Thanks for following the blog today and for all your comments. I’m wrapping up proceedings now with this summary:
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EU leaders have give the green light for Brexit negotiations to move to phase two, addressing Britain’s future relationship with the bloc. They ruled that sufficient progress had been made on the opening issues to go forward.
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But Theresa May and the European Commission president, Jean-Claude Juncker gave conflicting accounts of when the next stage of negotiations will actually begin. May said they should start “straight away” while Juncker said the European Commission president said they would not start in earnest until March.
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The European Council president, Donald Tusk, congratulated May but warned that the second phase talks would be tougher. Tusk said it was “still realistic” to complete phase two Brexit talks by the October deadline but, in comments echoed by Angela Merkel, he told reporters that the next phase would be “more demanding, more challenging”.
- May called the decision “an important step on the road to delivering a smooth and orderly Brexit”. She insisted that Britain would be exiting the European Union on 29 March 2019 despite EU guidelines saying that Britain would be subject to EU law and the four freedoms during the anticipated two-year transition period. The Brexit secretary David Davis called it a milestone, declaring: “We are ready for the next stage.”
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Five leading British business groups welcomed the news but warned that that jobs were at risk unless swift progress was made in the second phase.
My colleague Dan Roberts has looked into his crystal ball to forecast how the second stage of Brexit talks are likely to pan out.
French and stuck in England by Brexit? No chance. If you are an EU citizen you will continue to have the right to travel around the EU whatever the outcome of Brexit.
But British nationals in Europe fear being stranded on the continent after Brexit and have called on Theresa May and EU leaders to make EU citizens a key strand in the phase two negotiations.
They say the “failure to even discuss the deprivation of UK citizens in the EU” who face losing their freedom of movement rights could leave them landlocked in the countries they have adopted, unable to move for business or family reasons.
EU citizens settled in the UK will continue to have freedom of movements rights post Brexit as EU passport holders, while UK citizens elsewhere in Europe will not.
Jane Golding, chair of British in Europe, a coalition of 10 campaign groups, said
Imagine a French person living and working in Sheffield is suddenly no longer allowed to move outside Yorkshire to live or to work after Brexit. When we moved to the EU it was to a single territory without internal borders, not one with walls along national boundaries. The decision to defer discussion of our free movement means that many of the most enterprising citizens the UK has produced in the last 40 years have no idea yet how they will continue to earn a living.
The group fear citizens rights will “now fall off the radar” during the transition and trade talks and have called for a separate strand on talks on EU citizens rights in the same way as Ireland has got a separate strand on the Irish border.
My colleague Richard Partington has written about a survey for the Bank of England which suggests that almost a decade of improvements in household finances has started to be unpicked in the year since the EU referendum.
Here’s video of the prime minister claiming that second-stage Brexit talks will begin immediately, contradicting the European Commission president Jean-Claude Juncker, who said they will commence in March.
Talks about "future relationship" between UK and EU will begin "straight away", says Prime Minister Theresa May https://t.co/HvPmG1cJd5 pic.twitter.com/G3JQU5cyy3
— BBC News (UK) (@BBCNews) December 15, 2017
The Association of Financial Markets in Europe (AFME) has warned that business continue to face major uncertainty despite today’s agreement. Chief executive Simon Lewis said:
We very much welcome the council’s decision that enough progress has been made to move to the second phase of the Brexit negotiations and to proceed with negotiations on a transition period. This is of crucial importance for businesses to ensure an orderly transition and financial stability.
Businesses continue to face significant uncertainty and we urge the UK and EU27 to reach agreement on transitional arrangements, including addressing issues relating to the continuity of services under existing cross-border contracts as soon as possible. We also call on the parties to clarify the framework for the future relationship as soon as possible to provide businesses with a clearer direction of travel.
Similar sentiments were expressed by TheCityUK, which represents UK-based financial and related professional services industry. Chief executive Miles Celic said:
The first great Brexit hurdle has been cleared. It is right to celebrate this progress, but the momentum must now be maintained to deliver the future UK-EU relationship. That job is not yet done.
