Whatever the cost, Boris Johnson wants his country to no longer be part of the EU internal market and customs union by January 1, 2021. The EU and Great Britain must agree on an agreement by October 31, otherwise there will be a hard Brexit. Is that still feasible? And does Johnson want that at all?
Since then at the latest, Commission Director Ursula von der Leyen after a video conference with Boris Johnson officially notedThat the UK government will not ask for the Brexit transition to be extended beyond December 31 is clear that time is running out to avoid a hard Brexit.
An agreement must be in place by October 31, otherwise the UK will leave the EU internal market and customs union unregulated and become a third country. The rest of the time is needed to ratify a treaty in the 27 EU countries, the EU Parliament and the UK. But how is that supposed to work? Negotiations have so far brought little, and doubts are growing in the EU and the UK as to whether Johnson wants to prevent a hard Brexit at all.
No tangible progress so far
In order to at least reach a rough agreement, the next few weeks are crucial if the talks continue. David McAllister (CDU), head of the EU Committee on Foreign Affairs, mentions four sticking points: fair competitive conditions, fishing rights, police and judicial cooperation and how the cooperation should be managed in the future. His impression was that the negotiations were going on in a “constructive atmosphere, with goodwill, also with mutual respect,” he said yesterday in German Podcast of the EU-Parliaments. “But the four rounds of negotiations so far have not led to any tangible progress.”
Of the four sticking points mentioned, two are particularly explosive: fair competition and fishing rights in British waters. The latter is primarily about symbol politics. According to BBC fishing only accounts for 0.12 percent of UK economic output, and around 24,000 jobs depend on it. But for the former naval power, sovereignty over the waters around its islands is representative of the propagated regaining of control and independence from mainland Europe. While fishing has some symbolic meaning in some EU countries, the Community could be relatively easy to accommodate the British here.
It’s all about fair competition
In that case, however, she would give up an important bargaining chip in the discussion about fair competitive conditions, which is ultimately the priority in the negotiations. “We are offering the UK access to the internal market. No tariffs and no quotas for UK goods,” said David McAllister. “But the condition for this is that we agree on high standards that apply now.” It is about consumer protection, employee rights, environmental protection, state aid or tax policy.
In a common political statement the British had actually promised this last October. “Given the geographic proximity between the Union and the United Kingdom and their mutual economic dependency, open and fair competition must be ensured in future relations and these relations must include solid commitments to ensure a level playing field,” it said, inter alia. And: “To this end, the parties should respect the common high standards in the areas of state aid, competition, social and employment standards, the environment, climate change and relevant tax issues applicable in the Union and the United Kingdom at the end of the transition period.
Tax dumping tempting for London
In January 2017, the then Prime Minister Theresa May threatened the EU with tax dumping.
(Photo: REUTERS)
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But the Johnson government may not stick to the promises made, which are not legally binding. It is certainly not just about fishing in British waters. At 10 Downing Street probably still haunts Theresa Mays Rede vom 17. Januar 2017 through the heads. No deal is better for Britain than a bad deal, she said. Because then you would have the “freedom to set competitive tax rates and use political instruments that would attract the best companies and largest investors in the world to Great Britain. And – if we were denied access to the internal market – we would have the freedom, the basis of our economic model to change.”
The corona crisis probably makes the idea of tax dumping even more palatable for the Brexiteers. The “TAZ“hits the nail on the head when she writes that Britain has to compensate for the fact that it lives above its means. The country imports goods worth 501 billion in 2019, but only exported goods for 372 billion. The financial market has so far largely been able to absorb this, but with the Brexit, London will no longer be as attractive for international banks – in one published today Survey commissioned by the BDI stated about half of the companies surveyed that they expected Brexit to move to Germany.
Corona crisis an opportunity for Johnson?
Of the “Guardian“has found another motive why Boris Johnson could deliberately put negotiations with the EU on the wall. The corona crisis could serve the government to cover up the economic consequences of a hard Brexit because of the consequences of the pandemic for the British social product are a tremendous opportunity, because normally one could not sweep the Brexit costs under the table. “Forbes“has calculated that the UK will already pay for the consequences of leaving the EU by the end of the year, as much as it has contributed to the EU budget since 1973: over £ 200 billion.
And finally, the United States is putting Johnson under a lot of pressure. The trade agreement so much hoped for by London has still not come about, and an agreement with the EU would make it practically impossible to reach a deal with Washington. Because the Trump administration in turn wants to dictate the conditions. Among other things, this means no restrictions by any standards
So there are reasons enough to no longer believe that the negotiations are successful. In the BDI survey, around 30 percent of companies expected a hard Brexit. However, the survey was already carried out on May 30, around two weeks before the British finally refused to extend the transition phase. More than half of the companies hoped there would be a delay. British companies are also preparing “Bloomberg“according to a horrified end.
There is still hope
Michel Barnier is ready to compromise as long as the European single market is not called into question.
(Photo: REUTERS)
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But the last word has not yet been spoken. The Johnson government may actually want a no-deal Brexit on bends. Maybe he’s just playing poker and really wants to give the negotiations a new impetus, as he said after the conference with von der Leyen.
And something is actually happening – especially on the part of the EU: chief negotiator Michel Barnier said “Financial Times“On Wednesday signaled a cautious courtesy. The EU was ready to work with Britain to develop a” credible and operational “framework for fair competition.
He also said that he was ready to compromise on fishing, cooperation management and some other controversial issues as long as they were covered by the EU mandate. But Barnier also drew a clear red line: the European single market is not up for debate.
Johnson could also accommodate the EU. British officials have said the Prime Minister is considering a compromise that would give Britain the right to deviate from common standards in state aid, the Financial Times reports. In return, he would accept that Brussels levies tariffs to compensate.
The EU would view such a compromise as a constant source of friction with the UK, the Financial Times writes. However, the proposal reflects London’s new flexibility. Michel Barnier is also cautiously optimistic that an agreement is still possible until the end of October. He would be looking for signs of real movement next week. It is important that both sides are willing to compromise. It won’t be that easy.
Johnson and Merkel threaten
Johnson assured Polish Prime Minister Mateusz Morawiecki on Saturday that he would be “constructive” in the talks on Monday. At the same time, he repeated loudly “Independent“But the threat that Britain is also ready to leave the transition phase under Australian conditions. Australia currently has no free trade agreement with the EU, but its government started negotiations in 2018.
Angela Merkel had alreadyGuardian“Said Britain would have to live with the consequences in this case.” We have to say goodbye to the idea that we have to define what Britain wants, “said the Chancellor. It is up to the British,” and the EU27 will respond accordingly. “
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