As the summer break approaches, and with the first two rounds of Brexit negotiations completed, some early assessments can be made about the state of play. The general feeling on both sides of the Channel seems to be one of frustration. The EU Chief Negotiator, Michel Barnier, is threatening a suspension of the Talks for two months; he and other key EU figures are reported to be extremely dissatisfied with the lack of progress. While the UK Government has sounded much less discontented in its public pronouncements, there will be concern at the general impasse and the emergence of further obstacles in the road.
Each of the three priority areas, which have been identified as the first agenda items to be tackled in the Talks, are heavily bogged down. These are the areas on which sufficient progress is required before other matters, including trade, can be discussed. On none of the three does there seem to be any immediate prospect of a break through.
On the issue of reciprocal rights for EU and British citizens, at least the two sides have exchanged position papers. While there is certainly a lot of common ground, however, there remain large areas of disagreement. The UK side must be cognisant that one of the driving forces of Brexit was the issue of immigration. Therefore, it cannot just accept business as usual on this front. The EU side appears determined to ignore that very salient factor and are demanding a regime which looks very like the present set up. In truth, there is widespread unease throughout western Europe about the whole concept of freedom of movement. The Swedish, Austrian and Dutch Prime Ministers have all expressed concern about immigration levels in their countries. It is not unlikely that there will be further moves among Member States towards curtaining this “fundamental tenet” of EU policy. This is something which the EU Commission greatly fears. Therefore, the EU negotiating side are operating on a fairly weak base.
On the so-called Brexit Divorce Bill, there is complete deadlock. The EU seem to be waiting for the UK to come up with a figure and its own detailed calculations. However, the UK understandably wants the EU side to spell out clearly where it sees the outstanding amounts are due, as well as the legal basis of any charges. This EU list should then form the basis of discussions which would entail both sides going through the EU demand, line by line and item by item. While there will be undoubtedly some outstanding liabilities for the UK, including some pension commitments, the EU would need to justify fully any of their demands. There is also a need to reckon the UK share of EU assets, including its share of the capital of the European Investment Bank and even the share of the EU infrastructure of buildings, both inside the EU and around the world, that can be ascribed proportionately to the UK before a final reckonable amount can be arrived at.
The EU side also have to understand the political reality. No British Government can pay anything like the amounts being quoted by EU officials, as high as €80bn. Also, there is an element of bluff in the EU position. The EU is faced with the prospect of a potential gaping hole in its budget when the UK net contribution of €10bn per annum disappears. Already EU Budget Commissioner, Gunter Oettinger, has indicated he will purpose a combination of Budget Cuts, especially to the Common Agricultural Policy, together with enhanced contributions from Member States. Net Contributor countries, such as Germany, France, Netherlands, Austria, etc., have all indicated that they oppose making a bigger contribution to the EU budget. Hence the EU is hardly in a strong financial position to demand excessive payments from the UK. It may have to settle for what it can get rather than a larger theoretical figure which simply cannot be collected.
On the last of the three agenda items under discussion, namely the Irish border, there is the greatest frustration. There is simply no way a satisfactory solution, which would obviate the need for a border, is anywhere to be found. It is now accepted in Ireland, as I have argued previously, that there is simply no such thing as a “soft international customs border”. This has led to new Irish Taoiseach, Leo Varadkar, to announce that Ireland would not cooperate with the UK in establishing a new customs border. However, given that it is the EU which is insisting on a customs barrier, the statement may have been indirectly aimed at Brussels. The EU have insisted that anything relating to the Irish border must “maintain the integrity of the Union’s Legal order”, namely stick to the present regime. Barnier went on to state that there is no such thing as a frictionless border with the EU. This may lead instead to friction between Brussels and Dublin.
The difficulty for individual EU member states is that they all agreed very general guidelines for the EU negotiators and left it up to the Barnier team to work out the detail. This gives the EU bureaucrats a huge amount of latitude in the discussions, while only having to report back sporadically to the 27 remaining members of the EU Council. In this body, there is strong pressure to maintain a united front and not to rock the boat. Hence the lack of public dissension but continued grumbling in the undergrowth.
Even this level of consultancy with the Member States is somewhat illusory. Once the negotiations become serious the decision making on the EU side will move from Brussels to Berlin. The German Chancellor at that stage, who presumably will continue to be Angela Merkel, will be the real decision maker on the EU side. She will have to decide whether it is more important to secure agreement to preserve trade links with the UK or to follow the instinct of Brussels that the most important objective of the exercise is to teach any departing escapee from the EU a painful lesson.
While the present situation does not allow for a great deal of optimism, the familiar motive of self-interest remains in the background and will become much more important as the discussions progress. There is so much to be gained by an ordered and reasonable approach to Brexit on both sides that it may, despite the odds, win out in the end.