How UK poll could push Brussels to change tactics

Financial Times Financial Times
Core Brexit plan seen as adaptable to electoral surprises

When the German chancellor’s diplomatic adviser heard the UK election results, he was in a broken lift in a hotel — stuck, fed up of waiting and busy with other things, like many in Europe.

Since the result, EU politicians have publicly underlined a steady-as-she-goes approach to Brexit talks, largely unmoved by the Westminster tumult.

“We cannot allow ourselves to be sucked into this maelstrom,” said a principal figure on the EU negotiating side. “There is really nothing we can do but keep calm and carry on.”

The EU considers its core Brexit plan adaptable to electoral surprises and demands for a “softer” Brexit. Michel Barnier, chief negotiator, says the EU “is ready” when London is.

But some in Brussels say the changed Brexit calculus requires new tactics. Is an unmanaged exit more likely? What would happen if the Brits change tack?

We cannot allow ourselves to be sucked into this maelstrom. There is really nothing we can do but keep calm and carry on

EU negotiator

Theresa May’s pitch to the summit of EU leaders on June 23, the anniversary of the Brexit vote, will be an important moment for the EU27 to take stock.

The EU has laid out a strategy of “sequencing” talks, requiring progress on the rights of migrants and a gross financial settlement of up to €100bn before trade talks begin.

But with a weakened Mrs May comes the question of how hard the EU can push. “Her margin for manoeuvre has narrowed,” said another senior official. “The whole idea that they are so weak they will accept more — that is false.”

Starting with divorce means the EU and London can try to make technical progress on the past while Britain reassesses what it wants in the future.

Mr Barnier will send EU position papers to London today on citizen rights and financial settlement.

The danger for the EU is that a British leader is unable to deliver on his or her word, especially on a financial settlement. That may tempt anglophile countries to be more flexible on sequencing.

Customs union

Speculation over Britain remaining in the customs union has been noted with interest in Brussels. Günther Oettinger, EU budget commissioner and an ally of Angela Merkel, German chancellor, told Frankfurter Allgemeine it might have become possible “to talk about closer ties between the UK and the EU than Mrs May originally intended”.

A request on customs would largely be welcomed by the EU side, and would be relatively easy to negotiate.

Indeed there are clear benefits to a common external tariff: the Irish border question is sidestepped; Brussels keeps a dominant hand in trade while minimising disruption; the union’s interest in goods exports to the UK are satisfied. And it may be an excuse to demand budget payments from the UK.

Ireland

The emergence of the Democratic Unionist party as kingmakers in Westminster has worried Dublin, Brussels and Berlin. One senior EU official called the DUP “hard nuts” who might raise tensions around Brexit.

Enda Kenny, Ireland’s outgoing prime minister, “indicated his concern” to Mrs May about the implications of a DUP deal for the peace process — and pointedly commented on the “absence of a nationalist voice in Westminster”.

The DUP supports a customs union to avoid a hard border. At the same time it rejects any “special status” for Ulster.

Extra time

The EU side is unimpressed by suggestions of stopping the clock on Brexit talks. Manfred Weber, leader of the centre-right group in the European Parliament, said negotiations would not be extended.

European capitals stress that Brexit is not their priority. German diplomats have said Britain overestimates its importance for the EU.

Any requests for extensions are likely to be seriously considered only near the end of the process.

Single market

One British demand could upend negotiating assumptions: participation in the single market, while retaining control of immigration. This contradicts core EU principles but could open a divisive debate among the 27.

“We’ve looked for special answers so many times for the Brits and it never works,” said a diplomat from a traditional UK ally. “It just gets crazier every time. Brexit isn’t our problem.”