Salzburg has turned out to be a Suez moment, a sudden and unexpected blow to the government’s prestige delivered by the discovery that UK does not possess the political and economic weight to make a deal with the EU so special that that it violates existential Union rules. The shock is all the greater because the EU decided that, too close to deadline, the British had allowed themselves to be deceived by too much diplomatic fudging; and this had tempted them into fundamental miscalculation.
EU impatience with the British and their suspicions of stalling were amplified by May’s strategy of withholding detailed proposals to the last minute – perhaps not even in October but November. In a real sense therefore, negotiations on the crucial 20% hadn’t even begun. With a lack of British detail to grapple with, the EU therefore was thrown back to default. Those real world issues are explained by Peter Foster, Europe editor of the Daily Telegraph.
On July 5 this year, on the eve of the Chequers summit, the EU’s Brexit ambassadors were shown a slide presentation by Mr Barnier’s team which warned that allowing the UK to enter into a “single market for goods” would be disastrous.
Stephanie Riso, the top economist in Mr Barnier’s team, said it would lead to a “level of erosion in the single market” over a 15-year period roughly equal to the impact of a “no deal” exit for the UK – or 8-9 per cent of GDP.
In other words, it would leave the EU carrying the costs of the British vote to leave. The numbers were so toxic that when the British got wind of the presentation, they were forced to intervene “at the highest” level to suppress their publication.
The stay of execution was designed, on the EU side, to give the British a chance to prove that Chequers wasn’t the threat they feared.
The British argued that the “level playing field” guarantees, where Britain promised to remain aligned with the EU’s rules on state aid and keep a Common Rulebook on border checks, addressed EU concerns about competitive advantage.
They did not. “When we first saw the white paper that followed Chequers,” one EU diplomat said, “we didn’t even know where to start, it was so far from acceptable.”
Mr Barnier made no secret of his objections. He warned that since 20-40 per cent of the value of goods is comprised of services – and Chequers left the UK free to obtain competitive advantage by diverging on services – the EU could never agree.
Given the factual background, was disaster at Salzburg inevitable for Mrs May?. In Times Bruno Waterfield argues that it still might have been avoidable.
It began to go wrong a couple of minutes before midnight on Wednesday when she rose to speak at a dinner table in the Felsenreitschule theatre in Salzburg, city of Mozart. She needed to shine, as the EU leaders had just spent a fractious four and a half hours airing deep divisions on migration.
They had more than an inkling of what Mrs May was going to say, because she had set out her stall in an article in Die Welt, the Berlin daily, on Wednesday morning — and that was her first mistake, according to one prime ministerial aide.
“She began to read out the article,” said the diplomat. “The article they had all already read. That is not the way to command a tired group of leaders who are all a bit sick of each other.”
Her second mistake was to reject, out of hand, plans by Michel Barnier to revise proposals on Ireland even before seeing the redrafted text. “That jarred,” said one official. “There is a lot of creative work going on and that was dismissed before she had seen it.”
Mrs May had got off on the wrong foot but she and her officials believed there was still plenty to play for before talks between the other EU leaders the following lunchtime.
This, however, was a miscalculation and one shared by others on the EU side; particularly Donald Tusk, the president of the European Council.
Mr Tusk had praised Mrs May’s Chequers proposals and a changed British approach to the talks as a “positive evolution”. His comments reflected progress in negotiations but for France and Germany he had gone too far by suggesting a deal could be done by “reworking” Mrs May’s plans. He was not alone. Sweden, Hungary, Poland, Denmark, the Netherlands and Belgium were also pressing for the EU to engage with the proposals.
As the EU leaders entered the Mozarteum University yesterday morning the mood was still positive, with many urging compromise. “It is a balancing act,” said Mark Rutte, the Dutch prime minister.
The morning quickly began to go badly wrong. First came reports in the business press that Liam Fox, the trade secretary, was planning to tear up food regulations to seal a trade deal with the US, thereby gaining a competitive advantage over European companies.
President Macron and others were quick to seize on the report — later denied as “fake news” by Dr Fox — as proof that Britain was seeking to undermine the rules of the single market in pursuit of profit.
Mrs May was then undermined by her allies. Viktor Orban, the nationalist prime minister of Hungary, weighed into the debate, railing against a “camp” of EU leaders including the French president that wanted to “punish” Britain and “make it suffer” for Brexit.
As a discredited leader, Mr Orban’s support was, as one official said, “like that of a rope for a hanged man”.
Mrs May’s fate hung in the balance. Then the scales tipped against her.
Key to progress in the talks had been her pledge to match Mr Barnier’s revised Irish backstop with a new proposal from Britain that would echo EU plans to “de-dramatise” border issues with technical solutions. Instead, she told Leo Varadkar, the Irish prime minister, that the proposals would not be ready by an EU summit on October 18; proof, in the eyes of some, of the validity of Mr Macron’s argument that Mrs May could not be trusted. The French president could not help but rejoice at her humiliation as an abject lesson of Brexit; one he sees as necessary to convince voters of the punishing price of populism. “Brexit shows that it is not easy to leave the EU. It is not without costs. It is not without consequences,” he said.
Before it all went wrong, the sunny Alpine scenery and Salzburg settings had formed a magnificent backdrop. Drums played as the heads of state and government were ushered to the stage of the Felsenreitschule theatre for dinner on Wednesday, dwarfed on the huge stage at a table bathed in light with a backdrop of fiery arches. “Ian Fleming’s Spectre villain, Wagner or more sinister,” was one assessment. “Everyone was wondering where was Dr Strangelove or when James Bond was going to burst in,” said a leader’s aide.