Nearly one year into the negotiations, many of the critical issues relevant to our industry are yet to be discussed. Businesses, their employees and customers continue to face uncertainty. To address this, rapid progress needs to be made towards agreeing a transition period and further clarity provided on the shape of the final deal. It’s time for the negotiators on both sides to crack on and focus on the future.
Stephen Hammond, who voted against the government on the EU withdrawal bill on Wednesday, and was sacked as Conservative party vice-chair as a result, has explained why he did so.
He says:
I took no pleasure in voting against the government and my party for the first time. It was a very difficult decision, but I believe it was the right one. There did not have to be a rebellion, it was completely avoidable. My colleagues and I had raised our concerns with the government three months ago and have been trying to work with the government to find a solution that everybody would be happy with. In the end, the minor concessions offered 15 minutes before the vote unfortunately failed to address the issues being raised. Therefore, I had to vote with my conscience and put my country and constituency first.
Amendment 7 passing does not undermine the government or the prime minister, nor does it make it more likely Jeremy Corbyn will become prime minister. The evidence for this is clear as the EU27 have just agreed to move to the next phase of talks. The talk of delay is just what whips say to try to scare MPs and what the newspapers say to make a story.
Meanwhile, the prime minister’s chief of staff, Gavin Barwell, provides a textbook example of trying to please everyone at once:
PM's chief of staff commenting on deal here https://t.co/J5qmCNsh5U
— Laura Kuenssberg (@bbclaurak) December 15, 2017
And here - this is how No 10 is trying to sell the deal to both sides of the public, as well as the two halves of the Tory party https://t.co/p7Lf4zNbls
— Laura Kuenssberg (@bbclaurak) December 15, 2017
Speaking in her Maidenhead constituency, Theresa May told reporters:
This is an important step on the road to delivering the smooth and orderly Brexit that people voted for in June of last year. The UK and the EU have shown what can be achieved by commitment and perseverance on both sides.
I am pleased that it has been agreed that we should make rapid progress on an implementation period, which will give certainty to businesses and to individuals. There is still more to do but we are well on the road to delivering a Brexit that will make Britain strong, prosperous and secure.
While the EU negotiating guidelines make clear that there will essentially be full membership for the two year transition period, up to 2021, including adherence to EU law and the four freedoms, May insisted this did not have the effect of pushing back the exit date. She said:
We will leave the European Union on the 29th of March 2019.
The prime minister said:
There’s still more to do, but we’re well on the road to achieving the Brexit that the UK voted for
May insists talks to start immediately
The prime minister has told reporters that phase two Brexit talks will start “straight away”, despite Jean-Claude Juncker saying they will commence in March next year.
Updated
Summary
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EU leaders have give the green light for Brexit negotiations to move to phase two, addressing Britain’s future relationship with the bloc. They ruled that sufficient progress had been made on the opening issues to go forward.
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The European Council president, Donald Tusk, congratulated Theresa May but later warned that the second phase talks would be tougher. Tusk said it was “still realistic” to complete phase two Brexit talks by the October deadline but, in comments echoed by Angela Merkel, he told reporters that the next phase would be “more demanding, more challenging”.
- May called the decision “an important step on the road to delivering a smooth and orderly Brexit”. The Brexit secretary David Davis called it a milestone, declaring: “We are ready for the next stage.”
- The European Commission president, Jean-Claude Juncker, said that the “real negotiations” on the second phase would not begin until March next year. That is the date when the negotiation guidelines say that the framework for trade talks will be issued.
- Five leading British business groups welcomed the news but warned that that jobs were at risk unless swift progress was made in the second phase.
Summary
Tusk and Juncker are asked about Brexit again (they are taking question on a range of other issues as well).
Tusk says:
The second phase will I think be more challenging than the first phase.
