Post-Brexit: What Future for the EU-UK Relationship?

Florian Christl in a conversation with Molly Scott Cato (former Green MEP for the South West of England and Gibraltar), Terry Reintke (MEP for the Greens, Germany) and Dr. Fabian Zuleeg (Chief Executive and Chief Economist of the European Policy Centre).

Florian Christl: The Brexit negotiation process is sequenced into two distinct phases: one for withdrawal matters, the other for future relations between the EU and the UK. The first phase came to an end with the Withdrawal Agreement  agreed on 17 October 2019 and entered into force on 1 February 2020. What has been achieved from both sides? Can the Withdrawal Agreement be regarded as success for the EU?

Terry Reintke: I would say that having the Withdrawal Agreement was an important first step because it answered a couple of questions, such as the rights of EU nationals in the UK, and the financial questions were at least outlined and clarified, while the question of the border in Northern Ireland was also addressed. If the solution is going to be workable and under which conditions, I think there are still a lot of questions that were not clarified in the Agreement, so it should only be seen as a first step.

Molly Scott Cato: Terry and I have had quite a few discussions about this because I actually voted against the Withdrawal Agreement as a European, and that’s because I think that Michel Barnier essentially folded at the last minute. The British government didn’t negotiate in detail. They just used a pressure strategy which they are using again now, and in the end Boris Johnson gave way on the Irish border which is bad for everybody for political reasons and Barnier gave way on the level playing field which was bad for the European Union. The level playing field moved out of anything that’s legally binding and into the discussions that are happening now which I think put the European single market under stress and that’s why I voted against it.

Fabian Zuleeg: I think what is clear is that it was a necessary step because in the end what is the alternative? The only alternatives would have been that either the UK would reconsider leaving the EU, which was not in the cards, or we could have ended up in a situation without even a Withdrawal Agreement, which would have been even worse in terms of citizens’ rights, in terms of the financial obligations of the UK and the situation in Northern Ireland. 

However, the initial expectation was that the Agreement would enable us to get into the next phase of the negotiations with some things already settled, and with other things we would at least have an idea of what direction we’re headed. But that second part hasn’t actually happened because what we are seeing now is that the UK government seems to entirely disregard the political declaration and that the agreed upon commitments have not been pursued. On the Northern Ireland border progress is extremely slow, and we just had the House of Lords report which actually says unless something happens very quickly it will be impossible to meet the deadlines.

I think one of the most concerning things is that despite the progress which has been made we are still looking at the situation where no deal remains not only a possibility at the end of this year but probably the most likely outcome.

Dr Fabian Zuleeg

Dr Fabian Zuleeg is Chief Executive and Chief Economist of the European Policy Centre since October 2013. His analysis focuses on EU economic policies, including economic governance at EU/Eurozone level, the Single Market, Digitalisation, Industrial Policy, Better Regulation and the EU budget, as well as EU international economic relations. He has a long-standing interest in the political economy of European integration, with a particular focus on the UK-EU relationship, analysing the impact of Brexit on the UK and the rest of the EU, as well as the process of separation.

Florian Christl: You already pointed out that the Withdrawal Agreement is not a guarantee that the ongoing negotiations on the future relations between the UK and the EU will end well. What are the most significant differences of principle remaining with regard to a future trade deal?

Terry Reintke: I think the main and most fundamental fight that we are having right now is whether we are going to have a comprehensive agreement that is going to take all the different sectors and all the different issues into consideration and then we are going to find a package that somehow works for both sides. This is how the EU usually deals with difficult situations: you find a package deal and then everybody can bring home something. But this is not what the British side wants anymore; they want to have a minimum agreement probably on financial services, I believe that this is probably the field where the damage that would be done to the British economy would be the highest. This is obviously not what the EU can work with.

Molly Scott Cato: We’re not hearing anything like enough about financial services which is at the end of the day what the British government really cares about; a lot of European finance also goes through London, so it matters to both sides that there’s an arrangement on financial services. Also, because banks are going to become unstable due to the coronavirus pandemic there will be a lot of non-performing loans, and so the need to stabilise that is absolutely crucial. So I think some arrangement will be reached over financial services whatever happens with the overall deal.

Florian Christl: Do you think that not even the looming economic consequences of the pandemic will incentivise the British to be more willing to reach a compromise for a future trade agreement?

Fabian Zuleeg: Well, there are some people who have actually said that the pandemic makes the impact of Brexit less. I disagree. It might make it easier to hide that impact but that’s not the same as not having the same impact. Leaving the EU makes the UK much less attractive, so it actually amplifies the economic effect. So, if you look at this from an economic point of view, then it’s very clear that the pandemic should lead to a reconsideration of Brexit and at the very least should lead to an acceptance of an extension to the transition period to try not to have a negative effect. 

If you look at it from a negotiation perspective, it also gives a very strong indication that with the coronavirus negotiations cannot function in the way these negotiations have to function. You need political negotiations, not just technical negotiations, and they are not taking place at the moment since countries are dealing with the pandemic.

