Varadkar is right, the EU has the advantage over Brexit talks

Andrew Grice, The Independent

As Boris Johnson prepares to mark the UK’s departure from the EU on Friday, his Irish counterpart Leo Varadkar has put a dampener on his celebrations by declaring that the bloc will have the upper hand in the negotiations on a UK-EU trade deal.

The Irish prime minister said: “The EU is a union of 27 member states. The UK is only one country. And we have a population and a market of 450 million people. The UK, it’s about 60 million. So if these were two teams up against each other playing football, who do you think has the stronger team? So long as we’re united.”

Continuing his football analogy, Varadkar said that “we’re only at halftime on Brexit, it’s not done yet”. Which, as he well knows, is hardly the message Johnson wants the British public to hear this week.

At one level, Varadkar is merely copying Johnson’s tactics in warning that the UK will diverge from EU rules; they are both firing the opening shots in a negotiation. The EU’s biggest area of concern is state aid to companies. The bloc will insist the UK sticks to future EU rules on this, but will probably accept the UK signing up to only existing rules in areas such as the labour market and the environment.

It should be noted that Varadkar is under pressure ahead of a difficult Irish general election on 8 February, so his words were probably intended mainly for domestic consumption.

Indeed, there was a fair amount of Brit-bashing in his BBC interview; it normally plays well with Irish voters. He claimed that Westminster and Britain “don’t understand Ireland”, and there were people in the UK, with its “very colonial history”, that thought it would get together with France and Germany “at a big summit and tell the small countries what’s what. That’s not the way the 21st century works. That’s certainly not the way the EU works.”

Varadkar is probably right to think that Johnson’s intention to play “divide and rule” among EU member states will not be any more successful in phase two of the Brexit process than it was for Theresa May in phase one. Team Boris believes it will work because different EU countries will have different goals in the trade talks. But it would be unwise to underestimate the EU’s determination to stick together in the face of a common threat: the first country to leave the bloc becoming an economic rival on its doorstep.

However, some factors will work in Johnson’s favour. May negotiated with one hand behind her back because of divisions in her party and her lack of a majority in parliament. Johnson has a united party after purging most of its pro-Europeans and enjoys a thumping majority of 80. His five-year term will see him outlast some EU leaders, including Germany’s Angela Merkel.

His refusal to contemplate an extension of the standstill transitional period beyond 31 December is a sign he will play hardball, and that worries EU officials. However, some EU figures suspect he will repeat his tactics over the withdrawal agreement, by giving much more ground than the EU when the talks reach crunch point ahead of the December deadline. They see a natural trade-off between allowing EU countries access to UK fishing waters, in return for the UK’s financial services sector keeping its access to EU markets.

Johnson hopes the prospect of “no trade deal” will force the EU into concessions, because the bloc has more to lose than the UK from such a scenario given its trade surplus with the UK. He will also play his “Trump card”, crowing about the prospect of a US-UK trade agreement that would potentially take the UK out of the EU’s regulatory orbit.