Europe’s Firm But Fair Approach to Brexit

(Bloomberg View) -- With talks on Britain's exit from the European Union finally about to begin, one procedural issue looms large: Do the negotiations on three big subjects -- exit terms, transitional arrangements, and a future comprehensive agreement on a U.K.-EU partnership -- move in parallel or in entirely separate stages? Disagreement over this seemingly minor detail could sink the whole effort.

The U.K. has far more to lose in these negotiations than the EU, but if the talks break down it would advance the interests of neither side. An understanding on how the talks should proceed is therefore needed at the start -- and a formula suggested last week by the European Council offers grounds for optimism.

The EU is concerned, in the first instance, that Britain settles its liabilities and meets its other obligations to the EU when it leaves. The U.K. wants that discussion to happen alongside talks on future arrangements, so that concessions in one area might be traded against concessions in another.

The problem is that the European Commission has proposed an exit bill of as much as 60 billion euros (to cover planned investments, EU staff pensions and other costs), a figure that one British minister has called absurd. If the EU presents these terms on a take-it-or-leave-it basis, and the British government is unable to justify them to its citizens, the talks could fail almost before they've begun.

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Last week the European Council, the body representing EU governments, issued draft guidelines to its negotiators. The overall posture is firm but fair -- and on this issue of sequencing, the council isn't ruling out compromise. Describing the first phase of talks, the guidelines say the council will “determine when sufficient progress has been achieved to allow negotiations to proceed to the next phase.”

A good choice of words. “Sufficient progress” is sufficiently vague to allow negotiators to move on to other matters before exit terms are signed and sealed. The greater the scope for compromise across the full range of issues, the better the prospects of a successful, mutually advantageous result. EU governments will need to resist the temptation to harden this “sufficient progress” language as things move forward.

The disentangling of Britain from the rest of Europe is likely to be one of the most difficult and complicated international negotiations ever undertaken. The chances of this ending well, especially for the U.K., are poor. But if Europe's leaders adopt these guidelines, they'll deserve some credit for choosing not to cripple the talks from the start.

--Editors: Clive Crook, Michael Newman

To contact the senior editor responsible for Bloomberg View's editorials: David Shipley at davidshipley@bloomberg.net.

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