Molly Scott Cato: In Britain at the moment we have 50,000 people who are preparing to do the paperwork on the border, but we have only 20,000 contact tracing for the coronavirus, so you can see the priority of the government is still to push through Brexit at any cost. We are indeed heading for no deal and it becomes clear that this government is only working for England, because the three other governments that make up what is called the United Kingdom all are demanding an extension now because the damage will be huge if we don’t do that. But that’s been just completely ignored by the Westminster government.

Terry Reintke: I believe that the British government is completely underestimating the economic consequences that this crisis is going to have, and I think that they are really still not aware of how deep the situation after the transition period is going to affect the British economy. Furthermore, there is no ongoing powerful big campaign for an extension in the UK at the moment and I think that this is also because obviously the attention and the discussion is somewhere completely different and if there was a civil society demand and not only the governments of Scotland, Wales and Northern Ireland, this might actually change the political dynamic, but it’s not there, at least not to my knowledge.

Terry Reintke

Terry Reintke, 33 years old, from Gelsenkirchen in the German Ruhr-Area, is a Green Member of the European Parliament since 2014. She works on civil rights, democracy and rule of law in the LIBE committee and is a fighter for the rights of LGBTI in Europe, chairing the LGBTI Intergroup since 2017.

Florian Christl: What is there to expect from Germany, who is taking over the EU Council Presidency on 1 July 2020? Is Brexit even a priority given the massive challenges due to the coronavirus pandemic?

Fabian Zuleeg: I think the German Presidency is important, but it is not important because of Brexit. It is important because there are many issues which need to be addressed, including the European response to the pandemic and in how far we get the multi-annual financial framework passed. Brexit is, and it was already before the pandemic, certainly not at the top of the issues for the EU27. What hasn’t changed is that ultimately there are some red lines of the European Union and unless those red lines will be fulfilled there simply will not be a deal. A deal with the UK is important. It has an economic impact, but it is far less important than the principles of the European Union and it is far less important than the unity of the European Union in this and that also means protecting the single market.

Florian Christl: In case of a No-Deal Brexit, what is your outlook for the next decade(s) of UK-EU relations? How can the UK stay close to the developments within the EU?

Molly Scott Cato: It’s a gloomy prognosis for Britain, but where I see hope is that young people understand very clearly that their future is with Europe. Now how we mobilise younger people in a time which will be an extreme crisis to them because they are bound to suffer the worst with unemployment and convince them and work with them to be clear that their future is in Europe is a challenge and Terry’s friendship group helps with this.

Molly Scott Cato

Molly Scott Cato is Professor of Green Economics in the Roehampton Business School. She is a green economist who is also well-known in the field of co-operative studies and researchers sustainable finance. She was a Green Member of the European Parliament for South West England and Gibraltar from May 2014 until January 2020. Molly's areas of work are the green economy, addressing the question of how we might design and organise an economy that fits comfortably within planetary limits and achieves social justice. Furthermore, she explores the sustainable finance policy agenda. Building on her work as an MEP, she is exploring how mandatory disclosure and sustainability indexes can help to shift finance to supporting the sustainability transition.

Fabian Zuleeg: We have to recognise that the EU and to an even greater extent the UK need each other, but if we have no deal this will make a cooperation on a number of different issues more difficult. It will make it more difficult to cooperate, for example, on foreign policy and security policy where the UK is a very important factor. It will make it more difficult to have a United European front in global issues whether it is the global multi-lateral system, whether it’s about sanctions policy, whether it is about how we deal with China, how we deal with the US, all of that will be more difficult if we don’t have a deal. What we are actually looking at is an acrimonious situation, even up to the point where we might have open conflict on some issues. What happens if we have French fishermen trying to enter British waters? There are still some issues which have real political heat and could well lead to a situation where the relationship deteriorates. So the coronavirus reemphasises that we actually need to cooperate, but what we might end up with is exactly the opposite.

Terry Reintke: That’s why it’s even more important to bring the civil society actors in. There are a lot of entry points where you can actually fight for UK-EU cooperation and it starts on a local level. It’s even more important that we have these things, we continue to work with each other and then I don’t think it’s going to be something that within five years everybody is going to change their mind and realise that it was wrong what happened, but I think that in the long run if we keep these ties we can turn this around and this is always what we need to have in mind, not to only think in cycles of five or maybe 10 years, but 15 to 20 years.

Florian Christl: Finally, to sum this up, I would like to ask each one of you for a short concluding statement. What would be your recommendations for policymakers in the UK and the EU at this stage?

Molly Scott Cato: The EU should not show flexibility! I think that’s the most important thing. And then in terms of what I say for Britain, my energy has to be to try and turn Britain into a better democracy, and I’ve been trying to do that all my life, but every year that passes it becomes clearer we need decentralisation of power, more power to regions and local governments.

Terry Reintke: If I could have one thing it would be for the UK to stay in the Erasmus programme because I think that that is exactly the type of exchange that will be needed for future corporation.

Fabian Zuleeg: For Europe, the key thing is that we shouldn’t be distracted by Brexit. There are many big challenges out there and we will have to prove over the next years that the EU is an answer to those global challenges which we are facing. If we can do that, then I think there will also be a longer term impact on the relationship with the UK. 

Thank you all for taking the time.

The conversation took place on 3 June 2020.