Theresa May charges into battle
Last Wednesday wasn’t supposed to be spectacular at all. The House of Commons was to be dissolved in preparation for the snap election on June 8th. Wednesday was the last moment to do that, given the 36 day minimum prescribed for campaigning between a dissolution and an election.
However, Prime Minister Theresa May turned the occasion into an act of dramatic magnitude. In front of Downing Street she looked stern and her words sounded determined. She said, the next Prime Minister would be confronted with one task above all else. To get the best possible Brexit deal. The past few days had shown how tough those negotiations were bound to become. She had said as much before. Now, though, she went a step further. The negotiating position of her government had not only been misrepresented in the “continental press”.
European politicians had in fact “issued threats” against Britain. And the ultimate bombshell: “All of these acts have been deliberately timed to affect the results of the General Election.” Europe, according to May, is manipulating the British election. An outrageous accusation.
The conflict started at a dinner in Downing Street last week
This was the definitive escalation of a fight that had started a week before during a dinner in Downing street. This paper covered the dinner in its previous edition and was probably what May was referring to as the “continental press”. When May was first confronted with the matter on Monday she called the whole affair “Brussels gossip”. A smart move, that way May could ignore the content of the leaks and still retained the option of sending her negotiators to Brussels after the election without much ado about it. Because in spite of all the commotion caused by the report, the public is quick to forget. Nobody knows that better than politicians. Yet, 48 hours later May suddenly changed course. She went on the offensive.
David Davis put it this way during a BBC interview: “But then we had further briefings that we would have to pay a hundred billion, the Prime Minister would not be able to negotiate. And eventually we got to the point where the line was crossed. Clearly, what was happening was the Commission was trying to bully the British people.”
It seems plausible that the inflated bill is what did it for the government. When the Brexit bill ballooned from 60 to 100 billion Euros, as published first in the “Financial Times”, that crossed a line. But Davis’ conclusion was still wrong.
That’s because the Commission isn’t responsible for the new demands. Chief negotiator Michel Barnier actually fought the bigger bill behind closed doors. He wanted to include in his tally only assets that London is legally obligated to cover. That includes all past financial commitments and a big position from the structural fund submitted for the budgets of 2019 and 2020. So it concerns the time period after the Brits will have left the EU.
That’s where the money for investment in businesses, the support for minorities and infrastructure projects comes from. The Commission agrees with the member states at the beginning of a fiscal period – each lasting seven years – on how the funds are to be allocated.
Money for agriculture should not be part of the bill
It’s a different story for the money that farms and agricultural businesses receive. In the current year their share totals nearly 60 billion Euros, about a third of the overall budget. These expenses need to be reapproved every year. So London has yet to give its OK. That’s why Barnier omitted them from his calculations. But the EU member states whose farmers profit the most from these funds put pressure on the Frenchman. They argued hat the payments are in fact a part of the farmers’ property. The value of a farm depends mainly on the uniform payment per hectare, whereas it’s of little import how much milk their cows produce.
The countries these farmers have influence in were successful in pushing for including their respective subsidies during the EU summit last weekend. A highly formulaic (read hidden) phrasing was used to include them in the negotiation guidelines.
It’s the same old game in the EU. Each country is looking to get the best deal possible. That’s why the Brits are supposed to also cover their share of administrative expenses for 2019 and 2020. And British stakes in Union property are further not to be counted towards these demands. After all nobody’s planning on selling EU offices or dissolving parts of the Brussels infrastructure, the argument goes. This was important to the Germans. And that’s what drives up the cost to more than a hundred billion Euros.
Juncker and Barnier are not independent
Unlike Theresa May and David Davis suggest, Jean-Claude Juncker and Michel Barnier can’t act independently when it comes to the Brexit negotiations. Barnier’s in charge of the negotiations, but at the behest of the national governments. He’ll be present at each and every Brexit summit and report back to the heads of government. No negotiator before him was given that privilege, not even when it came to important trade agreements. The Commission usually aims for the utmost independence. Not this time. “We’re happy our hands are tied”, a source in Barnier’s team says. That strengthens his starting position while it limits his maneuverability.
Who will be in charge during the negotiations was also an important aspect of the Brexit-Dinner. Juncker wanted to drive home the point that he has no intention of dealing with every detail of the negotiations during the next two years. May on the other hand, seemed set on leading the talks herself. At the highest level. That’s why her suggestion of sorting out the future rights of EU citizens during the EU summit at the end of June set off alarm bells among Juncker’s entourage. On the EU side no one is interested in that type of arrangement. It would paralyze the Union for the next two years. There would be nothing on the agenda besides Brexit during summits. That’s why the negotiation guidelines are unequivocal on that point: “The European Council remains committed to drive forward with ambition the priorities the Union has set itself. Negotiations with the United Kingdom will be kept separate from ongoing Union business, and shall not interfere with its progress.”
Still, Juncker remains May’s favorite opponent. That’s got little to do with the dinner or what was leaked in the aftermath. It actually goes back to the era of her predecessor. In 2014 David Cameron had tried everything to stop Juncker from becoming Commission president. He even enlisted the tabloids. Back then Paparazzi were climbing trees in front of Juncker’s home in Luxemburg. Reports in the British yellow press were alleging that Juncker was already half drunk in the early mornings, stumbling about on his terrace. They also claimed his father had been a Nazi collaborator. His father had in fact been forcibly enlisted in the Wehrmacht.
