“It’s time to move to second stage of Brexit – trade talks”
Fine Gael MEP, Brian Hayes, speech to the 8th JP Morgan Annual Multinational Pensions Forum in Paris on Wednesday 11th October.
“Brexit negotiations are not a tennis game. Both sides need to get serious.
“In her speech in Florence and in her statement to the House of Commons on Monday the British Prime Minister, Theresa May, has shown a willingness to compromise on Brexit. There is now an onus of responsibility on the EU to respond in a positive fashion.
“It would be an economic and political disaster if no agreement came from the Brexit negotiations. A cliff edge is the worst outcome.
“Brexit has the potential of being a new, unquantifiable systemic threat to the financial system in Europe. Britain leaving the EU without a proper divorce settlement and without a future trading relationship with the EU, represents in my mind, an unmitigated political failure for the EU and for the UK. Countries caught in the middle of that, countries like my own, would pay a heavy and unfair price for such a failure of politics.
“It’s time for some realism to be injected into the talks. I believe that we need to begin a scoping exercise on the outlines of a future EU/UK trade deal with a view to beginning trade negotiations as soon as possible. I agree with Kristian Jensen, the Danish Finance Minister when he recently said it’s time to stop the games and get on with the deal.
“Certainly, the British Prime Minister is in a difficult position and there are genuine concerns at EU level regarding the reliability of the current British government as a negotiator. There are open divisions in the British cabinet. There is an insurrectionist element in the Conservative Party, which is opposed to any deal with the EU. The British press will of course make life virtually impossible for everyone in these negotiations.
“However, I think it is important to ignore the hysterical headlines in much of the British press and focus on the facts, as we now know them. Despite the rhetoric to satisfy the hardliners, it is now obvious that Theresa May is edging towards a softer Brexit.
“In the House of Commons on Monday the Prime Minster made it clear that the proposed transition period of around two years will operate under “the existing structure of EU rules and regulations”. I have repeatedly said that the longest possible transition period is in everyone’s interest, politically and economically. She also made it clear, much to the disappointment of some within her party, that the European Courts will have jurisdiction during the transition period. This represents a significant softening of the UK position.
“In fact if the EU moves onto the trade talks already, it makes the duration and early negotiation of the transition phase easier to get agreement which will help EU and UK business.
“Economic realities are beginning to have an impact on the politics of Brexit. The political uncertainty created by Brexit is beginning to weigh heavily on UK investment, productivity and growth.
“The British government is at last recognising its financial responsibilities to the EU after 40 years of membership. Boris Johnson has lost that argument. Reaching agreement on the final sum is essentially a matter for accountants and arbitration by an independent body if necessary. Some progress has been made on the rights of EU citizens in the UK and UK citizens in the EU and a possible role for the European Court in determining such rights. With a minimum of goodwill, issues regarding citizens’ rights can be readily resolved.
“On the Irish question some progress has been made on maintaining traditional British/Irish relations, particularly as regards the common travel area. The situation is not helped by the ongoing failure of the parties in Northern Ireland to reach agreement on a power sharing executive. Ireland, the UK and the EU are committed to finding solutions which do not include a hard border on the island of Ireland. That will depend of course on the shape of the final EU/UK trade deal.
“So returning to the facts as we currently know them; the UK will leave the EU at the end of March 2019 but could remain a shadow member for at least two additional years. If there is no deal – effectively a cliff edge – there is no transition period and no possibility of an orderly future trading relationship with the U.K. Are we really going to risk that?
“There is an urgency about commencing negotiations on the future relationship between the EU and the UK. What is needed to allow the talks to proceed past the divorce stage is a commitment on general principles that might ultimately shape a new relationship. If we don’t get movement on the divorce settlement – we reach an impasse and the real possibility of a complete breakdown. That would come at an enormous cost.
“Wolfgang Schauble leaving the Finance Ministry in Germany to become President of the Bundestag is a clear sign of major political and generational change obviously in Germany but also in Europe. He has been the stand out politician over the past 10 years and has helped steer the Eurozone economy especially to calmer waters. When the economic and banking crisis came, he was determined to defend the fledging euro currency by whatever means necessary. His comments this week about emerging debt and liquidity risks in the global economy need to be heeded. But a far bigger risk – a risk that faces us all now – is the risk that the UK and the EU would fail to settle Brexit.
“Speaking as an Irish man and as a committed European I hope that the outcome of Brexit negotiations will be the closest possible relationship between the UK and the EU. As an MEP of the largest political group in the European Parliament, I will work towards that end.”