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What to expect from the EU27 when we trigger Article 50

The Government’s Article 50 letter will probably have more to say about life after the divorce than about the divorce itself. The reply of the 27 will probably be the other way round.

Whether that ‘opposite-end-of-the-telescope’ approach endures will be critical to the atmosphere, conduct and outcome of the negotiation.

M, Barnier, the EU’s chief negotiator, has been clear: the discussion will be about the divorce (including the bill for ongoing liabilities that the UK has to pay) and only after that will it be about the transition to the future relationship between the UK and the EU after we cease to be a member state in two years’ time.

There are now signs that he is putting some water in his wine. His position currently seems to be that the scope of the UK’s financial obligations should be agreed, but that it should be left to the EU Court of Auditors to do the sums.

That the UK will have to pay something is clear both legally and politically: we entered into obligations which outlast our departure. Their extent and financial value is for negotiation.

Logically, however, it makes little sense to discuss the bill in a vacuum because its extent depends on how much the UK continues to participate in EU activities after its departure, activities to which it would logically have to contribute: Europol, Erasmus, EU research programmes, intelligence sharing against crime and so on. Those discussions would be even more about the nature of the ongoing relationship than about the financial implications.

The British Government wants an early discussion of the rights of EU citizens in the UK and of UK citizens in the EU. The door to this now also seems to be opening.

The EU27 will make a swift formal response to the British Article 50 letter, probably doing little more than restating the position of the 27 immediately after Brexit: ‘no access to the single market without freedom of movement. Any future trade deal will be negotiated with the UK as a third country.’

The 27 EU Government leaders will probably then meet in May after the second round of the French presidential elections (7 May) to agree guidelines for the negotiations with the UK.

Crucial to the UK interest will be whether the guidelines offer the possibility of starting negotiations on the UK-EU relationship post-Brexit in parallel with discussions about how the present obligations and benefits of membership are removed.

On the basis of the guidelines, the European Commission will draw up a detailed negotiating mandate: the basis on which Barnier and his team will negotiate with the British team, led by David Davis at ministerial level and probably by Ollie Robbins, the PM’s ‘sherpa’ at official level.

Given that presidential elections take place in France on 23 April and 7 May, the EU heads are unlikely to agree the mandate before June. Negotiations will begin thereafter, but then break after the end of July before resuming in September. The UK will leave the EU in March 2019. Six months at least will be needed for the 27 parliaments of the EU members, and the European Parliament, to ratify any agreement. So the negotiations will need to be completed by about September 2018.

The Government has not yet given up on the possibility of negotiating the entire long-term post-Brexit relationship with the EU within that timetable. That hope is unrealistic. So, the biggest part of the negotiation will be about the nature of a transition i.e. about the basis on which trade between the UK and the EU would continue for two to three years after the UK leaves the EU, while Britain, as a third country outside the EU, negotiates with our former partners a Free Trade Agreement.

Whether such a transition (or indeed the subsequent FTA) would encompass trade in services and financial services would be central to the British interest, but is at present unclear.

So far, the negotiating mantra in Brussels is ‘the more sovereignty you, the British, want the fewer benefits you can hope to retain’. If this negotiation is down to the Brussels machine on the one hand, and a British Government fired up by the UK eurosceptic press on the other, then the omens are not good.

The EU heads of Government (especially once the German elections are over this autumn) need to look long and hard at what is at stake for them and the UK politically and economically. Our Government needs to do the same.

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