The price of Brexit
It has been reported that the UK Government has agreed to offer to pay €40 billion as part of its ‘divorce settlement’ on leaving the EU in an effort to progress the current negotiations.
As noted previously, the EU’s position in the negotiations remains that talks on future trade can only commence once sufficient progress is made in relation to key aspects of the UK’s withdrawal. From the EU’s perspective, this comprises agreement relating to: the UK’s financial settlement on exiting the EU; the rights of EU citizens living in the UK and the border between Ireland and Northern Ireland.
The reported agreement by the Cabinet to offer €40 billion is intended to address the first of these – although it is not clear whether it will prove sufficient.
As regards the other two aspects, while the UK Government has repeatedly maintained that the rights of EU citizens and the Irish border should be capable of agreement, the EU does not yet appear to be satisfied with what has been proposed.
The issue regarding the Irish border remains a particular concern. While all sides have expressed the desire not to return to a hard border in Ireland, there remains little explanation as to how this could be achieved once the UK has left the EU, given the Prime Minister’s previous indications that the UK will no longer be part of the Single Market or the Customs Union and that free movement of people will come to an end. It has been suggested that one of the Government’s apparent aims in the European Union (Withdrawal) Bill, is to advance the notion of a single UK market post-Brexit. Aside from the fact that this runs the risk of undermining existing devolution settlements if and to the extent the Bill results in restrictions on the abilities of devolved administrations to legislate on areas of devolved competence post-Brexit, it is also incompatible with avoiding a hard border between Ireland and Northern Ireland.
Insofar as the UK desires to move on to the second stage of negotiations in the new year and begin talks on a future trade relationship, it is imperative that swift progress be made in relation to these outstanding matters.