Briefing from EU27 sources 03Jul18

Sources within the Commission and various EU27 member states describe how the EU’s Brexit strategy has recently evolved. The EU27 now plans to allow the Commission to continue to push HMG for as many concessions as possible, with no intention of member states ‘stepping in’ to encourage a more conciliatory approach. In the meantime, the EU27 plans to prepare a series of measures that would mitigate the most perilous aspects of a ‘no deal’ scenario in the short term, or that could be enhanced to be used at the end of an extended transition period when there will be a similar failure to concede to a comprehensive free trade agreement with the UK. In other words, the EU27 is planning to punish the UK now or in the future, while increasingly limiting the damage that does to member states.

New concessions sought by the EU from HMG will include: extra territorial control over financial services institutions (that, if accepted by the UK, would be proposed to other jurisdictions, too); long-term HMG commitment to subsidising future MFFs via channels (especially R&D programmes) that are effectively beyond Parliamentary scrutiny in the UK; demands for recompense for alleged ‘state aid’ infractions by HMG; and extending the ‘implementation period’ to prolong HMG’s adherence to current and incoming law.

In the meantime, the Council and Commission is preparing compensation measures (which are expected to focus on fiscal issues) that can be offered to Ireland when the EU27 forces Dublin to apply a ‘hard border’ with Northern Ireland. Similarly, the Commission is creating various bodies (like the Agency of Space Programmes of the EU) that can steadily usurp institutions that maintain UK involvement after March 2019 – this is intended to allow the EU27 to allow and exploit UK involvement is specific fields only for as long as it takes to build up alternative arrangements that exclude the UK.

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