Brexit: Brussels in a holding pattern

The UK referendum result was a shock in Brussels. Setting aside a few populist politicians, far many more have been taken aback by the result.

It has become clear that triggering article 50 TEU could not happen immediately. There was a call from Donald Tusk and the 27 EU leaders for the UK to give effect “as soon as possible” to the will of the people. Yet, a deep understanding is setting in as to how the UK first needs time to work internally on its negotiation priorities. Furthermore, as the conclusions of the summit between the 27 leaders in September show, the referendum result has made many look home and question how the EU could be improved and made more relevant or acceptable to its citizens.

Ahead of the trigger

Prime Minister May has now said that the UK will trigger article 50 by March 2017. The view in Brussels is there is a need to move on, to create certainty, and this can only be done once negotiations start and there is a general understanding of what Brexit may mean. Further, the timing would make sense in that the UK would not then participate in the May 2019 European Parliament elections, as article 50 sets out an initial two year time limit for the exit deal.

Meanwhile, Brussels is in a holding pattern, waiting for the UK to set its negotiation agenda and preparing teams for the upcoming task. The EU institutions have adopted a common line whereby neither they nor the other EU member states are going to start negotiations before article 50 is triggered.

This does not mean however that there is radio silence. Quite the contrary, there is a lot of discussion about the possible new relationship between the EU and the UK. Germany has been encouraging the idea that there will be a bespoke relationship, or special arrangement, between the EU and the UK, and think tanks, consultancies and academics, as well as the European Parliament, are busy exploring what this could mean. The current thinking is that the UK and EU will still share common markets and that they may even have special institutional arrangements, which ensure that the UK can be included in the EU structures where EU decision-making would have a direct impact on the UK.

Connected to this is of course the question of free movement of EU citizens. Most member states have emphasised that any deal with the UK must include free movement. Interestingly, however, Jean-Claude Juncker, in his State of the Union speech in mid-September, emphasised more simply free movement of workers. What could be interpreted from this is that there may be some room to negotiate on the rights of EU citizens where they are not contributing to the economy, and less so where they work and pay their taxes in their state of residence.

Strategy from the EU side

In addition to contemplating the nature of the new relationship, the EU institutions have started to prepare for the upcoming negotiations by putting their negotiation task forces in place.

The Commission task force is headed by Michel Barnier who, despite being vilified by the tabloids in the UK, is seen here as a good choice because he has a good understanding of UK issues. He was the Commissioner in charge of the financial services portfolio after the 2008 market crash and in that role he conducted a lot of negotiations with the UK, as well as UK stakeholders. He is assisted by German Sabine Weyand, who was previously a Deputy Director-General at the Commission DG Trade.

The Council has appointed Didier Seeuws, a Belgian diplomat who used to work as a chief of staff for Herman van Rompuy, the previous President of the European Council. He is also praised here for his political savvy and technical expertise.

The European Parliament has appointed Guy Verhofstadt, former Prime Minister of Belgium and one of the Europe’s most prominent federalists, as its lead negotiator. While he can hold politically controversial views, he is also a veteran EU politician.

It is too early to tell which institution will have the most influence over the negotiations. If the usual pattern is followed, the Commission and Council will take leading roles in the actual negotiations. They will co-ordinate their positions, the Commission working with the UK representatives, under the guidance of the Council. The Council and Parliament will need to accept the new EU-UK agreement, therefore the Parliament will want to join the Council and Commission in the co-ordination. The Parliament will also conduct open discussions as to the shape of the agreement – something that is very useful for an organisation like ours.

In summary, Brussels is preparing for years of negotiations and it looks like there is some political will to forge a new relationship. What the post-referendum relationship will be like is very much up in the air at the moment, but all kinds of permutations and possibilities are being explored.