European Commission recommends draft negotiating directives for next phase of the Article 50 negotiations
On 20 December the European Commission sent a recommendation to the Council (Art 50 format) on the next phase of the orderly withdrawal of the United Kingdom and published draft negotiating directives which set out additional details on possible transitional arrangements. EU Chief Negotiator Michel Barnier outlined five principles for the transition period:
- integrity of the single market (the freedom of movement of goods, capital, services and people will all continue to apply);
- integrity of the customs union (the external customs tariff will continue to apply);
- the Union legislation should continue to apply in full to and in the United Kingdom, any changes during this time should automatically apply to the United Kingdom, all existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures will apply, including the competence of the Court of Justice of the European Union;
- the United Kingdom will be a third country as of 30 March 2019 and as a result, it will no longer be represented in Union institutions, agencies, bodies and offices;
- the transition period needs to be clearly defined and precisely limited in time. The Commission recommends that it should not last beyond 31 December 2020.
The full text of the recommendation and the draft guidelines are available here.
Mr Barnier also made clear that the transition would only be given legal effect by the Withdrawal Treaty, the text of which would need to be finalised following the political agreement between the EU27 and the UK on the initial three priority areas of citizens' rights, the financial settlement and the Irish border. That Treaty would need to be ready by October 2018 for ratification by the European and UK parliaments. It would need to be accompanied by a political declaration on the framework for the future relationship between the EU and the UK, covering areas including trade, aviation, justice, defence, security and foreign policy. The European Council in March is expected to adopt guidelines on that framework, though informal discussions with the UK may begin before that. Following the political declaration, negotiations to reach a formal agreement on the future relationship would then need to continue during the transition period.
Mr Barnier concluded by reiterating that, as far as trade is concerned, every agreement with a third country is different, so a free trade agreement with the UK would not be an exact replica of any other. But it would be the same type of agreement, with the same clear parameters, given that the UK itself had set certain "red lines": it wanted to be outside the single market – and therefore the four freedoms – as well as outside the customs union and the jurisdiction of the European Court of Justice.
Mr Barnier's press conference can be viewed here
Inside the Brexit negotiations
Earlier, on Monday 18 December, Stefaan de Rynck, a member of the European Commission Article 50 negotiating team and special adviser to Mr Barnier, spoke at Chatham House and gave a broad outline of the next steps in the negotiations before taking part in a conversation with Chatham House Director Robin Niblett and a question and answer session with the full house audience. Mr De Rynck, as Mr Barnier has done on several occasions, underlined that there cannot be a sector by sector participation in the single market. He also explained that while the Commission had the necessary flexibility to conduct the negotiations, it was doing so based on a clear and specific mandate from the EU27, who were "involved every week, every day" in the process. Mr de Rynck explained that the Chief Negotiator and his team were also taking care to report regularly to the European Parliament, which would need to ratify the final deal.
The full podcast of the event is available here.
Less populist, more popular
EU Commissioner for Economic and Financial Affairs, Taxation and Customs, Pierre Moscovici, outlined his vision for the EU in 2018 and beyond at the London School of Economics. He focused on three priorities to help the EU to further push back populism, stabilise the economic recovery and reduce inequality: first, the successful conclusion of the Greek stability programme, second, strengthening the Economic and Monetary Union (EMU) and third, fighting tax fraud and evasion. Commissioner Moscovici said that the Greek programme could successfully conclude in the summer of 2018. The next question would then be how to support a growth strategy led by the country itself. He then spoke about the recent ideas by the European Commission on how to strengthen the governance of the EMU, including a European Monetary fund and a European Economic and Finance Minister. The Commissioner summarised recent action at EU level to combat tax fraud and tax evasion, including the latest EU list of non-cooperative tax jurisdictions. Commissioner Moscovici argued that for Europe to properly address the challenges posed by aggressive tax planning, the member states need to look into common rules for a common corporate tax base.
A podcast of this event will be available at the LSE website.
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