EU Fights Urge to Fan Brexit Flames as Rebels Tear Into May

(Bloomberg) -- European Union governments will probably resist further inflaming the U.K.’s Brexit turmoil when they meet on Friday by saying they believe talks can still make progress despite uncertainty over Theresa May’s blueprint for future relations.

While amendments to a key piece of customs legislation adopted by the U.K. Parliament late Monday will make negotiations even messier, they are unlikely to completely scupper talks on the crucial Irish border issue, two EU officials said. The meeting of European affairs ministers in Brussels will be the bloc’s first collective response to May’s “white paper,” published last week, which envisages maintaining close ties in many areas.

While this week’s developments were “unhelpful,” people “shouldn’t panic,” Irish Foreign Minister Simon Coveney said in an interview with broadcaster Newstalk on Wednesday in Dublin. “Legislation can be changed, amendments can be made.”

The EU is in a quandary over how to respond to the volatility in the British Parliament, which has seen pro and anti-Brexit lawmakers rebel against government positions. While the bloc rejects many aspects of the U.K. plan, notably May’s idea for customs arrangements, and is unimpressed that lawmakers are still trying to change the document, officials believe that it represents progress because it gives a foundation to build on.

Although the white paper focused exclusively on U.K.-EU relations after Brexit, the EU insists that if there’s to be a deal, which includes allowing a 21-month transition period, before Britain leaves, the two sides must reach agreement on a “backstop” insurance policy to maintain an unpoliced border between Northern Ireland and Ireland.

One of the amendments that passed on Monday rules out a customs border between Northern Ireland and the rest of the U.K. Although this further binds May’s hands in the talks, EU officials don’t believe it goes further than the commitment she’s already given.

The backstop isn’t dead, Coveney said, saying the U.K. needs to come up with something that works.

While the EU wanted the U.K. to accept a “Northern Ireland-specific” backstop, it hasn’t rejected outright Britain’s idea for a U.K.-wide customs arrangement, as long as some alignment of single market regulations apply only to Northern Ireland.

The EU believes this kind of solution should be attainable as long as the government can depoliticize the issue, an official said. This is what chief Brexit negotiator Michel Barnier was hinting at earlier this month when he said the U.K. must “de-dramatize the backstop” because it’s only about “technical controls on goods.”

Despite the importance of the Irish border issue, only one session was due to be devoted to it during the latest negotiation round this week. A lot of “haggling” is still needed, a U.K. official said, in particular because the EU has raised questions about how the U.K.-wide customs arrangement would work.

Barnier, who is due to meet new U.K. Brexit Secretary Dominic Raab for the first time on Thursday, has sympathy for May’s political predicament and sees the white paper as forming the basis of serious negotiations, according to a person who discussed the matter with him and who spoke to Bloomberg on condition of anonymity.

“I believe there will be an agreement in the next two years or so,” said Coveney in an interview with state broadcaster RTE. “I’m very confident” there will be a deal.

©2018 Bloomberg L.P.