There is a pathetic game of brinkmanship going on in the EU-UK talks with the EU27 more or less refusing to carry on unless the UK published its state aid regime with David Frost telling Barnier that he doesn't see why UK has to submit a policy up front for the EU to scrutinise. Frost appears to think the EU will sign up to a trade deal and then watch as the UK subsidises its industry to give it a competitive advantage. Of all the possible outcomes over the next few weeks this is the most unlikely I think.
It's hard to believe that a diplomat with Frost's background could ever think that was ever a possibility - unless, like a few other Brexiteers, he simply overestimates our position. We are the EU's largest export market but not that far behind the USA and the Americans couldn't shift the EU so I am quite sure we won't either.
We have consistently underestimated the value that Europeans put on the integrity of the single market and the solidarity of the EU27 against British efforts to drive a wedge between them.
Jennifer Rankin, Brussels correspondent at The Guardian, whose piece I posted about yesterday has added quite a bit in a Twitter thread:
There are 126 days until the UK leaves the EU economic system for good. The conventional wisdom is that a deal (another oven-ready triumph?) will be agreed at the last minute.Yes it can happen, but the risks of no-deal are real - thread.https://t.co/V6yXGY2lmu
— Jennifer Rankin (@JenniferMerode) August 27, 2020
Unlike her, I don't believe the risk a no deal exit is real. The political stakes in London are far too high for that and the EU27 are not going to be bullied or pressured or blackmailed into inflicting long term damage on themselves to appease a bunch of nationalist idiots in Westminster. That is not going to happen.
There will be a climb down - probably in the round of talks starting on 7 September - with the UK accepting the EU draft treaty, perhaps not in its entirety but pretty close to it. The whole thing will be dressed up as a triumph in Downing Street but they may have a problem in convincing the ERG that it is indeed a victory.
Having been fooled once with IDS, Owen Paterson and many others arguing for the Withdrawal Agreement to be rejected, I don't think it will be as easy next time. All the assurances that were given about the UK being able to renegotiate the WA will not work again and they will want to scrutinise the details before giving their approval.
The compressed time frame last year gave cover to Johnson to flash his agreement in front of the euro sceptics and rush it through before the deadline. Will it work this time? Maybe not.
Rankin says:
EU sources are once again trying to dampen British hopes that Angela Merkel or Emmanuel Macron will ride to the rescue. “I doubt even Merkel or Macron would be able to transform a stalemate into a positive outcome,”
The next Brexit round 7 Sept is seen as crunch time (again). Red warning lights are flashing on the Brussels dashboard about the slow progress v mountain of work - a 400+ page treaty has to be negotiated line by line in weeks. Translated, legally finessed, ratified.
EU diplomat “If [ 7 Sep round] ends without any progress as well, the window to clinch a deal will close quickly. Time would simply be running out.” WA was different, because only had to agree a few pars of Irish Protocol (and mostly pulled old version out of a drawer).
EU believes UK political establishment failing to understand 1. Importance of level playing field for EU. principle was set out by EU leaders in April 2017 and has its roots in the day after Brexit: “no cherry-picking”.
That doesn't mean nothing can be negotiated. E.g Barnier’s heavy hint no dynamic alignment on state aid, but common standards and governance via a “toolbox”. But the principle of LPF stays.
EU believes UK political class doesn't get that Brussels takes no-deal very seriously. Some think the government is getting ready for a fierce blame game if talks fail. (Still *if*) That leaked government memo
Michel Barnier has been ringing round capitals and advising 'garder son sang froid' (keep calm, stay cool) and stick to the mandate. His deputy had a similar message for EU officials last week. This has got lost in translation as “be cold blooded” with the British.
If there isn't a climb down in September watch out for howls of outrage from UK business, 80 per cent of whom are said to be unprepared for a no deal Brexit according to a survey published yesterday. At the end of October, the furloghing scheme is expected to end and unemployment will rocket. Businesses will be struggling to survive and the last thing they want will be a massive dislocation of their trading relationships inside the EU.
Another extension and an implementation period is a certainty but of most interest will be how its presented internally in the UK.
