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Blog Carsten Brzeski

Eurozone: Brussels answering

Today, the EU’s chief Brexit negotiator, Michel Barnier, presented first official guidelines for the European position in the upcoming talks.

The heat is up. The verbal ballyhoo is clearly gaining momentum after some leaked information about an alleged clash between Theresa May and Jean-Claude Juncker at last week’s meeting at Downing Street. Yesterday, May’s remarks that she would be a “bloody difficult woman” in the Brexit negotiations circulated in Brussels and other European capitals. At the same time, the European Commission presented first details of the European’s demands and negotiation positions.

Barnier’s guidelines were the formal follow-up to the European leaders meeting last week. The guidelines pick up on what Barnier called “three key areas” in which the UK government “must put a great deal of energy and effort”: borders (especially between Northern Ireland and the Republic of Ireland), the rights of EU citizens and financial settlements. It is the guidelines for the official and formal mandate that European countries have to give to the European Commission to start the negotiations with the UK government. Interestingly, also yesterday British Brexit minister Davis was quoted saying that these numbers were part of “rough and tumble” of negotiations. He even suggested that no deal could be more attractive than a deal with a high bill. According to several media reports, the gross financial settlements could amount to between 60bn and 100bn euro.

Probably the most important cornerstones of the European position in the upcoming negotiations can be found in the following text of the draft guideline, which now have formally have to be agreed by European leaders: “A non-member of the Union, which does not have the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member;…Participation in the Single Market requires the acceptance of all four freedoms;…Negotiations with the United Kingdom will be conducted as a single package. In accordance with the principle that nothing is agreed until everything is agreed, individual items cannot be settled separately.”

Judging from the above, it seems clear that the European Union is not willing to discuss the future relationship with the UK immediately. First, the EU wants to discuss the agenda, the issues to negotiate and the order of issues during the negotiations. This strategy bears the risk that the negotiations could even break down before the real debate actually begins.

In our view, today’s answer from Brussels was meant as a clear signal that the European Union is united in its position for the Brexit talks. Obviously, there is a lot of saber rattling at play but the principle that countries outside the EU cannot have the same rights as EU member states (earlier presented by German chancellor Merkel) seems to be one of the important red lines, the European Union has drawn and is not likely to give up any time soon.