough overall timelines, increasing prospects of a hard, and potentially disorderly Brexit.
— Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics