Despite peers voting against the government last night, May's March deadline will be stuck to. Once she does press the button, politics will matter more than economicsby Henry Newman / March 2, 2017 / Leave a comment
The government has committed to triggering Article 50, formally starting Brexit, by the end of this month. This means that Britain will be outside the European Union by spring 2019, unless both sides agree to extend negotiations or to introduce some sort of phased withdrawal. Last night’s defeat for the Government in the House of Lords won’t affect this timetable: either there will be a concession to address the concerns of peers, or the House of Commons will reject the amendment.
So far, Brussels and EU member states have broadly held the position that Brexit negotiations cannot start until the UK notifies them of its intention to leave. Nonetheless there have been some gambits from Europe—most significantly the Commission’s argument that Britain will have to pay a “divorce bill” of around €60bn, and the often-repeated line that the UK cannot have as good access to the single market from outside as it does from inside.
The first stage of negotiations will be to agree the form that the process itself will take. Discussions to this end will probably coincide with the period of elections in France and Germany. By the autumn, elections will be out of the way and negotiations proper can begin. The European Commission wants first to resolve Britain’s outstanding financial liabilities—the €60bn question—before discussing any future arrangement on trade and other cooperation. The UK argues both deals must be negotiated in parallel.
Over the next few weeks we will find out which side wins the struggle over process but there is some suggestion that Europe’s biggest power, Germany, supports parallel discussions. In July last year, at a joint press conference in Berlin with Theresa May, Angela Merkel went out of her way to call for “parallel processes.” She said: “you cannot completely cut off the bonds [with the UK] and then after a long winding negotiated process come up with how one sees the future relationship.”
Divorce battles often come down to money and Brexit seems likely to follow that pattern. In a bizarre move the Commission’s spokesman has even compared the divorce bill to a situation where you go “to the pub with 27 friends: You order a round of beer, but then you cannot leave…