Yesterday, as the EU leaders demolished Mrs May’s political hopes, they ate a traditional Austrian lunch including smoked venison ham, cheese dumplings, meat strudel, ox heart and corn flavoured with juniper.
As the humiliation is being absorbed, we are in the calm before the storm before the question is seriously asked: what now? Spectator editor Fraser Nelson predicts a “blind Brexit” rather than “No deal.”
This is what’s being called a “blind Brexit”, an inconclusive deal where MPs agree on certain huge aspects of Brexit – the money given to Brussels, for example – but they would not be told very much about what they’d get in return.
There would be a vague statement for MPs to endorse. We’d enter a “transition” period with no clear idea what we were transitioning to – the option once derided by George Bridges, a former Brexit minister, as the “gangplank into thin air.” And the Tories would walk down that gangplank because the alternative – jumping into the water of “no deal” – is one that, by now, terrifies even them.
It’s true that a good many Tories talk about being prepared to walk away, even now. But I’ve been struck by how many of those so confident in public now admit in private that it’s too late. “We have to say we’re not scared of ‘no deal’, it’s the basic part of any negotiation,” says one normally bullish minister. “But I’ve seen the preparations. And they’re pretty scary.”
But this omits the fact that a blind Brexit means leaving the backstop up in the air in the warm words of a “political declaration” assuming it could be agreed. And so we come back full circle.
Leo Varadkar was clearly frustrated by Theresa May’s cliff hanging negotiating strategy when at their breakfast meeting yesterday she was unable to give him a deadline for the UK’s detailed border plan. The Guardian has a full report of the Irish response.
“She didn’t exactly give a timeline, I’ll be very honest,“ McEntee told RTÉ’s Morning Ireland – referring to when May would deliver on a legal text for the Irish border backstop, which Brussels has been looking for since the joint agreement in December to ensure no hard border between Northern Irelandand the republic.
“She said it would be forthcoming. Obviously we know that the [Tory party] conference is coming up in a week and a half but the October summit is on very shortly after that so if you do the maths, it doesn’t give us very much time,” she added.
“So what we have asked is that they give this information, that it’s in written form, that it’s a legal document, because the backstop has to be a legal document and that they give it to the taskforce as quickly as possible, they are the experts on customs, experts in understanding and identifying if this could work whatever this proposal is.
“The time wasn’t specifically identified, but if you do the maths it is obviously very close to the wire,” said McEntee, barely concealing her frustration.
Varadkar confirmed on Thursday that the EU was reworking the existing backstop proposal by the bloc to say that agriculture and phytosanitary checks would be the only physical controls that would need to take place between Northern Ireland and Britain’s mainland.
Customs declarations would be done electronically and random customs checks for security and smuggling would continue on a level they do currently, minimising the changes post Brexit.
“Nobody is trying to dispute the constitutional status of Northern Ireland,” Varadkar said. “We need to get away from the idea of anyone trying to create a border between Northern Ireland and Great Britain. That’s not the EU’s objective.”
He also hinted at a long-rumoured “backstop to a backstop” offering London a political declaration as detailed as possible on post-Brexit ties, which would allow a clear, legally binding backstop in the withdrawal agreement but a strongly worded pledge in the future relationship document to ensure there was no regulatory differences between Northern Ireland and Britain.
The EU was clear that the backstop needed to be in the withdrawal agreement as a condition of a deal, but it felt it had demonstrated it was willing to compromise to address the political sensitivities in Britain.
“They showed willing and she showed nothing. You can’t have a negotiation when one side comes to the table empty-handed – and that is putting it politely,” said one source in Dublin.
The EU was clear that the backstop needed to be in the withdrawal agreement as a condition of a deal, but it felt it had demonstrated it was willing to compromise to address the political sensitivities in Britain.
“They showed willing and she showed nothing. You can’t have a negotiation when one side comes to the table empty-handed – and that is putting it politely,” said one source in Dublin.
The passionately Remain paper the New European, (star columnist Alastair Campbell) is out on a limb as it makes the “unthinkable” case.
…. the Irish backstop not only represents the withdrawal treaty’s backbone, but also the key to our future economic status. If the UK rejects any kind of internal sea border for tariffs or regulations, it follows that Northern Ireland will dictate Great Britain’s future status. In the absence of agreed alternatives, a backstop demands a permanent customs union for Northern Ireland – and so the UK must also commit to that possibility.
And if the UK must remain in the whole single market so goods can travel freely on the island of Ireland, that will reveal itself at least implicitly in the withdrawal text. The only alternative is for Great Britain and Northern Ireland to go their separate economic – and ultimately perhaps political – ways. May has already declared that no UK prime minister could allow that, and if she tried, she would remain UK prime minister only a few moments longer.
Consequently Brexit becomes blind only through a government which has its hands tied and still tries to blindfold us. The British people will view this relationship clearly enough: a near-vassal state scenario in which the UK remains in key EU institutions without any meaningful say or vote in them. Such an endgame is loathed by Leavers and Remainers alike.
Blind Brexit gives fudge to the British government and bread and drippings to the British people. It is the product of our government’s palpable and historic failure. But it is not as scary or unknowable as it sounds. If we keep our eyes open and survey the chaos in open sight, we will see right through it.
Jonathan Lis is deputy director of the think tank British Influence
Former BBC journalist and manager in Belfast, Manchester and London, Editor Spolight; Political Editor BBC NI; Current Affairs Commissioning editor BBC Radio 4; Editor Political and Parliamentary Programmes, BBC Westminster; former London Editor Belfast Telegraph. Hon Senior Research Fellow, The Constitution Unit, Univ Coll. London
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