Invoking Article 50: Europeans Lose Hope in an Amicable Brexit Deal

Written by | Monday, March 27th, 2017

Theresa May said that no Brexit deal would be better than a bad deal and her European counterparts seem to feel the same way. The two-year negotiating process will begin next week when the British Prime Minister finally invokes Article 50 of the Lisbon Treaty. London hopes that it will be able to secure an amicable long-term relationship with the EU but EU policymakers are getting more and more pessimistic whether a deal can be reached.

EU leaders doubt whether Ms. May has sufficient political capital to make the compromises that will be needed along the way to secure an aspirational deal. They are aware that some voices in the Conservative party would prefer the UK to leave the bloc without an agreement. London’s decision to withdraw from both the EU single market and the customs union will mean that the United Kingdom will technically end up even further detached from the EU than, for example, Turkey. This position is a difficult starting point from which to secure a comprehensive and deep agreement that would fulfill Ms. May’s goal of frictionless trade.

The UK government will thus face tough choices since one reason it gave for leaving the EU was to enable the UK strike its own trade agreements with third countries. However, the deeper the deal with the EU, the more London will have to compromise. For example, Brussels will demand mechanisms to make sure that British regulations continue to be equivalent to the EU rules. This has been a condition in all past deals granting deep market access, including those with Switzerland, Norway and Iceland. From the EU’s perspective, full equivalence means fully complying with all changes in EU regulations.

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