The remaining 27 member states will, on Friday 23 March, approve the terms of the post-Brexit transition period that will apply to the United Kingdom between 30 March 2019 and 29 December 2020, in line with the agreement reached on Monday between the European Commission and the UK government (see EUROPE 11984).
Following a moment of suspense as a result of questions from Spain over the wording on Gibraltar in the provisional agreement on UK withdrawal, Council President Donald Tusk finally recommended, on Wednesday 21 March, that member states approve the agreement on the post-Brexit transition period.
“In practice, the transition phase will allow to delay all the negative consequences of Brexit by another 21 months. It is important – not least to our people and businesses – to buy this time, so that everyone is prepared for the real impact of Brexit”, Tusk said.
According to the agreement on the transition phase that will be built into the agreement on its withdrawal, the United Kingdom will be required to comply with all European rules and contribute to the EU budget but will not be allowed to take part in any decision making. The EU has agreed to the UK’s being able to negotiate and sign free-trade deals with other countries, without, however, being able to implement them before 2021.
The post-Brexit transition phase will also be used to find a firm solution to the issue of the Ireland-Northern Ireland border that avoids any return of a hard border between the two.
On Monday, the UK government agreed to Northern Ireland’s full alignment with European standards as the backstop solution if no alternative measure can be found.
These assurances were welcomed in Dublin, a diplomatic source said on Wednesday morning.
The Ireland-Northern Ireland issue will be discussed again in June, with several sources expecting progress to be made on this point between now and then.
Guidelines for negotiation of future relationship. The 27 will, on Friday, grant Michel Barnier a new mandate to begin discussions on future relations, including on trade, with the UK.
On Tuesday, EU foreign ministers approved the draft guidelines presented at the start of March (see EUROPE 11985). They amended the text to include financial services in the future free-trade agreement envisaged with the UK by means of “improved equivalence” whereby the Commission will recognise UK standards as equivalent to those of the EU. The problem lies in improvement in the current system of equivalence.
For Luxembourg, inclusion of the financial services sector was very important, it having been astonished that they did not feature in the first draft texts. Financial services have to be included if the two sides want a genuine trade relationship, a source said.
Financial services do not form part of the free-trade agreement with Canada (CETA) but the Commission, led by then commissioner at the time, Jonathan Hill, argued for them to be included in the agreement under negotiation with the United States (TTIP), despite American reluctance.
The outlines of the future relationship should be clear and ready for discussion by October at a further summit. (Original version in French by Solenn Paulic with the editorial team)