Britain and EU reach breakthrough on Brexit divorce terms

Emmanuel Dunand, AFP | Theresa May and Jean-Claude Juncker on December 8 in Brussels

Britain and the European Union struck a preliminary divorce deal early on Friday that paves the way for "phase two" talks to begin on trade, easing pressure on Prime Minister Theresa May and boosting hopes of an orderly Brexit.


The European Commission said "sufficient progress" had been made after London, Dublin and Belfast worked through the night to break an impasse over the status of the Irish border that derailed an attempt to clinch a deal on Monday.

May, speaking in Brussels, said the deal opened the way for talks that would bring certainty to Britain's future after quitting the EU.European Council President Donald Tusk cautioned, however, that while the Brexit divorce was a challenge, building a new relationship would be even harder.

"So much time has been devoted to the easier part of the task," Tusk said. "And now, to negotiate a transition arrangement and the framework for our future relationship, we have de facto less than a year."

>> Read the full text of the EU and Britain's joint report

One senior banker said the deal signalled Britain was heading towards a much closer post-Brexit relationship with the EU than many had expected and that trade will likely keep flowing smoothly between the world's biggest trading bloc and the sixth-largest national economy.


The Commission gave its verdict in a statement after May took an earlymorning flight to Brussels to announce the deal alongside European Commission President Jean-Claude Juncker. The Commission's recommendation that sufficient progress has been made will now go to an EU summit of leaders on December 14-15.

"Prime Minister May has assured me that it has the backing of the UK government. On that basis, I believe we have now made the breakthrough we need. Today's result is, of course, a compromise," Juncker told the hastilyarranged news conference.

May said she expected a formal agreement to be approved at the summit."I also look forward to next week’s European Council meeting, where I hope and expect we will be able to get the endorsement of the 27 [member countries] to what is a hard-won agreement in all our interests," she said.

The Commission will now begin work on phase two talks, which cover a transitional exit period, trade and long-term relations with the bloc.Draft guidelines indicate the transition period will last around two years. During that time, Britain will remain part of the customs union and single market but will no longer take part in EU institutions or have a vote. And it will still be subject to EU laws.

Moving on to talks about trade and a Brexit transition was crucial for the future of May's premiership, which was thrown into doubt when she lost her party its majority in a snap election she called in June.

Oxford professor Kalypso Nicolaidis speaks on today's developments

May’s spokesman announced later on Friday that Britain would pay a financial settlement of between £35-39 billion (€40-45 billion) upon leaving the European Union.

British officials said the figure would include regular payments into the EU budget until 2020, promised contributions that have yet to be paid and funds for the pensions of EU officials.

The EU's red lines

The EU’s chief Brexit negotiator Michel Barnier said Friday that Britain's insistence on leaving the single market and customs union left the EU with no choice but to work on a post-Brexit free trade agreement modelled on the bloc's deal with Canada.

"It's not us, it's our British friends who are drawing these red lines that close certain doors," Barnier said.

Breakthrough in Brussels for Brexit talks

The remarks will come as a blow to London since May already rejected a Canada-style deal during a key speech in Florence in September, instead calling for the two sides to design a new "ambitious economic partnership".

Barnier underscored that the EU has its own red lines on preserving the integrity of the single market and its four key pillars on the freedom of movement for goods, capital, services and labour.

"Not everyone has yet well understood that there are points that are non-negotiable for the EU," he said.

>> EU's Barnier says Brexit divorce settlement talks at an 'impasse'

But Barnier also emphasised there would be continued EU-British solidarity on defence and foreign policy to ensure "the stability of the continent", although these issues will no longer be governed by EU treaties.

He said the full final version of the Brexit withdrawal agreement will have to be completed by October 2018 less than a year away.

Northern Ireland

May's key parliamentary ally in Northern Ireland gave a cautious endorsement of the new terms, four days after 11th-hour objections from Belfast scuppered May's attempt to sign off on a deal on the Irish border.

Britain agreed in the text that, should London and Brussels fail to agree a final Brexit deal, the United Kingdom will maintain "full alignment" with those rules of the internal market and customs union that help protect north-south cooperation in Ireland.

May: "We won't have a hard border with Ireland"

In the absence of a trade deal, no new barriers would develop between Northern Ireland and the rest of the United Kingdom unless the devolved government in Northern Ireland agrees that distinct arrangements are appropriate.

"In all circumstances, the United Kingdom will continue to ensure the same unfettered access for Northern Ireland's businesses to the whole of the United Kingdom internal market," it said.

Irish Foreign Minister Simon Coveney said the border agreement meant there was no way Brexit could lead to a hard border between Ireland and Northern Ireland which will be the only land frontier between Britain and the EU after Brexit.

"Very good outcome for everyone on the island of Ireland no Hard Border guaranteed!," Coveney said on Twitter.


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