This EU Won't Work

Michel Barnier, who if nothing changes will be the “Chief Negotiator for the Preparation and Conduct of the Negotiations with the United Kingdom”, gave a speech on 22 March to the plenary session of the European Committee of the Regions. In this post we comment on excerpts from his speech, selecting items that give clues as to how the negotiations might go, or at least begin.

The speech precedes the formal letter from the UK government triggering Article 50 and was surely intended to set the scene and perhaps pre-empt the opening terms of the negotiations.

Barnier opens by thanking his audience, “for this invitation to express my views on the challenges of the difficult and extraordinary negotiation that is about to begin.”

“Brexit will have important human, economic, financial, legal, social and political consequences.
It must be realized that the absence of an agreement would have even more serious consequences for everyone”.

He is expecting guidelines to come from the European Commission and the European Council and he will respect the mandate given by them. Since he was appointed by the Commission and the guidelines will be prepared by the Commission, we can expect the negotiations to focus on the intent of the Commission, at least in the early stages. That carries the implication that punishment for the UK, and discouragement for the remaining 27 member states, will be high on the agenda.

Barnier offers a list of issues that he sees as taking priority, including: EU citizens in the UK and vice versa, supply problems, binding customs controls, lorry queues at Dover, suspension of the circulation of nuclear materials, and “I could multiply the examples.”

He rejects the perceived threat issued by the UK government: “This scenario of a non-agreement, this no deal scenario, is not ours. We want an agreement. We want to succeed. Success is not against the British, but with them.”

“…we must therefore speak today about the conditions for success.”

He then moves from French (quotations above are translations by Google) into English, presumably aiming at the UK government.

“The first condition is the unity of the 27…”

“Unity does not mean uniformity. Unity is the first condition for reaching an agreement in the negotiations. It is of course in our interest, but it is also in the UK’s interests. And I want to say this to our British partners, and I know that some of them are in the room. Because at the end of the day, we both need – we both need – a united Europe to reach a deal.” 

He doesn’t say why unity does not mean uniformity and he doesn’t enlighten us on why he says this. Does he mean that not everyone has to agree, which would seem to contradict ‘unity’. Or does he mean that not every term in an eventual agreement has to be agreed by all 27 (presumably all have to be agreed by the UK or there is no agreement). Or is it that individual member states will have a veto?

“These negotiations cannot take place in secret. We will negotiate in a transparent and open manner, explaining to everyone what we are doing. During these negotiations, we must also explain objectively what ‘leaving the European Union’ means, for the country that leaves, but also for the other Member States.”

Possibly a carrot followed by a stick. We would all favour open negotiations, though we may ask how this is to be achieved, given that much of the to-ing and fro-ing in discussion will not be definitive and, if broadcast, will surely excite all sorts of speculations by, not least, the British tabloid press. But “explain objectively what ‘leaving…’ means” can be read as a message to the 27 not to expect any favours if they too consider leaving. This is the Commission’s message; punishment plus discouragement, as clearly articulated by Jean-Claude Juncker: “Britain’s example will make everyone realise that it’s not worth leaving“. Since the Commission has taken charge of the negotiations, we can expect this to be the ‘mandate’ given to Michel Barnier. 

“The second condition for reaching an agreement is removing the uncertainty created by the UK’s decision to leave.”

This refers to the uncertainty experienced by EU citizens who are resident in the EU but outside ‘their own’ country. He lists several good examples.

“The issues at play here are complex – very complex – whether they are residency rights, access to the labour market, pension or social security rights, or access to education. … It will take time, several months certainly. … But we can and we should agree – as soon as possible – on the principles of continuity, reciprocity and non-discrimination…”.

The implicit reference here may be to the fourth freedom, of movement of people. The UK Parliament does not see any complexity and wanted to offer the status quo unilaterally; The Commission may make it a bargaining item, perhaps based on acceptance of the fourth freedom, in which case the discussion could be across a hard-red-line for both sides.

“Next is the uncertainty for regional and local authorities and all beneficiaries of programmes that are currently financed by the European budget.”

His list includes: the European Social Fund, the European Regional Development Fund, the Juncker Investment Plan and the Horizon 2020 research programme.

“All these programmes we approved them together, at 28, with the United Kingdom. We finance them together, at 28. And we benefit from them, at 28. Each country must honour its commitments towards each other.”

This appears to be an oblique reference to the ‘bill’ that the UK can expect to receive as a mandatory item in the list of conditions for leaving the EU. 

“A third uncertainty created by the UK decision to leave concerns the new borders of the Union.”

He is referring to Ireland and the new land border that will be created once the UK leaves the EU. Interestingly – and characteristically for a representative of the Commission – he implies that the EU was responsible for the “Good Friday Agreement, of which the United Kingdom is one of the guarantors.” This will surely raise hackles in Britain, which never mentions the EU in this context. However, Barnier doesn’t allude to a condition in regard to the Irish border but he surely will when the discussions begin.

Now he goes back to French, perhaps expecting that the British will not understand (Google does, sort of).

“There is a third condition for success: we have to do things in order and put them into perspective.”

“This implies putting things in order: first, finding an agreement on the principles of an orderly withdrawal [of] the United Kingdom, and then discussing, with confidence, our future relationship.
The sooner we agree on the principles of an orderly withdrawal, the sooner we can prepare for this future relationship.”

This clearly means that the initial terms have to be agreed before negotiations on the details of a free trade agreement will begin. This may be a sticking point for the UK government, as some of the initial conditions are likely to be unacceptable. Although “we want an agreement”, this means that the UK must agree to the initials conditions before negotiations begin. A hammer wrapped in a fluffy blanket. 

“So, this new partnership, it is of course too early to negotiate it, but it is not too early to sketch the outlines. … At the center of this partnership, there will be a free trade agreement that we will negotiate with the UK at the appropriate time.”

Notice both the fluff, “the centre of this partnership…” and the hammer, “…at the appropriate time”.

“The United Kingdom has decided to leave the internal market and the customs union and will be a third State in two years. … In making this choice, the United Kingdom will find itself mechanically in a less favorable position than a Member State of the Union. … there is no precedent in European history for such a free trade agreement … So what is before us is not the prospect of regulatory convergence, but the risk, or the likelihood of a regulatory divergence, that could harm the internal market.” 

This is the expected response to the UK government’s insistence on a ‘hard Brexit’, as clear as it could be. The Commission’s answer is to agree to a hard Brexit, though they mean something different by ‘hard’. We can take “a less favourable position” in two ways: it conforms to the Commission’s expectation that Britain will be – and will feel – punished, or from the EU’s perspective any country not in the Union is in a less favourable position.

(If you want to learn more about what a ‘third country’ means, we can recommend Dr Richard North’s blog eureferendum.com which can be hard going but has lots of useful detail in recent posts on the risks of an ill-prepared, hard Brexit.)

“That is why we must prevent this regulatory dumping risk, which is why we must ensure a level playing field and enforce them effectively. Guaranteeing this level playing field – these common rules of the game – will be essential.”

The hard men and women are setting the tone and if the tone remains this hard then, whatever a majority of citizens and businesses may want, failure is the most likely outcome, the one on which to bet as things stand.

“Yes we can have ambition together! But for us, I make clear, this ambition will also apply to social standards, tax standards, environmental standards and consumer protection…”.

You will do as you are told.

“A number of transitional arrangements may be required. … In any event, these possible arrangements would necessarily be governed by European law and the judicial system associated with it.”

Much like two heavyweight boxers at the weigh-in, each trying to intimidate the other. Of course the purpose of a boxing match is for one to win.