The fifth round of Article 50 negotiations this week was the final one scheduled before next week’s European Council. At that meeting, the EU27 will make a decision about whether ‘sufficient progress’ – to use the language of their mandate to the Commission – has been made.
If there had been some hopes that this would be possible in the wake of Theresa May’s Florence speech last month, then the absence of movement this week confirms the growing feeling in Brussels that the European Council will not deem such progress to have been made, sending the Commission back to the UK to continue talking about the Phase I divorce issues – the Irish border, the financial liabilities and citizens’ rights – rather than moving on to Phase II transitional arrangements.
In short, things are not looking that good for those who want the process to end in a deal.
The reasons for the impasse are not hard to find, since they are the same reasons that have shaped the Article 50 negotiations to date.
Firstly, the UK continues to dispute the sequencing of discussions. In particular, it argues that any financial settlement can only be resolved once the broader outlines of the future relationship become clearer. For them, the money is a fundamentally political issue, rather than a technical one, a view that has been reinforced by the awareness that for many back in the UK the acceptability of any deal will be shaped by the amount that changes hands.
The Commission has some sympathy with this, but is also frustrated by the UK’s conflation of resolving current liabilities, financing of future liabilities that the UK might have a stake in, and contributions to participate in future activity. While the last of these necessarily has to wait until the end of the entire process, the first two could be agreed in principle already now.
The fear remains that the UK is trying to get off the hook for its liabilities by pushing it to the back of the process, precisely the fear that drove the EU27 to put it in Phase I in the first place. While May’s Florence commitment to honour all of the UK’s financial obligations was gratefully received, its benefit was blunted by the lack of detail that British negotiators could provide on what that means in more precise terms.
And this is the second issue: the British continue to have a mismatch between strategic interests and detailed positions.
In some cases – like finances or the Irish border – there are some general framings of principles and desired outcomes, but without any detailed models of how to achieve these in a way that might be acceptable to the EU.
But might more commonly, the UK remains in a situation where it has a handful of ideas about the overall package that it wants from Article 50, but no grand idea about how all those things sit together. As a consequence, British negotiators might have a good sense of what points of law need to be addressed in any given sub-field, but they have no clear political steer on which way to address them. For the Commission’s part, it cannot very well move things along by itself, given this seeming incapacity of the British side.
Indeed, it has been striking this week – as in all the other weeks of Article 50 – that it has not been the negotiations in Brussels that have been central in the Brexit process, but rather events back in the UK.
This week’s toing-and-froing on preparing for a no-deal scenario between May and Philip Hammond is a case in point. Hammond doesn’t want to allocate scarce finances to prepare for a situation that he dearly wants to avoid at all, while May needs to be seen to keeping this viable as an option. While much of this is semantics, since having funds allocated isn’t enough by itself, it does highlight the profound uncertainty in London (and Brussels) about what the British government wants from Brexit and whether it can ever reach an agreement with itself.
This is the final, more ghostly shadow hanging over the negotiations. May’s position as Prime Minister looks ever more precarious, after the failure of Florence to smash a big hole in the Article 50 logjam and a party conference speech that will haunt her for the rest of her political life.
Quite aside from the domestic political machinations about when and how to replace her, May’s situation has also cast a pall over Article 50 talks, since the Commission – not unreasonably – worries about moving on provisional agreements that might be upended within weeks by a new leader who wants something different. As much as there is a desire in Brussels to move things along, there is no wish so to just for its own sake. While the mandate does accommodate a range of potential British wishes, the complexity and inter-connected nature of the talks means that everything is shaped by – and shapes – everything else, so changing horses midstream makes things almost impossible.
And all the time, time passes. There is growing concern in European capitals, as there is in the Commission, that there is scarcely enough time left to piece together any deal, even if the UK is able to resolve itself into a coherent negotiating partner. The delay that next week is almost certain to bring – pushing Phase II back to December at the earliest – will be a further unwelcome complication to that.
What will be interesting to see if whether that delay has an effect on the UK, to push it make progress on the Phase I issues. On the one hand, the desire to reach a deal will intensify, and the seeming resolve of the EU27 to stick to their ordering of things will be demonstrated. But on the other, it might be the straw that breaks May’s hold on Number 10. It says something about the febrile state of British politics that both scenarios look possible and plausible. Something’s going to give, but what and how is deeply uncertain.