Brexit impasse set to drag on

Brussels agrees to talk on, but not to change divorce deal

Photo: EPA Juncker-May, a cool handshake in front of the cameras in Brussels.

British PM Theresa May had a cool reception last Thursday in Brussels as she arrived for meetings in attempt to persuade the EU to open divorce deal for further negotiations, news wires reported. In a joint statement EC President Jean-Claude Juncker and May described their talks on changing the Brexit deal as “robust but constructive”. The two leaders also agreed to meet for further talks before the end of February.

The Commission president stressed the divorce deal could not be changed, as the UK PM wants. But he said the EU was open to adding words to the non-binding future relations document that goes with it. EU negotiator Michel Barnier and Brexit Secretary Steve Barclay will hold talks on the matter in Strasbourg on Monday. At the same time both negotiating teams are set to resume their talks to find out “whether a way through can be found that would gain the broadest possible support in the UK Parliament and respect the guidelines agreed by the European Council.”

“The prime minister described the context in the UK Parliament, and the motivation behind last week's vote in the House of Commons seeking a legally-binding change to the terms of the backstop. She raised various options for dealing with these concerns in the context of the Withdrawal Agreement in line with her commitments to the Parliament,” May and Juncker said in their joint statement. Juncker underlined that the EU27 will not reopen the Withdrawal Agreement but expressed his openness to amending the future relationship to be “more ambitious in terms of content and speed.”

May is insisting the UK will not be “trapped” in the backstop, the plan to avoid the return of Irish border checks whatever UK-EU trade deal is agreed. She says the plan must change if it is to win the support of MPs who urged her to seek “alternative arrangements” when rejecting the deal last month. EU leaders have repeatedly said it would be impossible to replace the backstop, because it is required to ensure no hard border between Northern Ireland and EU-member Ireland.

After meeting Juncker May talked to European Parliament President Antonio Tajani and the Parliament's Brexit coordinator Guy Verhofstadt as well as European Council President Donald Tusk, who sparked controversy on Wednesday by declaring there was a “special place in hell” for those who campaigned for Brexit without a plan to deliver it safely. British MPs who backed Leave campaign in the 2016 referendum reacted with anger to his comments and accused Tusk of arrogance.

May will return to parliament next week for a debate on the Brexit negotiations when lawmakers could again try to wrest control of the process from her, but a crunch vote on approving the Brexit deal is likely to come later in the month. Both May's Conservative Party and the main opposition Labour Party are formally committed to carrying out Brexit following a 2016 referendum in which voters chose to leave the EU by a margin of 52-48%. But both parties are deeply divided internally over how or even whether to do so.

Meanwhile, Labour leader Jeremy Corbyn has written to the PM setting out his party's price for supporting a Brexit deal and to offer talks to secure “a sensible agreement that can win the support of Parliament and bring the country together.” The Labour leader's five demands include a “permanent and comprehensive UK-wide customs union” aligned with the EU's customs rules but with an agreement “that includes a UK say on future EU trade deals.”

Unless parliament approves a deal, Britain is on course to leave the EU on 29 March with no transition arrangement in place, a scenario that many businesses say would be catastrophic for the economy. Other options could include delaying Brexit, holding a new referendum or cancelling it altogether. The Bank of England said Britain faced its weakest economic growth in 10 years in 2019, blaming mounting Brexit uncertainty and the global slowdown.

In its last quarterly forecast before Britain's scheduled departure from the EU, the National Institute of Economic and Social Research, (NIESR) said that while economic growth would hover near zero in the two years following a no-deal Brexit, Britain could avoid sliding into recession if inflation and wage growth stay in check and policy makers respond with measures to support the economy. If Britain leaves the EU without a deal, trade between the two would revert to rules under the WTO.

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