Richard North, 18/01/2018  

Preoccupied with our own concerns as we are, it is easy to overlook the very real fact that the march of European integration goes on. Something of a milestone in that process is the appointment of Portuguese finance minister Mário Centeno as the new president of the eurogroup. His first concern is Germany though, declaring that Europe needs the German government "as soon as possible".

Wasting no time, he nevertheless promises to bring "consensus across the aisle" to strengthen the eurozone, which is no more or less than one would expect. But Centeno has also welcomed the reform proposals agreed by Germany's two biggest parties in their preliminary coalition talks. "There are positive signs on European policy coming from the exploratory talks", he says.

The German draft, agreed between Merkel's "conservatives" and the SPD last week raised the prospect of an "investment budget" for the eurozone, and also considered whether the ESM bailout mechanism should be turned into a full-blown European Monetary Fund under parliamentary control and anchored in EU law.

The particular relevance of this is that it builds on the Five Presidents' Report and the Commissions own plans, pointing to the inexorable build-up of activity that will eventually lead to a new treaty. It is only a matter of time, therefore, before the "colleagues" are embroiled in the treaty-making process, creating even greater distance between the core states of the European Union and the UK.

Lest we forget, therefore, the referendum and the Brexit process has relieved us of the responsibility to involve ourselves in further European political and economic integration. That is already a tangible benefit of Brexit and one which should not be under-estimated.

There was no status quo in voting to remain in the EU and had the remainers succeeded in the referendum, it would only have presented us with the future challenge. We would have had to have voted on the new treaty when it cames, with all the disruption and political trauma that that would have entailed.

For once, therefore, Mrs May has got the mood absolutely right, having dismissed what is described as a "plea from Brussels" to rethink the decision to leave the EU.

What this amounted to was an exchange during the proceedings in the European Parliament. European Council president Donald Tusk had told us that, if the UK Government stuck to its decision to leave, Brexit would become a reality - with all its negative consequences - in March next year unless there was "a change of heart among our British friends".

Invoking David Davis, who had said "if a democracy cannot change its mind, it ceases to be a democracy", Tusk went on to say that the EU had not had a "change of heart" over Brexit, telling us: "Our hearts are still open to you".

Commission President Jean-Claude Juncker apparently then joined the group hug movement, declaring "the exit of Britain is a catastrophe" and suggested he would like the country to stay. He added: "Our door still remains open and I hope that will be heard clearly in London". His deputy, Frans Timmermans, then said that the Union was ready for any British "second thoughts".

However, Juncker appears to be going for Article 49. The clue came with a latter comment when he said: "Once the British have left under Article 50 there is still Article 49 which allows a return to membership and I would like that". Pressing home the point, he then said: "I would like us now to treat each other with respect and not abandon each other".

Even then, Juncker was not the end of it. No sooner had Juncker done his stuff then the French President was stretching out "a hand of friendship”, calling for Britain to reconsider Brexit "amid fears it will wreak economic damage both sides of the Channel".

With Macron due to arrive in the UK today for an Anglo-French summit, a key aide to Mr Macron has stressed France would "look with kindness" on any future decision by Britain to remain in the EU.

For all that, Mrs May has not taken the bait. She has been unequivocal and direct. Meeting with Austrian president Sebastian Kurz – with his country next to hold the EU rotating presidency – she used the occasion to send a message to Brussels that she had no intention of reopening the question of Britain's EU membership. The Government, she said, "will respect the decision taken by the British public to leave the EU".

Alongside this, though, we seem to be setting the scene for an element of confrontation, if the negotiation "directives" go ahead on the basis of demanding a continuation of free movement until the end of the transition process. Downing Street, we are told, rejects this idea. If, on the 29 January, the demand stays, the UK will need to decide whether it is going to make this a "red line".

Another sticking point, and one that is probably going to become more prominent with time, is the question of the future relationship between the EU and the UK. Juncker, in this instance, is calling for more clarity on the UK's vision. Only then would the EU leaders meet and decide on the way the EU saw its future relationship with the UK as a third country.

What this most certainly does tell us it that the negotiations have as yet made very little progress in terms of substantive issues. That was a point picked up in Strasbourg by MEP Manfred Weber, leader of the European People's Party, who averred that blue passports had been the first and the only real thing that the British Government had achieved in more than one-and-a-half years of negotiations.

Weber is also warning that any transitional period could not be taken for granted. The cliff edge, he says, "is far from being avoided". And that has to be considered a shot across the bows, as the European Parliament has the power to veto the Article 50 settlement.

Another presentiment of trouble comes not directly from the European Parliament but from the Irish Prime Minister, Leo Varadkar, who is insisting that the Brexit commitments made by Britain in relation to the Irish border should be legally binding within the framework of the withdrawal agreement.

This demand was made when Varadkar spoke to the European Parliament in the first of a series of debates on the Future of Europe. The UK, he said, could not "backslide" on commitments made. He would ensure that "what has been promised in theory is delivered in practice".

Considering that the UK has yet to offer any firm proposals on exactly how the Irish border should be managed, and the need for detail is getting more urgent by the day, this whole issue shows every sign of becoming a major sticking point.

Varadkar's concern is hardly surprising as, almost daily, the importance of this issue is being reinforced. The latest indicator comes from Nestlé which has its chairwoman, Fiona Kendrick, warning that all products sold in Ireland are imported via Britain, amounting to 22,000 tons of product a year, via 2,500 truck movements.

As every product sold in Ireland was identical to those sold in the UK, it followed from this that any changes to trading rules and regulations post-Brexit would push up the company's costs. Kendrick also signalled that border delays would hit its exports to Ireland more than to other EU states, as the company has no distribution centres in Irish Republic.

Leigh Pomlett, executive director of freight management group Ceva, and president of the Freight Transport Association, adds to this cautionary note, warning that managing border checks on the island of Ireland would be "huge and complex".

Furthermore, says James Hookham, deputy chief executive of the Freight Transport Association, trade between Ireland and Britain had grown to the point where border checks at ports could not be accommodated at UK ports. In "areas such as Holyhead and the south Wales ports, but even in the port of Liverpool, there simply isn't the physical space for customs and border controls to be conducted", he says.

Collecting all the strands together, once again one gets the feeling of a Phony War - the calm before the storm. While the Brexit narrative generally is all over the place, there is still the brooding presence of the negotiations where the unresolved issues are stacking up.

Ignoring them or simply indulging in displacement activity – as so much of the politico-media nexus is doing – is not making them go away. Soon enough, we will discover that the Phony War becomes the gathering storm.

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