Britain retreats into insular shell of Brexit gloom

After a fleeting moment of optimism pushed sterling upwards against the dollar on Wednesday and fed speculation about a breakthrough, Brexit on Thursday slid back into its crusty carapace of gloom. Wednesday's excitement was sparked by Michel Barnier saying he wanted to offer Britain a partnership "such as has never been with any other third country" and a speech by Emmanuel Macron to French diplomats.

Barnier’s statement contained nothing new and included his standard warning that Britain must respect core structures of the EU such as the single market. Clearly alarmed by the comfort his words had brought to British hearts, the EU chief negotiator told a German radio station the EU had said from the start that it was offering a unique partnership.

“It cannot be built to the detriment of who we are. The internal market, the home market, is indeed our most important asset,” he said.

"We respect all the red lines of the United Kingdom. They do not want to abide by the rules of the court of justice, they do not want to follow our legal framework, they do not want to pay, they do not want freedom of movement. All of these are the cornerstones of the single market and the EU. So we have to preserve and protect what makes us."

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As for Macron, the Times reported on Thursday that he was "preparing to throw Theresa May a lifeline" by pushing other EU leaders to agree a close relationship with Britain as part of his vision for Europe's future. It referred to a speech to ambassadors earlier this week when the French president suggested that it was ironic that the EU was negotiating with Britain about leaving while countries like Albania wanted a closer relationship.

Macron has long championed a Europe of concentric circles, with the euro zone at its centre and an outer group with looser ties to Brussels. Could Britain find a place in that outer circle after Brexit?

‘Our values’

Maybe. But what Macron said about the actual Brexit negotiations was less encouraging for London, describing the decision to leave as a sovereign choice that could not come at the expense of the EU’s integrity.

"It is what the British people have chosen for themselves, not for others, and France would like to maintain a strong, special relationship with London, but not at the cost of the European Union breaking up. And for integrity to be defended by the capital city which champions it, in its own country, is one thing, but we have to defend the integrity of our values, of our foundations and of the European Union," he said.

The Macron tease was especially cruel because it chimed with the conviction, clung to fervently throughout much of Whitehall and Westminster, that the EU leaders are gearing up to push Barnier out of the way and take over the negotiations themselves.

When that happens, so the fantasy goes, the leaders will abandon the European Commission's legalistic approach and its veneration of principles like the four freedoms of the single market. Urged on by the carmakers of Germany, the winemakers of France and the Prosecco producers of Italy, the leaders will then strike a "sensible" deal based on May's Chequers proposal. Ireland will be told to get its backstop out of the way while Great Powers are at work on more important matters.

Negotiations deadline

There were high hopes for an informal meeting of EU leaders in Salzburg on September 20th, with suggestions that May would be able to negotiate directly with her counterparts for the first time. It is now expected, however, that the prime minister will simply make a statement to the other leaders, as she has at previous summits. Then, after she has left, the other 27 will talk about Brexit among themselves.

The deadline for the end of negotiations was until recently a summit in Brussels on October 18th. That will be an important meeting but few on either side believe a deal will be done by then, so another summit is likely in November.

In the meantime, May can look forward to the return of her MPs to Westminster next week after a hot summer listening to Conservative activists complaining about her Chequers proposal. With her own position in peril, she is unlikely to make a further bold move on Brexit before the Conservative party conference at the end of September.