The Disastrous Brexit Dinner
Jean-Claude Juncker has seen many difficult negotiations. The President of the European Commission wrestled for months with Alexis Tspiras so that Greece would fulfil its obligations. And with Viktor Orbán, he has been arguing ever since the start of the refugee crisis for European solidarity. Juncker is the kind of guy who after such discussions, when all heads are smouldering, rubs his counterpart’s shoulders and says that a solution will be found. As the Commission President left the official residence of the British Prime Minister, he left one more memorable meeting. There had been a friendly reception, it never got loud, but he wasn’t in the mood for placating words. Juncker was deeply shocked, and he made no secret of it. “I’m leaving Downing Street ten times more sceptical than I was before” he said to his hostess in parting.
Ten times more sceptical than before – that astounded even Juncker’s entourage. They’d never heard their boss speak like that before, not even in the darkest hours, of which there have been many during his Presidency. Naturally, everyone was already sceptical as they flew to London; but, with a dash of hope that the British government would gradually realise what an earth-shattering decision Brexit was, and what tremendous problems it will cause.
Pragmatic and ready for compromise?
The letter at the end of March, in which May formally announced the exit, had given them hope. For the first time, in that letter, she acknowledged that London would lose certain advantages once it was no longer a member of the single market. Thereafter, she reacted moderately when the draft negotiating guidelines became public, which were adopted almost unchanged by the heads of state and heads of governments last Saturday. They were reasonable proposals – even though they ran completely contrary to her expectations. Apart from that, the highly regarded Civil Service, the best officials of the Crown, had in the meantime diligently prepared all sorts of dossiers on every issue of the Brexit negotiations with fairness and professionalism. Would May now see it from a new perspective: pragmatic, ready for compromise?
The Prime Minister had invited Juncker after having announced the election. He reflected on whether he should go over with so little time before the vote. But that also meant that there was also only a short time before the EU summit, therefore: Yes. As President of the Commission he represents all 28 States, and in that, it seemed right and just also to hear the other side before the 27 states came together in Brussels. Until then, Juncker rigorously adhered to the principle he had defined: no negotiations on Brexit before a written notice of exit came from London. At a lunch in October during May’s inaugural visit as Prime Minister he had made that clear to her. Both agreed that at least their cabinet heads should meet every six weeks, informally to prepare the negotiation process: Martin Selmayr, the German at Juncker’s side, and Oliver Robbins for May. That was it.
On Wednesday evening, all four met in a room before the dinner began. May had announced via her spokesperson that she did not want to speak only about Brexit but about other world problems as well. Juncker asked what those issues were. They turned out to be nothing. So he brought up a topic that, in his view, had nothing to do with the EU-exit. London had just blocked an important resolution in Brussels. It concerned the so-called Midterm Review, the audit of the EU budget in the middle of the seven-year financial period. Because at the beginning of the period the refugee crisis had not been on the radar, billions of Euros had to be reallocated or approved: for example, for building up Frontex to become the new Border and Coast Guard; and, for the collaboration with African states. It had taken months to negotiate. On Wednesday morning the EU states were supposed to have agreed on the changed priorities, but on Monday evening, an email from the British EU delegation trickled in to them: because of the elections, the current Government could not take any more far-reaching decisions.
What was that all about, asked Juncker of his hostess. May wanted to explain to him the Purdah rules, but the Commission head knew about those already. They are to prevent a government, shortly before a Parliamentary election, from tying the hands of its successor. Of course, everyone currently assumes that May will also be the next Prime Minister – her included. On top of that, her government has already agreed important elements of the Midterm Review when it consented to the budget of the current year.
The clock is ticking
In EU circles, the push from London was seen differently: as a preliminary skirmish in the negotiations of the costs associated with the British exit from the EU. It was feared that May was using these irritants to disrupt the daily business of the others – in order to improve her bad negotiating position. Juncker, therefore, started his riposte. If May was so intent on not tying the hands of the next government, then neither could one discuss the modalities of the exit negotiations beforehand: areas of discussion, participants, timelines, and so on. The clock was ticking. After this beginning, it became clear to both sides that this would be no easy evening.
