Brexit without reaching deal is not our scenario

The EU realised that it had to stand up for itself as nobody would do for us what we don't do for ourselves

Photo: Photo: EPA A bus adorned in Union Flag colours passes pro-EU protesters waving European Union flags outside parliament in London.

Brexit could prove to be a turning point in the European project. For future historians, the year 2016 – with the UK referendum, the change of power in Washington, geopolitical tensions, terrorist attacks, and the rise of populist parties – will perhaps be seen as a time of awakening. 2016 could become the moment when the EU realised that it had to stand up for itself. And that nobody would do for us what we don't do.

Brexit could prove to be a turning point in the European project. For future historians, the year 2016 – with the UK referendum, the change of power in Washington, geopolitical tensions, terrorist attacks, and the rise of populist parties – will perhaps be seen as a time of awakening. 2016 could become the moment when the EU realised that it had to stand up for itself. And that nobody would do for us what we don't do for ourselves.
We need to continue speaking with one voice in the world. And we also need to act together to build a stronger Europe. The Eurozone needs a more complete Banking Union and a fiscal capacity with a finance minister. The EU needs a more integrated Capital Markets Union. Such increased risk sharing needs common rules and common enforcement.
The EU needs a stronger capacity to prevent and tackle internal and external threats – with stronger cooperation in fighting terrorism, but also with respect for fundamental rights. The EU needs a truly common foreign policy and European defence. The EU needs to lead on global challenges, from climate change to openness in trade based on its social market economy. And it needs to continue leading in global financial regulation, to make finance work for the real economy.
This stronger European Union will want to have a close relationship with the UK. We have a shared history – it started long before the last 44 years. That is why the “no deal” is not our scenario. Even though we will be ready for it. I regret that this no deal option comes up so often in the UK public debate. Only those who ignore, or want to ignore, the current benefits of EU membership can say that no deal would be a positive result.
There are three keys to building a strong partnership with the UK. First, we need to agree on the terms for the UK's orderly withdrawal. The 27 Member States and the European Parliament have been always very clear on what this means. And we have been consistent on citizens' rights; on settling the accounts accurately; we owe this to taxpayers as well as to all those benefiting from EU-funded projects, in the UK and the EU; and on Ireland.
We need to preserve stability and dialogue on the island of Ireland. We need to avoid a hard border. I know that this point is politically sensitive in the UK. It is not less sensitive in Ireland. Some in the UK say that specific rules for Northern Ireland would “endanger the integrity of the UK single market”. But Northern Ireland already has specific rules in many areas that are different to the rest of the UK. Think of the “all-Island” electricity market, or of the specific regulations for plant health for the whole island of Ireland.
The UK and the EU have recognised that Ireland poses specific challenges. And that the unique circumstances there require a specific solution. On the EU side, we must preserve the integrity of the Single Market and the Customs Union at 27. The rules for this are clear. The UK said it would continue to apply some EU rules on its territory. But not all rules. What is therefore unclear is what rules will apply in Northern Ireland after Brexit. And what the UK is willing to commit to, in order to avoid a hard border.
The second key is the integrity of the Single Market. Public debate on what leaving the EU means needs to be intensified. Everywhere. Not only in the UK. There are two contradicting sound bites from ardent advocates of Brexit. The UK will finally “set itself free” from EU regulations and bureaucracy, some claim. Others claim that – after Brexit – it will still be possible to participate in parts of the Single Market. Simply because we have been together for more than four decades, with the same rules, and we can continue to trust each other.
None of these views seems to offer a sound basis for going forward. The same people who argue for setting the UK free also argue that the UK should remain in some EU agencies. But freedom implies responsibility for building new UK administrative capacity. On our side, the 27 will continue to deepen the work of those agencies, together. They will share the costs for running those agencies. Our businesses will benefit from their expertise. All of their work is firmly based on the EU Treaties which the UK decided to leave. 
Those who claim that the UK should “cherry-pick” parts of the Single Market must stop this contradiction. The Single Market is a package, with four indivisible freedoms, common rules, institutions and enforcement structures. The UK knows these rules like the back of its hand. It has contributed to defining them over the last 44 years. With a certain degree of influence…
On financial services, UK voices suggest that Brexit does not mean Brexit – Brexit means Brexit, everywhere. They say there would be no changes in market access for UK-established firms. They say joint UK-EU Rules would be decided in a new “symmetrical process” between the EU and the UK, and outside of the jurisdiction of the European Court of Justice. 
The legal consequence of Brexit is that UK financial service providers lose their EU passport. This passport allows them to offer their services to a market of 500 million consumers and 22 million businesses. But the EU will have the possibility to judge some UK rules as equivalent, based on a proportional and risk-based approach. And in those areas where EU legislation foresees equivalence. Once again, the integrity of the Single Market is not negotiable.
The UK will, of course, have access to the Single Market. But this is different from being part of the Single Market. And a good deal on our future relationship should facilitate this access as much as possible. To achieve this, there is a third key: we need to ensure a level playing field between us. This will not be easy. For the first time ever in trade talks, the challenge will be to limit divergence of rules rather than maximise convergence.
The UK has chosen to leave the EU. Does it want to stay close to the European model or does it want to gradually move away from it? The UK's reply to this question will be important and even decisive because it will shape the discussion on our future partnership and shape also the conditions for ratification of that partnership in many national parliaments and obviously in the European Parliament. I do not say this to create problems but to avoid problems.
If we manage to negotiate an orderly withdrawal, fully respect the integrity of the Single Market, and establish a level playing field, there is every reason for our future partnership to be ambitious. This is our preferred option. This is why we have started internal preparations with Member States. To be ready to talk about the future, as soon as we will have agreed on how to settle the past. (abridged)
Speech by EU chief negotiator on Brexit Michel Barnier at the Centre for European Reform at The Future of the EU conference on 20 November.

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