29 June 2016

When interpreting what the EU referendum result means for the UK’s negotiating priorities in forthcoming talks in Brussels, the next Prime Minister will need to balance the UK electorate’s expectations against the terms that the EU might be prepared to agree.

Three broad strands withing EU position on Brexit

The EU’s common public line at this stage is that there will be no informal or formal negotiations until the Article 50 exit clause is triggered by the UK. But, beyond this, much is uncertain and there are different strands of opinion emerging.

European Commission, European Parliament, Eurozone-south

The first, which is the toughest nut to crack, and is comprised of the European Commission, European Parliament and the Eurozone-south led by France, is pushing for a speedy British exit. Federalist-minded member states and centralising institutions view the crisis triggered by Brexit as a means to spark the next push forward in ‘the project’.

From a French point of view, putting as much distance as possible between the UK and the EU would cement its place as second in the European pecking order to Germany, without the UK as competition. It has already been flexing its muscles, with French Prime Minister Manuel Valls quick to rule out an EU-US trade deal if it doesn’t “respect the EU’s interests,” by which he means France’s. Economics plays a role too, since these countries have the most to fear from short-term losses in confidence.

Baltics, Central and Eastern states

At the other end of the spectrum are the Baltic and Central and Eastern states where geopolitical considerations are likely to be paramount and the prospect of losing the EU’s most Atlanticist, most committed NATO state is proving a sobering experience. These countries often shared Britain’s scepticism about the EU’s accretion of power and have already put pressure on Mr Juncker to resign. Jaroslaw Kaczynski, who heads Poland’s ruling Law and Justice party and is the main power broker within the government, has even called for “efforts aimed at making Britain return, including a second referendum,” conceding that the “EU would have to radically change”, albeit without spelling out how.

The UK’s prominent role in Europe’s defence and its close relationship with the US might, if deployed intelligently by the UK, transcend the seemingly intractable impasse with these states in the last round of negotiations over the free movement of people.

Germany, the Netherlands, the Scandinavians

Then there is Germany, the Netherlands, and the Scandinavians, which sit somewhere in the middle. German Chancellor Angela Merkel and Dutch Prime Minister Mark Rutte have stressed that the priority is to get the talks right. These countries share Britain’s liberal trading instincts, are the most deeply economically intertwined with the UK, and are wary of Brexit being used as a pretext for greater centralisation, which could further fuel domestic Eurosceptic sentiment. As net contributors to the EU budget, they would also have to pick up the lion’s share of the tab in Britain’s absence. On the other hand, they are also keen to avoid Brexit becoming an attractive precedent others might wish to follow.

Special case: Ireland

Ireland is understandably a special case. Its close economic and political links to the UK means it has the most to lose from a botched negotiation and it has urged calm on all sides.

There are limits to a ‘divide and conquer’ strategy

These differences should not be overdone and there are obvious limits to any ‘divide and conquer’ strategy on the UK’s part. All EU members – as well as MEPs – will have to ratify a UK deal and all have so far been united in saying that the UK cannot ‘cherry pick’ the best of the EU from the outside. Nevertheless, the UK Government must remember it is not dealing with a homogeneous free trade bloc but a political entity with its own internal dynamics. It must use these to pitch its negotiating offer appropriately.

A version of this article appeared in The Daily Telegraph