Decision time approaches for Brussels over Brexit tensions

With the UK standing firm over its plans to ease the consequences of Brexit for Northern Ireland, Brussels must decide how hard it wants to push back.

Maros Sefcovic, the EU commissioner in charge of Brexit, told the Financial Times last week that the European Commission would take legal action against the UK “very soon” because of Westminster’s move to extend trade-related grace periods for Northern Irish businesses.

Sefcovic used a closed-door meeting last week to tell the European Parliament’s Brexit oversight group that commission lawyers were reviewing different routes for legal action under the terms of the 2019 divorce treaty. These include a dispute settlement procedure with independent arbitration or launching an infringement procedure that could end up at the European Court of Justice. 

Meanwhile, MEPs have retaliated against the UK measures by postponing a decision on ratifying the laboriously negotiated trade agreement between the two sides.

That deal, struck on Christmas Eve last year, is separate to the EU-UK divorce treaty and its measures on Northern Ireland, which are at the centre of the current row. But the assembly’s political leaders see ratification of the accord as a source of political leverage. They will review the situation again on Thursday.

For the EU, the British move is a breach of trust at an extremely sensitive time for politics in Northern Ireland and EU-UK relations.

Brussels and the UK reached a deal in December on how to operationalise their Brexit treaty as regards the region. The agreement included waivers of normal rules and bureaucracy — such as health certificates for foods arriving from Great Britain — that could have led to supermarket shortages in Northern Ireland.

Last week, the UK decided to act alone after several weeks of talks with Brussels over how to handle the approaching expiry dates of some of these grace periods.

The UK insisted its actions were essential to provide certainty for business. Writing in the Sunday Telegraph, Britain’s Brexit minister Lord David Frost urged Brussels to “shake off any remaining ill will”, emphasising that the UK move removed a source of “disruption”. This, he wrote, should allow the two sides to continue talks to “resolve difficulties arising from the [divorce treaty] protocol constructively”.

In a sign of rising tensions, Germany’s ambassador to the UK, Andreas Michaelis, retorted on Twitter: “David Frost asks the question whether we Europeans are ready to build a friendly relationship with the UK. Should there be any real doubts? We already enjoy a very friendly relationship. We work on further deepening and adjusting it in the post Brexit context. Should be obvious.”

Nonetheless, the situation presents a strategic conundrum for the EU.

First, there is the EU parliament’s pending decision on how to handle the trade deal agreed by UK prime minister Boris Johnson and Ursula von der Leyen, the EU commission president.

Sefcovic has been clear that it is for MEPs to decide whether to ratify. But he has also emphasised the agreement’s importance, telling the FT that he would still like the process to be completed by the end of April as planned. The deal is currently in place provisionally, ensuring tariff-free trade in EU and UK-made goods.

“It would be both in the interest of the EU and UK to complete the ratification process,” he said.

But this is far from the only difficulty. For one thing, the UK actions have temporary consequences and legal proceedings against Britain would likely take a long time. For another, the UK has stressed its desire to keep talking but the EU cannot be seen to brush aside an alleged breach of trust and international law. 

There is also a broader issue. The UK move is based on an argument that its businesses need more time to adapt but there is sensitivity to that within the commission.

Brussels is haunted by a nightmare scenario of endless extensions to grace periods, meaning companies do not adapt and the divorce deal on Northern Ireland is never bedded down. These concerns have only been heightened by what Brussels sees as lax implementation of customs controls by UK authorities. 

Lord Frost may want more talks with Brussels but the UK’s actions have made the politics of that much more complex for the EU.

“My strong preference would be to come back to the normal order of business,” Sefcovic said, while cautioning that this must include “respect for each other”. 

Chart du jour: Hard times and hard alcohol

Global sales of tequila, vodka and liqueurs outperformed the broader alcohol market in 2020 as housebound consumers took to sipping high-end spirits and mixing their own cocktails.

With “on trade” drinking — buying drinks in pubs, bars, restaurants and clubs — impossible because of lockdowns, people shifted to spirits as they drank more at home. (chart via FT)

Trans-Europe Express

• German chancellor Angela Merkel’s conservative bloc — the CDU/CSU — has been rocked by scandal after two of its MPs announced they were resigning following disclosures that they had personally profited from deals to procure coronavirus face masks. (FT)

• FAZ reports that even while Germany’s CDU party loses support in the polls ahead of crucial regional elections, its new leader Armin Laschet is winning over the party’s fiscal hawks and youth wing.

• The EU will urge the US to permit the export of millions of doses of Oxford/AstraZeneca’s Covid-19 vaccine to Europe as Brussels scrambles to bridge supply shortfalls that have hobbled its inoculation drive. (FT)

• The FT’s Davide Ghiglione and Ben Hall take a deep dive into Mario Draghi’s decision last week to bloc the export of the Oxford/AstraZeneca vaccine to Australia.

• Germany has called for greater co-operation with Russia on climate change, in a contentious new effort to restore frayed EU ties with Moscow. (FT)

Coming up on Monday

US vice-president Kamala Harris will give a speech by video link at the European parliament’s International Women’s Day celebration. The European parliament’s plenary session begins in Brussels. Charles Michel, European Council president, is on an official trip to Rwanda.

jim.brunsden@ft.com; @jimbrunsden
sam.fleming@ft.com; @Sam1Fleming