EU Referendum


Brexit: assuming the position


30/05/2017




Following on from the massive exercise in self-delusion in Conservative Home, Roger Bootle has been prattling in the Telegraph about the Conservative's "no deal" strategy.

This particular idiot believes that, if UK walks away from the Article 50 negotiations, "the result might be that they [the EU] would come back with an attractive set of proposals". But, in the event that they might not, however, Bootle argues that "going it alone" must be "a reasonable prospect".

The essence of his pitch, therefore, is that the EU would react with horror if the UK walked and immediately come back with an "attractive set of proposals". But in the unlikely event that it did not, he – the great Roger Bootle – has a master plan that will make things alright.

We need not detain ourselves further with his madness, other than remark that this is another fool obsessed with tariffs, a man who does not even begin to understand the impact of non-tariff barriers if we leave without a deal.

However, we need to note that Mrs May yesterday won applause from the audience watching the televised "proximity debate" when she said Britain would "have to" walk away from the EU without a Brexit deal if a bad deal was all that was on the table. Stupidity is not confined to the chattering classes.

Meanwhile, the grown-ups in the European Commission have been at work doing what Mrs May should have done for the UK when she invoked Article 50 – setting out the detail of their negotiating position.

They have given us two separate documents to look at, one on Citizens' Rights and the other on the financial settlement. These cover two of the three key issues in the first phase of the negotiations, with the position on the Irish border yet to come.

The basis of the Citizen's Rights position is relatively straightforward as it seeks to safeguard the rights of citizens of the EU-27 Member States who are or have been resident in the UK at the date of withdrawal, giving them the same level of protection as set out in Union law, including the right to acquire permanent residence after a continuous period of five years of legal residence.

To balance the equation, the Commission is also proposing that UK citizens resident in the EU-27 should be given the same rights in the EU Member States in which they are resident, which ostensibly settles the concerns of all those who are living abroad.

However, not only is the Commission asking for the full range of rights to be upheld, it also wants them to be treated as directly enforceable vested rights. Its proposal says, "should have full powers for the monitoring and the Court of Justice of the European Union should have full jurisdiction corresponding to the duration of the protection of citizen's rights in the Withdrawal agreement".

It goes on to say: "Citizens should thus be able to enforce their rights granted by the Withdrawal Agreement in accordance with the same ordinary rules as set out in the Union Treaties on cooperation between national courts and the Court of Justice".

Potentially, this creates a huge political problem for a May government which has committed to removing ECJ influence from the UK courts. If allowed to stand, this creates a highly visible conflict which is going to be difficult to resolve.

Furthermore, Mrs May isn't going to find the second proposal any easier to deal with. It sets out in excruciating detail the charges that the Commission considers come within the "single financial settlement".

The settlement, the Commission says, shall relate to the Union budget, the termination of the membership of the United Kingdom of all bodies or institutions established by the Treaties, and the participation of the United Kingdom in specific funds and facilities related to the Union policies.

Nine pages of detail set it all out, with the "Union obligations" spanning five categories. The first is the Reste à Liquider ("RAL") from the successive Multi-annual Financial Frameworks during which the United Kingdom was a member of the Union, and the second is the financial programming for the period between the date of withdrawal of the United Kingdom and the end of the 2014-2020 MFF period.

Category three takes in the liabilities as recorded in "the consolidated accounts of the Union which are not balanced by corresponding assets", i.e.: pensions and other employee benefits, and a long list of "provisions" which include things such as the European Fund for Strategic Investments, EGNOS and the Galileo European satellite navigation systems, and ITER (the International Thermonuclear Experimental Reactor).

This category also includes "financial liabilities not related to borrowings" and then "payables and accrued charges other than RAL", terms which are going to give endless enjoyment to those charged with deciphering them.

And then, just to round off the entertainment, there are the final two categories, "the contingent liabilities disclosed in the consolidated annual accounts" and "the specific costs related to the withdrawal process".

The latter category will strike some as not unlike the Chinese government practice of billing relatives of the people it executes for the cost of the bullets used. But the Commission obviously sees it differently. It did not ask the UK to leave and is intent that it should pay the costs incurred in the process.

The one thing, of course, that the proposal doesn't do is set an amount. "This single financial settlement", it says, "should be based on the principle that the United Kingdom must honour its share of the financing of all the obligations undertaken while it was a member of the Union".

Thus, it says: "the United Kingdom obligations should be fixed as a percentage of the EU obligations calculated at the date of withdrawal in accordance with a methodology to be agreed in the first phase of the negotiations".

But what matters is that final figure, and that we will not know until the negotiations have been concluded. What we can conclude is that, whatever the sum, the EU is not going out of its way to make it easy.

Then, all of this was so predictable. From the £350 million a week "savings", the Vote Leave cretins claimed was our leaving bonus, we're actually looking at the wrong side of billions before we're finally clear of the EU.

Yet, for all that, only if we follow the path set by Bootle and his "no deal" zealots will we be really screwed. We have to look at the financial settlement as payment for the mistake of joining. Getting out will be cheap at the price.

The ultimate irony, though, is that whatever the sum is finally agreed, it will have to be paid in euros. And I don't suppose they'll take cheques.