EDITORIAL: “In essence this is about damage control”

EDITORIAL: “In essence this is about damage control”

Donald Tusk’s name was on the envelope, but Theresa May’s letter triggering Article 50 was clearly addressed primarily to a domestic audience. It was very clear and, by the standards of the Brexit debate to date, remarkably free of rhetoric or grandstanding. In fact, it may well mark the beginning of a process of letting the British public down gently, of educating them slowly in economic realities. For example, nothing like this paragraph has been seen before: “We … understand that there will be consequences for the UK of leaving the EU: we know that we will lose influence over the rules that affect the European economy. We also know that UK companies will, as they trade within the EU, have to align with rules agreed by institutions of which we are no longer a part …”

Even when May set out the British approach to talks, the language was relatively temperate: “We recognise that it will be a challenge to reach such a comprehensive agreement within the two-year period set out for withdrawal discussions in the Treaty. But we believe it is necessary to agree the terms of our future partnership alongside those of our withdrawal from the EU.” The EU has been clear from the start that this will not happen: Article 50 specifies very clearly that the EU controls the format of the talks.
In case there was any doubt, German Chancellor Angela Merkel rowed in very quickly: “The negotiations must first clarify how we will disentangle our interlinked relationship… and only when this question is dealt with, can we, hopefully soon after, begin talking about our future relationship.”

This is the fault line that we will all have to dance around for the next two years. It would take a small miracle to get agreement on parallel talks and an absolutely huge one to get any sort of interim deal that would avoid hard borders and tariffs.

No one had the bad manners to mention the exit bill, variously estimated at €45-60 billion. May is bound to come under extreme pressure from Brexiteers and the tabloids to renounce it or at least play very hard ball on a much smaller payment. This gives the EU a very good reason to refuse parallel talks. The British side wants and badly needs a trade deal and/or an interim agreement on trade, so Michel Barnier has a powerful motivation to demand payment in advance before trade talks begin.

There will have to be a substantial payment for reasons that have nothing to with punishing the UK. Firstly, the UK has made very real commitments: to take one example, to participate in the European Space Programme it has to pay into a fund for eventual safe decommissioning of communications satellites which will stay in space for decades, including a compensation fund in case one of them falls.  Morality aside, practical politics demands payment. There is a real bill to be paid here and if the British do not pay, it will fall upon the 425 million people of the EU27. Any one of the 27 prime ministers could veto a trade deal with the UK, and all would one day have to face voters who had been forced to pay Britain’s bill.

Donald Tusk will now issue negotiating guidelines on behalf of the EU Council to the 27 governments, which have four weeks to prepare their responses ahead of an EU summit on 29th April which will agree the full negotiating position. That meeting will take place between the first and second rounds of the French presidential election. A more detailed mandate for the EU Commission will be agreed in May and then the talks will begin.

In her letter, May reiterated her desire “to avoid a return to a hard border” but gave no indication as to how that particular circle might be squared. When questioned by BBC Radio Ulster, Secretary of State James Brokenshire seemed to think there would be no hard border because the UK would be in a customs union with the EU, which would be very big news indeed. May and other ministers have previously said the UK would conclude its own trade agreements with individual countries, which is absolutely incompatible with any customs union anywhere.