During a meeting of the Council of the European Union, held on 15 December 2017, EU27 leaders assessed the progress of Brexit negotiations and concluded that there had been sufficient progress to move on to their second phase of the negotiations.
On that basis, they adopted draft guidelines to move to the second phase of negotiations where they will also start discussions on:
The EU draft guidelines are available at
Statement by President Donald Tusk on the draft guidelines for the second phase of the Brexit negotiations following release of the Joint Report on negotiations in Phase 1 presented on 8 December 2017.
This morning, I received the confirmation from our negotiators that sufficient progress has been made. This allows me to present the draft guidelines for the December European Council, which I have just sent to the leaders. My proposals are the following.
First, we should start negotiating the transition period, so that people and businesses have clarity about their situation. As you know, the UK has asked for a transition of about two years, while remaining part of the Single Market and Customs Union. And we will be ready to discuss this, but naturally, we have our conditions. I propose that during this period, the UK will respect:
The whole of EU law, including new law;
It will respect budgetary commitments;
It will respect judicial oversight;
All the related obligations.Clearly, within the transition period following the UK’s withdrawal, EU decision-making will continue among the 27 member states, without the UK.
All of what I have said seems to be the only reasonable solution, and it is in the interest of all our citizens that it is agreed as soon as possible. This is why I will ask the EU leaders to mandate our negotiator to start these talks immediately.
Second, we want to begin discussions with the UK in order to explore the British vision of its future relationship with the EU. So far, we have heard a number of various ideas. We need more clarity on how the UK sees our future relations, after it has left the Single Market and Customs Union. I therefore propose to mandate our negotiator to start exploratory talks with our British friends about this problem. On our side, we are ready to start preparing a close EU-UK partnership in trade, but also in the fight against terrorism and international crime as well as security, defence and foreign policy. For this to happen, the European Council will have to adopt additional guidelines next year.
While being satisfied with today’s agreement, which is obviously the personal success of Prime Minister Theresa May, let us remember that the most difficult challenge is still ahead. We all know that breaking up is hard. But breaking up and building a new relationship is much harder. Since the Brexit referendum, a year and a half has passed. So much time has been devoted to the easier part of the task. And now, to negotiate a transition arrangement and the framework for our future relationship, we have de facto less than a year.
Thank you
Details of the Draft Guidlines sent to the Council of the European Union for consideration have been mentioned at
Politico EU
https://www.politico.eu/article/tusk-puts-forward-guidelines-for-phase-2-talks/
and Reuters
Today the Commission has stated that, in its assessment, “sufficient progress” has been reached in the first phase of negotiations. It will now be for Member States to appraise the results of the negotiations, and for the European Council on 15 December 2017 to decide whether it agrees that “sufficient progress” has been achieved. Should that be the case, the President of the European Council recommends these draft guidelines for adoption.’
A copy of the Draft Guidelines for Phase 2 is available
Draft GuidlinesDraft Guidlines
A Joint Report, consisting of 15 pages covering 96 points, has been released by the teams involved in the negotiations between the UK and EU regarding the UK’s withdrawal from the EU. The EU has demanded that discussions are held in 2 phases with no progression to the 2nd phase of negotiations (primarily the future relationship between the UK and the EU) until topics defined under their Phase 1 agenda have been concluded.
Both parties have reached agreement in principle in the areas under consideration in the first phase of negotiations, with the UK having conceded to all the demands from the EU.
The role of the CJEU in maintaing Citizens Rights remains unclear. Does the following indicate that the UK will have to refer to CJEU rulings for 8 years after the UK leaves the EU?
Page 6, Paragraph 38
In the context of the application or interpretation of those rights, UK courts shall therefore have due regard to relevant decisions of the CJEU after the specified date. The Agreement should also establish a mechanism enabling UK courts or tribunals to decide, having had due regard to whether relevant case-law exists, to ask the CJEU questions of interpretation of those rights where they consider that a CJEU ruling on the question is necessary for the UK court or tribunal to be able to give judgment in a case before it.
As regards the European Health Insurance Card (EHIC) scheme, it looks as though this will only apply to UK citizens who are in an EU country (and vice-versa) on the “specified date of leaving” and will not be carried forward in the future when UK citizens are travelling abroad.
Page 5, Paragraph 29,
Rules for healthcare, including the European Health Insurance Card (EHIC) scheme, will follow Regulation (EC) No 883/2004. Persons whose competent state is the UK and are in the EU27 on the specified date (and vice versa) – whether on a temporary stay or resident – continue to be eligible for healthcare reimbursement, including under the EHIC scheme, as long as that stay, residence or treatment continues.
