Brexit News, Member News

Vulcan Insight | Final Brexit negotiations set to go into the weekend

Expectations that a Brexit deal would be done by the end of the working week have been dashed after it was reported that the French and British clashed on key elements of the agreement, pushing negotiations into the weekend.

The latest optimism for a deal to be struck by today likely originated with Irish Foreign Minister Simon Coveney commenting on Thursday that “there is a good chance that we can get a deal across the line in the next few days”.

While Mr. Coveney’s optimism is shared by some, his comments unfortunately appear to clash with EU chief negotiator Michel Barnier telling EU ambassadors and the European Parliament on Thursday that it is still too close to tell whether an agreement can be reached in the coming days. This was proved correct last night as the French and British fell out over issues of state aid and the level playing field.

With only 27 days until the UK is set to leave the EU, Member States, specifically France, Belgium and the Netherlands, are said to also be increasingly concerned that Mr. Barnier may agree to make compromises which would go further than his relatively strictly defined negotiating mandate in order to facilitate reaching a last-minute deal. This is particularly true on the fishing issue, where countries are looking for long-term stability and security for their fishing communities.

With time running out on reaching a deal which can still be ratified by years’ end, EU Member States and the Commission are set to significantly step up their no-deal preparations in order to minimise the negative impacts on EU businesses and citizens. While the Commission has already put in place a number of unilateral measures to extend time-limited equivalence decisions to the UK financial sector on share trading, securities settlements and clearing houses, further measures are expected in the coming days on facilitating the continuation of essential services in aviation, rail transport and road haulage.

Meanwhile, eyes across the EU will be on Westminster next week, with the Government set to introduce its long-awaited Taxation (post-transition) Bill and the controversial Internal Markets Bill scheduled to return to the House of Commons for its second reading. Upon its introduction in September, the Internal Market Bill came to immediate notoriety, as a number of its clauses seemed to actively overwrite the international commitments the UK had signed up to in the EU-UK Withdrawal Agreement.

While the House of Lords, in its reading of the Bill, removed the clauses which Northern Ireland Secretary Brandon Lewis admitted would break international law, the leader of the House of Commons Jacob Rees-Mogg confirmed on Thursday that the Government intended to re-insert the clauses once the bill returned to the Commons. While the Government hasn’t yet published the text of its Taxation Bill, it is widely expected to include similar clauses.

Although the parties appear to be getting close to announcing an agreement, the Commission and EU diplomats are said have forcefully made clear to their UK counterparts that any plans to overwrite or circumvent the commitments of the Withdrawal Agreement would mean an immediate collapse of the talks.

At this point, the only way for Michel Barnier and David Frost to avoid that scenario is to finalise the deal in the coming days.

Compliments of Vulcan Consulting – a member of the EACCNY.