EU-UK: How to Break the Brexit Deadlock

Europe’s main conundrum in 2019 is this: Most politicians and people in the UK do not wish a “no deal” exit from the EU but are stunningly unable amongst themselves to come up with the terms of an agreement.

The EU, meanwhile, sits around coyly, arguing it can only respond to specific UK proposals that command support of a parliamentary majority in the House of Commons.

However, when analyzing the balance of power between the negotiators, it is clear that the EU holds most of the cards. Given that a “no deal” exit would be harmful to the EU as well, it is incumbent on the EU authorities to lay out a workable plan to come to a resolution.

The EU really has little to lose by showing such openness and willingness to go the extra mile. This is evident if one looks at the important contributions the UK has made – and would continue to make — to the EU in a number of highly relevant fields.

This includes the UK’s military capacity and excellence in intelligence gathering which has given the EU geopolitical credibility. Similarly, the UK’s extensive diplomatic network, its seat on the UN Security Council and general geostrategic savvy accumulated in centuries of global management.

If it is in the objective interests of the EU 27 to go the extra mile in order to conclude an agreement and for its leaders not to wait for the UK side, but to take the initiative, it would be false to conclude that the EU is giving away the store. It controls what it wants to offer.

Norway plus

From a pragmatic point of view, I would suggest offering a deal inspired by the Norwegian model, with a series of specific adaptations:

1. Within its participation in a “customs union,” the UK would be offered participation in trade negotiations with third party countries or organizations.

The UK, in view of its special weight, would also be invited to attend those meetings of the European Council where the negotiating mandate (or its modifications), conferred on the Commission, is debated.

It would retain the same voting power that it currently enjoys. It would not have a veto power (which would give it more rights than those of Members) but would retain a real influence in the debate.

2. Services, and in particular financial services, would be included in the Customs Union treaty, restoring passporting privileges to the UK.

3. An agreement concerning the supervision of City firms whose activities are deemed systemic for the Eurozone would give EMU authorities the necessary rights to exercise their “sovereignty” (clearing…).

4. The UK would be granted the right to participate in the activities of all relevant EU Agencies assuming both rights and obligations – but would not be entitled to house their operations. Participation in EU programs for research education etc. would also be allowed.

5. The UK should be integrated as appropriate, into present and future regulations governing the protection of the external borders of the Union so as to avoid restoring a hard border between the two Irelands.

As in the Norwegian model, the UK would make an appropriate contribution to the EU budget.

In exchange for these concessions, current arrangements in terms of cooperation in matters of defense, foreign affairs and the judiciary would be maintained or reinforced.

An achievable deal

Concluding before the end of the transition period an agreement based on the “off the shelf” Norwegian format is probably achievable, while negotiating an ad hoc Free Trade Agreement would appear out of reach.

Furthermore, it might prove appropriate in an ulterior stage to negotiate a full-fledged treaty with the UK.

One of its aims might be to suggest that France and the UK share one of their two seats on the Security Council, attributing the second to the EU under the responsibility of the Council and the High Representative for Foreign Affairs.

This seemingly outlandish proposal makes eminent sense because, having left the EU, the UK will come under intense pressure to abandon its privileged status and this will undoubtedly have a knock-on effect on France’s position.

Conclusion

If the current stalemate persists, a “no deal” Brexit will become the default outcome and will bring serious hardship to both parties.

It is therefore incumbent on the EU authorities to take the necessary steps and make proposals that can get both the EU and the UK out of the rut towards which they are heading together.

Editor’s Note: The full text by Paul Goldschmidt is available on his website.