Michael Barnier, commissioner of internal markets at the European Commission, gestures while speaking during the International Financial Market Regulation conference, in Berlin, Germany. (Photographer: Michele Tantussi/Bloomberg )

EU Offers U.K. Carrot, Warning Over Breaking Brexit Promises

(Bloomberg) -- The European Union warned the U.K. against rowing back on the agreements it made last week as leaders prepare to hand Britain its first reward in the Brexit negotiations.

Michel Barnier, the EU’s chief Brexit negotiator, said the bloc was on alert against the U.K. trying to unpick the deal Prime Minister Theresa May struck on Friday on the first phase of negotiations. Still, Europe’s leaders are planning to hand Britain the carrot of future-relationship discussions when they hold a summit later this week.

“There will be no going back,” Barnier told the European Parliament, in Strasbourg, France, on Wednesday, adding that the conditions have been met for the negotiations to move forward. On Tuesday, Barnier said he would be “vigilant” and wouldn’t “accept any backtracking from the U.K.”

The U.K.’s breakthrough last week paves the way for another intense period of diplomacy over the next three months. The EU expects to have its offer of a possible two-year transition period ready to present to the U.K. by the end of January, and is prepared to start talking about the future trade partnership by the end of March.

‘Good Faith’

Barnier’s warning capped three days of uncertainty over whether the British government considered last week’s deal -- on Britain’s financial settlement valued at around 45 billion euros ($53 billion), the Irish border and the protection of citizens’ rights -- as legally binding, or whether it thinks it’s dependent on getting a satisfactory trade arrangement.

On Sunday, Brexit Secretary David Davis said the deal was “more of a statement of intent than it was a legally enforceable thing.” On Monday he said it was “of course legally enforceable” within the overarching Brexit agreement in March 2019; and on Tuesday he said that it needed to be “converted into legal text as soon as possible.”

His latest comments were in response to changes made by lawmakers on Tuesday to a European Parliament motion, due to be voted on Wednesday, in which they took the highly unusual step of naming Davis personally responsible for risking “the good faith that has been built during the negotiations.”

Although the parliament’s resolution isn’t binding, it will set out a number of recommendations and red lines that all sides will have to heed because the assembly has a veto over the final Brexit agreement.

Savvy Skills

EU officials in Berlin, Paris and Brussels said leaders were set to sign off on the start of the next phase of the negotiations at this week’s summit.

“The British are known for their savvy negotiation skills,” Detlef Seif, a lawmaker from German Chancellor Angela Merkel’s Christian Democrat party, said in a speech in the lower house of the country’s parliament on Tuesday. But “if we put ink to paper in this first phase, they will stick to the points that have been agreed.”

The next phase, that will cover the contours of a trade agreement between the U.K. and the EU, could be even trickier than the work that’s consumed negotiators for the past six months, and could threaten the united front that the bloc’s other 27 countries have presented until now.

“This will be a furious race against time, where again our unity will be key,” EU President Donald Tusk said in a letter to leaders published on Tuesday.

©2017 Bloomberg L.P.