May's negative view on Juncker has a long history
In the end Juncker was victorious. He became head of the Commission. The Tories and their friends in the media – many die-hard Brexiteers – have felt like they had a score to settle with Juncker ever since. Now they believe the time has come. Theresa May made the point in the past few days again and again. Those who vote for her in the coming election are strengthening her hand to fight for British interests. Meaning in her fight against Juncker. It seems to work. “Nuclear Juncker” wrote the Sun on it’s front-page. As if Juncker had gone ballistic on the Brits. “Hands off our elections” the “Daily Mail” cried in its headline. The all adopted May’s assessment and reaction. The local elections went well for the Tories and the General Election promises to go the same way.
Ironically, that’s also in the interest of the Commission. Brussels is all for a strong Prime Minister May. Even before the Brexit-Dinner, background channels in the Commission suggested that were May to emerge from the elections emboldened that would help the negotiations. That way she could distance herself form the Brexit hardliners and make the necessary concessions in Brussels. Important people in Brussels had started thinking about the election schedule long before May called a snap election. In 2020 at the latest new elections were necessary. What would that mean for the next two years? Each and every time May would have to accept a difficult compromise, the tabloids would have called for elections, questioning her mandate. Better to get going to the polls out of the way.
If you look at it this way the circumstances of the dinner were actually favorable. They should have been. However, shortly before take-off in Brussels something happened that angered Juncker. The British had - quite nonchalantly - informed the other member states via Email that they wouldn’t be able to approve the Midterm Review. In the world of EU lawmakers that’s a big deal. The Midterm Review reassesses the priorities of the budget. When Juncker entered office, he inherited his predecessor Barroso’s financial planning. If he can’t make amendments now he won’t be able to at a later point in time. Imagine if Martin Schulz was elected chancellor and had to implement Angela Merkel’s budget for the duration of his term in office.
Midterm review as a chance
The Midterm Review is Juncker’s first opportunity to shift financial priorities. It’s also his first chance to adjust the budget according to new developments. That’s why more than 2.5 billion Euros are earmarked for improving border patrol and the coast guard.
New partnerships with African states are supposed to receive 1.4 billion Euros. The fight against youth unemployment is to be addressed with an additional 1.2 billion. Juncker also aims for more flexibility with the budget. He’s trying to draw the right lessons from the dramatic months of the refugee crisis. In case history were to repeat itself.
The European Parliament had agreed on all this. So had the member states. The British had abstained. The only thing needed was a mere formality, an agreement in the European Council. That’s when the Email from London arrived. Juncker regarded the British explanation for withholding their consent as a pretext. The British claimed they couldn’t agree on such far-reaching measures this close to an election. On the flight to London Juncker reread the so-called Purdah rules.
The British blocking will continue till the german election is over
In his view, London was not committing to more expenditures. The agreed upon amounts would only be reshuffled. That was the first thing May and Juncker fought about during the first half hour when he arrived. May was aware of the British position. That showed Juncker the move had not been made on a lower level. May herself was responsible. She stood by her decision.
If that’s the case, though, May would have to agree to the review after the election. But people in the Commission doubt she will. They believe the British will continue to block it at least until the election in Germany’s over. Among the Commissioners there are some who suspect that the UK wants to drag the daily business of the Union into the negotiation proceedings. They think May wants to improve her weak hand that way. Budget Commissioner Günther Oettinger is the first to be affected by this. By the end of May he has to submit a budget for 2018 according to the old priorities. And what happens in September once the refugee support program in Turkey ends? The member states had already allocated another three billion Euros for the program. Will London pay its share? Now these questions are discussed on a daily basis. That shows a deep level of distrust.
Still, both the Council and the Commission are intent on calming tempers this week. In Britain elections are coming up, Brussels has always been a favorite target during British election season. Why should that be different in the times of Brexit? And Brussels expects everybody to calm down afterwards. Then, the negotiations can begin. Nobody thinks that Theresa May would prefer no deal over a bad one. It’s common sense in Brussels that a chaotic exit would be the worst case scenario for the Brits.
The German government definitely agrees. Ms. May wouldn’t even want to begin to imagine what would happen to her country in that case. And the Chancellery in Berlin stresses a further point: However large the landslide victory May achieves in the election, there won’t be a discount for an impressive result. The guidelines are in place and won’t be watered down. Unity among the 27 has the utmost priority. Chancellor Merkel keeps repeating that. She means it.
No equal negotiations – Britain has to comply with the conditions of the other EU-members
Bottom line is then: The negotiations with London can only start once May agrees to play by the EU timetable. First settle the divorce, then discuss the new relationship. During the dinner with Juncker May had refused that sequence. She wanted to start the talks with the discussion of a free trade deal and speak about financial obligations towards the end. Last Friday, May’s right hand man in the Brexit talks flew to Berlin. There, Oliver Robbins tried to macerate the EU guidelines. He failed and the 27 remaining member states agreed on them at the EU summit in record time. It took them four minutes. Another provocation for London for sure. Even if Barnier had wanted to discuss the future relationship with the United Kingdom, he’s now prohibited from doing so. So far the governments have only given him the mandate to discuss the exit.
Truth is, the negotiations won’t be held between equal partners. The 27 member states decide the timing and the topics. That’s the same experience states make when they’re trying to become Union members. European bureaucrats assess where their national legislation complies with EU law and where it doesn’t. They prescribe the necessary changes and oversee their implementation. For accession candidates that’s a painful and at times humiliating process. But there’s simply no other way of doing it. Because in the end all the members and the European Parliament have to agree to accept a candidate.
To admit a new country, agreement among the members has to be unanimous. For leaving the Union, a simple majority is sufficient. The Commission is interested in an orderly withdrawal of the UK. Juncker told May that. They want a strong partner in Downing Street. Not someone who’s embattled at home but someone able to accept painful compromises.
This is the english translation of the article „Theresa May zieht in den Kampf“ (F.A.S. vom 07.05.2017). Translation: Moritz Eichhorn.