Brexit one year on: how Brussels sees it

It’s simply business as usual for a strangely unobsessed European Commission

The message from Brussels to London after Theresa May's election drubbing was simple: "We are ready to talk as soon as you are."

The talks duly opened on June 19th. They were more about procedure and timing than substance, and there was little commentary, publicly anyway, beyond that. The subtext, however, was “Please tell us what you want.”

A year has elapsed since the UK held its referendum on whether to leave the European Union, and no one is really the wiser about what it wants.

There has been much general talk of hard- versus soft-Brexit camps. The former favours a clean break with the single market, the latter a situation akin to a Norway solution, in which the UK would remain in the single market, part of the European Economic Area, but outside the decisionmaking structures of the union.


The latter is preferred, it would seem, by the Conservatives.

The Norway model, much the preferred option for Dublin, most EU partners and, it would appear, the Democratic Unionist Party, requires acceptance of free movement of people, a complete no-no for the Tories.

The UK's Brexit minister insisted there was no change of policy: 'We are leaving the EU, we are leaving the single currency, we are leaving the customs union'

The UK's Brexit minister, David Davis, insisted there was no change of policy, and repeated the mantra at the launch of the talks. "We are leaving the EU, we are leaving the single currency, we are leaving the customs union."

This month’s Westminster election led to media speculation in Brussels and Dublin that the new parliamentary maths should allow May’s government to move to a softer Brexit position – if it wanted to.

Tory Europhiles and centrists, like the UK chancellor, Philip Hammond, and May's new deputy prime minister, Damian Green, as well as the new batch of Scottish Tory MPs and a DUP keen to see the softest North-South Border, will press the case that voters rejected the hard option.

But the Eurosceptics still have the whip hand in the Tory party, and there is no evidence of any political will to take them on. Which all bodes ill for substantive progress in the talks.

Unlike the UK, whose aspirations remain as yet largely unclear, the European Commission taskforce, under its chief negotiator, Michel Barnier, has begun to elaborate in some detail its own view of the issues that need to be addressed in the preliminary discussions on the first-phase withdrawal agreement, widely known as the "divorce talks".

These are supposed to tackle the issue of the ongoing rights of UK and EU citizens abroad in each others’ respective territories after Brexit, the financial liabilities of the UK arising from its commitment to ongoing programmes, and how to deal with the Border in Ireland.

Once EU leaders at a European Council summit are satisfied – perhaps as early as October – that "sufficient progress" has been made in the divorce talks, they will agree to discussions on the "future relationship", predominantly trade issues – which will inevitably overlap with decisions about the Border – that cannot be resolved in the first-phase talks.

The UK was keen that both discussions take place simultaneously, but it has accepted the staggered start, and what “sufficient progress” means is likely to be determined in part by the tone of the divorce discussions.

Herman Van Rompuy argued that the essential ingredients would be trust – clearly missing – and a 'quick win' in the first phase of negotiations

Speaking recently in Brussels, the former European Council president Herman Van Rompuy argued that the essential ingredients for the talks would be trust – clearly missing – and what he called a “quick win” on one or more of the issues in the first phase of negotiations.

“If we survive the summer I become much more confident,’’ he said while warning that the trade talks would inevitably be long and difficult, a point acknowledged by Davis.

The balance of forces in the talks, Van Rompuy insisted, would not be determined, as the UK had suggested, by an equal interest on both sides in free trade. Although the EU sells only 8 per cent of its goods to the UK, the latter depends on the EU taking 45 per cent of its products – far from equal negotiating hands.

Barnier has published two papers in recent weeks setting out the issues that have to be resolved in citizens’ rights and the financial settlement. A paper on Ireland is expected to follow, perhaps next month.

The UK will outline its position in detail on citizens’ rights next week in the Commons, and there is a hope in Brussels that a “quick win” may indeed be achievable. The EU position is that both sets of citizens should simply retain existing rights wherever they are living, a parity of treatment that, it believes, should facilitate agreement.

There is a consensus that achieving a figure for the financial settlement will not be possible by October: it is too politically toxic for the UK at this stage and, it is feared, might collapse the talks.

The Barnier paper suggests a means for calculating the UK’s liabilities “based on the principle that the United Kingdom must honour its share of the financing of all the obligations undertaken while it was a member of the Union . . . fixed as a percentage of the EU obligations calculated at the date of withdrawal in accordance with a methodology to be agreed in the first phase of the negotiations”.

If that method of calculation can be agreed by October it will be no small achievement, and the largely technical job of working out the final figure can then be put to one side.

Few doubt that the Barnier methodology will end up producing a figure put by the 'Financial Times' at between €50bn and €100bn

Few doubt that the Barnier methodology, largely unarguable, will end up producing a figure put by the Financial Times at between €50 billion and €100 billion (the latter a revision that takes account of agricultural payments not included the first time).

That scale of figure, at any stage of the negotiations, may yet prove a fundamental stumbling block and collapse the talks. The commission refuses to be drawn on its estimate of an exact figure, but it does not dispute the paper’s broad approach to the calculation. There is also hope that the divorce talks will be able substantially to advance the Irish issue, although there is also acknowledgment by both Irish and EU officials that the customs border will remain unresolved until discussions on trade.

The two sides have established a “dialogue” on the Irish issue and have emphasised that it remains a top priority.

Agreement to preserving the Common Travel Area, which includes the whole of the UK and predates the accession of both states to the EU, appears likely, as does agreement on preserving elements of the Belfast Agreement such as rights to EU citizenship for those in the North who wish to apply for Irish citizenship and the maintenance of what EU peace-programme funding in Border areas is still applicable.

Although Ireland is not formally represented on the Barnier group responsible for direct negotiations when they start – the commission and its working groups function strictly on a non-national basis – Irish diplomats in Brussels are confident that their almost daily contact with its senior members mean national concerns will be fully recognised and prioritised in the negotiating guidelines.

Brussels is, however, unlike Ireland and the UK, strangely unobsessed by Brexit matters. The commission’s mantra is “business as usual”. Its response to Brexit has also been to launch a series of discussion papers around scenarios for the future of Europe.

The message is that Brexit consists not solely of preparations for disengaging with the UK but also of an opportunity for the EU to move forward and complete the projects, like monetary union or the single market, that remain works in progress.

As Van Rompuy put it, Europe has a window of opportunity. If we don’t take it, he argued, populism will surely return in five years.