Early focus on the money as May triggers marathon Brexit


By Jill Craig

The UK’s notification of Article 50 kicks off what may be a contentious withdrawal process. It is likely to take place in three stages.

First, the leaders of the remaining EU countries, the so-called EU27, will need to agree between them how and what to negotiate, in the form of broad guidelines.

A draft of these guidelines is expected within 48 hours and will show what sort of negotiating line the EU plans to take.

Reaching this agreement would be no mean feat at the best of times, but especially given that the summit to finalise it falls on April 29, between the two rounds of France’s presidential election.

The Council will then also agree legislation which gives the European Commission a mandate to negotiate on behalf of the EU27 with the UK.

Didier Seeuws, a Belgian diplomat who was previously Council President Van Rompuy’s chief of staff, is head of the Council’s Brexit task force. It will be his job to get these first two stages completed, which may take three months.

From around June, the Commission’s negotiating team, led by former French foreign minister and European Commissioner, Michel Barnier, and his German deputy, Sabine Weyand, will take over, working strictly within the mandate EU27 has given.

The negotiations are expected to take place in Brussels and to resemble trade negotiations, with different chapters and rounds opening as the negotiations evolve.

As in most divorce settlements, the EU27 side intends the early focus to be on money – establishing a methodology for dividing up assets and liabilities which include existing budget commitments to EU research and regional development programmes, pension rights for British staff in EU institutions, property and capital.

These discussions, along with those on the rights of EU citizens in the UK and UK citizens in the EU, are likely to be combative.

Even so, Barnier hopes to have them concluded by the end of 2017 to leave room for discussions on the potential future relationship between the two sides. Both Council President Tusk and the Commission have said that an EU-UK trade agreement can not be discussed until after the UK leaves the EU. But several countries, including Germany, have indicated that, in practice, negotiations on this future relationship will have to be conducted in parallel with the divorce settlement.

Nevertheless, it is possible that the EU27 will only contemplate talk of a second agreement if there is early progress with the first.

Parallel timetables look impossible. A trade deal could take several years to negotiate, and, just like the contentious CETA free trade deal with Canada, will require unanimous agreement in the Council and ratification by all 27 remaining EU members before it can take effect.

This affords every EU country –  not all of which are impressed with the UK’s decision or behaviour on Brexit so far or indeed have much of a trade relationship with the UK currently – the opportunity to make its own demands before agreeing.

The trade deal is unlikely to be concluded within the two-year timeframe allotted under Article 50. A third agreement – a transition or implementation agreement – may therefore also be needed to provide legal certainty in the gap between the UK leaving the EU, and entry into force of a trade deal.

This too is controversial and dependent on the success of early negotiations.

The third and final stage on the EU side, assuming a withdrawal deal is concluded, is final approvals. First, the European Parliament needs to give its consent by a simple majority.

As MEPs have no right to amend the deal, their maximum leverage over the EU-27 governments and the Commission is during the negotiations.

Their Brexit representative, the fiery federalist, Guy Verhofstadt, has made clear that the parliament will not simply rubber-stamp what it is presented. Indeed, Verhofstadt is preparing an EP resolution which will be debated by MEPs next week.

In the Council, 20 of the 27 remaining Member States will need to agree for the exit deal to pass. It remains to be seen whether the pragmatists or the hardliners prevail.