The UK confirms the committment that NI will remain an integral part of the UK.
Page 7, Paragraph 44
The United Kingdom continues to respect and support fully Northern Ireland’s position as an integral part of the United Kingdom, consistent with the principle of consent.
The UK hope to ensure that there is no hard border created between Northern Ireland (NI) and Ireland following discussions between the UK and the EU in the next Phase of negotiations. The wording in this Joint report has been carefully constructed to ensure acceptance by representatives of NI and the Irish Government. “full alignment with those rules of the Internal Market and the Customs Union” would appear to come into effect if there is no agreement reached during Phase 2 negotiations.
Page 8, Paragraphs 49,50
49. The United Kingdom remains committed to protecting North-South cooperation and to its guarantee of avoiding a hard border. Any future arrangements must be compatible with these overarching requirements. The United Kingdom’s intention is to achieve these objectives through the overall EU-UK relationship. Should this not be possible, the United Kingdom will propose specific solutions to address the unique circumstances of the island of Ireland. In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all island economy and the protection of the 1998 Agreement.
50. In the absence of agreed solutions, as set out in the previous paragraph, the United Kingdom will ensure that no new regulatory barriers develop between Northern Ireland and the rest of the United Kingdom, unless, consistent with the 1998 Agreement, the Northern Ireland Executive and Assembly agree that distinct arrangements are appropriate for Northern Ireland. In all circumstances, the United Kingdom will continue to ensure the same unfettered access for Northern Ireland’s businesses to the whole of the United Kingdom internal market.
The UK and EU have agreed a methodology to determine the financial settlement demanded by the EU.
Many questions remain unanswered with no specific figure mentioned or when payment(s) will be demanded.
Will the UK will still receive the rebate from its “GNI based Own Resources” gross contributions?
It is interesting to note that the EU have already specified their own repayment program of 12 YEARS! regarding repayment of funds (paid-in capital) due to the UK from the European Investment Bank. Perhaps the UK should suggest a long repayment period of small amounts each year over a similar time period.
European Investment Bank.
The UK will provide a guarantee for an amount equal to its callable capital on the day of withdrawal. The EU will take 12 years to return the UK’s share of the paid-in capital (3.5 billion euro) at a rate of 300,000,000 euro for the first 11 years and a final payment of 195,903,950 euro in year 12, 2019 – 2030.
There is no mention of a share of the accumulated profits of the EIB which are worth a total of around 44.5 billion euro (cfr. https://politick.co.uk/the-uk-and-the-european-investment-bank-eib/ ) and would provide a share to the UK worth around 7.0 billion euro. In fact, the report specifically excludes any further remuneration.
Page 13, Paragraph 77
77. Apart from these reimbursements, the EIB will not make any other payment, return or remuneration on account of the withdrawal of the UK from the EIB or on account of the provision by the UK of a guarantee.
There is also mention about paying towards the relocation of the EU Agencies currently based in London. (Typical of the EU attempting to screw as much money as possible from the UK)
Page 14, Paragraph 86
86. The Commission welcomes the UK Government’s offer to discuss with Union Agencies located in London how they might facilitate their relocation, in particular as regards reducing the withdrawal costs.
At least the final item does mention that the report is dependent on an overall agreement on the UK’s Withdrawal and a framework for the future relationship between the UK and the EU.
Page 15, Paragraph 96
This report is put forward with a view to the meeting of the European Council (Article 50) of 14 and 15 December 2017. It is also agreed by the UK on the condition of an overall agreement under Article 50 on the UK’s withdrawal, taking into account the framework for the future relationship, including an agreement as early as possible in 2018 on transitional arrangements.
The document can be found in it’s entirety at
With a copy that can be downloaded from HERE (pdf)
This report summarises the key points which can be used in a formal Withdrawal Agreement when the UK leaves the EU.
It appears highly likely, that following publication of this report, there is a strong possibility of the negotiations being allowed (by the EU) to progress to the next Phase (2) of negotiations where the future relationship between the UK and the EU will be decided (by the EU) discussed. One of the important discussions during the next Phase will, of course, be a Future Trade relationship between the UK and the EU.
In order to understand some of the details mentioned in the section of the Financial Settlement there is an interesting post
The UK’s Brexit bill: what are the possible liabilities?
which was written in March 2017 and contains a description of some of the terms used in the Report.
Bruegel is a European think tank that specialises in economics.
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