EU summit will tackle Brexit and banking backstops

Like with the 46A of old – though I believe it has improved – you can be waiting around for ages for one, and then two appear at once. In Brussels it's the "backstop", the new mot du jour, until recently just a wall behind home plate in baseball, now the vital ingredient in two of Thursday's key EU summit discussions.

There’s the Irish backstop, the Brexit fallback guaranteed by the UK in December to preserve the frictionless Border in case no overall EU-UK deal is forthcoming. The summit will this time simply note with regret the lack of progress and warn that October is a real deadline.

As one official warned on Wednesday, “the British must understand that transition is not a done deal yet – the withdrawal agreement, and its Irish protocol, is a necessary condition for it”.

Leaders will on Thursday evening over dinner hear British prime minister Theresa May set out her perspective on the state of play. On Friday, leaders of the EU27 will briefly and simply note a progress report by chief negotiator Michel Barnier.

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And then there’s the banking backstop. The idea, in completing the EU Banking Union, will be to provide a fund of last resort to guarantee that the union’s banking rescue fund can’t be overwhelmed should a “too big to fail” bank go belly up.

Leaders will entrust that role to the European Stability Mechanism, the body that bails out failing states and that last week saw its last client, Greece, given its freedom from its own bailout. Again, a fairly straightforward and uncontentious decision for the leaders, although other elements in the discussion on euro-zone reform, notably Franco-German ideas about creating a euro-zone budget, promise to be more contentious.

Ireland will be supporting the idea of a macro-economic stabilising fund as long as there is no attempt to make it into a means of transferring wealth from rich states to those in trouble – insurance is one thing, bailouts quite another.

But the real meat of this summit will be the debate on migration and the hope by most leaders that they can do something to provide German chancellor Angela Merkel with some kind of backstop to protect her from her rebellious coalition partner.

Flow of migrants

Three key ideas are likely to be pushed on Thursday as evidence of the EU “doing something” to stem the flow of illegal migrants. Firstly there is the idea of creating what have been called “disembarkation platforms” in “third countries”, places outside the EU, mostly in north Africa, to which migrants rescued at sea can be taken.

EU officials insist the plan is not to create “camps” for migrants, but what such reception centres will be is not exactly clear. They cite the example of the successful EU-Turkey agreement, which, by removing the incentives for smugglers, has reduced the eastern Mediterranean migrant flow to Greece by 96 per cent.

Officials suggest that the very existence of such alternative landing points away from the union, where asylum seekers will be processed and genuine cases ferried on to the EU, will break the smugglers’ business model and can relieve pressure, particularly on overburdened Italian ports.

They insist that, with the co-operation of international migration organisations and third countries, compensated for their support, the rights and conditions of migrants can be safeguarded.

Leaders will also be asked to establish in the next EU budget a substantial dedicated and flexible fund specifically targeted at disrupting the flow of migrants. And they will be asked to step up the funding and training of the Libyan coastguard service.

Pass the ball

The emphasis is all on stemming the external tide of migrants – the internal, “secondary”, migration flows between member states remain a far more difficult political problem.

There have been attempts since 2015 to amend the Dublin regulations, which require the EU member states where a migrant lands first to take responsibility for them. Attempts to create a permanent system of burden-sharing through mandatory quotas have foundered on the vehement objections of a number of states, led by Hungary. The summit will simply pass the ball of Dublin reform on to the incoming Austrian presidency.

The crowded summit agenda also takes place against the background of a major trade dispute with the US, and European Council president Donald Tusk hopes to stimulate a wider political discussion among leaders about Trumpism and the threat it represents to the EU and to its cherished multilateral world order.

"Despite our tireless efforts to keep the unity of the West," he says in his note of welcome to leaders, "transatlantic relations are under immense pressure due to the policies of President Trump. Unfortunately, the divisions go beyond trade.

“I will share with you my political assessment of where things stand. It is my belief that, while hoping for the best, we must be ready to prepare our union for worst-case scenarios.”