Brexit: Where are we now? Part Three – The EU Institutions

IIEA9th February 20188min
In this third article in the IIEA’s February 2018 Brexit Status Report series, the IIEA Brussels provides a perspective on the negotiations from the EU Institutions.

In this third article in the IIEA’s February 2018 Brexit Status Report series, the IIEA Brussels provides a perspective on the negotiations from the EU Institutions.

As noted in the previous entry in the series, by John Palmer, the UK Government has struggled to present a clear position on its preferred terms of withdrawal. However, the EU Institutions and Member States have so far presented a remarkably unified front in the Brexit negotiations. With the negotiations on the transitional arrangements set to begin, this third part of the IIEA’s Brexit Status Report draws on the IIEA Brussels network to provide perspectives on the negotiations ahead from the European Commission, the European Parliament and the European Council.

 

The European Commission

Since his appointment in July 2016, chief negotiator Michel Barnier and his Task Force (TF50) have had a strong mandate from the EU27 Heads of State or Government, and have enjoyed the unwavering support of the College of European Commissioners. As was extensively covered in the media, the EU27 reached agreement in December 2017 that sufficient progress had been made in phase one of negotiations. A joint statement to this effect was made on 15 December 2017. This agreement on an orderly withdrawal was never a foregone conclusion. Talks were slow, and at times frustrating, with those close to the process often expressing concern, and sometimes disbelief, at the UK side’s apparent lack of realism. The most sensitive aspect of the three-pronged first phase was Northern Ireland (the other two were citizens’ rights and the architecture of the financial settlement).

The next milestone is the discussion of a transitional period, which could prevail for a defined period following 29 March 2019, the date on which the two-year Article 50 notification period expires. In public at least, the UK has given mixed messages about how long it would like such a transitional phase to last. Mr Barnier has indicated that a cut-off date of 31 December 2020 would make sense, as this would coincide with the end of the current budgetary period for which all Member States, including the UK, have clear commitments.

On 20 December 2017, the Commission adopted a Recommendation to the Council on adaptations to the negotiating mandate and these have since been agreed, and supplemented, by the Member States at the General Affairs Council on 29 January 2018. The discussions resulted in a very firm, unified position which is even more explicit than that recommended by the Commission. The EU27 Leaders have agreed guidelines spelling out the terms of the transition period, and Mr Barnier has been given a mandate to enter phase two of the negotiations on the basis that the transition period is discussed first.

If agreed, a transition period would be subject to the following provisos:

  • The direct effect and primacy of EU law will continue to apply (including any new laws introduced during the transition period);
  • supervision and control by EU institutions, agencies and the European Court of Justice will remain applicable;
  • the UK will have no input into the decision making process during this time;
  • the UK will continue to be bound by all obligations concluded by the Union, however it cannot be guaranteed that third countries will extend the benefits of agreements to the UK.

In addition, the UK will not be free to enter into binding international agreements without the explicit agreement of the Union (the mechanism for such agreement is yet to be elaborated upon). Similarly, there is scope for discussion of the UK’s participation in committees and expert groups, on an exceptional basis and subject to agreement by the Member States.

Crucially, the UK is expected by the EU to further clarify its position on transition and the framework for the future relationship, which is widely regarded as being unclear.

Only when transitional arrangements have been considered and hopefully agreed in Spring 2018, will talks move on to more substantive matters. This means timing is very tight, as agreement must be reached by October 2018 (or the end of the year at latest) in order to fit with the political cycle. Agreement will require ratification by all 27 and to be successful, regulatory dumping will have to be avoided. The Commission intends to be ambitious, citing tax, environmental, and social standards in particular. Security policy is considered a priority.

 

European Parliament

Any agreement on the withdrawal from the Union must ultimately be approved by the European Parliament (by simply majority) as per Article 50(2) of the Treaty.  The Parliament’s Committee on constitutional affairs will play a key role and will be responsible for preparing the Parliament’s consent.  In September 2016, Parliament appointed Mr Guy Verhfostadt as its representative on Brexit and set up a “Steering Group” composed of representatives of the political groups as the main body coordinating Parliament’s position on Brexit.  The Steering Group has had a series of exchanges with Parliament committee chairs and the EU Chief Negotiator, Mr Barnier, and on 4 December 2017 it met with Commission President Juncker to discuss the latest developments.

