UK 0 – 0 EU
Today some disappointing, albeit expected news was delivered. “There have been no significant areas of progress”, EU chief negotiator Michel Barnier said during a press conference to report on the outcome of this week’s round of negotiations between the EU and the UK. The UK-EU talks “can’t go on like this forever”, he added.
The EU-UK drama goes on without any significant progress having been made in the past few months. Despite numerous rounds of negotiations and calls from both sides to relax their position, the situation is not moving forward. The clock meanwhile keeps ticking with the deadline to reach an agreement – 31st December 2020 – looming closer and closer every day.
With this grim scenario on sight, can we expect any progress during the next few months or should we start bracing (again) for a no-deal scenario?
There is still hope
The outcome of this round of negotiations leaves the EU and the UK in a very fragile situation: with only six months to go until the transition period ends, it is more unlikely and yet more urgent than ever that a prompt agreement is reached. EU leaders are expected to also participate in the negotiations starting from September with the aim of reaching a deal at an EU summit on 15th October 2020. The UK government hopes that this will be an opportunity for the EU position to be moved after the UK’s numerous calls for EU politicians to get involved and break the stalemate the talks have fallen into.
The issues of contention that remain are the fishing quotas and the level playing field (on environmental and labour standards, state aids etc.). And there is no guarantee that EU leaders will present a more flexible position on these issues than Barnier, with France, for example, expected to be particularly inflexible on fishing quotas in the Channel.
In the meantime, the UK Prime Minister Boris Johnson, European Commission President Ursula von der Leyen, and EU Council President Charles Michel will meet in mid-June – around the same time as a EU summit scheduled on 19th June – to try to find a way forward on some of the more contentious issue.
Northern Ireland calls for extension
In an unexpected turn of events, the Northern Ireland assembly have asked for an extension to Brexit’s transition period to be able to put in place the complex border checks set by the special protocol on Northern Ireland. This protocol, agreed in January this year between Ireland and the UK, aims to avoid a hard border on the island.
The motion passed by the assembly – supported by the nationalist, green and social democratic parties – argues that the Covid-19 pandemic and the ensuing economic recession means that there will be not enough time for the region to establish the required IT systems, VAT and regulatory checks. The DUP and UPP parties voted against it arguing that any decision should be postponed until the outcome of this week’s round of negotiations between the EU and the UK was known.
It remains to be seen whether this motion will have any impact in the UK Government decision on whether to ask for an extension by 1st July – the legal deadline established to do so. Boris Johnson has consistently stated that he will not in any case ask for an extension, leaving the door open for a no-deal scenario.
Won’t someone please think of the services sector
Think tank The UK in a Changing Europe has warned in a report published yesterday that the services sector is being ignored in the UK and EU negotiations with potentially dangerous consequences for the UK.
With services representing 80% of the UK economy and the EU being the primary export market for these, the sector would be greatly affected by a no-del scenario as World Trade Organisation rules for services are much less comprehensive than those for goods. If a deal is not agreed with the EU, the financial sector would largely depend on a EU decision on whether or not to maintain equivalence – by which the EU would recognise the UK has having a sufficiently similar level of regulations as its own.
Meanwhile, services also represent 30 million jobs for the UK labour market and any shortages in staff once free movement of people ends would have a big impact for the financial, health, education sectors, which largely depend on EU workers.
Even if a basic free trade agreement is reached – the UK Government preferred option all along – services would likely be greatly affected as they involve details and technicalities that are difficult to negotiate in a basic agreement.
And speaking of EU workers shortages…
The UK Prime Minister made a plea this week to EU workers who left the UK during lockdown to return. The Covid-19 pandemic has resulted in a number of these citizens moving back to their home countries, which is resulting in a shortage of staff in some sectors.
Notwithstanding the Immigration Bill promoted by Johnson that will make living and working conditions for EU nationals arriving in the UK after Brexit worse, and his comments during the election campaign criticising the numbers of EU nationals in the UK, the Prime Minister is now asking for these EU nationals to return and help the economy.
“But I thought that foreigners stealing British jobs was one of the reasons you wanted Brexit?” tweeted Guy Verhofstadt, echoing the sentiment of the 3 million EU citizens in the UK that have been made to feel unwanted by Mr Johnson for the past few years.
For some of these 3 million citizens it may feel nice to be appreciated again, but others might just prefer it if Johnson would stop switching the anti-immigration rhetoric on and off whenever it suits him.