The U.K. needs to decide if it wants to stay “close to the European model” after leaving the EU or “gradually move away from it,” Michel Barnier, the bloc’s chief Brexit negotiator, said Monday.
In a speech at the Brussels base of the Centre for European Reform, a British think-tank, Barnier said the answer to that question “will be important and even decisive” for the future partnership “and shape also the conditions for ratification of that partnership in many national parliaments and obviously in the European Parliament.”
Barnier said an “ambitious” free-trade agreement can’t be established “without common ground in fair competition, state aid, tax dumping, food safety, social and environmental standards.”
He was speaking just over a week after the sixth round of Brexit talks ended without a great deal of progress. It also came in the wake of Barnier giving the U.K. two weeks to show movement in Brexit talks in order to ensure EU leaders can say “sufficient progress” has been made at their summit in December.
“If we manage to negotiate an orderly withdrawal, fully respect the integrity of the single market, and establish a level playing field, there is every reason for our future partnership to be ambitious,” Barnier said Monday, adding that the EU had to avoid a situation “where trade would happen under the WTO rules for goods and services.”
Last week, POLITICO revealed that documents from Barnier’s team show that Brussels views its free-trade agreement with Canada is the only realistic model for post-Brexit trade with the U.K., scotching British Prime Minister Theresa May’s hopes of a far broader, bespoke deal.
On Ireland, Barnier said the U.K. had to come up with better ideas on how to avoid a hard border. “Those who wanted Brexit must offer solutions,” he said.
“The U.K. said it would continue to apply some EU rules on its territory. But not all rules,” Barnier said. “What is therefore unclear is what rules will apply in Northern Ireland after Brexit. And what the U.K. is willing to commit to, in order to avoid a hard border.
“I expect the U.K., as co-guarantor of the Good Friday Agreement, to come forward with proposals.”
Barnier also took a firm line on financial stability, reminding the audience that the EU’s financial crisis was not that long ago. “Let’s not have a short memory,” he said. “We will not compromise on financial stability — we will never compromise on financial stability — in the EU and in the eurozone.”
He also said U.K. banks would lose their “passporting” rights allowing them to easily provide services in the EU after Brexit.
“On financial services, U.K. voices suggest that Brexit does not mean Brexit. Brexit means Brexit everywhere … The legal consequence of Brexit is that the U.K. financial service providers lose their EU passport.”
Barnier also warned that the U.K. will not be able to cherry-pick which parts of the EU it wants and does not want.
“There are in fact two contradicting soundbites from ardent advocates of Brexit: the U.K. will finally set itself free from EU regulation and bureaucracy, some claim; others claim that after Brexit it will still be possible to participate in parts of the single market simply because we have been together for more than four decades, with the same rules,” he said.
“Ladies and gentlemen, none of these views seems to offer a sound basis for going forward.”