EU Says Johnson Proposal Has `Problematic Points': Brexit Update

EU Says Johnson Proposal Has ‘Problematic Points’: Brexit Update

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Boris Johnson sent the European Union his new blueprint for a Brexit deal on Wednesday, saying a no-deal divorce would be a “failure of statecraft” and threatening to walk away if the bloc doesn’t engage. European Commission President Jean-Claude Juncker said there are “problematic points” in the proposal that need more work.

The next few days will be crucial. If Johnson fails to get a deal, he faces a showdown with Parliament and a battle in court. It could ultimately be up to the judges to decide if Johnson can make good on his threat to lead the country into a no-deal split. Signs are not positive, with the Irish government in particular saying the plans do not look like the basis for a deal.

Key Developments:

Johnson writes to Juncker setting out his plan to abolish and replace the contentious “backstop” arrangement for the Irish borderNorthern Ireland politicians will have a veto over the arrangements and will have to give consent every four years to allow them to continue, under the U.K. planJohnson says there will be no checks at or near the Irish borderJuncker welcomes “positive advances” but says there are difficulties, especially over customs rulesCoveney says leaked details don’t look like basis for a dealEU officials say the question now is whether this really is the final offer or an opening gambitJohnson vows to pursue no-deal exit if EU doesn’t movePound reverses losses

Barnier: Progress But Still Work to Do (6 p.m.)

The EU’s chief negotiator Michel Barnier said the U.K.’s Brexit proposal contains “progress,” but more work is needed to ensure the principles of the so-called Irish backstop — included to ensure no hard border and to protect the EU’s single market — are retained in any agreement.

“To be frank lots of work still needs to be done,” Barnier told reporters in Brussels. “No-deal will never be the choice of the EU,” he said, adding that talks would continue with the U.K.

ERG’s Baker Welcomes Brexit Proposal (5:40 p.m.)

Steve Baker, chairman of the pro-Brexit European Research Group of Conservative MPs, has given a broad welcome to the proposals, in the latest sign that they’re getting ready to support Johnson.

He said there are other Brexit-related issues he wants to resolve, but this was a “fair and reasonable” offer, and he wants to back the prime minister.

Irish Opposition Condemns Johnson Plan (5.20 p.m.)

Boris Johnson’s proposals for Northern Ireland after Brexit “are not realistic and fall very far short of what is required to protect the all-island economy, north-south cooperation and the Good Friday Agreement,” Lisa Chambers, Brexit spokeswoman for Fianna Fail, Ireland’s main opposition party, said.

Fianna Fail props up Prime Minister Leo Varadkar’s minority government, so her comments highlight how poorly the plan has been received in Dublin and emphasize how difficult politically it would be for Varadkar to accept the proposals.

Juncker: U.K. Proposal Has ‘Problematic Points’ (5:10 p.m.)

Jean-Claude Juncker, president of the European Commission, gave a cautious welcome to Johnson’s proposals, saying there were “positive advances” especially in the acceptance of an Irish Sea border.

But in a statement following a phone call with Johnson, Juncker said there remained “problematic points.” He emphasized the need to provide “legally operable solutions” that met the objectives of the existing backstop proposal for the Irish border.

EU Unlikely to Reject U.K. Proposal Immediately (5 p.m.)

Over the past 24 hours, EU officials have been scathing about the leaked contents of Johnson’s proposal. Now it has been published, they’re being much more circumspect. The bloc is unlikely to reject the blueprint out of hand — at least not immediately — in order to convince the British to come to the table and make further concessions, officials said.

But if the U.K. doesn’t signal it’s ready to do that, expect some pretty damning verdicts in the days to come, they said. Even if the U.K. plan offers some glimmers of hope for the EU, major sticking points remain — particularly on the proposal to keep Northern Ireland outside the EU’s customs union.

Corbyn, Farage Reject Johnson’s Plan (4.15 p.m.)

Opposition Labour Party leader Jeremy Corbyn rejected the U.K.’s Brexit proposals. “We believe this deal isn’t acceptable,” he told Sky News. He said he feared it would allow Britain to deregulate, reducing workers’ rights.

From the other end of the political spectrum, Brexit Party leader Nigel Farage was equally scathing: “Boris only wants to change one part of the Withdrawal Agreement,” he wrote on Twitter. “Despite his words there is no guarantee that we will leave the customs union, and any future trade deal needs good faith from the EU side. It’s like putting your head in a crocodile’s mouth & hoping for the best.”