Juncker says the draft withdrawal agreement will be drawn up “in the course of the next weeks”. But he adds:
The real negotiations on the second phase will begin in March next year. I cannot say when they will conclude.
Earlier, Angela Merkel said that the decision to move on to phase two represented “quite significant progress”.
The German chancellor said:
Phase two may now be ushered in, but obviously that is an even tougher piece of negotiation than we have had up to now.
The good news is that all 27 member states so far have put in tremendous efforts, have stood together, and I am very optimistic that we will continue to go forward in quite the same spirit.
Emmanuel Macron, who appeared alongside Merkel at a joint press conference, said he “fully agreed” with the Chancellor’s comments, adding:
We managed to keep the unity of the 27, the integrity of the single market, compliant with our rules.
In the future we will do what it takes to do the same.
Another quote from Tusk from the press conference in Brussels:
At a Brussels press conference, he said:
As for the framework for future relations, it is now time for internal EU27 preparations and exploratory contacts with the UK to get more clarity on their vision.
On that basis, we should adopt guidelines and start negotiations next year.
I trust that the unity on the EU side will continue.
Jean-Claude Juncker essentially echoed Tusk’s comments.
He also praised Juri Ratas, the prime minister of Estonia, which currently holds the presidency of the European Union, for maintaining unity in the face of those who he said sought to impose division.
Theresa May was "she was tough, smart, polite and friendly negotiator" says Jean-Claude Juncker. He jokes that he made her come to Brussels 6am London time last Friday as a "sanction" in negotiations
— lisa o'carroll (@lisaocarroll) December 15, 2017
Updated
The Donald Tusk and Jean-Claude Juncker press conference has begun.
The European Council president is up first.
Tusk says:
Opening the second phase of negotiations wouldn’t be possible with the unity of the EU27, the hard work of [EU chief negotiator] Michele Barnier and the constructive effort of Theresa May.
He calls for the unity to be maintained and for “more clarity on their [the UK’s] vision”
Updated
Well-placed MEPs have told the Guardian that despite the drama that has accompanied the first phase of Brexit negotiations, there is an air of inevitability to the way talks are playing out.
Greek MEP Giorgos Kyrtsos, an avid Brexit watcher who sits on the European Parliament’s economic and monetary affairs committee, said:
Every party, playing to electorates at home, wants to dramatise the situation. The French want to be seen as a dominant player, the Germans want to be regarded practical, given the lack of government in Berlin but the truth is the EU is not being as tough as it said it would be and Mrs May has survived the ordeal. There is an inevitability to what we are seeing.
Angela Merkel and Emmanuel Macron are giving a press conference.
The German chancellor said phase two negotiations on Brexit will be an “even tougher piece of negotiations”.
She praised the “unity” of the 27 member states as did Macron.
He said:
We managed to keep the integrity of the single market and compliance with our rules.
Labour MP Chuka Umunna, on behalf of the Open Britain campaign for close ties with the EU, said ministers are now being confronted with the “sheer complexity and monumental costs” of Brexit, and are ill-prepared and have “insufficient time”.
He said:
Contrary to the claims of Brexiters who said that trade talks would begin speedily, we now won’t be able to discuss the future relationship until March at the absolute earliest. And the Cabinet has still yet to even discuss - let alone agree on - what form of relationship it wants the UK and the EU to have.
The clock is ticking, and we are far away from anything resembling a deal. Brexit is intractable and complicated, far more so than people were told at the time of the referendum. Voters have the right to keep an open mind about whether this is really the best future for our country.
Liberal Democrat leader Vince Cable renewed calls for a referendum on the final deal. He said:
Now comes the hard part. The outcome of these talks will affect jobs, living standards and prices for years to come. Yet with just over a year to go, the Cabinet still can’t even agree on what they want the final deal to look like. The people must have a say on the terms of any deal, including the option of an exit from Brexit.
Nigel Farage is predictably angry.
