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Not so fast, Theresa: EU seeks divorce terms to stay friends
September 24, 2017 / 12:20 PM / 3 months ago

Not so fast, Theresa: EU seeks divorce terms to stay friends

BRUSSELS (Reuters) - In pledging to stay best friends with the European Union after Brexit, Theresa May is getting ahead of herself, say EU negotiators who want her to start putting the divorce money on the table as soon as Monday.

Britain's Prime Minister Theresa May speaks at the Complesso Santa Maria Novella, Florence, Italy September 22, 2017. REUTERS/Jeff J Mitchell/Pool

Three days after the prime minister’s speech in Renaissance Florence promising a warm and vibrant future relationship, her Brexit minister David Davis will launch a new round of talks in Brussels with the EU’s Michel Barnier. And the Frenchman first wants details on May’s broad promise to pay Britain’s bills.

Without “significant progress” on that and other elements of a planned treaty to ease Britain’s passage out of the Union in March 2019, Barnier said, EU leaders will refuse to open any talks on a free trade and cooperation deal, let alone on the two-year transition to it that May requested.

With German Chancellor Angela Merkel concentrating on her likely re-election in voting on Sunday, her coalition deputy still found time to echo French President Emmanuel Macron in ramming home the demand that Britain focus first on its exit.

“We heard nothing concrete. It is time for the government of Great Britain to clearly state under what conditions it wants to leave the European Union,” Foreign Minister Sigmar Gabriel said.

May’s speech was intended to jolt the divorce talks out of deadlock, three months after they began and to demonstrate some unity in her government -- notably on remaining in the EU single market and accepting its rules for a couple of years after Brexit, a bitter pill for some hardline opponents of EU membership.

But much of her 35-minute address dwelt on the “Shared Future”. A Facebook video targeted at continental neighbours emphasised the message with clips from the speech. A Dutch-language version led off with the bold caption: “Wij willen uw beste vriend en partner zijn” -- We want to be your best friend and partner.

The tone went down well with some: “There are many positive elements, especially regarding the future relations,” a senior EU government official said. “On the other hand, on issues related with the separation there is not much clarity. We are looking forward to receiving detailed proposals.”

CONCESSIONS

May made two potentially important concessions on the other two criteria for moving on to trade talks: a direct role for the EU-UK exit treaty and for EU case law in British judges’ rulings on the future rights of EU citizens in Britain; and she said Brexit would not immediately cost other states money.

On the first, Barnier may repeat the EU demand for direct oversight by European Court of Justice; on the second, EU negotiators insist Britain will owe a share of Union spending for years after the budget May referred to, which ends in 2020.

One potential benefit from a transition period may be that it lets Britain present its voters with a somewhat less hefty bill for leaving than the 60 billion euros ($70 billion) or so that Brussels reckons it would owe the EU come March 2019.

About a third of that 60 billion represents what the EU wants Britain to pay into the current budget for 2019 and 2020, whether or not it remains in the single market. By staying in for a transition period, Britain could deduct that 20 billion euro payment from the one-off, pre-Brexit divorce settlement.

Such payments to the EU have become a hot-button issue for British voters, somewhat to the frustration of EU negotiators who note that Britain’s annual net contribution to the EU budget represents little more than 1 percent of its public spending.

May will meet Donald Tusk, who chairs EU summits, over lunch in London on Tuesday and then the 27 leaders at dinner in Estonia on Thursday, just after Barnier and Davis are expected to have concluded the negotiating round in Brussels.

The Europeans insist they will not negotiate with May over Barnier’s head, but this week could be an important moment in setting how quickly they are willing to open trade talks for the future -- and indeed in determining how far mutual tactics of bluff and counter-bluff may risk ending in chaos without a deal.

Additional reporting by Jan Strupczewski and Robert-Jan Bartunek; Editing by Keith Weir

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