Parliament gives its input primarily through plenary debates and by adopting resolutions and has been exercising its right to do so. To date there have been three Resolutions – one in April 2017 on the UK withdrawal, a second one in October 2017 on the state of play and a third one in December 2017 on the issue of sufficient progress (which was adopted by a large majority – 556 votes in favour, 62 against and 68 abstentions). It will continue to do so at key moments throughout the negotiations.

In terms of concerns, Parliament has been particularly active in defending the rights of EU citizens in the UK and vice versa and in advocating a regime that would extend to future partners of citizens and that would also be ‘light touch’. It has proposed the creation of an ombudsman to oversee this. Parliament has also called for specific solutions on Northern Ireland to avoid a hardening of the border. There are also a number of general principles that Parliament has consistently put forward, such as the integrity of the four freedoms, a correct balance between rights and obligations and safeguarding the EU legal order.

As regards the next steps, the position of the Parliament is that transitional arrangements are necessary to ensure an orderly withdrawal, yet they should be strictly limited in time and involve EU law continuing to apply fully, including any changes to EU law that take effect during the transitional period.

As for the future relationship, Parliament’s stance is that this could take the form of an association agreement.

 

Council of the European Union / European Council

The European Council continues to play a key role in the Brexit negotiations, but it is clear that EU leaders have begun to look to the future – discussions on the future of the EU of 27 Member States now dominates the EU summits of heads of state or government.

Nonetheless, there have been a number of key developments in the Brexit context in recent months, and perhaps one of the most significant developments in this regard was the decision on the relocation of the EU agencies based in the United Kingdom. These EU agencies are currently and will remain located in the UK until 30 March 2019. All interested Member States had the opportunity to submit their offer to host one or both of the Agencies by 31 July 2017.  The voting took place in the margins of the General Affairs Council (Art. 50) in November 2017 with the Netherlands securing the EMEA and Ireland narrowly losing the EBA to France with lots being drawn due to the dead heat in the voting.

On 8 December 2017, the European Commission published the Joint Report from the negotiators of the European Union and the United Kingdom on progress during Phase One of the negotiations under Article 50.  The Report contains 96 articles covering the three areas under consideration in the first phase:

  1. Protecting the rights of EU citizens in the UK and UK citizens in the EU;
  2. The framework for addressing the unique circumstances in Northern Ireland;
  3. The financial settlement.

It should be noted that the report was issued subject to the caveat that ‘nothing is agreed until everything is agreed’.

Following some feverish last-minute internal negotiations on the British side, the European Council gave its authorisation to open the second round of negotiations in the UK’s withdrawal from the EU on Friday 15 December 2017, and published the guidelines for Phase Two of the talks, including transitional arrangements and a framework for the future relationship between the UK and EU. These were confirmed, and supplemented on 29 January 2018, and the talks are set to begin once the UK side signals its assent.

While the December 2017 Council was a significant landmark, it is clear that a lot of hurdles remain to be cleared. The general view in Brussels seems to be that agreeing the practical arrangements for an orderly withdrawal and optimal future relationship will be complex and difficult, not least when it comes to the ‘special circumstances’ surrounding Northern Ireland. Solidarity among the EU27 will remain a priority, and the rhythm of constant, transparent consultation through the General Affairs Council and European Council will continue.

The withdrawal of the UK is undoubtedly one of the most important issues on the EU agenda at present, but its dominance among political priorities in Council and across Europe should not be overestimated. Many Member States are more focused on national politics, whether in anticipation of upcoming elections, trying to find agreement on government composition or dealing with internal geo-political challenges. Migration, economic stagnation and the rise of populism preoccupy many other Member States to a greater extent than Ireland, and in Brussels, political minds will soon also turn to European elections and the choice of Spitzenkandidaten for the next European Commission Presidency contest.