Half an hour later they had dinner. The circle was enlarged now to include Michel Barnier, the European chief negotiator for Brexit and his deputy, the German Sabine Weyand; at May’s side was David Davis, the Brexit Minister. Over the course of the evening, Davis praised himself three times for an heroic deed: namely having successfully brought British Data Retention before the European Court of Justice. At the time, he was still a Conservative backbencher; Theresa May, as Home Secretary, was responsible for drafting the law. Maybe Davis thought the multiple references would be a good icebreaker.
But his boss seemed not exactly amused by what, for her, was not a praiseworthy episode. The visitors asked themselves whether Davis would still be in charge of the negotiations after the parliamentary election.
Especially since May expressed her own ideas on how the talks should run. First of all, she wants to sort out the rights of the three million Europeans in the United Kingdom and the one million Britons on the continent. That could be easy, because it’s also the first priority of the EU. She proposed, already at the end of June, that one could clear up that matter during the next European Council. Her visitors were astonished: a mere two weeks after the parliamentary election?
The Brexit-crazed tabloid press breathing down her neck
For May, this presented no problem: under British law, the EU citizens should simply be treated like other citizens of third countries. For Juncker, it was a big problem. After all, they now enjoy many privileges, and those should be maintained to the greatest extent possible. There are tricky questions to resolve, not only with regard to the right of residency. Health insurance, for example: until now EU-foreigners have been treated by British doctors for free, like any other Briton; in return, Britons also pay nothing when they go to the doctor in Berlin or Paris – the bill is paid by the British state.
“I believe you underestimate that, Theresa”, said Juncker. He produced two heavy stacks of paper from his briefcase: the accession treaty with Croatia and the trade agreement with Canada, both several thousand pages long, all together weighing about six kilograms. The divorce contract and a future free trade agreement would be at least as extensive, he warned.
May also wants to handle other subjects unconventionally: monthly four-day negotiation blocks in Brussels, prepared with position papers. That should all remain secret, she urged, until the conclusion. Clearly, the Brexit-crazed tabloid press is breathing down her neck. But from Brussels’ perspective, this is simply an impossibility. Every step must be aligned with all of the Member States and with the European Parliament. The Commission will therefore publish their documents continuously.
Then the biggest point of contention over the procedural matters came to the fore. The EU has a clear order: first settle the divorce, then discuss the future relationships. On the contrary, May wants to talk about a free trade agreement right away, and only at the very end about the costs of the divorce. She was painting a rosy picture of Brexit reminiscent of what she had said publicly: a prosperous Britain, open to the world, closely intertwined with the single market – everything like it was, only without the burdensome obligations. “Let us make Brexit a success,” she said to the gathering.
“Brexit cannot be a success”
He had a somewhat different view, countered Juncker. Yes, he wanted an orderly exit, no chaos. And yes, he also wanted further good relations with London. But Britain would be a third country for the European Union after Brexit, no longer in the customs union like Turkey. He believes that the country would then be worse off than it is today: “Brexit cannot be a success.”
May appeared surprised. Presumably, no one had said it to her so plainly in a long time. She defended her vision, while alluding to earlier European negotiations: with Protocol 36 it proceeded like that, though - a mutually beneficial reciprocal agreement, which on paper changed much, but in reality, changed little. That set off alarm bells among Juncker’s people. They had already feared something like this, now it had surfaced.
Protocol 36 dealt with an addition to the Lisbon Treaty, the last major reform of the European agreements. Therein is the hodgepodge of special rules, one of which concerns the British. They had agreed on an opt-out of the entire interior affairs and justice policy. At home, that could be sold as defending British sovereignty. However, for two thirds of the approximately fifty laws concerned, London voted directly to opt back in, having just opted out – in its own interest. No one wanted to draw attention to it. And this is how May now imagined the future relations of the entire Union: officially a hard severance, but in reality, on the basis of self-interest, still together.
Confronted with a choice
Juncker saw himself confronted with a choice: either keep quiet and, if possible, sustain May’s illusions, or counter them. He chose the latter. “The more I hear, the more sceptical I become,” said the head of the Commission. The dinner was half over.
