Momentum builds behind transitional Brexit deal

European Council President Donald Tusk and British Prime Minister Theresa May. [European Council]

EU institutions and governments discussed the need for additional time before negotiations for Britain’s exit from the EU start, in order to complete the new bilateral association agreement.

Key member states accept the Parliament’s option for extra time to iron out the details of the new relationship, given the tight calendar to settle before dealing with controversial issues such as citizens’ rights and Britain’s financial contributions.

The treaties foresee a two-year period to conclude the negotiations. But the EU chief negotiator, Michel Barnier, wants to conclude the talks in 18 months to give enough time to  co-legislators to endorse it.

Tusk to Brexit Britain: ‘We already miss you’

The United Kingdom triggered Article 50 today (29 March), beginning an unprecedented two-year period of tough negotiations that will end in Britain leaving the European Union.

Following the UK’s notification to activate Article 50 on Wednesday (29 March), in early June, the remaining 27 member states and Britain will start to “disentangle our interlinked relationship”, as Chancellor Angela Merkel said.

“Only when this question is dealt with, we can, hopefully soon after, begin talking about our future relationship,” she added hours after Britain launched the process.

In her first remarks after Brexit began, Merkel pointed at two of the main and interrelated issues London and Brussels will face over the next two years: the sequencing, and the sense of urgency to seal a deal.

British Prime Minister Theresa May and her partners across the channel acknowledged the looming tough period ahead.

“This is the starting point of a difficult and complex negotiation to define the conditions of the United Kingdom’s departure,” said European Parliament President Antonio Tajani.

Officials explained that the first months will be probably the hardest ones. The two sides are expected to discuss, arguably, the most complex issues at the beginning of the process.

These are the rights of EU citizens living in Britain, and vice versa; the borders, and the UK’s outstanding bill with the 27 member bloc.

‘Serious crisis’ in autumn?

The negotiators are running against the clock. For some, a breaking point could come as soon as next autumn.

A senior diplomat pointed out that if there is an agreement on these three points by then, Europe could meet the two-year deadline foreseen in the treaties.

Otherwise, we would be entering into a “serious crisis”, with consequences of all kinds, including market turbulences, he added.

Another diplomat did not want to speculate about the deadline to settle these opening issues. However, he considered that it would be “extremely difficult” to settle all the divorce terms and the future association agreement in the expected period.

A Commission source also considered it “extremely optimistic” to believe that these three points could be solved in less than half a year.

Despite all the differences and the uphill talks ahead, at least both sides agreed on where to start the negotiations.

May faces setback on Brexit law over EU citizens' rights

Theresa May’s government is set to be defeated in the House of Lords over securing the rights of EU citizens living in the UK.

Citizens’ rights are seen by both sides as the first issue to be discussed.

The EU also wants to discuss during this initial period Britain’s outstanding financial commitments towards the EU. Commission President Jean-Claude Juncker confirmed that it would be around €60 billion.

Only then, and once a solution is reached for Northern Ireland, the EU side would be ready to start examining the future agreement with the UK.

But May prefers to finalise the break-up, while both sides progress on the new terms of their relationship.

The treaties are ambiguous enough to allow both the sequencing backed by the Europeans, and the double-track approach desired by May.

“The Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union,” article 50 says.

Barnier and his team would not open the future deal at least until the outstanding financial bill is settled, a Commission official explained. But once it is done, both sides would discuss the “contours” of a future arrangement as it is foreseen in article 50, the source added.

Extra time for details

On a similar note, European Parliament Brexit negotiator, Guy Verhofstadt, said on Wednesday that, during the two-year period, there could be an agreement on “the general terms of the future relationship”.

But the details of this future relationship would be fixed during a transition period. For the MEPs, this interim period should not exceed three years.

Revoking Article 50 would be illegal, claim EU diplomats

European Union member states questioned on Wednesday (29 March) the legality of a European Parliament move to open up the possibility that Article 50, the legal process taking Britain out of the EU, could be reversed.

Diplomats told that by …

Verhofstadt said that agreeing on the new relationship “of course” would take more than two years.

The ambition of the new deal will influence how much time the negotiators need. The Parliament wants to go beyond trade and economic ties, to include sectors like security or research, and programmes like Erasmus.

The Parliament is not alone in making the case at this stage for a transitional period. The Spanish government, seen as a key ally for Britain’s interest in the EU, also backed this extra time.

Spain’s Minister of Foreign Affairs, Alfonso Dastis, said that this transition would be “the bridge toward the future framework” of the EU-UK relations.

This opinion is shared by other capitals.

The withdrawal conditions could be agreed upon within the two-year period, but it would be “difficult” to seal a deal on the new relationship, a diplomat from a large member state said.

Against this backdrop, he said that an interim period should be on the radar.

Priorities, timing and interim deadlines are expected to evolve over the next months as the Brexit negotiations unfold.

A senior diplomat said that more negotiation mandates will come after the first one is drafted following the adoption of the guidelines for the talks by the EU leaders on 29 April.

Once the Parliament’s plenary adopts its opening position on Brexit next Wednesday (5 April), Verhofstadt explained that the institution will put forward more detailed resolutions on specific issues after the summer break.

  • 31 March: European Council President Donald Tusk will issue draft negotiating guidelines to be agreed by the EU-27
  • 11 April: First Sherpa meeting
  • 19 April: Revision of the draft guidelines
  • 24 April: Second Sherpa meeting
  • 25 April: New draft guidelines
  • 27 April: General Affairs Council in Luxembourg
  • 28 April: Revised guidelines
  • 29 April: EU Summit on Brexit

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