(Bloomberg) -- Even though Brexit negotiators on both sides of the Channel say they will be working through August, you will be forgiven for thinking some summer indolence is kicking in, meaning that not much will happen until you’re back from the beach.
When talks resume on the last week of August, a cliff edge exit will be one month closer, as the clock ticks down to March 2019 without any of the major outstanding issues having been resolved.
Here’s a guide of the key dates ahead:
Back from the beach
Brexit talks are set to resume this week after the summer recess. The replenishment of Vitamin D levels alone won’t be enough to improve the mood of negotiators, who parted ways in disagreement after their last meeting in Brussels in late July: the EU now expects more details from the U.K. on a method for calculating the exit bill, while Theresa May’s government expects the EU to compromise on its insistence that the European Court of Justice remains the ultimate guarantor of citizens’ rights on British soil even after 2019.
The fourth round of plenary negotiations is scheduled to begin. In addition to citizens’ rights, the financial settlement and the status of Irish borders, working groups also need to resolve dozens of other issues, from judicial cooperation, to nuclear safety and the status of goods put on the market before March 2019.
What of Merkel?
The assessment that separation talks have progressed enough for trade negotiations to begin will be a political decision to be made by EU leaders. This means that meaningful Brexit negotiations might not start until after the German elections, when a new government coalition may be formed. Irrespective of whether Angela Merkel wins a fourth term or Social Democrat Martin Schulz becomes chancellor, it could take until as late as November before a coalition is formed. That shortens the U.K.’s window for negotiations substantially.
EU heads of state or government gather in Estonia’s capital to discuss digital policy. Topic of the agenda notwithstanding, this will be the first meeting of the bloc’s leaders after the German elections, and will take place days before the Conservative Party conference. Such get-togethers in the past have proved to be turning points for major issues troubling the EU. Just ask the Greeks what happened in Riga...
Tory Party Conference
May takes center stage in Manchester at the annual conference of her Conservative Party, the first since she formally set Brexit negotiations in motion. Those opposed to leaving the EU kept a low profile at last year’s meeting; if the negotiations aren’t going well, prominent dissidents may be more vocal this time around.
That’s the last scheduled round of plenary talks in Brussels between U.K. and EU negotiators. The initial plan was to reach a breakthrough on separation terms by this time, so that negotiations on a future trade deal can start. This plan now looks increasingly ambitious, but hope dies last...
EU leaders meet in Brussels. That’s probably the earliest date for a discussion on a post-Brexit trade deal to begin, if the bloc’s governments decide that sufficient progress has been made in the meantime on the thorny issues of the first stage of the talks: the exit bill, the status of expatriates, and the border between the Republic of Ireland and Northern Ireland. There’s no need for a final agreement on those issues by then, just a political assessment that sufficient progress has been made.
Moment of Truth
Given slow progress in separation talks so far, December’s Summit is a more realistic target for the launch of negotiations on the future trade relationship between the U.K. and the EU, as Bloomberg reported in April and the bloc’s chief Brexit negotiator Michel Barnier is said to have told ambassadors last week. Failure to meet this timeframe would force companies to start planning for a cliff-edge exit, the U.K’s largest business lobby said, making the impact of uncertainty more visible on the British economy and -- potentially -- the pound’s exchange rate.
Assuming enough progress has been made in agreeing on the exit terms, and the U.K.’s landing zone after Brexit, the two sides can start discussing transitional arrangements. No one in Brussels expects that all the details of the future trade relationship will have been carved out by March 2019. The ambition though is to get as far as possible in defining the framework for the future. Only then can the EU agree to build bridge arrangements toward this new relationship. “Once you know where you are going you can also consider the modalities of getting there,” EU spokesman Alexander Winterstein told reporters in Brussels on Friday.
Wrapping Things Up
Discussions on the exit deal must conclude to allow sufficient time for the European Parliament and the European Council to approve it before time runs out in March 2019. The U.K. Parliament also will debate the deal -- and vote on it -- although May has said a defeat there wouldn’t send her back to the negotiating table. The deal needs to include transitional arrangements. A potential mixed agreement between the two sides would eventually require national ratification procedures in each of the 27 member states, while the separation terms only require a qualified majority of 27 government leaders and a simple majority of the European Parliament to approve.