The second half wasn’t better. The subject of money came up in conversation. The EU estimates costs of 60-65 billion Euros for London. May argued that her country didn’t owe the European Union one penny; after all, there’s nothing in the treaty about a final tally due in the event of an exit. Her visitors countered: London accepted legally binding payment obligations with every budget decision and medium-term finance planning of the past. The EU is not a golf club one can join and quit at will (certainly not without losing one’s deposit). The European Union is much more like a lifelong partnership with the purpose of peace; the parents had children and with divorce, they must acknowledge their obligations.
Brexit Minister Davis proffered that the EU could not indeed push through its requirements if London was out and no more subject to the European Court of Justice. Alright, said Juncker, but then the others would refuse to enter into a free trade agreement. Moreover, the entire exit process would be entirely different. According to the EU-Treaty, only the Governments and the European Parliament must agree to an exit convention in each case with a majority. But if the negotiations were to go as Davis suggested, so that the other states sit on the British bill, each and every parliament must be involved. After all, national MPs decide what their governments are going to pay to Brussels. And why should they foot the bill for London?
Juncker’s hard farewell
After an hour and a half, the dinner was over. Juncker’s hard farewell: “I’m leaving Downing Street ten times more sceptical than I was before.” It should have been a late night wake-up call. But because Juncker didn’t have the impression that he had made an impression, he sent yet a second wake-up call the next morning. That’s where the German Chancellor came in. What Angela Merkel says can’t be ignored in London so easily. After all, Berlin is seen as a close ally in the EU.
Juncker and Merkel were due to speak by telephone at 3 p.m. the day after the dinner. On morning television, the Commission head saw that she was to deliver a speech ahead of the upcoming European Council. It was shortly after seven in the morning. He called Maerkel on her mobile to get her up to speed. His message: Theresa May lives in another galaxy, she is deluding herself. Merkel hastily reworked her government statement.
An hour and a half later, the Chancellor stood at the speaker’s lectern of the Bundestag. She spoke first about Turkey, then about the principles of Brexit. Everything was very clear, with three priorities: ensure the rights of Germans in Britain, avoid damage to the European Union, and strengthen the solidarity of the 27. Every point that Juncker had made that evening reappeared: first talk about the divorce, including the financial settlement, then about the new relationship. A third country cannot have the same rights as a member. Then came the new passage: “Dear colleagues, perhaps you think that these are clear, self-evident facts. But I must unfortunately state so very clearly, that I have the feeling that a few British are deluding themselves. That is a waste of time, however.” A few British – meant none other than Theresa May.
Theresa May against the rest of Europe
The message did not fail to have an effect; the British media reported it prominently. They called it Merkel’s “hard-line Brexit speech”. Even May reacted immediately – in a campaign speech in a long-standing Labour constituency. Everyone had heard Merkel’s words, she said. “There will be times, when these negotiations will become tough”, warned May. Her domestic political opponents – meaning Labour – would try, indeed, to disrupt the discussions. “At the same time the 27 states are lining up to oppose us.” Every vote for conservative candidates and for her, would make her stronger at the negotiating table.
Theresa May against the rest of Europe – that is how the Prime Minister wants to attract votes. It is a risky strategy, for her and for Europe. It is highly likely that after the election her majority in Parliament will be so large that Brexit hardliners no longer decide her agenda. But what’s the use if she buys this position by feeding the illusions of the hardliners?
Juncker left London with major concerns. In his entourage, the probability that the negotiations will fail is now estimated at “over fifty per cent”. One hopes that the British will come to their senses and face the uncomfortable reality while there is still time. And that at least business will put more pressure on the Government, since a chaotic Brexit could drag the country into an existential crisis. To communicate these concerns so bluntly is part of the strategy. Sometimes the alarm clock has to ring very loud to wake up even the most sleepy.
Translated by David Pike.
Note: This is a translation of an online version published by FAZ.NET on May 1st, 2017. The original article appeared in the Frankfurter Allgemeine Sonntagszeitung on April 30th, 2017 under the headline “Das Brexit-Dinner”. The text remains unchanged with the exception of the title, the teaser and added subheaders.