Brexit: What’s the deal?

Nobody wants the UK to leave the EU, not even most people in the UK and the current UK government. So can a deal be done? When EU Reporter spoke with senior EU diplomatic sources about today's (17 December) Brexit discussions, we were told that a lot of progress had been made on the technical side. The European Commission now has a dedicated team led by one of the EU’s most senior and distinguished officials, Jonathan Faull. The main stumbling block will be the issue of migration within the EU.

The other issues all appear solvable.

The UK wants to increase European competitiveness and ability to create growth and jobs – this isn’t an objective any EU leader is going to argue about, as the EU has already proposed a text on better law making. Yesterday (16 December), the Commission put forward a text for an inter-institutional agreement on better regulation. This is about designing EU policies and laws so that they achieve their objectives at minimum cost. It aims to ensure that policy is prepared, implemented and reviewed in an open, transparent manner, informed by the best available evidence and backed up by involving stakeholders. The EU says that it wants to reduce the flow of new regulations and set a target for reducing the burden of existing regulations. This could go far in addressing the UK’s concerns and could be presented – at least by David Cameron – as a UK victory.

On sovereignty the UK wants a formal, legally binding agreement to make sure that the treaty reference to ‘ever closer union’ no longer applies to the United Kingdom. Everyone has made clear that treaty change, which is recognized by all as long overdue, is needed, however there will be no treaty negotiations until French and German elections have taken place.

The UK also wants to protect the rights of non-eurozone members, ensuring that they do not face discrimination, that their taxpayers are not financially liable for the eurozone and that any participation in banking union is voluntary. This is an area where the UK could garner wider support from other non-eurozone countries. The new Polish government is at the very least reticent on joining the euro and other non-eurozone countries like Sweden and Denmark are also likely to be supportive.

The most contentious issue remains migration within the EU. The UK is likely to special plead that because the UK’s welfare system has developed in a very different way from the rest of the EU, it requires a special dispensation for EU citizens coming to Britain. The UK has called for residents to contribute for four years before they qualify for in-work benefits and for an end to the practice of sending child benefit overseas. The second requirement is less contentious, but the first is still proving difficult to win over allies. Is compromise possible? Yes, the special pleading may be – a little like the British rebate – an awkward and rather messy compromise, but it may open the way to a deal. Given that recent polling suggests a 'Yes' vote in the referendum may be won by a narrow majority, others may fear that a UK exit might have a domino effect.

So what will we learn today? Very little – David Cameron is not going to say we’re nearly there, he will say that it is going to be a very tough battle because he is demanding so much and that compromise is a long way off. He will welcome the EU’s recognition for the need for better (namely less) regulation and say that he has allies on defending the rights of those outside the eurozone. Other than that, we will be told that he has a tremendous battle on his hands and a fight to the finish. He may well do!

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