Press play to listen to this article
LONDON — It is (to use a football term) squeaky bum time in the Brexit talks.
Prime Minister Boris Johnson, his chief negotiator David Frost and various anonymous U.K. government briefings have teed up plenty of negative mood music ahead of the eighth round of future relationship negotiations, which start in London on Tuesday.
Johnson has set a hard deadline for a deal (the European Council summit on October 15) and insisted that failing to secure one would be a “good outcome.” Frost gave a rare interview to insist the U.K. wouldn’t “blink” in the talks. Meanwhile, briefings to the Times newspaper put Downing Street’s estimate of the probability of a deal at 30-40 percent and it was even suggested the U.K. was prepared to undermine the foundations of the talks themselves by altering the withdrawal treaty struck with Brussels last year.
After such a salvo, the stage might seem set for a huge Brexit bust-up when Michel Barnier arrives in London. But despite the noise, the fundamentals of the negotiations remain where they’ve been for weeks, stuck on just two issues: state aid and fisheries.
On the latter, officials on either side have said all along there is a route to a deal should a mood for compromise take hold. On the former, a deal looks further away, but not impossible — if the U.K. can decide what it wants.
‘I will not back down’
In a statement issued overnight, Frost said the U.K. side would use this week’s talks to “drive home our clear message that we must make progress this week if we are to reach an agreement in time.”
“We have now been talking for six months and can no longer afford to go over well-trodden ground. We need to see more realism from the EU about our status as an independent country,” he said.
To some extent, Johnson’s own no-deal drum-beating might have been — in part — theatrics for a domestic audience. On Monday, the prime minister’s words were relayed to thousands of Conservative Party supporters via email under the subject line: “I will not back down.”
Barnier, now four years into his role as chief EU negotiator, has grown used to such shadow-boxing (and indeed has partaken in plenty himself).
Brussels will likely reserve judgment until officials have seen the detail in legislation due in the coming days.
But before he gets down to the meat of the negotiations, his team may want to clear up Monday’s reports that the U.K. is preparing to undermine elements of last year’s Withdrawal Agreement by introducing its own, potentially contradictory laws underpinning customs and state aid arrangements in Northern Ireland.
Downing Street insisted Monday the measures, first reported by the Financial Times, were merely “limited and reasonable steps” to “clarify” certain elements of the Northern Ireland protocol part of the deal in U.K. law — not an attempt to tear up an international treaty in the manner of a rogue state, as some in the EU initially interpreted it.
Brussels will likely reserve judgment until officials have seen the detail in legislation due in the coming days. But for now it appears to be a matter of keeping calm and carrying on. In a sign that the issue had not done too much to harm goodwill, French President Emmanuel Macron, usually one of the more robust EU leaders on Brexit, described his Monday phone call with Johnson as “very good.”
Whether that goodwill extends beyond the end of this week depends on what Barnier reports back to EU capitals. The EU’s chief negotiator has for several weeks been seeking clarity from the U.K. on what is now the main outstanding issue: state aid. He may not get it this week, with Johnson’s spokesperson saying on Monday that it would not be an expectation in a typical free-trade agreement for one party to outline its entire program of state subsidies in advance.
It’s also not entirely clear the government has fully decided what kind of state aid regime it wants.
There is, Foreign Secretary Dominic Raab told Times Radio, “an economic debate” in the U.K. government about the issue.
Downing Street has been clear that it wants a subsidies regime that will allow the government to aid industries recovering from COVID-19 while delivering an economic boost to poorer areas as part of Johnson’s wider regional inequalities agenda. According to the Times, Downing Street is also keen to support the U.K.’s tech sector. But these are policy goals that are butting up against more traditional Conservative, pro-free market instincts.
“As Conservatives, we’ve got a proud record of being pro-competition, pro-consumer,” Raab said. “But we’ve also got our leveling-up agenda and in the context of COVID we see that you have to have more significant interventions in some areas.” The foreign secretary emphasized that it isn’t the precise state aid regime that matters, but the principle that the U.K. gets to decide — rather than having its hands tied by the EU’s “level playing field” demands.
One U.K. official said the U.K. is standing firm on state aid, not necessarily “because we have some massive state aid program ready to roll out” but because “the principle of who decides this is key.”
It’s a position that might suggest there’s some room for a deal — if the U.K. can convince the EU it isn’t about to embark on a mass subsidy spending spree. Among U.K. officials, expectations of a sudden breakthrough this week are nonetheless low.
Johnson — with his new October deadline — won’t mind. But it is worth remembering that he’s a close watcher of public opinion. A new YouGov poll published Monday following his announcement shows that 50 percent think no deal would be a bad outcome, versus just 24 percent who agree with Johnson’s “good outcome” assessment.
So even if this week has not been teed up for a breakthrough, Johnson — despite the rhetoric — will likely be hoping that one comes along eventually.
Want more analysis from POLITICO? POLITICO Pro is our premium intelligence service for professionals. From financial services to trade, technology, cybersecurity and more, Pro delivers real-time intelligence, deep insight and breaking scoops you need to keep one step ahead. Email firstname.lastname@example.org to request a complimentary trial.