Richard North, 21/04/2017  

Even though the draft negotiating guidelines from the European Council were pretty unequivocal, the "colleagues", it seems, have been working on a new draft which makes them even tougher.

This is according to the Financial Times which has seen a "non-paper" commenting on the new guidelines. As such, "non-papers" are usually published to "facilitate and structure discussion" and do not amount to formal proposals.

The FT itself tells of "small but significant revisions" to the original draft guidelines. But, to be more accurate, these are discussion points and clarifications offered by the Commission. There is no new draft as such.

Nevertheless, the newspaper believes the "non-paper" shows that EU Member States are happy to take a harder line on some issues than its negotiators originally suggested. In actuality, this reflects a hard line being taken by the Commission, but more in the form of tentative kite-flying.

Most notably, the Commission is challenging a UK requirement that EU migrants complete an 85-page form to prove that they are permanently resident in the UK. Guarantees of migrant rights "must be comprehensive, effective, enforceable and non-discriminatory" the document states. "Citizens should be able to exercise their rights through smooth and simple administrative procedures".

From "several diplomats", we learn that this call for "simple administrative procedures" was a direct reference to what are unnecessary bureaucratic hurdles that will make it harder for EU citizens to exercise their rights in Britain. "We've all seen that 85-page form", one senior EU diplomat tells the FT.

Another significant suggestion for amendment confronts one of the UK's supposedly most important "red lines" by including a more explicit reference to the ECJ and its role during a transition.

Any transition phase extending EU law would require not just the continuance of regulatory, budgetary, supervisory and enforcement instruments and structures, but also the EU's judicial oversight. The new draft also seeks to preserve the "autonomy" of EU decision-making at all stages, as well as "the role" of European courts.

One wonders whether Mrs May knew about this before her surprise announcement on the election and whether it influenced her decision. This is, after all, a dagger at the heart of her Brexit policy, ostensibly keeping the UK locked into the ECJ's jurisdiction until any free trade agreement comes into force – which could be years down the line.

Unsurprisingly, there is little enthusiasm in the Commission for establishing special judicial arrangements for the UK, just to cover the transition period. The UK will have to fit into the EU mould, not the other way around.

And having stabbed deep, the "colleagues" are intent on twisting the knife, demanding that the UK not only addresses the reste à liquider issue but also agrees to a "single financial settlement" which includes issues related to the European Investment Bank, development spending and contributions to the capital of the European Central Bank.

Not content with that, the non paper notes that the withdrawal agreement will need to address "potential issues arising from the withdrawal in other areas of cooperation, including security".

But the real bombshell comes in what the FT terms a "subtle edit". This downplays the EU's view of how soon it is willing to engage in discussions on an "ambitious" post-Brexit trade deal with the UK.

The original draft noted the EU was willing to start work on this before 2019, but the suggested text merely notes a willingness to discuss "an agreement on trade". This, apparently, is a deliberate attempt to lower expectations, leading one to suppose that, if adopted, team Brexit is going to find it hard going extracting a substantial agreement from the "colleagues".

Even then, the bad news isn't done. On trade deals in general, the Commission is suggesting that any new arrangements should not "endanger financial stability in the union, which is interpreted as a demand that the UK financial sector stays in line with European standards and potentially accepts some EU oversight.

That regulatory oversight, however, does not stop with financial services. The reference to social and environmental "dumping" in the original is also suggested for modification, with a reference to the need to tackle "unfair competitive advantages" including "tax, social, environmental and regulatory measures and practices".

As a final touch, the non-paper demands that the relocation of the European Medicines Agency and the European Banking Authority, currently based in London, be settled "rapidly". Britain will have no say in where they go, but there is some suggestion that the UK should cover the relocation costs.

Small wonder than that Finnish Finance Minister Petteri Orpo ventures the opinion that Brexit is inevitably going to be so painful that no one will want to feel it for themselves. He adds: "I believe it's going to be a precedent no one will want to follow".

And for all that, we have yet to see the final version of the actual guidelines, which are set to be approved on 29 April at a European Council meeting. But anybody who thought that the general election might buy us a temporary truce could be prey to over-optimism. The Commission seems determined to close down as many of Mrs May's options as they can.

This could make the Council an event of electoral significance if the hardest of the suggestions are adopted and they feed back into the campaign over here. Any sign of a stiffening resolve in Brussels is going to need careful handling, otherwise we end up with a bunfight that nobody can win.

Just for once, Brussels needs to realise that concessions cannot just go one way. To get something, they are going to have to give something. Playing the hard nut doesn't always work. However tough the nut is, one can always find a bigger sledgehammer.

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