Liz Saville Roberts, Westminster leader of the Welsh nationalists Plaid Cymru, said Johnson’s plan is “a fantasy deal, full of contradictions” that cause economic damage, including to the farming and manufacturing sectors in Wales.

The ‘What If’ Dogging Johnson’s Proposal (4 p.m.)

Boris Johnson’s plan doesn’t set out what would happen if the Northern Ireland Assembly were to refuse consent for the arrangements, or withdraw it at some point in the future. Ireland has insisted on a backstop as an insurance policy against things going wrong, making this is a crucial gap, and one government officials briefing on the plan were unable to fill.

The question of the assembly being unable to give consent is a live one. It has been suspended for almost three years after a row between the two main parties. It would need to return before July 2020 to give its consent.

It’s also clear that the noises from Johnson’s office late Tuesday about this being a “final offer” were misleading. The emphasis today is on Johnson’s line that his proposal sets out a “broad landing zone.” This is an opening bid.

VAT Plan Might Be Problematic (3:55 p.m.)

One of the areas of contention in the proposal is what the U.K. plans to do about value-added tax on goods moving between Northern Ireland and the Irish Republic. At present, VAT is subject to EU rules.

In the blueprint, the U.K. says that VAT wouldn’t be paid at the border and wouldn’t be subject to checks there. The two sides should “cooperate to minimize evasion and ensure payment of the tax in the country where it is due.” It will be tricky for the EU to accept that level of trust and may insist on tougher controls.

DUP Welcomes Johnson’s Brexit Proposal (3:25 p.m.)

The Northern Irish Democratic Unionist Party, key players in Boris Johnson’s efforts to get a divorce deal through Parliament, welcomed his proposal to replace the contentious Irish backstop.

“These proposals would ensure that Northern Ireland would be out of the EU customs union and the single market as with the rest of the United Kingdom,” the DUP said in an emailed statement. The party also backed the principle of giving the Northern Ireland assembly a say on whether the arrangements come into force, and stay in force, every four years.

The DUP has long opposed any Brexit outcome that treated Northern Ireland differently from the rest of the U.K., and its support for the proposal — which removes the backstop as per their demands — still represents a compromise because the province will stay in regulatory alignment to the EU.

“We would encourage all concerned to approach these discussions in a positive mindset within a spirit of wanting to secure a negotiated withdrawal agreement,” the party said.

N. Ireland to Get a Say Every 4 Years (3:20 p.m.)

Under Johnson’s proposal, Northern Ireland would remain in regulatory alignment with the EU for agricultural products as well as manufactured goods. But crucially, the U.K. proposed that the region be allowed to exit the arrangements if it wishes.

“The zone of regulatory compliance will mean that Northern Ireland will be, in significant sectors of its economy, governed by laws in which it has no say,” according to the proposal, which was published by the U.K. government.

“That is clearly a significant democratic problem. For this to be a sustainable situation, these arrangements must have the endorsement of those affected by them, and there must be an ability to exit them.”

Johnson proposed that at the end of a transition period, the Northern Ireland Assembly and Executive – which currently isn’t sitting – would be given a vote on whether to retain EU alignment. They’d also be given the opportunity to vote on it every four years thereafter.

Johnson Sends His Plan to Juncker (3:10 p.m.)

The prime minister wrote to European Commission President Jean-Claude Juncker with the details of his plan.

“There is now very little time in which to negotiate a new agreement,” Johnson wrote. “The government wants to get a deal, as I am sure we all do. If we cannot reach one, it would represent a failure of statecraft for which we would all be responsible.”

He said the “broad landing zone” for a deal was clear and urged the EU to compromise.

Germans Skeptical About Johnson’s Plan (2:45 p.m.)

The German Chancellery has not yet seen the full text of Johnson’s proposal, but a government official sounded skeptical about its prospects after hearing Johnson’s party conference speech.

It would be no solution to move the Irish border just a few miles inland, the official said under the condition of anonymity. He also remained skeptical about a possible time limit for the backstop, arguing that this had been one of the EU’s main points of criticism.

For a final judgment, Chancellor Angela Merkel will wait for a phone call with EU commission president Jean-Claude Juncker later today, the official said.

