1 Mar 2018

Theresa May gets eve of speech warnings from EU

The EU fired warning shots today that Theresa May must face up to the down-sides of her own red lines.

European Council President Donald Tusk, visiting Downing Street, delivered a snippy on camera soundbite saying that Mrs May has effectively abandoned “frictionless trade” with her red lines. Mrs May looked on, wondering how far the European Council President was going to go in what are normally bland words as the cameras film a handshake.

In Brussels, Michel Barnier’s curtain raiser for Mrs May’s speech tomorrow said something similar. Britain was “closing the door on itself” with its red lines and, for good measure, he underlined to a business audience that the transition, which the UK government dearly wants confirmed to reassure UK-based businesses, can never really be a certainty until a deal is fully agreed early next year.

Earlier, Mrs May held her second Cabinet of the week. Ministers had 30 minutes to read the speech she will deliver tomorrow outlining her approach to the Brexit negotiations Phase 2, the future relationship. The Prime Minister then led the discussion emphasising that this was a “serious” and “ambitious” opening bid. One Cabinet minister said there was a message to colleagues that the Government was entering these talks in the knowledge that it would get negotiated down on some areas, but you shouldn’t fold on issues before you start.

Mrs May’s speech is expected to repeat that Britain is not going to be in the Single Market or the Customs Union but will seek associate membership of some EU agencies for some sectors of the economy. Mrs May will promise that the UK will continue to follow the high regulatory standards it has adhered to as a member of the EU and insist that it is not engaged in some race to the bottom on regulations. She will call for a mechanism that allows the UK to diverge in some sectors in the future. Pro-Brexit ministers have acknowledged they don’t have the votes in Parliament to get such policies through in this administration but want the freedom to shed some Brussels rules in some areas in the future. Remain supporters in the Cabinet say they feel able to live with that on the grounds that they think it’ll never happen and there never will be a Commons majority for such exercises.

Mrs May will revive the Government suggestions for replacing the Customs Union membership with a “mirroring” or “streamlining” approach  which got fairly short shrift from Brussels when they were unveiled in the summer.

The usual hierarchy of ministers being called to speak was thrown by various ministers having to get away to longstanding engagements. There was some pushback on language in the speech which has prompted more exchanges between ministers through the day. The Brexiteers thought the alignment had firmed into something rigid and potentially even permanent.

It’s emerged that yesterday at the meeting of European Commissioners which Michel Barnier briefed on the draft Article 50 Treaty, the British European Commissioner, Sir Julian King, warned the EU it was in danger of imposing a “Carthaginian peace.” Sir Julian, a former UK Ambassador to Dublin, is thought to be nervous of the consequences if the EU appears to take sides over Northern Ireland.

There’s been concern amongst a number of pro-EU figures that Brussels’ impatience with the UK was in danger of feeding a brittle tone which would aid the cause of the Brexiteers who want a harder Brexit. You regularly hear EU sources exasperated at what they say is the Government’s refusal to a spell out the down sides of the Government’s own red lines. One source said there was now widespread exasperation in Brussels with the Government here. In December, we saw attempts by EU figures to throw Mrs May a lifeline after the DUP threatened to withdraw its backing for the Tories over the Article 50 agreement. One EU source said he hoped the speech tomorrow didn’t have more “La-la land” stuff in it. They are “fatigued by the Tory government soap opera,” one source said.

The Government here is hoping such feelings can be put to one side and the speech will be given a neutral welcome by the institutions and not dismissed. They hope some of the EU27 give it a much more interested hearing and end up enticed by some of the suggestions inside.

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