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31 August 2017

Why are the Brexit talks stalling? Because the government doesn’t know what it wants

The United Kingdom can't use its leverage if the government doesn't know what concessions it wants to secure. 

By Stephen Bush

What do the remaining nations of the European Union want out of Brexit? Broadly, they want everything to stay the same as far as possible. For the Republic of Ireland that means the same customs and border rules to prevent the emergence of a hard border between the Republic and Northern Ireland. For the nations of the former eastern bloc and the PIGS (Portugal, Italy, Greece and Spain) that means continuing access to the British labour market. For those countries which are net beneficiaries of the EU budget, they want to continue to receive more from the EU than they pay in. As for the creditor nations of the EU, such as France, Germany and the Netherlands, that means making sure they don’t end up on the hook for Britain’s missing budget payments.  And every nation of the EU27 can agree on wanting to make sure that Brexit is a one-off event and not the beginning of a series of exits from the European Union.

Then there are the things that everyone wants to stay the same: for Europe-wide research and medical programmes to remain undisrupted, for the United Kingdom to continue to provide most of the apparatus and personnel for Europol, and so on.

Those are the interests that shape the Council of Ministers’ position on the task which in turn drive the mandate of Michel Barnier, the EU’s chief negotiator.  And it’s easy to see why Barnier and his team are proceeding in the way they are. Priority one is to get some form of guarantee that a) the creditor nations won’t be left on the hook (the so-called “divorce bill”) and to reach broad agreement on the question of the border between the Republic and Northern Ireland.

What the British government is correct to say, though, is that it is hard to reach a conclusion on these areas in isolation to discussion of the final relationship between the EU and the UK. For example, if the United Kingdom is going to continue to pay in and participate in Europol, there is no need to settle its account. It is difficult, too, to see how you can reach accord on the question of the Irish border without knowing what the future relationship would be.

The good news is that the United Kingdom only needs to show “sufficient progress” on these issues. This is a lot easier. What unifies most of the EU27 is money – whether you are a creditor nation or in net receipt of EU funds, whether your overriding priority is to shore up the project, or so on, there is nothing that is not made substantially easier if you know the United Kingdom is going to keep paying in after Brexit. And as the government’s Brexit strategy includes retaining British participation in, among other things, research and security projects, there will still be some level of payments anyway.

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This is where the British government’s positioning becomes a little harder to follow. Ultimately talk of the United Kingdom’s legal obiligation to pay is a massive red herring – what’s actually at stake is that the creditor nations of the EU don’t want to pay more and the beneficiaries don’t want to receive less or become creditor nations themselves.

On that side, the risk of asymmetric damage to the United Kingdom is the EU27’s stick and the carrot is continuing access at an equivalent level to its membership. On the British side, the stick and the carrot are the same: its budgetary contributions. It also has allies in whichever of the EU27 nations it decides that it also wants the status quo to endure.

The difficulty is that, as the government’s position papers show, the government isn’t at all clear what it actually wants out of Brexit, which is why it can’t use its leverage constructively or move the EU27. And while that remains the case, the path to a positive outcome from the Brexit talks remains unclear.

So depending on what the British government wants out of Brexit, there are obviously a variety of different levers and different pressure points.