Brexit Briefing: Brussels Picks Its Cherries

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1) Brussels Says No To Theresa May’s Cherry Picking Plans...

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Theresa May appealed for compromise between the UK and the EU in her big Brexit speech at Mansion House last week, but the message seems to have fallen on deaf ears in Brussels.

The European Council this week published its draft guidelines for the upcoming trade negotiations – the ones’ described as the “easiest in human history” by Liam Fox last year – and there wasn’t a lot of compromise on offer.

The document rules out “cherry picking” participation in the Single Market “on a sector-by-sector approach” – which suggests no special deal for the car industry or financial services.

Brussels did sneak something dubbed as the “evolution clause” into the guidelines, saying the EU will “be prepared to reconsider its offer” if the UK drops some of its red lines. Given May will already feel she is compromising, particularly over regulatory alignment post Brexit to help facilitate an invisible Irish border, the EU might not want to hold its breath.

I’ve done a detailed analysis of the document here, and although the two sides are still the width of the Channel apart on some issues, there are some signs of progress on others.

2) ...But It’s OK When Brussels Cherry-Picks, Yeah?

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One cherry the EU is quite keen on harvesting is the UK fishing waters. The guidelines insist that “existing reciprocal access to fishing waters and resources should be maintained.” May has seemingly already given in to Brussels on that point, as in her Mansion House speech she said the UK would “agree reciprocal access to waters”.

Yet one key difference is the word “existing” in the Brussels text. The EU clearly wants the Common Fisheries Policy (CFP) to continue, giving vessels from its members the right to fish in British waters.

Environment Secretary Michael Gove has already ruled out staying in the CFP, and May caveated her support for “reciprocal access” by calling for “a fairer allocation of fishing opportunities for the UK fishing industry.”

What does this all mean in the grand scheme of things? The EU wants access to the UK’s fishing waters. The UK wants access to the EU’s financial sector. Seems like a deal could be struck.

In an interview with me last month, Gove insisted the UK’s fishing waters were not going to be traded away as part of a deal to get better access for the financial sector. Of course, it would never be painted so nakedly as that, but as part of the “deep and comprehensive agreement” May wants with this EU, this could be an area of trade off.

After all, fishing is worth less than half a percent of the UK’s GDP. The financial services industry is worth 7.2%.

3) Not A Lot Of Impact, Not Much Use As Assessments


The Government Brexit impact assessments leaked earlier in the year have now been published in full – and it’s more of the same.

According to the documents, having regulatory divergence from the EU will harm the economy and the UK could be forced to borrow an additional £55billion to cope with the economic cost of Brexit – even if a trade deal was secured.

But as the report notes on the page headed “The Analytical Challenge”, “a number of factors make any analysis highly uncertain.”

And, as ministers kept saying when the reports were leaked, the analysis does not take into account the Government’s preferred Brexit outcome, as that is “unprecedented.”

While these reports are interesting for those of who pay a close attention to Brexit – of which I count you, dear reader – most people gave up listening to, let alone believing, economic forecasts predicting what will happen in 15 years a long time ago.

4) No Wonder They Have So Many Elections

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If you think the deal between the Tories and the DUP took some negotiation, stay tuned to Italian politics.

The country’s general election delivered a confusing result at the weekend, with some parties running in coalitions and no one getting a knock-out victory.

The group with the largest number of seats was the centre-right coalition of League, Forza Italia and two smaller parties. League is headed up by Matteo Salvani, and his party delivered most of the seats and votes in the coalition, with Forza Italia’s Silvio Berlusconi coming second in that group.

Salvani is a Eurosceptic – both of Brussels in general and the single currency specifically. He’s a fan of Trump and has adapted his famous slogan to “Italy First.” His hardline on immigration has led comparisons to Nigel Farage.

But the individual party with the largest number of votes is Five Star – an anti-establishment moved created by comedian Beppe Grillo in 2009. It too has taken a hard-line on immigration, a position which strikes chords with many Italians who feel their country does not receive enough help to deal with migrants making the journey across the Mediterranean from Africa. Five Star has ruled out entering into a coalition government with Salvini.

What does this mean for Brexit? Whoever takes over as Prime Minister – which might not be decided for many weeks – is likely to be one of the most Eurosceptic leaders on the continent. If they wanted to see Italy leave the EU, it would be in their interest to make sure the UK gets a good deal to show that life beyond the grasp of Brussels is possible. Of course, Macron and Merkel will want the negotiations to continue on the current path, and may therefore want much of the deal to be concluded before the much-prized EU unity begins to fragment.

5) The People’s Negotiation Needs YOU!

As we approach the one-year mark before the UK officially leaves the EU on March 29, HuffPostUK is producing a series of videos we’re calling The People’s Negotiations.

We want readers of this newsletter to send in their solutions to some of the biggest Brexit issues - from the Northern Ireland border to the Customs Union.

In the video above I give a bit more detail about what we’re after, but it’s essentially a video of your good self explaining what you would do if you were around the negotiating table.

Videos only have to be about 30 seconds long, and you can talk about one issue or more. I’m looking forward to seeing what you would do in the People’s Negotiation.


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