On Tuesday 20 March, the European affairs ministers of the Twenty-Seven approved the EU's draft guidelines for the future relationship with the United Kingdom following a post-Brexit transition period, in other words early 2021.
The draft text, which the European leaders are expected to adopt without issue on Friday 23 March, has changed little since it was presented by Donald Tusk on 7 March, according to a European source (see EUROPE 11976, 11977). In particular, the future EU/UK free-trade agreement will be ambitious and avoid customs tariffs and quotas.
The greatest change, however, is the reference to financial services that has been included in an appendix to the most recent draft guidelines. The future free-trade agreement will include financial services, but these will be subjected to an 'enhanced equivalencies' mechanism.
Luxembourg called for the financial sector to be included, but France opposed this. The wording is therefore a compromise between these two extremes. For the EU, this means that a unilateral decision of the Twenty-Seven will make it possible to rule that British rules on financial services are equivalent to those in force in the EU.
This decision will provide a guarantee of the respect of the integrity of the single market and the EU's decision-making autonomy, the negotiator-in-chief of the EU, Michel Barnier, explained after the ministerial meeting. He also stressed that these equivalences work very very well with the United States and Japan.
As for the word 'enhanced', this refers to the process of granting equivalences that the EU is currently in the process of reviewing (see EUROPE 11879, 11734) and is expected to be up and running when the free-trade agreement between the EU and the UK enters into force.
For the remainder, these guidelines reiterate that the EU hopes to have the deepest possible relationship with its neighbour, particularly on defence and security, but also on culture and education.
Glimmer of hope on Ireland?
Finally, Barnier referred to the terms of the agreement, reached the day before, on the post-Brexit transition period (see EUROPE 11983). Progress has been made, but the two sides have still not completed the negotiations, particularly on the Irish question, which is still one of the toughest, he said.
However, the former Commissioner said that he had received new assurances over the backstop solution that will apply if no other solution can be found to avoid a return to a hard border between the Republic of Ireland and Northern Ireland.
In particular, Barnier spoke of reassurances provided by the British Prime Minister in a letter on the evening of Monday 19 March. In the letter, Theresa May reiterated her country's commitment to ensure a solution in line with the provisional agreement of 8 December (see EUROPE 11922). Although accepting this principle of the backstop solution, she reiterated her opposition to the protocol put forward on 28 February when the British withdrawal agreement was presented (see EUROPE 11971) which referred to a common regulatory area in Northern Ireland, aligned on EU rules.
The content of this backstop may evolve during forthcoming discussions, Barnier acknowledged. This could be the backstop we proposed or something else, the negotiator said.
A number of meetings on the Irish question will take place in the coming weeks.
Ireland, but also other subjects such as Gibraltar, are in any case on the list of questions that continue to be of concern to the Twenty-Seven. According to the same European source, they have still not reached a unanimous agreement on the terms of the post-Brexit transition period.
President Tusk, has given the capitals until midday on Wednesday 21 March to take a position on the text on the table.
"Yesterday, our negotiators reached a solution on several parts of the withdrawal agreement. Can all 27 member states welcomed this at the European Council? This remains to be seen", Tusk said on Tuesday, in his letter of invitation to the Summit sent out to the European leaders. (Original version in French by Solenn Paulic)