Brexit transitional deal will lock UK into EU court, says Verhofstadt

Britain will remain under the jurisdiction of the European court of justice for years to come if it seeks a transition deal to cushion its withdrawal from the EU, the chief negotiator for the European parliament has said.

In the clearest sign to date that Britain is on a collision course with Brussels over the court, Guy Verhofstadt said European negotiators were primed to push back against Theresa May’s promises to remove the UK from the writ of European judges as soon as Britain leaves the EU in 2019.

Verhofstadt, who is representing the parliament in the article 50 negotiations, said he expected a transition agreement to be put together following the settling of Britain’s debts and before withdrawal in 2019.

But asked whether the UK would remain under the European court of justice after 2019, the former Belgian prime minister said: “The starting point from the European side will be yes.”

Downing Street made clear as recently as last month that it believed the UK would leave the jurisdiction of the court as soon as the UK left the EU. May, who was repeatedly frustrated by the court’s rulings during her time as home secretary, sees it as a benchmark for whether the country has truly left the EU.

Verhofstadt’s remarks are the latest sign that, under a transition deal that the prime minister wants to be put in place while a free trade agreement is finalised, the EU will not allow Britain to withdraw from the ECJ.

Such a scenario would elicit a storm of protest from many of the prime minister’s colleagues in the Conservative party, for whom the ECJ is a particular Brussels bugbear. Many will regard continued observance of ECJ rulings after 2019 as evidence that the prime minister has not kept to her promise that “Brexit means Brexit”.

With just weeks to go before May is expected to formally announce Britain’s intention to leave the EU by triggering article 50, Verhofstadt also dashed UK government hopes that it will be able to conduct negotiations in tandem about withdrawal and a future trade agreement with the EU.

He said that the EU institutions were now agreed that the UK would have to settle its withdrawal bill before any progress could be made on the future relationship. He said it would be reasonable to consider “an idea, a principle” on which to base a future relationship, but only to enter into talks on a free trade agreement during the transitional period.

On Britain’s hopes of negotiating a deal at the same time as the divorce, he added: “That is not possible. Technically [it is not possible] in the time we have, 14 or 15 months, let’s be honest.”

It is understood that it was agreed during a meeting between the EU’s Brexit negotiators and member states on Monday that the UK will be told to pay €57bn (£49bn) as the price for exiting the EU, although France and Germany wanted as much as €70bn.

A senior EU source added that at the meeting, hosted by the European commission Brexit negotiator, Michel Barnier, member states were also informed that the City of London was likely to be offered a so-called “equivalence” deal, whereby the UK and the EU’s regulations were deemed to be in line.

This would allow the City’s financial services to continue to operate across the continent. However, a source told the Guardian that Barnier insisted that the EU would have the power to pull the plug on the deal at any point.

Verhofstadt declined to comment on a possible arrangement with the UK regarding the City. But he described the claims from some in the UK and elsewhere that the EU had more to lose from a bad deal for the City than Britain as part of a pre-negotiation “psychological war”.

He said: “I don’t believe in this catastrophic scenario: without the City of London the whole thing collapses. I think this is completely, well, [much] of what you hear today is the building up of the muscles in the negotiation. Fine, it is good. But that is more creating the environment of psychological war.”

The Brexit secretary, David Davis, has sought to minimise the role of the European parliament in any deal between Britain and the EU, suggesting its role would be “peripheral”.

But Verhofstadt pointed out that MEPs would need to give their consent to the deal, insisting the parliament would play a pivotal role alongside member states in setting the negotiating position of the EU under agreements recently struck in Brussels.

Responding to Davis, he said: “If he thinks that parliament is peripheral, well the peripheral parliament needs to approve [any deal].”

The EU is assuming that May will deliver a letter to the European council on 9 March, formally triggering article 50. “Then we come out in mid-March with the opinion of the parliament,” Verhofstadt said.

“The resolution will give our opinion, red lines. Parliament will be the first institution to react.”

It is understood that the leaders of the other 27 other member states plan to meet on 8-9 April to finalise their negotiating position.

Verhofstadt said he believed that formal talks between the UK and the EU would then start in May. It is expected that Barnier and Davis will spend three days a week locked in talks together over the coming months as they bash out a deal.

Verhofstadt also warned May that the EU would not stand for any attempt by the British government to use Britain’s defence and security capabilities as a bargaining chip in the talks, as has been suggested by Downing Street. “In my opinion there cannot be a trade-off between both,” he said.

Verhofstadt said that he was concerned about the ramifications for the peace process in Northern Ireland following the UK’s withdrawal. “Everybody is anxious and saying we don’t want to return to the past. If you take Brexit as it is then, yes, you create a hard border again. Nobody thinks that is a good solution.

“How to have a Brexit and no hard border? That is the question and it is not only through some technical innovations, cameras and sensors [on a customs border]. That’s a real concern.”

Discussing the wider consequences of Brexit, and the future of the EU, Verhofstadt, who is a self-professed anglophile and is currently reading a book on Winston Churchill, said he believed it was “absolutely stupid” for countries to respond to the world’s challenges by splitting back into nation states. However, he added that the UK’s vote in June had aided the EU, by illustrating the foolhardiness of withdrawal.

“It is difficult to say, but Brexit has created a reaction in public opinion on the continent, a reaction that is positive for the European Union.”

Source: The Guardian