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Brexit: avoiding a meltdown

The UK will reportedly be offered a goodwill gesture at a crucial summit in Brussels this week as EU nations seek to break the deadlock over Brexit.

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Brexit: avoiding a meltdown

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The UK will reportedly be offered a goodwill gesture at a crucial summit in Brussels this week as EU nations seek to break the deadlock over Brexit.

However, diplomats say there will be no watering­ down of their demand for tens of billions of euros they say the UK owes.

Ambassadors broadly agreed the plan on Friday, despite scepticism, including from powerhouse Germany. They requested some harder language to ram home that any
offer is conditional on Britain making progress toward agreeing Brussels’ terms.

One diplomat called the draft a “search and rescue mission” to help the British premier out of a jam. Another said it was a bid to break a “stalemate” and avert “disaster” over the winter.

“Some states were not very happy about this but what else can we do? We are trying to reach out.” the diplomat said. “They must come up with something on the money.”

The details

Diplomats say Germany and France coordinated on Friday to limit any watering-down of the EU position so that its negotiator, Michel Barnier, cannot so much as mention to his British counterparts what might come after Brexit until leaders deem there has been “sufficient progress” on three issues the EU says must be settled before the UK leaves.

These are the rights of EU citizens in Britain, Northern Ireland’s new border and the intractable “Brexit bill”.

EU Council chief Donald Tusk offered a draft text which says there is not enough progress but which welcomes the advances there have been and flags up a hope that the next summit in December could open trade talks. He met German Chancellor Angela Merkel and French President Emmanuel Macron last week and spoke to almost all other EU leaders, including Theresa May.

The draft proposes that Barnier start working out internally ­without negotiating with London ­ what will happen after Brexit. Barnier himself has sought flexibility to break the deadlock, diplomats say.

“If this is the concession May needs to be able to make a move on financial settlement, let’s try it,” said a diplomat from one of the UK’s close trading partners.

“She is so weak at the moment she can do nothing. And we need the money.”

Tension building

As the process approaches the half­way stage between last June’s referendum vote for Brexit and Britain’s departure on March 30, 2019, tensions are building not just between the two negotiating sides but also within the bloc of 27.

While hardliners would prefer less, or no, talk of a future after Brexit and more about demanding money, others are keen to give May, beleaguered at home, something to show for the effort to compromise she displayed in a speech in Florence last month.

What has Theresa May said?

The UK Prime Minister has also indicated she might make a move at this week’s summit. A spokesman says “there will be more to say there” on a promise May made last month to honour financial commitments when Britain leaves.

The EU are ‘the enemy’ – UK finance minister

Underscoring tensions, British finance minister Philip Hammond referred to the EU as “the enemy” at one point, but then apologised.

His remark came as he defended himself against accusations from hardline Brexit supporters who say he is “soft” on
Brussels.

What do businesses think?

They are calling for a clear idea by the New Year of how the split and subsequent years of transition to a new trade relationship will function.

Otherwise, some firms say, they may assume a disruptive “hard Brexit” and move some operations to continental Europe.

Why are they saying this?

To end an apparent stalemate in talks on Britain’s leaving the EU. Summit chair Donald Tusk proposes to tell May the EU will start internal work on a post­Brexit transition plan.

Avoiding a melt-down

Despite protestations of unity, some diplomats detect nuance in approaches to the prospect of talks collapsing.

Those countries with most to lose from trade barriers with the UK going up are the most keen to avoid a meltdown.

This means its near­ neighbours like the Nordic states, the Netherlands and Ireland.

What they are saying

“This is a very big gesture towards Britain, maybe way too big,” ­ a senior EU diplomat said ahead of an evening meeting of envoys from the 27 remaining states to discuss summit chair Donald Tusk’s draft for a statement to be made after leaders meet in a week’s time.

“Time is running out” – German Chancellor Angela Merkel’s spokesman warned after a week of stalemate in negotiations and faction-fighting within May’s government that have raised concerns that talks could collapse and leave Britain bumping out into legal limbo in March 2019.

“They have to pay. They have to pay.” – EU chief executive Jean-Claude Juncker.