Brexit comes down the priority list for jaded, divided EU leaders

Europe Letter: Brexit will get a look-in, but is by no means leaders’ main preoccupation

"My country is in flames," Bruno Le Maire told fellow finance minsters last week, imploring on them the necessity and urgency of measures that would show the ordinary people of France that the EU hears them and feels their pain: a tax on the profits of wealthy giant digital companies, a stability mechanism and budget for the euro.

His point was emphasised ahead of Thursday’s EU summit by the brutal attack in Strasbourg, and in a paradoxical way by his leader’s weekend U-turn and concessions to the crowd.

No, Brexit is not the only issue on the agenda and in the subtext of the European leaders' summit on Thursday and Friday. Issues that many of them see as of equal moment loom large – France on fire, Italy thumbing its nose at EU budget rules (both will be avoided by leaders, not least because the French have torn up budget plans in a rather Italian fashion), migration reform deadlocked, Poland and Hungary up on charges for rule-of-law breaches, looming European elections and the threat of populism, a trade war with the US, Russian naval adventurism in the Sea of Azov ... and Brexit too.

They will listen to Mrs May on Thursday afternoon and ask her a few questions about what she feels she needs. Later on Thursday evening, leaders of the EU27 will discuss what they can do to help her. Senior EU officials were coy about what form this would take – at a minimum, the standard "council conclusions" expressing their support again for the terms of the withdrawal treaty, insisting it can not be renegotiated, but offering to "clarify" elements of concern to her.


As one senior EU official put it, “I don’t know what is possible. I know what is impossible. The rest can be negotiated.”

Kicking the can

Most likely they will kick the can down the road – there’s been much of that – and defer considering the language of any “reassurance”, declaration, protocol or treaty addendum until the new year, not least because lawyers will need to pore over it.

One senior diplomat briefing journalists expressed a somewhat jaded, but not untypical, view of British special pleading – after all, he said, the final version of the backstop is based on a British demand for an all-UK customs union. Yet that is now apparently the problem, he complained.

There will be a strong message about the need to accelerate no-deal planning.

The leaders will be most keen to emphasise the real success story of the summit – the deeply unsexy and largely uncontentious work of completing economic and monetary union and banking union. “Europe working, even off the media radar,” was how one ambassador put it.

Finance ministers have prepared a package of measures for leaders' approval that range from further developing the union's bailout mechanism, the ESM, to enable it to assist states in financial trouble before and after a crisis, agreement on operationalising a backstop – the mot du jour – for the banking Single Resolution Fund it case it is overwhelmed by the collapse of a giant, and measures for risk reduction in banking and reducing non-performing loans.

Where there are disagreements still, the summit will agree further work, on issues such as a common deposit insurance scheme and Franco-German proposals for a first euro-zone budget with a “convergence and competitiveness” funding mechanism.

Divided members

There will be a long debate on the next seven-year, post-Brexit EU budget, the Multiannual Financial Framework, the first time that leaders will have had a real chance to air their respective national concerns – and there are many.

The British hole in the finances and the inclusion of a number of new policy priorities such as defence, a euro budget and the expansion of science spending have all combined to divide member states between net contributors and beneficiaries, rural versus urban prioritisers, backers of cohesion funding. The aspiration to get agreement by next summer looks utopian.

And on migration there will also be divisions – notably on the complete failure of the Austrian presidency to advance the “Dublin” file, the asylum regulations that the Italians, Greeks, and Spanish would like to see requiring mandatory resettlement of asylum applicants from the front line state where they land to other member states.

Resolute opposition to such proposals led by Hungary has resulted in complete deadlock and paralysed the passage of other less controversial external measures.

In recent days the French and Germans are reported to have put forward new proposals that would allow member states reluctant to take asylum seekers to provide alternative “solidarity” in the form of cash or other assistance. But it is unlikely that any of the package of measures will be agreed today.

Over dinner tonight they will discuss foreign policy and are expected to renew sanctions against Russia.