Brexit: Warmer than Canada, colder than Norway

Read this article in German.

The Brexit negotiators were in a surly mood over long stretches of time: The EU reproached Great Britain for its lack of direction in the negotiations and for wanting to cherry-pick the best parts of EU membership while ridding itself of onerous obligations. Great Britain countered by claiming that some elements of the EU were not interested in bringing negotiations to a successful conclusion and were adopting an aggressive posture towards Great Britain as a warning to Member States that may perhaps be toying with the idea of an exit as well. Although the first round of negotiations ended on a note favouring the EU's positions, the accusations being traded by both sides nevertheless seemed for a brief period of time to have been surmounted upon its conclusion. 

Dreams are my reality

The key items under dispute with Great Britain - its financial obligations towards the EU, the border between the EU Member States Ireland and Northern Ireland and civil rights of EU citizens in Great Britain and British citizens in the EU – remain central points in the second phase of negotiations. This was evident at the beginning of the second, more difficult phase of negotiations that are intended to lay down the arrangements underlying future relations and a transition phase being sought by Great Britain following the Brexit in 2019. Contradictory notions and statements by the British government do not ease the task of sizing up developments. The British positions and their prospects of success are discussed in a paper that Sunder Katwala has written for the Friedrich Ebert Foundation.

It appears clear that Brexit-camp phantasies that trade relations could be maintained "as-is" with the EU without being bound to the four basic freedoms of the Single Market (goods, services, capital and above all persons) will not be realised. Great Britain wants to have a closer relationship with the EU than any other third state without being part of the Single Market and Customs Union – but at the same time conclude trade agreements on its own, only provide financial support to hand-picked EU projects, control migration, stray away from European regulation and not be subject to decisions handed down by the European Court of Justice. The governing Conservatives, but also the Labour Party, are split when it gets down to the details, however. The debate in Great Britain has revolved around desires for economic ties with the EU that are as close as possible and the strictest possible controls on immigration.

The clock is ticking ever faster for Great Britain

Large majorities are in favour of both in surveys – but with the EU it will not be possible for the U.K. to have its cake and eat it, too. A balance will have to be attained here. A relationship is being sought with the EU that is colder than the one with Norway, which as a member of the European Economic Area is subject to EU rules without being able to influence EU policy, but warmer than that with Canada, which is only tied to the EU through a free-trade agreement. Although both sides have clearly traced out their red lines, they have not indicated what compromises between the Single Market and migration controls they are respectively willing to accept.

The clock is ticking on the negotiations at any rate, and it is ticking faster for Great Britain than for the EU. The Brexit is to take place in 2019. Prime Minister Theresa May believes that no deal would be better than a bad one. But without any deal at all, the British economy may well take a nose-dive. This is why British proponents of a transitional phase lasting an additional two years, in which EU rules continue to apply, are becoming more vocal. At the same time, ex-prime minister Tony Blair is calling for a second referendum on whether to accept the deal or to stay in the EU after all. But the sand in the hourglass is running out on this as well: A deal that can be voted on by the UK population needs to be agreed upon before the 2019 Brexit. Otherwise "remain" would have to be turned into "return" – which would be significantly more difficult, as the well-known "UK rebate" and other exceptions for Great Britain would definitely no longer be possible. The EU thus appears to be holding all the cards in its hands.

Contact at the Foundation:

Nicole Katsioulis