EU leaders will seek to hold UK to ‘backstop’ deal

Ireland prefers international rather than European measures to iron out tax loopholes used by multinationals

Chief EU negotiator for Brexit, Michel Barnier:  said his work is ‘not just about regulations and rules; it is about people’. Photograph: Emmanuel Dunand/AFP

Chief EU negotiator for Brexit, Michel Barnier: said his work is ‘not just about regulations and rules; it is about people’. Photograph: Emmanuel Dunand/AFP

 

EU leaders are expected to restate that there should be no backsliding by the UK on Monday’s “backstop” deal to maintain an open border when they meet at the end of their two-day summit in Brussels.

The British government conceded this week that the default position guaranteeing full regulatory alignment North and south on the island of Ireland would apply in the event of no deal on Brexit, despite rejecting the EU’s proposal in last month’s draft withdrawal treaty.

The agreement was reached with Britain alongside a deal on a 21-month transition period that avoids a cliff-edge Brexit for British businesses after the UK leaves the EU at the end of March 2019.

The final text of a statement from the European Council of the 27 remaining EU member states is expected to give cautious welcome to the progress made around certain parts of the Brexit negotiations.

The summit’s final statement is likely to include a holding line saying that EU leaders will keep negotiations under review until the next summit in June, in a move aimed at ensuring that the UK abides.

Before departing for Brussels, Taoiseach Leo Varadkar said he was pleased that the UK has now agreed that a backstop solution to avoid a hard border proposed in December will form part of the legal text of the withdrawal agreement.

He welcomed that all the issues identified by the EU side in the draft will be addressed “to deliver a legally sound solution to avoid a hard border on our island”.

Guidelines

EU leaders are expected to approve guidelines for the EU’s chief Brexit negotiator, Michel Barnier, to steer talks on the future relationship between the EU and the UK.

Speaking at an Irish event in Brussels on Wednesday night, Mr Barnier said he recognised that his work as Brexit negotiator was “not just about regulations and rules; it is about people.”

In a brief speech, during which he delivered a few words in Irish, he said he “won’t ignore the fact that Brexit is a cause of concern” for people on the island of Ireland, and that they did not have only economic concerns.

Brexit negotiations will be the focus of discussions on Friday.

“This is an important moment in the Article 50 negotiations and it is hoped that we can agree guidelines on the future relationship between the EU and the UK,” said a spokesman for the Taoiseach.

The main focus of discussion on Thursday evening will be on the EU Commission’s proposal to tax digital companies with a 3 per cent levy that could raise up to €5 billion a year.

There are likely to be strong differences of opinion between France, which is pushing the tax, and the smaller member states including Ireland, which prefers international measures rather than European measures to iron out national tax loopholes being used by multinational companies on a global basis.

“We believe that global solutions are needed to ensure that tax is paid by companies where value is created and profits are generated, reflecting the highly international nature of the digital economy,” said Mr Varadkar.

“I will strongly argue that the EU should wait for the OECD to complete its work before deciding on how to act, and should do so only in the context of agreement on an international level.”