(Bloomberg) -- The European Union on Wednesday published the draft legal text that will form the basis for the Brexit divorce treaty. It’s explosive, and includes a fallback option for Northern Ireland to remain in the customs union with a border between the province and the rest of the U.K.
That was swiftly rejected by Prime Minister Theresa May. “No U.K. prime minister could ever agree to it,” she said of the EU text, which she argued “would, if implemented, undermine the U.K. common market and threaten the constitutional integrity of the U.K. by creating a customs and regulatory border down the Irish Sea.”
We will be following developments here in real time, including a speech by former Prime Minister John Major. Time stamps are London.
Major: Customs Union Could Solve Ireland Border (2:48 p.m.)
“The only solution that I can see is to join a customs union,” Major said in a Q&A session after his speech. “A number of people who should have known better denied there was a problem, and offered solutions that patently could not succeed.”
Major: Voters Have Right to ‘Reconsider’ Brexit (2:20 p.m.)
“The will of the people can’t be ignored, but Parliament has a duty also to consider the wellbeing of the people,” Major said. “Although the referendum was advisory only, the result gave the government the obligation to negotiate a Brexit. But not any Brexit; not at all costs; and certainly not on any terms. The true remit can only be to agree a Brexit that honors the promises made in the referendum.”
Major Sees Risks of No Deal With EU Increasing (2:18 p.m.)
“If our ‘red lines’ are held to be inviolable, the likelihood of no deal -- or a very poor deal -- increases. Every single time we close off options prematurely, this encourages the European Union to do the same -- and that is not in our British interest,” Major said in a speech in London.
Major’s interventions on Brexit will carry weight in the Conservative Party as a former leader. Tory infighting over Europe also dominated his administration.
Soubry Reminder That May Faces Pro-EU Rebellion (1:24 p.m.)
Conservative Party lawmaker Anna Soubry gives her take on the Northern Ireland debate:
“We’ve got to wake up now as a country and realize, if we’re not going to rip our nation further apart we don’t only have to have a pragmatic approach to Brexit, but an honest approach to Brexit. And the only solution to a hard border is membership of the customs union and the single market.”
Read more here on the challenge facing Theresa May: Pro-EU Tory Rebellion Grows Further as May Ever More Boxed In
Foster: EU Text ‘Constitutionally Unacceptable’ (12:50 p.m.)
Arlene Foster, leader of Northern Ireland’s Democratic Unionist Party tweets: “EU draft text is constitutionally unacceptable & would be economically catastrophic for Northern Ireland.”
As expected, she also welcomes May’s commitment to “not allow any new border in the Irish Sea. Northern Ireland must have unfettered access to GB market.”
Irish PM Says ‘Brexiteers’ Will Reject EU Text (12:34 p.m.)
In parliament in Dublin, Irish Prime Minister Leo Varadkar said the draft text will anger and be rejected by “hard Brexiteers.” At the same time, the backstop of Northern Ireland essentially staying in the customs union while the rest of the U.K. exits is a “last resort,” he said, and that he wants the wider issue to be solved by a trade agreement between Britain and the EU. There’s time to figure that between now and October, he said.
May Says No U.K. PM Could Agree to EU Draft Deal (12:31 p.m.)
EU draft text “would, if implemented, undermine the U.K. common market and threaten the constitutional integrity of the U.K. by creating a customs and regulatory border down the Irish Sea.”
“No U.K. prime minister could ever agree to it,” May says, adding that she plans to make that “crystal clear” to the EU.
“We are committed to protecting and enhancing our precious union.”
Corbyn Clashes With May on Brexit (12:19 p.m.)
This is the second week the Labour leader has focused on Brexit in Prime Minister’s Questions, and of course he finally laid out his policy on Monday.
At their weekly question and answer session in the House of Commons, May and Corbyn both claimed they have the backing of business for their Brexit plans.
“We want to deliver on the vote of the British people that means we will bring back control of our laws, our borders and our money,’’ May told lawmakers. The Labour position would “be a betrayal of the British people.’’
Corbyn said he wants the U.K. to retain a relationship with the trading bloc, citing the backing of the Confederation of British Industry.
May Sticks to Red Lines on ‘Bringing Back Control’ (12:06 p.m.)
A customs union isn’t compatible with taking back control of borders and trade, May says in Parliament, answering a question from opposition Labour leader Jeremy Corbyn -- who said on Monday he’d push for the U.K. to stay in a customs union.
“We want trade kept as easy as possible with the EU27,” she says. A customs union “would mean we couldn’t do our own trade deals.”
U.K. to Make Biannual Payments to EU After 2020 (12 p.m.)
The U.K. Will make two payments per year after 2020 to settle its exit settlement, and any delays will mean interest is accrued, the draft treaty shows.
Barnier Says Options Still Open on N. Ireland (11:59 a.m.)
Barnier says he’s trying to take a “pragmatic” approach and wants to find solutions; that the backstop or fallback option contained in the draft text can be avoided if negotiations progress. That idea is also contained in the text.
But Barnier also acknowledges that his “fallback” legal proposal could lead to controls being established in Northern Irish ports and airports for goods transported between the province and mainland Britain. This is not a border, he insists.
More on the ECJ’s role (11:45 a.m.)
The level of detail will be off-putting for the British side. Notably it gives the European Court of Justice a lot more sway than the hardliners in May’s party will feel comfortable with.
Take Article 11 on supervision and enforcement on Northern Ireland:
“The institutions, bodies, offices, and agencies of the Union shall in relation to the United Kingdom, and natural and legal persons residing or established in the territory of the United Kingdom, have the powers conferred upon them by Union law. In particular, the Court of Justice of the European Union shall have jurisdiction as provided for in the Treaties in this respect.”
EU Reiterates Stance on ECJ Oversight (11:44 a.m.)
“The ECJ must play a role in the interpretation and implementation of the withdrawal agreement whenever it refers to European law,” Barnier says.
Barnier also has strong words on the transition period, accusing the U.K. of still pushing back against any new rules. He says it is still not a given that a transition -- so vital for businesses -- will be agreed.
Barnier Says Negotiating Pace Must Pick Up (11:34 a.m.)
The EU’s negotiator tells reporters in Brussels that the draft “is a tool based on legal principles and facts and solutions which are concrete and realistic,” and that it’s should not “surprise” the U.K.
“These points have been already agreed between the EU and the U.K.”
EU Says Brexit Transition to End Dec. 31, 2020 (11:28 a.m.)
The U.K. had said that the transition period demanded by businesses should be able to be extended to allow key issues to be finalized.
EU Says N. Ireland Could Remain in Customs Union (11:25 a.m.)
As expected, the European’s Union draft text is direct when it comes to the future of Northern Ireland. A fallback option for the province -- if other negotiations fail -- is that it must remain in the EU customs union, must keep a consistent tax regime with the Republic of Ireland (i.e. the EU), while the U.K. will not hold regulatory authority over goods produced in the North.
These are all essentially red lines for May’s government and especially her key backers, the Democratic Unionist Party, on which she relies for a majority in Parliament. Let the fallout begin.
Here is a link to the draft: https://ec.europa.eu/commission/sites/beta-political/files/draft_withdrawal_agreement.pdf
* May will speak at Prime Minister’s Questions at noon
* May gives landmark Brexit speech on Friday
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