Brexit Briefing: EU Want Some, Do EU?

All you need to know from the world of Brexit this week.

Theresa May Is That Lairy Mate Who Wants To Fight Everyone After A Few Too Many Shandies

“Every stray word and every hyped up media report is going to make it harder for us to get the right deal for Britain. Our opposite numbers in the European Commission know it, which is why they are keeping their discipline. And the ministers in this government know it too, which is why we will also maintain ours.” So said Theresa May on January 17 as she set out her negotiating goals for Brexit.

Less than four months later, and May stood in Downing Street and accused the EU of issuing “threats” against the UK in a bid to “affect the result of the election.”

The gloves are well and truly off. But who started it? An explosive account of last week’s Downing Street dinner involving Theresa May and EU Commission Jean-Claude Juncker found itself into a German newspaper, and it did not paint the PM in a flattering light.

She was shown to be delusional about the sort of deal the UK could get from Brexit and also agitating for Britain not to pay any of the divorce bill.

To a UK audience this looks like a provocative stance designed to infuriate Downing Street and kick the negotiations off in a spirit of mistrust and bad blood.

But if you look at it from a EU perspective, this leak of the meeting makes total sense. The EU want to get a good deal with the UK, but they need to make it seem like the UK has a bad deal to deter other anti-Brussels movements across the continent.

Leaking that May won’t pay any money means that when she does cough-up, no matter how much, it will be seen as an EU victory.

Likewise, on the length of negotiations. The UK wants the divorce and new trade deal signed, sealed and delivered within two years.

Brussels can extend the trade talks, seemingly against the wishes of London, thus showing to the rest of the EU that leaving the club is a long and difficult process.

This approach is really not that different from the UK’s. They want us to pay €100billion, we want to pay nothing. We both settle on €50billion – both sides call it a win.

We want a new deal within two years, they say it can’t be done. Both sides reach a broad agreement by March 2019 with a transitional period to iron out the details – both sides call it a win.

Brussels and London aren’t working against each other; they are operating in complete tandem.

The EU Wants You To Know There Will be Consequences For Brexit

The European Council formally adopted its negotiating guidelines on Saturday after considering them for all of four minutes.

The clause that no Brexit deal would apply to Gibraltar without Spain’s agreement stayed in – slightly contradicting the part of the guidelines which states “there will be no separate negotiations between individual Member States and the United Kingdom on matters pertaining to the withdrawal of the United Kingdom from the Union.”

In a speech setting out the guidelines on Wednesday – which prompted Theresa May’s explosive intervention hours later – the EU’s Chief Negotiator Michel Barnier gave further evidence of the hardcore language Brussels is prepared to use in the airwar.

“There will be consequences... there are human consequences, there are social consequences, there are economic consequences, there are technical consequences, financial, legal consequences. You are unwinding 43 years or so of a relationship.

“We need sound solutions, we need legal precision and this will take time.”

As frequently documented in this Briefing, the UK’s financial sector is where the consequences could be felt the strongest.

The European Commission today published a “communication” (not quite a report, but more than a tweet) on new rules for clearing houses - banks who act as middlemen during financial transactions. Almost €1trillion are traded in London every day in this manner, and the Commission today announced it was considering tougher regulations for those dealing in euros outside of the EU, and also calling on clearing houses to be moved into the single currency zone.

We Should All Drink More Guinness As Ireland Are Being Really Decent About This Whole Brexit Thing

The EU is keen to show a united front going into the negotiations, but you don’t have to look too hard for cracks to appear. One country which seems to willing to dampen down the rhetoric and act as a friend to the UK is Ireland.

The Irish Government’s chief whip Regina Doherty described the leak of the May/Juncker dinner as “not helpful” and setting the “wrong tone”.

The only country to share a land border with the UK published its own approach to the Brexit talks this week, and deviated from the Brussels line that there should be no trade talks until the bill is paid.

“In accordance with the phased approach agreed in the EU Negotiation Guidelines, it is therefore likely, once sufficient progress is being made in the withdrawal negotiations, that discussions will then begin in parallel on the scope and shape of the EU’s future relationship with the UK,” reads the document.

Ireland is keen to get a trade deal done and dusted with the UK as soon as possible, as, according to the British Irish Chamber of Commerce, business between the two countries supports 400,000 jobs and generates 60billion.

And far from wishing to punish the UK’s lucrative financial sector – which could drive business to Dublin – the Irish Government recognises that as was as “opportunities in financial services arising from Brexit there are also risks.”

The Irish Government will strive to “maximise any opportunities that might arise” from Brexit, but the tone of the report is very much one of more-of-the-same than slash-and-burn.

Theresa May’s Brexit Tactics Are Already Causing Trouble For The UK’s Farming Sector

Back in Blighty, concerns were raised – again - this week about the state of the UK workforce after Brexit. Two reports from Parliament laid bare – again – the real reason why we have net migration running at more than 300k a year – we need people to come here and work

A report from the Environment, Food and Rural Affairs Committee warned the Government does not seem to understand the labour force issues facing the agricultural and horticultural sectors.

Brexit could make the situation worse: “It is vital that the labour supply available to the agriculture and horticulture sectors does not suddenly dry up as a result of any uncertainty caused by the new immigration arrangements instituted following the UK’s exit from the EU.”

A House of Lords report echoed the warnings, and said: “The evidence we heard suggests the agricultural sector is already struggling to fill vacant positions and that this challenge is being exacerbated by the uncertainty surrounding the UK’s withdrawal from the EU.”

And here is the rub. Theresa May, David Davis and all the other Tories trotting out the line that negotiations must be done behind closed doors in order to get the best deal need to realise that approach can have negative consequences.

May’s refusal to give any details of the UK’s future immigration policy is having a material affect right now. It may be this is just the way it has to be in order to get a ‘good deal’, but this creates uncertainty, and businesses don’t like uncertainty.