May’s Brexit speech long on aspiration but short on solutions

Brussels has given a cautious welcome to British prime minister Theresa May's Florence Brexit speech. EU chief negotiator Michel Barnier described it as constructive, and reflecting "a willingness to move forward".

The commitment by the UK to at least €20 billion, perhaps more, in divorce payments to the EU, and clarification of its wish to see a two-year transition period which mimics membership, it is believed, should help to see the drifting Brexit talks begin to move to a new level.    Specifically, they may make possible agreement, probably by December, that “sufficient progress” has been achieved and allow the opening of the second phase of talks on the “future relationship”.

May’s language on Northern Ireland disappointed. She simply reiterated previously expressed aspirations to safeguarding the Common Travel Area, the gains of the Belfast Agreement, and to what she said was the common wish not to have any physical infrastructure on the Border, but without saying how these aspirations could be achieved.

“Today’s speech does not clarify how the UK intends to honour its special responsibility for the consequences of its withdrawal for Ireland,” Barnier said.

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The wish to remain part of the customs union and single market on current terms will be welcomed in Dublin. Barnier, however, recalled the European Council insistence that if any "time-limited prolongation of Union acquis be considered, this would require existing union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures to apply". In other words, that all EU rules would continue to apply to the UK – there could be no cherrypicking of aspects of the single market.

Divorce treaty

Her comments on protecting the rights of EU citizens in the UK after Brexit were seen by Barnier as a positive but unspecific step in this important strand of the phase-one discussions. She articulated a formula in which the divorce treaty will be enshrined in UK law and its courts will be required to take account of the rulings of the European Court of Justice.   May’s speech, albeit welcome in Brussels, is problematic in two regards. The form of her offer on the Brexit bill, wrapped in proposals for a two-year transition – widely seen as too short – is another attempt to bounce the EU into phase-two discussions on the “future relationship” ahead of “sufficient progress” on the priority phase-one divorce talks.   That has not been a bridge that the EU negotiators have been willing to cross until recently, although Barnier opened new possibilities when he spoke on Thursday of agreement on orderly withdrawal as a “precondition for any constructive and trustworthy discussions on our future relationship”.     The nature of the offer is also difficult. In essence May has offered €20 billion not in “exit” money, but “staying in” money, a continuing UK contribution to programmes that the UK has committed to and will continue to enjoy as a “virtual” member in the transition period. (All the rights and obligations without a seat at the table.)

Long-term obligations

Member states also want a clearer commitment by the UK that it understands and acknowledges long-term obligations. Then there is the agriculture budget, and the UK’s “share” of possible default – albeit unlikely – bills from outstanding loans by the EU to the likes of Ireland, Portugal and Ukraine.

May’s suggestion that the UK would also honour “all commitments made in the course of our membership”, particularly her use of the until-now toxic word “commitments”, is being interpreted by some as just such an undertaking. Barnier was less sure, saying “we’ll see”.

Whether it will be sufficient to cross the hurdle of “sufficient progress” will begin to emerge at the Brexit talks resuming next week.