News analysis

Messy divorce looms as Brexit talks go nowhere

EU officials frustrated with London's inability to present a workable negotiating position

A top European Union official has admitted that, while the organisation still hopes to reach a deal with Britain over the country's departure from the union, it is also planning for the eventuality of a total breakdown in negotiations with London, and for Brexit to happen with no deal whatsoever.

"Brexit is a process we want to manage in a calm and rational way," said Mr Stefaan De Rynck, an adviser to the EU chief Brexit negotiator. But if no deal is feasible, he warned, the EU is ready to let Britain go with no deal; "we are preparing for that, for sure," Mr De Rynck added.

Until recently, the possibility that Britain would crash out of the EU without a negotiated "divorce deal" was regarded as the worst of all possible options, for it would leave unsettled thorny questions such as border controls, and tear apart free trade arrangements.

Yet European negotiators now fear they have to contemplate this grim eventuality, since they are growing increasingly frustrated with the British government's inability to come forward with a workable negotiating position.

Officially, the impasse in the negotiations is due to the EU's insistence that no negotiations about the trade arrangements can start until the British specify how much money they are willing to pay into the EU's coffers to cover their previous financial obligations as well as future ones such as pension liabilities. The British retort is that it is impossible for them to make such a financial pledge without knowing first what trade relations they will enjoy.

And the gap between the sums discussed remains huge. The European Commission calculates that Britain's total divorce bill comes up to €100 billion (S$160 billion); the British have privately offered to pay only a fifth of that.

At an EU summit last week, British Prime Minister Theresa May appealed to her European colleagues to relent, by agreeing to hold trade talks in parallel with financial negotiations. But although she got a sympathetic hearing, she also received a polite refusal, largely because EU leaders are increasingly perplexed by London's inability to say what it wants.

The overall impression in other European capitals is that the British want to have their cake and eat it, by leaving the EU and yet retaining all its advantages, a demand which no EU government is prepared to concede.

London has published no fewer than 22 different "policy papers" about its future relationship with Europe, but all these do is rehearse various options, without saying explicitly what Britain is prepared to pay - in either money or political concessions - to reach its objectives.

The overall impression in other European capitals is that the British want to have their cake and eat it, by leaving the EU and yet retaining all its advantages, a demand which no EU government is prepared to concede.

Squabbles inside Mrs May's ruling Conservative Party add to the confusion. A group of ardent anti-European former senior Cabinet ministers has published an open letter to the Prime Minister, urging her to simply crash out of the EU with no deal; Britons should "concentrate our resources on resolving administrative issues" rather than trade negotiations, they say.

But recent analysis compiled by the Centre for Economic Performance at the London School of Economics indicates that the option of leaving the EU without a negotiated trade deal could cost the British economy £430 billion (S$773 billion) over the first five years, or around 5 per cent of the country's total output.

Meanwhile, the British government is embroiled in a growing parliamentary dispute over the role lawmakers will have in the negotiating process. The government plans to introduce a key piece of Brexit legislation in the next two weeks, but that has already attracted at least 300 amendments, threatening to derail Mrs May's entire agenda.

And Mr David Davis, the minister responsible for the Brexit negotiations, only added fuel to the political fire by implying in a parliamentary debate this week that MPs will get to vote on the final EU deal only once, and only after all its provisions have been negotiated, a tactic that means, in effect, that lawmakers will have no influence over the talks.

Mrs May hopes to reassert her authority and relaunch talks with the EU by enforcing a Cabinet reshuffle in the next few weeks. This is rumoured to include both senior and junior ministers in an effort to construct a more coherent negotiating team.

But officials in Brussels are not holding their breath. Nor are some of Mrs May's domestic critics, such as Sir Ivan Rogers, who resigned earlier this year as her top representative in the EU - it was he who told MPs in London this week that the British government is "living in fantasy land".

A version of this article appeared in the print edition of The Straits Times on October 28, 2017, with the headline 'Messy divorce looms as Brexit talks go nowhere'. Print Edition | Subscribe