U.K. Proposals ‘Not Encouraging,’ Irish PM Says (2 p.m.)

Irish Prime Minister Leo Varadkar said the reported proposals from Prime Minister Boris Johnson were not encouraging and didn’t form the basis for a deal.

Speaking in Parliament on Wednesday, he confirmed that Johnson’s aides had briefed Irish officials yesterday, but he wanted to see the final proposals before offering a definitive verdict.

He appealed to the U.K. To listen to the majority in Northern Ireland who, he said, don’t want a return of customs posts.

Business Is Disappointed With the Plan (1:40 p.m.)

Leaving the European Union without a deal would be a “historic failure of statecraft,” said the director-general of the Confederation of British Industry Carolyn Fairbairn.

“It’s not clear the Government’s proposals as reported move us forward. They cannot be the final destination,” she added.

Anti-Brexit Rebel Grieve Says Cummings Is Lying (12:35 p.m.)

Dominic Grieve, until recently a Tory MP, accused Johnson’s senior adviser Dominic Cummings of telling “outright lies” for briefing that there was foreign funding for the efforts of Grieve and others to block a no-deal Brexit.

The claim that there is a government investigation ongoing is untrue, Grieve said and “mercifully this country is not yet run as a police state by Mr Cummings.”

Foreign Secretary Dominic Raab, standing in for Johnson at prime minister’s questions, said it was right that efforts to block no-deal, including the Benn Act supported by Grieve, should be subject to scrutiny. Johnson has also raised questions about how the legislation was drafted.

Johnson Calls Labour “Anti-Semitic Marxists” (12 p.m.)

The prime minister took every opportunity throughout his speech, to attack his opponents in the Labour Party, in another sign he’s on an election footing.

Pitching himself as a champion of capitalism against Labour Leader Jeremy Corbyn’s socialism, Johnson describes Labour’s social care plan as “deranged and ruinous” and “borrowed from the playbook of Bolivarian revolutionary Venezuela.”

He repeated his desire to get Brexit done, criticizing Labour’s efforts to stop a no deal exit, calling the Labour leadership “fratricidal anti-Semitic Marxists”. He also criticized Corbyn’s plans for a four-day week and to end tax breaks for private schools.

Johnson took another swipe at Parliament’s refusal to give him an election. MPs are refusing, because they want to prevent a no-deal exit first.

“If Parliament were a laptop, then the screen would be showing the pizza wheel of doom,” he told the conference.

Johnson’s Mother Voted for Brexit (11:55 a.m.)

Boris Johnson brought some levity to the party conference by glossing over the divisions in his own family over Brexit.

Johnson’s brother Jo, a remainer, quit the cabinet – and will stand down from Parliament because he disagrees with the premier’s course of action. The prime minister’s sister and father also voted remain.

But, “for keen students of the divisions in my family you might know that I have kept the ace up my sleeve,” Johnson said. “My mother voted leave,” he said, to applause from the floor.

Johnson is Ready for No-Deal (11:55 a.m.)

If the EU refuses to engage, then the country is ready for no-deal, he told the hall, to cheers.

“I hope very much that our friends understand that and compromise in their turn,” Johnson told his audience in Manchester, England, Wednesday. “If we fail to get an agreement because of what is essentially a technical discussion of the exact nature of future customs checks, when that technology is improving the whole time, then let us be in no doubt that the alternative is no deal.”

“That is not an outcome we want. It is not an outcome we seek at all. But let me tell you this conference: it is an outcome for which we are ready.”

Johnson Sets Out ‘Compromise‘ on Border (11:50 a.m.)

Johnson said the Brexit plan he’ll send to Brussels later today protects the peace agreement in Northern Ireland, involves no checks at the Irish border and represents a compromise for both sides.

“We will under no circumstances have checks at or near the border in Northern Ireland,” Johnson said in his speech at the Conservative Party conference in Manchester.

He also said the regional assembly of Northern Ireland will have a role. The assembly is currently suspended.

“By a process of renewable democratic consent by the executive and assembly of Northern Ireland we will go further and protect the existing regulatory arrangements for farmers and other businesses on both sides of the border.”

It’s a “compromise,” he said.

Let’s Get Brexit Done (11:40 a.m.)

“Lets’s get Brexit done,” Boris Johnson tells conference in Manchester, as he reiterated his call for an election.

