It has become conventional wisdom to assume that the EU will exact a price from Britain for leaving the EU; that some European countries are out to punish the UK, and that all they need to do is wait and a desperate Britain will strike a bad deal. Similarly, there is little to suggest that the UK will view the negotiations as anything but an adversarial, zero-sum affair.
But even if we assume the negotiations will be calm, cool and collected, and that politicking takes a backseat, the time challenge presented by Article 50 is enormous. When Article 50 is activated by Theresa May, Britain will get 24 months to conclude a decent divorce agreement with the rest of Europe. If a deal cannot be reached within that time, Brexit will be direct, dramatic and disorderly.
May’s notification will sound the opening bell for a flurry of discussions. But at least initially, these will not involve London. The EU’s 27 other member-states will first have to agree on the negotiating guidelines for the Commission, and aligning different interests will take time. Britain has refused to ‘show its hand’ and Europe has avoided pre-negotiations. So, since the referendum, the leaders of the 27 have only met twice to discuss Brexit, with the next meeting scheduled for February in Malta. Expect a few more meetings and delays before the EU’s guidelines are agreed.
When the chief negotiators on both sides – Michel Barnier and David Davis – finally meet, their first order of business will be talks about the talks. They must agree on crucial procedural issues including whether to negotiate the withdrawal agreement and a future trade deal in parallel or one after the other, and how to negotiate a transitional agreement to avoid a ‘cliff-edge’ while finalising a comprehensive trade deal after Britain has formally left the EU. The transitional agreement is likely to grant the British more access to the EU’s single market than the final trade deal, and could be very cumbersome to agree.
Less high-brow but no less important, Barnier and Davis will need to settle issues like how often to meet, where to meet, who can be present at the meetings, and even perhaps, what language to use. Towards the end of the divorce talks, more time will be lost. Article 50 says that a withdrawal agreement has to enter into force within 24 months. That means any parliamentary consent, including from the European Parliament, must be given before the two years are up. The British parliament will vote on the final agreement – and that could take up to six weeks – but so might others.
Since the rights of EU workers in the UK will be a key feature in the divorce, Central European parliaments might seek a proper debate before their governments sign off on any deal. Neither should we dismiss the possibility that the European Court of Justice will be asked to give its views on the legality of the divorce terms. In 1991 the Court unpicked some elements of the new European Economic Area – even after all countries involved had agreed to its design – causing a year long delay.
As for the meat of the Article 50 talks, it is not just about who pays the pensions of British EU civil servants. Article 50 covers many delicate areas including the UK’s new schedule of WTO commitments and British access to European counter-terrorism databases.
But if anything Article 50 has all the ingredients to become a fight about money. Here are some of the thorny issues that need resolving: Britain must be untangled from the European Investment Bank, and its 16 per cent share of the bank’s capital – nearly 40 billion euros – must be returned. EU grants will need to be repaid and fishing quotas adjusted. Someone will have to pay for relocating the European Medicines Agency and the European Banking Authority from London. In turn, the UK will claim its share of EU assets – from EU offices down to the Commission’s wine cellar and cutlery. Lawyers on both sides will have a field day. As the deadline approaches, an extension is not likely. Europeans will elect a new European Parliament in Spring 2019, a new Commission will take office later that year, and a new multiannual budget will start in 2020. The 27 will want to get Brexit out of the way before a new institutional cycle starts.
So the negotiating horizon will be much, much shorter than 24 months – perhaps 18 months or less – and the issues to be resolved are deeply divisive. And this assumes two big ifs: that no event in the next two years will throw the talks off course and that the political climate is favourable.
The UK and EU can hardly be faulted for being meticulous in the negotiations. This is what voters, parliaments and the courts expect. But the time constraints mean that the perfect will be the enemy of the good. Crashing out of the EU without a withdrawal agreement would be the hardest Brexit imaginable. Inside the Article 50 pressure cooker, someone will have to carry a watch.