Slow progress on the negotiations

The European Parliament Brexit Steering Group, headed by Guy Verhofstadt, published a joint statement with Michel Barnier on the second round of the negotiations. The statement contained little of substance, noting that the latest round of the negotiations had allowed the UK and the EU to “review the main issues and map out where further explanations are necessary”, while also emphasising that further progress must be made.

This echoes the frustrations of EU negotiators in recent weeks on the slow pace of talks, especially on crucial issues like the divorce payment owed by the UK to the EU and the future of EU nationals living in the UK and UK nationals living in the EU. Settlement on these issues, the statement suggests, is a pre-condition to any discussions about trade:

We can only start talking about a new EU-UK relationship if sufficient progress has been achieved in the three main withdrawal areas: citizens’ rights, the financial settlement and the border issue on the island of Ireland.

The talks are set to resume on 28 August.

Another nail in the coffin of free movement

This time last week, ministers were giving conflicting views on whether free movement would continue past March 2019, the expected date of Brexit, revealing a split within the Government on the issue.

But, in a Sunday Times interview, Trade Secretary Liam Fox dismissed the suggestion that the cabinet had agreed on a “soft” Brexit that would include a transitional arrangement on free movement. On Monday, Theresa May’s spokesman confirmed that the free movement of people from the EU will end when Britain leaves the bloc.

EU member states bid to host London-based EU agencies

Citing the Council of the European Union, Reuters reported on Tuesday that 19 EU member states are bidding to host the European Medicines Agency (EMA) and eight are bidding for the European Banking Authority (EBA), two EU agencies currently based in London.

The EMA, which is responsible for approving and monitoring drug safety in the EU, employs nearly 900 people. The EBA, which acts as an EU-wide banking regulator, employs some 160 people in London.

A second Brexit referendum?

In a widely-shared column published in The Guardian on Thursday morning, Vernon Bogdanor argues for a second Brexit referendum.

Given that a “soft” Brexit—a way of leaving the EU that maintains many of the current legal and trading arrangements with the bloc—is incompatible with the promise of sovereignty that has been central to Theresa May’s stance, Bogdanor says that it is inevitable that Britain will be negotiating a trade agreement in a “hard” Brexit scenario. In other words, from scratch. And, Bogdanor says, it will be doing so from a relatively weak negotiating position.

Bogdanor gives four reasons for why the public should be given a final say on the final terms of the agreement with the EU:

  • There is no majority in the Commons for a “hard” Brexit.
  • Labour’s electoral rise indicates that there is public opposition to a “hard” Brexit.
  • Both parties are divided on the question of Brexit, which could lead to a deadlock if the final agreement is too “hard” or too “soft”.
  • The House of Lords could reject a “hard” Brexit, arguing that Theresa May’s minority government does not have the mandate to implement it.

On balance, the assessment of the challenges is right. But I can’t help but see this as the same kind of wishful thinking that blinded commentators to the outcome of the referendum last June.

Consider this: what if a second referendum is held and it affirms Britain’s commitment to exiting the bloc? The consequences would be dire not just for Britain’s already-strained relationship with the EU, but also for those in the UK harbouring hopes of any meaningful association with the bloc in the near future. A second Leave victory could be a further stain on the EU’s credibility.

A better way might be to push for as long a transitional arrangement as possible—enough time to avoid the economic and legal fallout of a hard break with the bloc—and to give the public time to digest the consequences. In this scenario, the UK would withdraw from the EU gradually, with minimal disruption to trade or the lives of EU citizens living in the UK or UK citizens living in other EU member states.

A lot can happen over the coming years. If the public is given the chance to see the EU as a reasonable negotiator that is not seeking to punish the UK for leaving, it may warm to the idea of continued membership. And the EU has said, repeatedly, that it would welcome Britain back.

In other news

  • Writing in The Telegraph, former Conservative Party leader William Hague warned on Tuesday that Brexit could become the “greatest economic, diplomatic and constitutional muddle in the modern history of the UK, with unknowable consequences for the country, the Government and the Brexit project itself.”
  • In an interview with The Wall Street Journal (paywall), Donald J. Trump said the White House was hoping to enter into a “big and exciting” trade deal with the UK. “I can say that we’re going to be very involved with the UK,” he said. “I mean, you don’t hear the word Britain anymore. It’s very interesting. It’s like, nope.”
  • As feared by many in the UK, it appears that the import of US agricultural products not meeting EU food safety standards, including chlorine-washed chicken, could form part of any trade deal. “We have farm products that you just can’t get into the EU. And we don’t do that to them,” Trump said.
  • In a report, Oliver Wyman, the consultancy, estimates that bank costs will rise by 4% and capital requirements by 30% as a result of Brexit. The report upheld earlier predictions that Brexit would push 31,000-35,000 financial sector jobs out of the UK, including 12,000-17,000 in banking.
  • The Proms were embroiled in Brexit tensions as concert goers were asked to put away their EU flags during a performance of Beethoven’s Ode to Joy, the EU anthem.

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Lead photo of Liam Fox. Foreign and Commonwealth Office / Flickr

Pawel Wargan is the Co-Founder and Editor-in-Chief of The Dial.