Thread by @JenniferMerode

The European parliament could veto UK-EU trade deal, according to leaked resolution.

I know you’ve heard this one before, but here’s the twist...(thread)

theguardian.com/politics/2020/…

EP not minded to give Michel Barnier an inch to compromise on level playing field, especially on state aid. (Not in public anyway) See here the reference to dynamic alignment i.e. the EU starting point MB failed to endorse recently.

EU negotiators and member states are playing down hopes of an imminent breakthrough on state aid. There has been a move. The talk is of ‘dynamic, not alignment’. But how does that work? Nobody knows and it wasn’t discussed in R4.

Why does state aid have to be dynamic (for the EU). Because events. Coronavirus is exhibit A, but see also 2008 financial crisis. On both occasions quick and sudden easing of EU rules on bailouts and company rescue. EU wants that dynamism preserved in future r/ship w UK.

The other problem with state aid (for EU) is nobody sees robust international reference point. For climate change there is Paris, but WTO rules for the EU don’t really cut it. There has to be more. And LPF is front and centre of every member states' Brexit priority list.

UK officials say they are not going to just split the difference. UK government wants to be in charge of state aid rules - for Boris Johnson greater state intervention could be part of his plan to secure ex-Labour seats in northern England.

By the way, UK has not been a big spender in comparison with other EU governments, when measuring state aid. Germany accounts for 52% of emergency coronavirus state aid approved by EU authorities, France 17%, Italy 15.5% ... and the UK 4%/

The landing ground for compromise looks vanishingly small. There is a parallel with fish. Barnier has hinted at compromise, but says won’t and can’t accept zonal attachment. EU member states insist on historic rights. But UK wedded to ZA. So no meet in the middle in sight.

And that’s the final point.. Expectations of Brexit compromises are running ahead of reality at the moment.

And nobody in Brussels expects Boris Johnson’s meeting wth Ursula von der Leyen + Charles Michel to solve this. (So far no date agreed). Instead...

Hopes are centred on a reset of negotiation process in early July.

Michel Barnier said he had proposed to David Frost a smaller “more restrained” format. And two sides should resume face-to face talks in July.

But the big problem remains the substance not the format.