2 Mar 2018

Lipstick on the cake?

The EU wanted to hear Theresa May utter some hard truths about the costs of Brexit and in her speech at Mansion House she tried to oblige. She acknowledged that the EU had a duty to protect its institutions and rules and that access to some markets would get worse after Brexit.

But she stuck with the fundamentals of what many in EU deride as the “cake and eat it” UK government approach. She wants the EU to grant favourable terms of market access to UK economy sectors even though the UK will be regulating them from home and not through the EU’s regulatory institutions and court.

She acknowledged that many EU27 countries want to see the UK adhering to EU standards and not driving down regulatory standards to make a fast buck. She promised the EU the UK didn’t want to do that but did want to regulate itself in most sectors now. The EU should trust us to honour those commitments through our own institutions. It is hard to convey just how hard a pill that is for the EU to swallow.

Perhaps what conveys it best is the curt response in a tweet from Michel Barnier, the EU Chief Negotiator. He ignored Theresa May’s hard work on a new hybrid, middle way approach that tries to soften a hard Brexit.

All that stuff about mutual recognition of standards and Britain’s commitment to staying on the same page might as well, as far as he was concerned, not have been written. He tweeted that he welcomed Theresa May’s clarity about leaving the Single Market and the Customs Union and that would inform the EU’s guidelines.

Talking to some EU sources, you sense that they think Mrs May has gone through the motions of acknowledging the downsides of her red lines and then repeated her previous attempt to have cake and eat it anyway. The main change here, some in Brussels suggest, was tone and presentation. She is putting lipstick on the cake, so to speak.

But Mrs May is hoping that the EU27 desire to keep Britain in check, make sure it doesn’t sail off into the Atlantic with a low tax/low regulation economy, could help swing things her way. The EU was, she said, in danger of demanding the UK have Norway style conformity with Canada style access to markets.

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