10 February 2017

Brexit transitional deal will lock UK into EU court, says Verhofstadt

In the clearest sign to date that Britain is on a collision course with Brussels over the court, Guy Verhofstadt said European negotiators were primed to push back against Theresa May’s promises to remove the UK from the writ of European judges as soon as Britain leaves the EU in 2019.

Verhofstadt, who is representing the parliament in the article 50 negotiations, said he expected a transition agreement to be put together following the settling of Britain’s debts and before withdrawal in 2019.

Verhofstadt’s remarks are the latest sign that, under a transition deal that the prime minister wants to be put in place while a free trade agreement is finalised, the EU will not allow Britain to withdraw from the ECJ. [...]

With just weeks to go before May is expected to formally announce Britain’s intention to leave the EU by triggering article 50, Verhofstadt also dashed UK government hopes that it will be able to conduct negotiations in tandem about withdrawal and a future trade agreement with the EU.

He said that the EU institutions were now agreed that the UK would have to settle its withdrawal bill before any progress could be made on the future relationship. He said it would be reasonable to consider “an idea, a principle” on which to base a future relationship, but only to enter into talks on a free trade agreement during the transitional period.

On Britain’s hopes of negotiating a deal at the same time as the divorce, he added: “That is not possible. Technically [it is not possible] in the time we have, 14 or 15 months, let’s be honest.”

It is understood that it was agreed during a meeting between the EU’s Brexit negotiators and member states on Monday that the UK will be told to pay €57bn (£49bn) as the price for exiting the EU, although France and Germany wanted as much as €70bn.

A senior EU source added that at the meeting, hosted by the European commission Brexit negotiator, Michel Barnier, member states were also informed that the City of London was likely to be offered a so-called “equivalence” deal, whereby the UK and the EU’s regulations were deemed to be in line.

This would allow the City’s financial services to continue to operate across the continent. However, a source told the Guardian that Barnier insisted that the EU would have the power to pull the plug on the deal at any point.

Verhofstadt declined to comment on a possible arrangement with the UK regarding the City. But he described the claims from some in the UK and elsewhere that the EU had more to lose from a bad deal for the City than Britain as part of a pre-negotiation “psychological war”.

He said: “I don’t believe in this catastrophic scenario: without the City of London the whole thing collapses. I think this is completely, well, [much] of what you hear today is the building up of the muscles in the negotiation. Fine, it is good. But that is more creating the environment of psychological war.”

The Brexit secretary, David Davis, has sought to minimise the role of the European parliament in any deal between Britain and the EU, suggesting its role would be “peripheral”.

But Verhofstadt pointed out that MEPs would need to give their consent to the deal, insisting the parliament would play a pivotal role alongside member states in setting the negotiating position of the EU under agreements recently struck in Brussels. [...]

It is understood that the leaders of the other 27 other member states plan to meet on 8-9 April to finalise their negotiating position.

Verhofstadt said he believed that formal talks between the UK and the EU would then start in May. It is expected that Barnier and Davis will spend three days a week locked in talks together over the coming months as they bash out a deal.

Verhofstadt also warned May that the EU would not stand for any attempt by the British government to use Britain’s defence and security capabilities as a bargaining chip in the talks, as has been suggested by Downing Street. “In my opinion there cannot be a trade-off between both,” he said. [...]

Full article on The Guardian

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