What do the EU Want?

Brexit has rightly dominated the news in recent weeks with a blizzard stories to choose from. The meaty issues of Northern Ireland, potential trade deals, a £52 billion divorce bill have been greatly devoured by journalists online, in print and on the TV. They have even been joined by excruciatingly high profile coverage of Nigel Farage graceless comparison of the EU to the mafia, Michael Howard declaring war on Spain and even attempt’s from the Daily Mail reinvent Miss UK.

One issue has however been overlooked despite being at the centre of the future negotiations. While a great deal of focus has been given to the UK’s objectives, including what best and worst case scenarios look like, there has been very little coverage of what the EU wishes to secure. As the party who, in this writer’s opinion, holds the trump cards in the negotiations, the lack of coverage given to their priorities, red lines and fears is puzzling and I think needs addressing.

The first, and probably most simple, priority for the EU and the remaining member states is securing the rights of their citizens in the UK. As of April 2017 there are approximately 3.3 million EU citizens living and working in the UK. It would be extremely damaging, both economically and politically, for the EU to have to relocate these people back to their native countries, in particular as the burden would fall hardest on a few of the newer members.

Countries such as Poland, Lithuania and Romania have seen tens of thousands of their citizens move to the UK and benefit from the higher wages and business opportunities available to them it seems almost unthinkable that a deal can’t be struck on the respective rights of citizens but it is a significant priority for at least half a dozen member states and one that could provide headaches on both sides.

It has been well publicised that the UK is seeking a trade deal as that mirrors the benefits of single market membership as closely as possible. Improving trade conditions were a significant promise from the Leave campaign and the Government is fully aware that, eventually, it will be judged at the ballot box, on the deal it is able to do. This economic imperative however does not just flow one way, with the EU and several members anxious to ensure that the UK’s exit of the single market doesn’t affect the already tenuous economic situation within the Eurozone.

As we heard consistently from the Leave campaign, the UK has a significant trade deficit with the EU. From German cars, French wine and holidays in Portugal, the UK currently has a £8.6 billion trade deficit with the EU and it will be important for businesses in the EU to keep their customers. For example, the UK accounts for 8.8% of Belgium’s exports and hosts a significant number of Estonian businesses – relationships these countries will be desperate to protect as completely as possible. While Germany and France for example have been definitive that the UK will not be able to ‘cherry pick’ aspects from the single market it will be incumbent on the final deal to find a way that EU countries do not lose out economically.

Northern Ireland’s and Gibraltar’s common travel areas will of course be issues that loom large over all negotiations and securing peace in these regions will be a fundamental goal to the EU. As we have already seen in the case of Gibraltar (and thankfully have not in Northern Ireland), these two situations are potential powder kegs in negotiations and will be seen as a measure of the EU’s ability to solve political problems. The EU has a more than commendable record as acting as a facilitator of peace and buffer against a war since its beginnings in the aftermath of World War II to the aftermath of the horrors in the Balkans. Indeed, the record of peace in Europe is one of the biggest and most celebrated achievements of the union and one they will wish to preserve at all costs. Ensuring that these two delicate situations are handled carefully and successfully will be crucial for the EU, as well as the UK.

On top of these mutual concerns between both parties will be, particularly in the heart of the Brussels and its top negotiators, ensuring that the UK is the first and last member to leave the EU. As Donald Tusk said in his acceptance of the UK’s Article 50 letter, the EU was genuinely saddened by the UK’s decision to leave the EU. While this may have something to do with a genuine affection for our expertise, strength as a partner and even our representatives (although perhaps not Robert Kilroy-Silk and Nigel Farage) it is most likely because it raises serious questions about the EU and its future.

With stuttering economies, a currency often on the edge of cliff and the rejection of Treaties by member states the EU has not been in the best of health since 2008 and has given rise of the populist right across Europe. In the previously EU mad nations of France, Hungary and the Netherlands Euroscepticism and nationalism has flourished in a way that has many across the continent, not least Brussels, worried. It is not unreasonable to say that the EU is facing its most difficult period ever and is scared that Brexit may just be the beginning of the ‘Exits’.

Given this situation, The EU simply cannot then begin to allow the UK to leave in a way that seems beneficial and encourages others to do the same. A process that sees the UK ‘cherry pick’ single market access while refusing future immigration from the union, that sees the UK strike deals with India while avoiding a the billions of euros it being asked to pay cannot be countenanced by the EU, in particular Germany and France. While the obituaries of the EU’s death may be premature it will be at the back of every EU negotiator that a precedent must be set to secure the future of the project.

Therein lies the biggest problem for the UK. While the UK will be determined to strike a good deal and hopeful that the mutual benefits can override the pain of divorce, it is the future of the EU and the instinct of self-protection that will make this process long and arduous.

Will O'Brien, Account Manager