#Brexit: Commission publishes draft negotiating positions on citizens' rights’ and the financial settlement

Today (29 May) the Brexit Taskforce published two draft position papers: Essential principles on citizens' rights and essential principles on the financial settlement. This is consistent with Barnier’s claim that he wants to keep negotiations open and transparent, writes Catherine Feore.

There are few surprises in the much trailed views of the EU-27, but clear sticking points are already apparent in the two draft papers.

Citizen’s rights

The citizens concerned are EU-27 citizens who are resident in the UK and UK citizens who are resident in the EU-27 at the date of at the date of entry into force of the Withdrawal Agreement. It includes their family members – regardless of nationality – a point that Theresa May has always questioned since her time as British home secretary.

Theresa May (if prime minister) has said that she would like to guarantee citizens' rights but that there is resistance from “one or two” European countries. May has denied that she is using citizens as bargaining chips - this paper will force the prime minister to show her hand early in the negotiations.

Relevant to Northern Ireland and Gibraltar the rights of border workers are considered i.e. those who reside in an EU-27 country but work in the UK and vice versa. Again family members are included. Finally, the paper also covers those who have accrued rights from living in the UK or the EU-27 and covers those who have pensions rights and sickness benefits among others.

May has said that she does not want the European Court of Justice to protect rights acquired under EU treaties. The Commission’s paper is clear that this is a sine qua non of any agreement. There may be room for manoeuvre in the form of a EFTA (European Free Trade Area) court, used by Norway, Liechtenstein, Iceland and Switzerland – but this type of court has no real autonomy. Still, it could be delivered as a victory by May.

The EU seeks to protect many rights including: non-discrimination, access to the labour market, to pursue an activity, and non-discrimination as regards working conditions, social and tax advantages, workers' and family members' access to education, apprenticeship and vocational training, housing, collective rights. Quite a list, it is difficult to see how these rights could be effectively protected other than via the European Court of Justice.

Financial settlement

The financial settlement will “be based on the principle that the United Kingdom must honour its share of the financing of all the obligations undertaken while it was a member of the Union.” And will be paid in euros. The UK can continue to benefit from these funds until their date of closure – though subject again to EU rules.

The UK’s investment in the European Investment Bank will be amortized as loans are paid back. For the European Central Bank paid-in capital will be reimbursed over time to the Bank of England over time.

For the European Development Fund the UK will remain liable in full for the obligations of the successive European Development Funds, with similar arrangement for trust funds.

The UK will have to pay for the costs related to the termination of contracts for housing the European’s Medicines Agency and European Banking Authority that will have to move as a consequence of the withdrawal, the costs related to the move itself, in addition to the costs related to installation in the new location.

There are also costs associated with the many EU agencies, but it would almost certainly be cheaper in the medium term for the UK to agree to pay towards many of these agencies – such as the European Chemicals Agency and Medicines Agency rather than setting up national agencies that mirror their activities. For example, if the UK wants to sell a new drug or chemical in the EU-27, it will still have to seek approval from the same organizations.

Finally, the paper says that the schedule of payments should ‘mitigate the impact’ of Brexit on the EU-27 but leaves the exact timing of payments to the second phase of negotiations – once the past critical elements of the divorce are settled. This might allow May to put a more favourable spin on the Brexit bill.

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