The Waugh Zone Friday October 13, 2017

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The impasse between the UK and the EU over Brexit was confirmed yesterday as Michael Barnier warned of the “disturbing” “deadlock” in the talks. David Davis pleaded with the EU to allow Barnier more freedom to discuss future trade relations as well as the ‘divorce’ bill.

British sources say that while the EU is unlikely to budge in time for this month’s EU summit, they’re “optimistic” that things will be sorted by December. Barnier’s words included a warning to both the EU27 and London that they should show “the necessary will” to make progress. One UK official tells the Times that his words were “an elegant cry for help”, after the Germans last week tried to reduce his room for manoeuvre.

And it’s the Germans who are playing hardball, as Berlin insists it won’t allow the talks to move on unless May gives a written commitment accepting her financial liabilities (they had a kind of verbal one in her Florence speech, but want it nailed down). Several papers and the BBC have got hold of the draft EU paper for the summit which suggests they are prepared to talk transition as long as finances are dealt with.

Given that a specific divorce bill figure was never likely (DD tells colleagues privately he would never give play Britain’s trump card on cash until the last possible moment), will the EU settle for mere words or insist on an algorithm that frames future finances? DD’s department were politically shrewd enough to rattle off a letter to Labour’s Keir Starmer asking him to “spell out exactly how much” he would offer for the EU divorce bill.

Back home, Andrea Leadsom’s decision to postpone the EU Withdrawal Bill suggests rebel Tories may have the numbers to defeat the Government on a string of amendments. Insiders told SkyNews that the volume of amendments means the bill won’t be ready for committee stage next week. The new alliance of Ken Clarke and Labour’s Chris Leslie is obviously the whips’ big worry. Still, I may be wrong, but I suspect we’ll see a Government concession on Henry VIII powers that will dissolve the Tory Remainers’ resolve.

The real question is the EU’s resolve, and May’s. If no movement is made on starting talks on trade and transition this December, the stakes are really high indeed. May will be under huge pressure from the Right to suspend all talks – or lose her own job. Brexiteers love a war analogy and at least two apply here. The phoney war of WW2 lasted months before real hostilities began with Germany. And in ‘the Great War’, everyone thought the action would be all over by Christmas. By the end of 2017, we may know whether an economic World War Three looms between Britain and the EU.

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