Archive for May, 2017

Recent decisions may have increased the chance of a ‘no deal’ outcome in the Article 50 negotiations. It’s time to restore trust and moderation.

May 10, 2017

Formal negotiations on the UK’s exit from the EU are fast approaching. While it is theoretically possible that the UK Parliament could vote to reverse Brexit (by revoking Article 50) at any time before 1st April 2019, this appears highly unlikely. Almost certainly, it would not happen without a second referendum, which both the Conservative and Labour parties have ruled out. (The Liberal Democrats, on the other hand, promise a second referendum on the terms of Brexit when they become clear; but every poll since the General Election was called on 18th April has the Liberal Democrats on between 7% and 13%, so their chance of winning a Parliamentary majority is very remote.)

There is one possible outcome to the Article 50 negotiations which both parties should be trying hard to avoid – namely, a ‘no-deal’ scenario, where one or more issues derail the talks, and the UK ‘crashes out’ of the EU without an agreement at the end of March 2019 – which would presumably happen amid mutual recriminations and acrimony.

A ‘no-deal’ outcome could leave 4.5 million EU and UK citizens at risk of losing basic rights – the right of residence, the right to work, and the right to access social security and healthcare. (Except of course in the event of ’emergency’ unilateral guarantees from both sides, which one hopes but cannot assume would be forthcoming, and which anyhow would lack a mechanism for dispute resolution.) It would probably lead to the UK refusing to pay a ‘divorce’ bill of any significant size. It would risk the creation of a ‘hard’ customs border between Northern Ireland and the Republic of Ireland, thereby endangering the gains of the peace process. It would almost certainly preclude a mutually beneficial trade agreement from being signed in the near future. It might even endanger security and foreign-policy cooperation between the UK and the EU27, at least in the short term.

Both sides can and should aim for a better outcome. An agreement that will safeguard the rights of the EU27 citizens in the UK and of the UK citizens in the EU27. An agreement that will lead to the UK’s payment of an exit bill that could be considered ‘fair’ by an impartial observer, and is at least palatable to many reasonable people on both sides of the Channel. An agreement that will allow the maintenance of a close trading relationship in the future. An agreement that will safeguard cooperation on domestic security and foreign-policy issues, between the UK and the rest of Europe, for the foreseeable future.

I believe, however, that some recent decisions may have (perhaps inadvertently) increased the chance of a ‘no-deal’ outcome to the Article 50 negotiations. I should add that I still believe the chance of reaching some kind of an agreement to be significantly more than 50%. Being a mathematician by profession, I might hesitate to introduce probabilities into the discussion, had this not already been done by Lord Kerr and others. (Last week, Lord Kerr, one of the authors of Article 50, estimated the chance of a ‘no-deal’ outcome at 45%.)

The first decision I refer to is the decision to leak to the Frankfurter Allgemeine Zeitung a blow-by-blow account of the private dinner on 26th April at 10 Downing Street, those present being Theresa May, Jean-Claude Juncker and some of their colleagues. Juncker’s (alleged) words ‘Brexit cannot be a success’ have been widely reported on, but the account also appears to cast scorn on May and Davis’ lack of preparedness, and even suggests a rift between them:

‘Over the course of the evening, Davis praised himself three times for an heroic deed: namely having successfully brought British Data Retention before the European Court of Justice. At the time, he was still a Conservative backbencher; Theresa May, as Home Secretary, was responsible for drafting the law. Maybe Davis thought the multiple references would be a good icebreaker.

But his boss seemed not exactly amused by what, for her, was not a praiseworthy episode. The visitors asked themselves whether Davis would still be in charge of the negotiations after the parliamentary election.’

Several different motives for the leak have been suggested. One possible motive seems to be claimed at the end of the article:

‘In his [Juncker’s] entourage, the probability that the negotiations will fail is now estimated at “over fifty per cent”. One hopes that the British will come to their senses and face the uncomfortable reality while there is still time. And that at least business will put more pressure on the Government, since a chaotic Brexit could drag the country into an existential crisis. To communicate these concerns so bluntly is part of the strategy. Sometimes the alarm clock has to ring very loud to wake up even the most sleepy.’

Another possible motive, which I find somewhat plausible, is suggested here, but I do not wish at this stage to get into a detailed discussion about possible motives. At best, the person responsible showed a reckless disregard of the danger of damaging trust ahead of the negotiations. Indeed, the leak immediately undermined the trust of many in the UK government in some of their counterparts at the European Commission, and led to a hardening of rhetoric and positions, both by Theresa May and by some senior EU figures. It is a basic rule of international negotiations that trust is a crucial ingredient, and it is clear that the further apart the two sides are at the beginning, the lower is the chance of an agreement. I believe it is fairly clear that an undermining of trust and hardening of rhetoric and positions, such as took place after the leak, will make it harder (at least at the outset) for the negotiators to converge on an agreement.

