Theresa May achieved a crucial breakthrough after six months of Brexit divorce negotiations on Friday only to be confronted by blunt warnings about Britain’s expectations for its future relations with the EU. Fresh from securing a historic deal on the UK’s exit terms — including a net divorce bill of at least €40-45bn — the British prime minister faced tough political choices in a second phase of talks, which EU leaders see as even more difficult than the first. Speaking after the early morning divorce deal was struck in Brussels, Donald Tusk, European Council president, noted there was now in practice “less than a year” to negotiate a transition period and new UK-EU relationship. “We all know that breaking up is hard, but breaking up and building a new relation is harder,” he said. In a blow to UK hopes, the EU issued instructions to its chief negotiator Michel Barnier that implied substantial discussions on a future relationship may not begin until February or March because Britain had yet to be “clear” about its aims.
Mrs May’s divided cabinet will have its first formal discussion on the “end state” of the UK’s trade relationship with the EU before Christmas. Philip Hammond, chancellor, is leading those demanding that Britain stay close to the EU regulatory model to maximise access to the single market, while Brexiters — including Boris Johnson, foreign secretary — prefer a much looser relationship. Mr Barnier warned that the UK’s stated commitment to leaving the EU’s single market and customs union would narrow its options to a standard free trade deal, such as the agreement the bloc struck recently with Canada.
“It is not us, it is the British government that is indicating those red lines, that is closing certain doors,” he said. In contrast to Mrs May’s hopes for rapid progress on an ambitious trade deal, Mr Tusk’s draft statement for EU leaders set to meet next week noted that only a “political declaration” is expected before 2019, based on “preliminary and preparatory discussions”. Friday’s deal, struck after a week of high drama in Brussels, London and Dublin, covered the UK’s divorce bill, citizens’ rights and the fraught issue of Northern Ireland’s border with the Irish Republic, where the two sides agreed a fallback of regulatory “alignment” with the EU. British Eurosceptic cabinet ministers and mainstream pro-Brexit Tory MPs rallied behind Mrs May, reflecting a general desire to make sure that Brexit happens and that it is not an economic disaster. Michael Gove, environment secretary, claimed that Mrs May had “won” and that the deal struck in Brussels marked “a significant personal achievement for the prime minister”.
Mr Johnson tried to brush aside claims that Mrs May’s commitment to an open border in Ireland did not represent a possible backdoor route to Britain staying close to — or even in — the single market and customs union. After meeting Mrs May on Thursday, Mr Johnson tweeted that he found her “totally determined that ‘full alignment’ means compatibility with taking back control of our money, laws and borders”. Arlene Foster, Democratic Unionist party leader, told Mrs May in a tense phone call at 11pm on Thursday night that she was still not satisfied with the compromise deal text and was unclear what the reference to “full alignment” of UK and EU rules meant. But Mrs May forced the point and said that, unless a deal was done on Friday, there would not be time for a breakthrough at next week’s European Council. “We ran out of time essentially,” Mrs Foster said later. Nigel Farage, former Ukip leader, said the deal was “good news for Mrs May because we can now move on to the next stage of humiliation”. Pro-European Tories said that the agreement on the Irish border meant that a “no deal” Brexit scenario was now off the table and that there were grounds for hope that Mrs May would now oversee a soft Brexit. Nick Macpherson, former permanent secretary at the Treasury, tweeted that the future was now looking clearer and would involve a long transition deal leading towards a Canada-style trade deal in around 2024. “Much more certainty, suboptimal endpoint,” he said.
Article from the "Financial Times"