31 March 2017

Financial Times: EU officials set sights on ‘orderly withdrawal’

The EU’s negotiating guidelines are devoted to explaining the benefits and obligations of EU membership, and what is lost when Britain becomes, in the language of the guidelines, simply “a third country”.

[...] So it casts the main purpose of talks as managing “orderly withdrawal” and maintaining the integrity of the union. An ambitious trade deal post-Brexit is possible, but cannot come early or “amount to participation in the single market”. And any gradual transition will require the EU structures and obligations that supporters of Brexit so hate: European courts, free movement and budget payments.

There is no need for punitive threats to Britain. As Donald Tusk, the European Council president, put it on Friday: “Brexit in itself is already punitive enough.”

The conditions for a gradual transition out of the single market are stark, and tougher than expected At the same time the draft uses judicious ambiguity to create space for convergence over the next two years.

Starting with divorce issues, it seeks to gradually open strands of dialogue that ultimately come together in a final deal, when money, withdrawal conditions and future trade goals are combined. With the backing of Paris and Berlin, Mr Tusk is proposing a “phased approach”, meaning that Britain will need to offer assurances on budget commitments and citizens’ rights before any discussion about future trade relations is approved. But Michel Barnier, the EU’s chief negotiator, will have room for manoeuvre, in part through a lack of precision.

“Sufficient progress” on withdrawal is required for EU leaders to open trade talks, but what that means is left undefined. Principles on an exit bill and expected rights of citizens will need to be agreed — but it presents progress as a political, not mechanical decision. The conditions for a gradual transition out of the single market are stark, and tougher than expected. Anything that prolongs the single market participation will require the apparatus of EU governance, European courts and all. But again there is some wriggle room.

If agreement can be reached on a future framework, it mentions possible “bridges” to cover that gap, hinting at a phasing in that may be more palatable for British politics. 

Similarly, the text offers an unvarnished view of what Britain will lose in trade benefits after withdrawal, saying the UK’s advantages from hundreds of EU agreements with third countries will fall away on Brexit day. To take the edge off, the EU suggests that an accommodation could be found to help Britain manage its trade relations around the world. A third theme relates to special concerns of EU-27 member states.

Ireland’s “unique circumstances” are acknowledged, as well as the need for “flexible and imaginative” solutions that “aim” to avoid a hard border. While the text still states that any fix must comply with EU law, this is a welcome political signal for Dublin, London and Belfast.

On Gibraltar, the balance is tipped more in the favour of Spain; any agreement with the UK will not apply to the Rock without Madrid’s permission. A top concern of many member states is the status of their citizens in Britain. Here the text is exacting, calling for reciprocal guarantees of rights taken from the date of withdrawal in two years’ time, not the date this week when Article 50 was triggered, as some Brexiters would want.

Such guarantees are expected to not just cover EU citizens, but their families, and even unborn children. They must be enforceable (a hint at a possible role for European courts) and non-discriminatory (so Bulgarian labourers are treated the same as Swedish doctors).

The EU, in short, is defending the principles of the status quo. It has left a path to a deal open. And the vexing question of citizens rights and Britain’s budget commitments will be the first test of whether the political will exists to bring such an ambitious deal together.

Full article on Financial Times (subscription required)

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