LEADING THE WAY OUT OF THE EU

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Tuesday 13 February
 

Today’s Sun claims unequivocally that we will be put out of our misery before 2021 following the EU27’s recommendation in late January that: “The transition period should apply as from the date of entry into force of the Withdrawal Agreement,” set to be the end of 2020. The Sun confirms Britain’s agreement, with a white Whitehall source quoting the EU’s words almost verbatim.

There is no doubting the EU is calling the shots (again). At her speech in Florence last year, Theresa May asked for the misguided transition period to last “around two years”. The EU’s end date, originally proposed by Michel Barnier shortly before Christmas falls only three months short of May’s suggestion. If only the EU had pitched it earlier.

The EU’s rationale is to keep Britain out of its headache of negotiations towards the next seven-year budget cycle to be concluded by January 1, 2021, when the new cycle begins. As promised in Florence, alongside the transition request in Florence, the British government will continue to pay into the EU coffers even though it is no longer a member, all the way up to the end of this budget cycle.

With the exception of transition, this is all very logical. Less clear, up until recently, has been the EU27’s commitment for transition to only last up until the end of 2020.

At the beginning of the year, the FT reported on a secretive meeting of EU27 diplomats in Sofia, where whispers were to be heard of keeping the British cash cow in the EU for as long as possible.

“The interesting thing will be: is the transition period a one-off, or can it be prolonged?” said a senior EU official involved in negotiations, “it will take a lot of money.”

The Hungarian delegation even suggested adding an extension clause, later dismissed by the other countries. The clause would not need to be written in to be an available option. This is the EU, where rules never got in the way of a political expediency. “We can do it if we need it,” said another EU diplomat.

This would explain the original wording in the EU27’s council document, quoted above: the transition period “should apply”. Curiously, this was changed in the Commission’s position paper – the very first sentence of which fixed the issue of when transition will conclude – to:

“There shall be a transition period, which shall start on the date of entry into force of this Agreement and end on 31 December 2020.”

This is the same position paper described as “discourteous” by David Davis last week. The document adds that, “during the transition period, the parliament of the United Kingdom shall not be considered to be a national parliament.” The same was said of the Bank of England, erroneously citing articles from the EU treaty. No wonder, Davis also described the document as “political”.

The Sun is therefore only half right. Yes, the prospect of leaving the EU proper before 2021 has just gotten a bit stronger. But the Council’s “should” document carries legal weight, whereas the Commission’s “shall” paper does not. The former was devised by member states anxious about how they are going to fill that £15bn budget hole left the UK. As ever, the Commission is bullish it can find a resolution – even though proposals made so far have yielded nothing. What is more, the Commission is motivated to impose its will on the British. Hence the use of political language and more affirmative words like “shall” instead of “should”.

There is still a very worrying possibility transition will be dragged into the next budget cycle, delaying independence yet further. Theresa May was asking for trouble when she asked for transition. She has it in abundance.

In other news: Davis and Philip Hammond launch parallel continental charm offensives this week. The Brexit Secretary will be visiting the pivotal capitals of Germany and France in the run-up to May’s appearance at the Munich Security Conference, where it is feared she will offer to write a blank cheque in defence support. She is also expected to announce her intention to keep Britain signed on to the ruinous European Arrest Warrant – which she as Home Secretary had brought Britain into after we had secured a valuable opt-out. Westmonster has the write-up.

Davis undertook a similar mission in the run-up to the December European Council when the government was still hoping to get the EU to agree to “sufficient progress” thereby launching phase II of the Brexit talks, without major concessions. The divide and rule strategy did not work then, but this time around it carries more promise. The wrangling over budget commitments – the net payers like the UK do not want to pay more, the recipients do not want to receive less – is a powder keg waiting to ignite. Britain has already provided the match and is poised to re-arrange the pieces.

However, sending ‘Spreadsheet Phil’ to Norway, Sweden, the Netherlands, Spain and Portugal to woo leaders (during Valentine’s week of all weeks) is an opportunity missed. Boris would surely have been a better shout.