Tick Tock

12 October 2017

Cogito Ergo Non Serviam

UK, EU in Brexit Bill Deadlock

The clock is ticking on the negotiations needed to successfully extricate the UK from the European Union. Article 50, which provides for such a departure, gives the two sides 2 years to settle up, and that means less than 18 months remain since Britain gave notice at the end of March. As of today, there is a deadlock on the payments the UK will have to make, the so-called Brexit bill. The EU Summit next week is critical. If there is not enough progress on the Brexit bill, the summit will be unable to tell the EU negotiator to move ahead with the rest of the talks. Britain needs to settle quickly or risk a no-deal exit.

The BBC stated, "The so-called divorce bill covers things like the pensions of former EU staff in the UK, the cost of relocating EU agencies based in the UK and outstanding commitments to EU programmes. The UK has said it will meet its legal requirements and there has been speculation the bill could be anywhere between £50bn and £100bn, spread over a number of years."

The EU's top negotiator, Michel Barnier, stated that there was some new momentum in the fifth round of discussions he is holding with the UK negotiator David Davis. In almost the same breath, he said the two sides were deadlocked over the bill, which he found "disturbing." He stated, "I am not able in the current circumstances to propose next week to the European Council that we should start discussions on the future relationship." The problem, Mr. Barnier maintained, is that the UK is unready to say what it will pay for, so there were no detailed discussions this week on the bill.

If the October summit doesn't give the go-ahead to discussions on the other issues arising, the negotiations are probably going nowhere for a while. Laura Kuenssberg of the Beeb reported, "although it has been slow, there has been some progress in the talks but officials in some areas have reached the end of the line until their political masters give them permission to move on." That being the case, the next opportunity for such permission would be in December when the European Council has another summit.

The financial issue is, perhaps, the strongest card the British have to play. The longer they can hold out on a financial commitment, the greater their leverage will be. They can always throw more money into the pot to get whatever they think they want. It is for that reason that the EU wants the matter settled first.

However, the EU has a better hand to play. The simple fact is that, although no deal at all would be bad for Europe, it would be disastrous for Britain. As a result, the EU really doesn't have to do very much, and the odds are Britain will cave.

Time is also running short. While March 2019 is the Brexit date, any deal will have to be ratified by all 28 nations involved -- the UK and the rest of the EU. Each member state will have its own constitutional arrangements, and this can take some time. Experts in such arcana believe that any deal would have to be signed by December 2018 to allow for proper ratification.

Simply put, time is not on the side of the British government. Theresa May as offered a two-year transition period following Brexit, but that doesn't get to the heart of the matter. Britain is a net contributor of about £10 billion a year. If the Brexit bill is £100 billion (the top of the range given), it's only a decade of contributions. Ms. May needs to negotiate a figure quickly, point out that after a certain date Britain comes out ahead, and get the rest of the negotiations started. There is still the border in Ireland, the rights of EU citizens in the UK and vice versa, and trade and tariffs to discuss. Those will make the Brexit bill look easy.

© Copyright 2017 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Ubuntu Linux.

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