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May's Brexit transition demand 'would demonise EU citizens' May's Brexit transition demand 'would penalise EU citizens'
(about 3 hours later)
Unthinkable for EU to agree to PM’s key demand on citizens’ rights, says VerhofstadtUnthinkable for EU to agree to PM’s key demand on citizens’ rights, says Verhofstadt
Daniel Boffey in Brussels Daniel Boffey in Brussels and Peter Walker
Sun 18 Feb 2018 12.59 GMTSun 18 Feb 2018 12.59 GMT
Last modified on Sun 18 Feb 2018 13.56 GMT Last modified on Sun 18 Feb 2018 16.44 GMT
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Theresa May’s key demand over the terms of the transition period after Brexit would amount to a “demonisation” of EU citizens in the UK and will be rejected, the European parliament’s Brexit coordinator, Guy Verhofstadt has said. Theresa May’s demand that EU nationals coming to the UK during a Brexit transition deal should enjoy fewer rights than those already in the country would amount to “penalising citizens”, Guy Verhofstadt has said.
Speaking on BBC1’s The Andrew Marr Show, the former Belgian prime minister argued it would be unacceptable for the UK government to have the freedom to treat citizens arriving during the 21-month period after 29 March 2019 differently to those already in the country. Verhofstadt, the European parliament’s Brexit coordinator, said May was “not very serious” when she proposed the idea.
May has insisted a deal over what she refers to as an implementation period should recognise the “difference between those who came prior to us leaving and those who will come when they know the UK is leaving”. He said: “It’s not acceptable for us that rules will continue without change for financial services, for goods, for whatever other business, and only for the citizens, their situation will change. That is penalising citizens.”
Verhofstadt told Marr, however, it would be unthinkable for the EU to agree to a “status quo” transition period until December 2020 on everything apart from the rights of citizens who settle in the UK during that 21-month period. He added: “For us that is not acceptable. We do not even want to be talking about it.”
The Belgian MEP told Marr: “It is not acceptable for us that that rules will not change for financial services, for goods but only for citizens, their situation will change. That is demonising citizens. That is not acceptable. We do not even want to talk about it.” The Belgian MEP was equally blunt when asked about UK hopes for a final deal that would mean different arrangements for different sections of the economy.
Earlier this month, the EU’s chief negotiator, Michel Barnier, had warned that the differences between the negotiating parties over the terms of the transition period were substantial and imperilled an agreement. “That will not be the outcome of these negotiations. It cannot be the outcome,” Verhofstadt told BBC1’s Andrew Marr Show, saying he could not countenance a trade deal that would also see the UK seek advantage through lower taxes and regulations.
The UK is hoping to have those terms agreed by March so it can focus on negotiations over a future relationship. The European parliament will have the right to veto any withdrawal agreement struck between the EU and the UK sometime in October or November this year. His comments came as the shadow foreign secretary, Emily Thornberry, said it seemed inevitable the UK would have to stay in some sort of customs union after Brexit, a further indication of what seems to be a gradual Labour shift on the issue.
Asked about the consequences of the European parliament, or the UK parliament, voting down the agreement at the end of the year, Verhofstadt suggested such a scenario would likely lead to “unknown territory”, with “a crisis in British politics, I presume, maybe an election, after that election a new government and a new position on Brexit”. She told ITV’s Peston on Sunday: “We cannot see a way forward when it comes to Northern Ireland or to tariff-free trade across Europe without us being in some form of customs union that probably looks very much like the customs union that there is at the moment, and that’s our position on that.”
Verhofstadt did suggest there was more flexible thinking on the key issue of including the financial services sector in any future trade deal. Barnier has at times appeared to rule it out. During her trip to China at the end of last month, May raised the idea of different rights for EU citizens who arrive after March 2019, during a transition period expected to last until the end of 2020.
“There will certainly be something in financial services, on regulatory equivalence”, Verhofstadt said. “What we don’t want with this withdrawal agreement, we establish a sort of financial sector that is competing with the continent, not in a serious way by lowering taxes, lowering type of rules ... We want a level playing field in this.” Verhofstadt said the European parliament was “very worried” at the idea of such a reduction in citizens’ rights, calling it “a bureaucratic nightmare”.
Asked why there could be no change to citizens’ rights during a transition period, he said: “Because transition is simply the continuation of the existing situation. That’s not a bureaucratic answer.
It was, Verhofstadt noted, the UK that had asked for the transition. He said: “Britain needs a period from now on, let’s say until the end of 2020, to prepare itself. But the rights and duties will be the same during transition. That is also the case for UK nationals living on the continent.”
Asked whether the UK could secure a so-called Canada+++ trade deal, for example one with special dispensation for financial services, Verhofstadt reiterated the EU’s view that this was impossible.
“It will be a far more difficult negotiation than simply to say, ‘Oh, we like financial services, we’ll put it in; we don’t like this sector and we put it out’,” he said.
“There will be something, certainly, about financial services, but there will then also be something about regulatory equivalence. What we don’t want is that with this whole agreement we establish a type of a financial centre that is competing with the continent not in a serious way by every time lowering the type of rules so that we create a competitive disadvantage.”
Asked why the UK would not be able to see the flexibility given in EU trade deals with Japan and Canada, Verhofstadt said this was because they were external nations seeking to converge with the bloc, while the UK was seeking to diverge, and had to face the consequences of this.
• This article was amended on 18 February 2018. It originally quoted Verhofstadt as warning about demonising EU citizens during a transition phase. This has been corrected to penalising.
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