The second decision I refer to is the suspension of the informal talks on the UK’s exit. Two weeks ago, the UK government requested a delay in the mid-term review of the EU budget, citing ‘purdah’ rules in the run-up to the UK’s general election. Even within the EU27, views seem to differ on the reasonableness of this request: President Juncker said on Saturday 29th April ‘The UK is currently blocking the decision and … it would facilitate the beginning of negotiations if the UK were to be able to withdraw the reservation that it has entered in respect to the mid-term review.’ On the other hand, according to a Bloomberg News article (4th May), ‘Three European government officials in Brussels told Bloomberg News that the short pause in budget talks for the U.K. elections wasn’t a problem for the bloc.’ Be that as it may, in response to the UK’s request, Martin Selmayr announced the following on Twitter (29th April): ‘Now, we’ll have to apply FULL PURDAH RECIPROCITY. Talks with UK, formal or informal, will start only after 8 June.’

I believe that the decision to suspend informal talks was a bad one. According to most experts in the study of negotiation (such as Deepak Malhotra), the absence or reduction of informal talks makes a final agreement much harder to reach – partly because it reduces the time available for reaching an agreement – and in this case, the deadline (mid-2019) is already very tight.

Predictably, the leak elicited a strong reaction from 10 Downing Street. Theresa May claimed on 3rd May that ‘the events of the last few days have shown that whatever our wishes, and however reasonable the positions of the Europe’s other leaders, there are some in Brussels who do not want these talks to succeed, who do not want Britain to prosper.’ The Guardian even reported the following on 7th May: ‘Key Downing Street advisers are said to be convinced that opponents in the European Commission are actively plotting to engineer a car-crash Brexit.’

I have not myself seen enough evidence to justify the conclusion that there is (among some in the Commission) a deliberate intention to engineer a ‘no-deal’ outcome. Such an intent would surely be Machiavellian in the extreme, given the European Council’s core negotiating principle no. 2 (‘nothing is agreed until everything is agreed’), which effectively links the residency rights of 4.5 million EU citizens to the final outcome of the Article 50 negotiations. However, it is undeniable that some in the UK now suspect such an intent, at least on the part of some who may have influence on the negotiations. These suspicions may have been fuelled by a number of ardently pro-federalist commentators advocating an extremely punitive course of action towards the UK, even at the cost of economic harm to the EU27, on the grounds that anti-EU movements in other member-states must be deterred at all costs. (See e.g. this article.) One may hope that the resounding election victory of Emmanuel Macron (who chose for his victory march the EU’s official anthem, ‘Ode to Joy’), together with the March 2017 Parliamentary elections in the Netherlands (in which anti-EU parties gained a total of only 15% of the popular vote), might reassure such commentators that the EU can afford to deal fairly with the UK.

It is now time for both parties to endeavour to restore trust and moderation to the debate, so as to maximize the chance of an agreement at the end of the Article 50 negotiations. (Donald Tusk’s calls for calm last week, and President Juncker’s statement yesterday that the leak was ‘a serious mistake’, and that it was not his doing, were most welcome.) Looking ahead, another piece of Malhotra’s advice is relevant: both the UK and the EU27 should think about the constraints facing the other party, and endeavour not to box themselves in with ‘red lines’ (a.k.a. ‘non-negotiable demands’) that the other party cannot realistically accept.

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‘Nothing is agreed until everything is agreed’ – a mantra jeopardizing the rights of 4.5 million European citizens

May 2, 2017

Perhaps the most urgent issues in the upcoming Brexit negotiations are the future residency rights of the approximately 3.3 million EU citizens in the UK, and of the 1.2 million UK citizens elsewhere in the EU. Both Theresa May, and many of the EU27 leaders, have advocated an early reciprocal agreement on this issue; the security of millions of ordinary citizens is at stake, and they have already suffered a year of uncertainty. The ideal solution would perhaps have been for the UK government to unilaterally guarantee the rights of EU27 citizens already in the UK, soon after the referendum, on the understanding that the EU27 would reciprocate – and then for the EU27 to reciprocate, securing a cast-iron agreement on this issue before negotiations on tougher issues got underway. Sadly, neither side has yet given such a guarantee, either due to lack of confidence that the other side would reciprocate, or (at worst) because they wish to use the issue of citizens rights’ as a bargaining chip later on to exact concessions on other issues.

The European Council’s negotiating guidelines, published on Saturday, appear to place the future of these 4.5 million citizens in greater jeopardy.

http://www.consilium.europa.eu/en/press/press-releases/2017/04/29-euco-brexit-guidelines/

Core Principle 2 of these negotiating guidelines states “In accordance with the principle that nothing is agreed until everything is agreed, individual items cannot be settled separately.” As stated, this means that any initial agreement on future residency rights for citizens would be rendered invalid if other, more contentious issues (such as the ‘divorce bill’) prevent a final agreement from being reached by mid-2019, leaving 4.5 million citizens at risk of losing their residency rights.

If it truly cares about ordinary citizens, the European Council should answer the pleas of EU citizens’ campaign groups such as ‘The 3 Million’ to amend Core Principle 2, and agree to strike an early, cast-iron agreement on citizens’ residency rights, ring-fenced from the rest of the negotiations. Legal experts have assured The 3 Million that such a ring-fencing is legally possible. Short of immediate unilateral guarantees from both sides (which, sadly, do not appear to be forthcoming), an early, ring-fenced agreement on this is the only moral course of action, for both the UK government and the EU27.

The ‘all or nothing’ approach is reckless in the extreme, given the uncertainty over whether a final agreement will be reached. It is also deeply wrong. While this may not have been the intention, it perpetuates the treatment of 4.5 million human beings as pawns in the negotiations.