Talk is not cheap – an update from Brussels

11 December 2020, Tamlin Vickers, DRD Partner in Brussels, provides an insight into what’s really going on in the ongoing Brexit negotiations, and whether or not we’re likely to have an answer by Sunday.

State of play

Things are looking bleak in Brussels, and not just because of the freezing temperatures and unremitting drizzle. The dinner earlier in the week between Boris Johnson and Ursula Von der Leyen, the European Commission’s President, was not far short of a disaster, with the parties not even being able to agree on a joint statement afterwards. The atmospherics were disjointed and unconstructive to put it mildly, with the two sides effectively talking past each other. The only positive (clutching at straws here) is that the talks did not break down entirely. So long as the they are still talking, there is still a chance of a deal.

The sticking points are well known and have not changed much over the past few months, although state aid has now largely been resolved, leaving just fisheries and the level-playing field as it relates to environmental, social and labour standards, plus the outstanding issue of governance. The EU continues to believe that the asymmetric effects of a ‘no-deal’ mean that the onus is on Johnson to shift his position in order to reach a deal. The EU has therefore not felt the need to seek creative solutions and consider if and how the EU itself might soften its red lines. Following growing pressure from member states, the Commission has begun to publish details of no-deal contingency plans. The Commission had previously been reluctant to publish these plans for fear of undermining its negotiating team, but judged that time was just too tight to leave it any longer.

Dynamics in EU’s favour

Johnson has been working against a structural disadvantage in these negotiations. He knows that Michel Barnier and the Commission do not have the authority to make the sort of trade-offs that would pave the way to a deal, yet his efforts to negotiate directly with member states, particularly with key decision-makers France and Germany, have been rebuffed, with Emmanuel Macron and Angela Merkel insisting that the Commission must be the main interlocutor. This structure is a function of how the EU operates, particularly in relation to negotiating trade deals, and one could argue that the EU has used it very effectively. The upshot, however, is that the necessary high-level tete-a-tetes have simply not happened.

Unity among member states has held up well. That the UK has not been able to divide member states on key issues does not, however, mean that there are not tensions between them, and as the prospect of no-deal comes closer into view, such tensions will inevitably grow. It is no secret that Ireland, which stands to lose most from no-deal, is keen for the EU to soften its position. Germany, for economic and geo-political reasons, is keen to avoid no-deal and is not much fussed about fisheries. France, by contrast, has driven a hard line throughout the process, with most other member states simply content to fall into line behind France’s (highly effective) diplomatic machine.

France’s position

France’s uncompromising position is by no means irrational. Its fishing fleet stands to be hit hard by the UK’s departure, whether or not there is a deal. Small family operations relying on access to UK coastal waters are particularly vulnerable. Macron has a clear political interest in appearing tough on this issue. With regional elections in spring and the next presidential election in 2022, it would be highly damaging for Macron if a perception caught on that he had abandoned coastal communities, many of which are already leaning towards Marine Le Pen. France’s position on the level-playing field is rooted in ideology as well as a practical concern about French businesses being undercut by British ones.

To be clear, it is not just France that is demanding tough level-playing field commitments. This is an issue of importance to all member states and there is a real concern about the impact of an agile UK on its doorstep. This was illustrated last week following the UK’s approval of the BioNTech/Pfizer vaccine. Without getting into the ins and outs of whether such approval was aided by Brexit (for what it’s worth, I think Brexit did actually make a difference here, albeit a political rather than legal one), it was noteworthy that a number of politicians throughout Europe, including Italy’s Matteo Salvini, publicly lamented that the UK had been able to get there before the EU. This sense of anxiety was not helped by UK ministers crowing about the announcement. This will inevitably become an increasing feature of the relationship, whether or not a deal is reached.

End game

Johnson’s challenge is that while the EU would like to avoid no-deal, the Commission is not empowered to make the necessary trade-offs to reach one. At the same time, member states do not feel compelled to use up valuable political capital to push for a softening of the Commission’s negotiating mandate. Deadlines have come and gone and I would not be surprised if Sunday’s one does too. The mood is bleak, but so long as the sides are continuing to talk, a deal is still possible.

Feature photo credit: AFP

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