One year after Theresa May's government notified the intention of the United Kingdom to withdraw from the European Union (triggering article 50 of the treaty) and a year before Brexit takes place, on 29 March 2019, Charles Grant, the Director of the Centre of European Reform (CER), met EUROPE to reflect on how London and the EU have managed the negotiations so far. Favouring the 'Jersey' option for the future relationship between the United Kingdom and the EU, he warns against the Twenty-Seven taking too tough a stance (Interview by Solenn Paulic).
Agence Europe - What has changed since the notification? Does the UK government have a clearer vision of what it wants now?
Charles Grant - What the UK is accepting now is at least the reality. They said at the beginning that they could negotiate tough; but it was unrealistic. They have now accepted that they will pay (they said that they would not pay). They have accepted the terms of the transition period. They have accepted all the terms of the EU in this very one-sided negotiation, which is like the accession process in reverse. Brexit is in many ways boring, because we know exactly what will happen; Brexit will be bad for people, bad for financial services.
Is Theresa May making the wrong decision in leaving the Single market and the customs Union? What would be the best option, in your view?
There is still a possibility that the UK ends up staying in the Customs Union; all the opposition wants it and there are currently two pieces of legislation discussed (on trade and on the so-called withdrawal agreement); texts can be amended; there is also the pressure of industry, representatives of the chemicals industry etc etc; it cannot be ruled out that the UK ends up staying in the Customs Union; I think the 'Jersey' option would be the best option, with no border controls and frictionless trade. The EU doesn’t like it; but it’s not unlikely that the British government ends up with something like what Jersey has.
(According to the researcher Sam Lowe of the CER, the Jersey model would equate to staying in customs union with the EU and also the single market for goods, with the addition of the EU VAT zone and also rules on state aid. This would help to resolve the Irish question, as no physical infrastructure would be required between the Republic of Ireland and Northern Ireland: Ed).
Can lessons already be drawn from the Article 50 process? Is the process entirely in favour of EU interests?
The EU is extremely determined. Countries such as France and Germany are taking tougher stances than other member states. They want to show that leaving the EU is a punitive process. I can understand the logic, but there are risks involved in pushing in this direction, as if it were indeed a punishment. This could have repercussions on the cooperation we may wish to have subsequently, possibly even in security matters.
If the British feel that they are being offered a bad deal, this will have an impact on the negotiating climate. Admittedly, developments in public opinion in the UK is not the EU's main subject but if the British take the view that the agreement being put to them is a bad one, they will not say that they were stupid (to leave the EU). They will think that the French, the Germans, the EU are the bad guys.
This could also feed into populist reflexes in Europe. In my view, the EU negotiators are not sufficiently aware of the risks to themselves of an excessively stringent policy. For instance, concerning internal affairs, the United Kingdom would like to continue to apply the European arrest warrant and participate in Europol. But the EU does not really want that. It is tough talking.
Do you think that everything will be settled in 2021, or will a further post-Brexit transitional period be required?
This is a subject on which everybody is lying. Theresa May pretends that it will all be done and dusted within two years. The EU is lying as well. It is impossible. But if the British want to stay longer, they will have to pay to have access to the single market. This will be a problem.
Several governments are perfectly well aware that 21 months is not long enough. Even for the member states. Putting in place physical borders and control infrastructure in ports in France and Belgium will take time. Similarly, it will take years to develop systems to register individuals, to conclude all the agreements. I am therefore not ruling out the possibility that in the final version of the United Kingdom's withdrawal agreement, a reference will be made to an extension of this post-Brexit transitional period.