It has become conventional wisdom to assume that the EU will exact a price from Britain for leaving the EU; that some European countries are out to punish the UK, and that all they need to do is wait and a desperate Britain will strike a bad deal. Similarly, there is little to suggest that the UK will view the negotiations as anything but an adversarial, zero-sum affair.
But even if we assume the negotiations will be calm, cool and collected, and that politicking takes a backseat, the time challenge presented by Article 50 is enormous. When Article 50 is activated by Theresa May, Britain will get 24 months to conclude a decent divorce agreement with the rest of Europe. If a deal cannot be reached within that time, Brexit will be direct, dramatic and disorderly.
May’s notification will sound the opening bell for a flurry of discussions. But at least initially, these will not involve London. The EU’s 27 other member-states will first have to agree on the negotiating guidelines for the Commission, and aligning different interests will take time. Britain has refused to ‘show its hand’ and Europe has avoided pre-negotiations. So, since the referendum, the leaders of the 27 have only met twice to discuss Brexit, with the next meeting scheduled for February in Malta. Expect a few more meetings and delays before the EU’s guidelines are agreed.
When the chief negotiators on both sides – Michel Barnier and David Davis – finally meet, their first order of business will be talks about the talks. They must agree on crucial procedural issues including whether to negotiate the withdrawal agreement and a future trade deal in parallel or one after the other, and how to negotiate a transitional agreement to avoid a ‘cliff-edge’ while finalising a comprehensive trade deal after Britain has formally left the EU. The transitional agreement is likely to grant the British more access to the EU’s single market than the final trade deal, and could be very cumbersome to agree.
Less high-brow but no less important, Barnier and Davis will need to settle issues like how often to meet, where to meet, who can be present at the meetings, and even perhaps, what language to use.
Towards the end of the divorce talks, more time will be lost. Article 50 says that a withdrawal agreement has to enter into force within 24 months. That means any parliamentary consent, including from the European Parliament, must be given before the two years are up. The British parliament will vote on the final agreement – and that could take up to six weeks – but so might others.
Since the rights of EU workers in the UK will be a key feature in the divorce, Central European parliaments might seek a proper debate before their governments sign off on any deal.
Neither should we dismiss the possibility that the European Court of Justice will be asked to give its views on the legality of the divorce terms. In 1991 the Court unpicked some elements of the new European Economic Area – even after all countries involved had agreed to its design – causing a year long delay.
As for the meat of the Article 50 talks, it is not just about who pays the pensions of British EU civil servants. Article 50 covers many delicate areas including the UK’s new schedule of WTO commitments and British access to European counter-terrorism databases.
What experts have said about Brexit
What experts have said about Brexit
1/11 Chancellor of the Exchequer Philip Hammond
The Chancellor claims London can still be a world financial hub despite Brexit “One of Britain’s great strengths is the ability to offer and aggregate all of the services the global financial services industry needs” “This has not changed as a result of the EU referendum and I will do everything I can to ensure the City of London retains its position as the world’s leading international financial centre.”
2/11 Yanis Varoufakis
Greece's former finance minister compared the UK relations with the EU bloc with a well-known song by the Eagles: “You can check out any time you like, as the Hotel California song says, but you can't really leave. The proof is Theresa May has not even dared to trigger Article 50. It's like Harrison Ford going into Indiana Jones' castle and the path behind him fragmenting. You can get in, but getting out is not at all clear”
3/11 Michael O’Leary
Ryanair boss says UK will be ‘screwed’ by EU in Brexit trade deals: “I have no faith in the politicians in London going on about how ‘the world will want to trade with us’. The world will want to screw you – that's what happens in trade talks,” he said. “They have no interest in giving the UK a deal on trade”
4/11 Tim Martin
JD Wetherspoon's chairman has said claims that the UK would see serious economic consequences from a Brexit vote were "lurid" and wrong: “We were told it would be Armageddon from the OECD, from the IMF, David Cameron, the chancellor and President Obama who were predicting locusts in the fields and tidal waves in the North Sea"
5/11 Mark Carney
Governor of Bank of England is 'serene' about Bank of England's Brexit stance: “I am absolutely serene about the … judgments made both by the MPC and the FPC”
6/11 Christine Lagarde
IMF chief urges quick Brexit to reduce economic uncertainty: “We want to see clarity sooner rather than later because we think that a lack of clarity feeds uncertainty, which itself undermines investment appetites and decision making”
7/11 Inga Beale
Lloyd’s chief executive says Brexit is a major issue: "Clearly the UK's referendum on its EU membership is a major issue for us to deal with and we are now focusing our attention on having in place the plans that will ensure Lloyd's continues trading across Europe”
8/11 Colm Kelleher
President of US bank Morgan Stanley says City of London ‘will suffer’ as result of the EU referendum: “I do believe, and I said prior to the referendum, that the City of London will suffer as result of Brexit. The issue is how much”
9/11 Richard Branson
Virgin founder believes we've lost a THIRD of our value because of Brexit and cancelled a deal worth 3,000 jobs: We're not any worse than anybody else, but I suspect we've lost a third of our value which is dreadful for people in the workplace.' He continued: "We were about to do a very big deal, we cancelled that deal, that would have involved 3,000 jobs, and that’s happening all over the country"
10/11 Barack Obama
US President believes Britain was wrong to vote to leave the EU: "It is absolutely true that I believed pre-Brexit vote and continue to believe post-Brexit vote that the world benefited enormously from the United Kingdom's participation in the EU. We are fully supportive of a process that is as little disruptive as possible so that people around the world can continue to benefit from economic growth"
11/11 Kristin Forbes
American economist and an external member of the Monetary Policy Committee of the Bank of England argues that the economy had been “less stormy than many expected” following the shock referendum result: “For now…the economy is experiencing some chop, but no tsunami. The adverse winds could quickly pick up – and merit a stronger policy response. But recently they have shifted to a more favourable direction”
But if anything Article 50 has all the ingredients to become a fight about money. Here are some of the thorny issues that need resolving: Britain must be untangled from the European Investment Bank, and its 16 per cent share of the bank’s capital – nearly 40 billion euros – must be returned. EU grants will need to be repaid and fishing quotas adjusted. Someone will have to pay for relocating the European Medicines Agency and the European Banking Authority from London. In turn, the UK will claim its share of EU assets – from EU offices down to the Commission’s wine cellar and cutlery. Lawyers on both sides will have a field day.
As the deadline approaches, an extension is not likely. Europeans will elect a new European Parliament in Spring 2019, a new Commission will take office later that year, and a new multiannual budget will start in 2020. The 27 will want to get Brexit out of the way before a new institutional cycle starts.
So the negotiating horizon will be much, much shorter than 24 months – perhaps 18 months or less – and the issues to be resolved are deeply divisive. And this assumes two big ifs: that no event in the next two years will throw the talks off course and that the political climate is favourable.
The UK and EU can hardly be faulted for being meticulous in the negotiations. This is what voters, parliaments and the courts expect. But the time constraints mean that the perfect will be the enemy of the good. Crashing out of the EU without a withdrawal agreement would be the hardest Brexit imaginable. Inside the Article 50 pressure cooker, someone will have to carry a watch.
Rem Korteweg is a senior research fellow at the Centre for European ReformReuse content