Ursula von der Leyen described her dinner with Boris Johnson on Wednesday as "lively and interesting" but it left both sides feeling downbeat about the future of the Brexit talks. No new ideas emerged from the meeting so although David Frost and Michel Barnier have a few more days to negotiate, their leaders gave them nothing new to talk about.
Each twist and turn in the negotiations over the past couple of weeks has been a kind of Rorschach test, open to wildly different interpretations depending on whether you are an optimist or a pessimist. Pessimists viewed the breakdown in the talks between Frost and Barnier last Friday as the end of the road, while optimists saw it as a chance for the political principals to add fresh impetus.
This week's agreement on how to implement the Northern Ireland protocol saw Britain remove the treaty-breaking clauses from the Internal Market Bill which were an obstacle in the way of a deal. But their removal has also lowered the cost of a no-deal option for Johnson because he can reassure Joe Biden that it will not undermine the peace process in Northern Ireland.
The three sticking points in the negotiations remain the same: fisheries; the level playing field; and governance. But the focus has narrowed onto a specific element of the level playing field guarantees of fair competition – the so-called ratchet clause.
Downing Street confirmed on Thursday that Britain accepts the principle of non-regression which means that it cannot reduce its labour, environmental or consumer standards. But the EU wants to go further, demanding that if it raises its standards and Britain does not, it should be able to impose tariffs on relevant British goods if the emerging gap creates an unfair competitive advantage.
“Our friends in the EU are currently insisting that, if they pass a new law in the future with which we in this country do not comply or do not follow suit, they should have the automatic right to punish us and to retaliate,” Johnson told the House of Commons on Wednesday.
“I do not believe that those are terms that any prime minister of this country should accept.”
Speaking in the Bundestag a few hours earlier, Angela Merkel also identified the ratchet clause as the biggest obstacle in the way of a deal but she characterised it very differently.
“We currently more or less have the same legal system, a harmonised legal system, but over the years the legal systems will diverge regarding environment law, labour law, health legislation, everywhere,” she said.
“And how will the respective other side react to this, when the legal situation either in theEuropean Union or in Great Britain will change? And we can’t just say we won’t talk about this, but we not only need a level playing field for today but also for days to come. For this we need to find agreements about how each side can react when the other changes their legal situation.”
Britain complains that the EU envisages a one-sided system that would allow it to automatically apply lightning tariffs on Britain but would not allow London to retaliate. Neither side can see room for a compromise but both agree that if they can unlock this issue, they will be able to reach agreement on fisheries and governance.
The British side has been briefing against Barnier in recent days, accusing him of hardening the EU’s position and of an inflexible, uncooperative approach. In the British negotiators’ current salvation fantasy, Merkel’s role as a benevolent Valkyrie flying in to rescue the talks has been taken by Stéphanie Riso, Von der Leyen’s deputy head of cabinet.
A former chief of staff to Barnier, the French economist is widely admired in Brussels and has become an increasingly influential figure in the commission president's team, playing a central role in the design of the €750 billion coronavirus rescue package earlier this year. As Von der Leyen's representative on the Brexit negotiating team over the past few weeks, Riso won Frost's confidence and the British side were reassured to see her at Wednesday's dinner.
Set against Frost, a retired middle-ranking diplomat, Barnier is the apotheosis of a 300-year-old French bureaucratic tradition stretching back to Colbert. Colleagues say that Riso has the expertise and boldness of vision to bring a fresh perspective to the talks but Barnier retains the confidence of the member states who will make the final call and Britain’s hostile briefing against him is deeply unwise.