Enjoy the weekend Mrs May, as the EU is coming for you on Monday
If Theresa May’s only task in delivering her third major speech on the road to Brexit was to satisfy a domestic audience, then this speech could be instantly chalked up as a triumph. The speech was an exquisitely crafted synthesis of domestic opinion on Brexit. Like a sapper crossing a minefield, the Prime Minister painstakingly poked and prodded her way to a temporary place of safety between the warring factions of her Cabinet. But while the new tone of realism was quietly welcomed in Brussels, Paris and Berlin, no-one should be distracted from the reality that Mrs May stood her ground on the fundamental issues that still separate both sides. Mrs May should enjoy the weekend, because this will become painfully clear as soon as Monday next week when the European Council produces its draft negotiating guidelines on the future EU-UK trade relationship. Michel Barnier, the EU chief negotiator, welcomed Mrs May’s speech on Twitter with an icy promise that “recognition of trade-offs” flowing from the UK’s decision to leaving the single market and customs will “inform” those guide-lines. Mrs May did acknowledge that “in certain ways, our access to each other’s markets will be less than it is now”, but then still proposed an approach in which the UK aligns in certain important sectors – aviation, pharma, medicines – while being free to diverge in others. From an EU perspective, this fails to grasp what Mr Barnier describes as the “ecosystem” of the single market – in which customs, law and a single rulebook all work in harmony with each other. There is a determination that this cannot be compromised. In part there is a legal imperative to protect this ecosystem, but more pressingly a political one. Norway and Switzerland have already made clear that if the UK gets a cherry-picked deal, they will want the same. And more broadly there is a determination that the UK must be “worse off out than in”. Measured against this benchmark – which like it or not, is the yardstick that ultimately matters – Mrs May’s speech contained little that was new, or that bridged the divide. It was, said one very senior EU negotiator, the “same old cherries and fudge”. Mrs May did her best to disguise this. She said it was time “to face up to some hard facts” even as she dodged the question of how to avoid a hard border in Ireland if the UK is leaving the EU customs union. She is correct that the EU is itself cherry-picking by demanding Norway-levels of safeguarding for Canada-levels of access to the market, and she challenged the EU to take a more “pragmatic” approach – but as another top EU official said, “we have heard all this before”. On customs, as the CBI noted, Mrs May recycled ideas, like a dual external tariff and trusted trader schemes, which have not delivered and which the EU has repeatedly dismissed as unworkable “magical thinking”. As the EU demonstrated this week with its unilateral approach to the Irish border, this is now a game of bare-knuckle interest politics, not a touchy-feely process designed to “deliver the best outcome for both sides”. The British negotiators will hope that Mrs May’s more emollient tone can reset the process as talks get under way next week, conscious that the Prime Minister is not without allies in Europe who are concerned at the ultra binary approach being taken by France, German and the European Commission. But experienced Brussels hands know the Brits would be unwise to set too much store in their power to reset negotiations. At very best, from an EU perspective, this speech was a baby-step on a long road to realisation, but as yet there is still no common destination.