Taking the Plan to Brussels (11:25 a.m.)

Johnson’s speech will fire the starting gun for a round of diplomacy in Brussels. David Frost, the prime minister’s EU envoy, will arrive at the European Commission mid-afternoon with copies of the plan for Michel Barnier, the EU’s chief Brexit negotiator, and his team.

European Commission President Jean-Claude Juncker is then expected to speak to Johnson by telephone.

After a few hours of scrutiny, EU officials will brief and discuss the document with diplomats from the EU’s 27 remaining countries. The meeting starts at 6.30 p.m. Brussels time and could last more than two hours. It’s here that the first proper indication of what the bloc thinks of the blueprint will emerge.

EU Officials Don’t Like the Plan So Far (11 a.m.)

The reaction in Brussels to Johnson’s plan, as reported so far, is downbeat. Officials said it fails on two key measures — the need to avoid checks on the island of Ireland and to protect the single market.

The question now is whether this really is the final offer — as Johnson says — or is it an opening move. In any case, there’s skepticism that the divide can be bridged in time, according to officials speaking privately.

Opposition Parties Meet Again (10:45 a.m.)

Opposition parties are meeting again on Wednesday. So far no action plan has been decided as different factions have different ideas about how to stop Johnson pursuing a no-deal exit.

The Scottish National Party wants a vote of no-confidence now. Labour doesn’t think that’s the right approach.

“This is a PM that is clearly not doing things by the book,” SNP member of Parliament David Linden told Sky.

Varadkar’s Limited Room for Maneuver (9:25 a.m.)

Even if Irish Prime Minister Leo Varadkar wanted to embrace Boris Johnson’s reported proposals to break the Brexit deadlock — and there’s no sign he does — he has little scope to do so.

The biggest opposition party, Fianna Fail, which keeps his administration in power, called the reported plans “unacceptable and unworkable,” echoing the Irish government’s initial response to the leaked proposals last night.

We may hear similar language when Varadkar is questioned in parliament at his weekly round of leaders’ question at noon in Dublin.

Coveney Is Not Encouraged (9:20 a.m.)

Irish Foreign Minister Simon Coveney reiterated that what he has seen of Boris Johnson’s proposals are not encouraging.

“Essentially, if he’s proposing customs checks on the island of Ireland then I don’t think that’s going to be the basis of an agreement,” he told Sky News.

Tory Chairman Urges EU Flexibility (Earlier)

Conservative Chairman James Cleverly refused to confirm any details about Boris Johnson’s Brexit blueprint in a series of media interviews, but said the plan is deliverable and the European Union now needs to move.

“This is a serious set of proposals which are a credible way forward,” Cleverly told the BBC. “If some pragmatism and flexibility can be applied by the EU, and if British politicians who have said that they will vote for a deal if one is presented stick to their word, then we can leave on Oct. 31 with a deal.”

Cleverly also doubled down on his warning this week that there may be civil unrest if Brexit isn’t delivered, telling BBC Radio 4 that voters “may regard disappointment in that as a trigger to use other methods to initiate change.”

Patel: U.K. Not Planning for Post-Brexit Disorder (Earlier)

Home Secretary Priti Patel said that while the government is preparing for “every Brexit scenario,” she’s not planning for any disorder if the U.K. leaves the EU without a deal.

“If we have to leave with no deal, we’ll be ready to leave with no deal,” Patel told LBC radio on Wednesday. “That is the purpose of all the work that we are undertaking in government right now.”

Earlier:

Boris Johnson Issues Ultimatum as EU Balks at His Brexit Plan‘Corbynomics’ Is More Popular Than You Think: Matthew GoodwinIt’s My Deal or No Deal, Johnson to Tell EU: Brexit Bulletin

–With assistance from Stuart Biggs, Thomas Penny, Tim Ross, Kitty Donaldson, Dara Doyle, Tiago Ramos Alfaro, Jessica Shankleman, Arne Delfs, Robert Hutton, Alex Morales and Peter Flanagan.

To contact the reporters on this story: Ian Wishart in Brussels at iwishart@bloomberg.net;Alex Morales in Manchester, England at amorales2@bloomberg.net;Robert Hutton in London at rhutton1@bloomberg.net

To contact the editors responsible for this story: Tim Ross at tross54@bloomberg.net, Stuart Biggs, Thomas Penny

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