If the trade talks don't start until March then why did @Theresa_May leave Downing Street so early last Friday? We've been taken for mugs, no wonder the EU leaders applauded her last night.
— Nigel Farage (@Nigel_Farage) December 15, 2017
You can read the full guidelines on phase two here (pdf).
Referring to the transition period, it says:
In order to ensure a level playing field based on the same rules applying throughout the Single Market, changes to the acquis adopted by EU institutions, bodies, offices and agencies will have to apply both in the United Kingdom and the EU. All existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures will also apply, including the competence of the Court of Justice of the European Union.
As the United Kingdom will continue to participate in the Customs Union and the Single Market (with all four freedoms) during the transition, it will have to continue to comply with EU trade policy, to apply EU customs tariff and collect EU customs duties, and to ensure all EU checks are being performed on the border vis-à-vis other third countries.
On the future trading relationship, it adds:
The European Council will continue to follow the negotiations closely and will adopt additional guidelines in March 2018, in particular as regards the framework for the future relationship. It calls on the United Kingdom to provide further clarity on its position on the framework for the future relationship.
It looks like Juncker and Tusk’s press conference has been put back to 12.50pm UK time. Sky News says it is probably running late because Juncker is on the phone to May.
The secretary of state for exiting the European Union is happy:
Today is a good day for Brexit and an important step for Britain. Thanks to hard work and determination, we have reached an important milestone and have achieved #sufficientprogress. There is still lots of work to come but we are ready for the next stage.
— David Davis (@DavidDavisMP) December 15, 2017
Leo Varadkar has admitted that the hard work is still to come on the Irish border deal.
The prime minister of Ireland, who threatened to veto today’s deal if he didn’t get what he ultimately described as a “bullet proof” guarantee on the Irish border, told reporters “there was a lot of thinking to be done about that” once phase two negotiations get underway.
The Irish border deal calls for the UK to come up with a “bespoke solution” for the border if the wider UK-EU deal doesn’t resolve the problem of how to keep “full alignment” in regulation north and south of the border. Varadkar said:
From an Irish point of view we’d like to look like as near as the current relationship as possible, but that wouldn’t necessarily be the view of everyone.
The pound has dropped back after its early gains despite the agreement to move Brexit talks on to the second phase. It is now down 0.26% against the dollar at $1.3394, its low of the day. Against the euro it has dropped 0.39% to €1.1350.
Sterling has been unsettled by comments from EC president Jean-Claude Juncker about the difficulties ahead.
William Anderson Jones, head of UK corporate dealing at foreign exchange specialist RationalFX, said:
The pound slipped against its major peers as [Juncker] warned that phase two of talks, focused around trade, would be even more difficult.
Positive sentiments from EU leaders suggest that the talks will continue to advance to the much desired trade and transition talks, but all echo Juncker’s warning over the difficulty of talks to come.
The prime minister has responded on Twitter to the decision taken at the EU summit:
Thank you to Presidents @JunckerEU and @donaldtusk. Today is an important step on the road to delivering a smooth and orderly Brexit and forging our deep and special future partnership. https://t.co/PSaATiA17n
— Theresa May (@theresa_may) December 15, 2017
Five business groups - the British Chambers of Commerce (BCC), Confederation of British Industry (CBI), EEF (manufacturers’ organisation), Federation of Small Businesses (FSB) and Institute of Directors (IOD) - have jointly welcomed the progression to phase two of Brexit talks. But they said much more work was needed.
We welcome the fact that the European Council has approved the progression of talks to the discussion of a transition period, and a future trade relationship.
It is our collective view that the transition period must now be agreed as soon as possible, to give businesses in every region and nation of the UK time to prepare for the future relationship. Further delays to discussions on an EU-UK trade deal could have damaging consequences for business investment and trade, as firms in 2018 review their investment plans and strategies.
While our members will be particularly pleased that EU citizens currently living and working in the UK now have more clarity, it’s still essential that an unequivocal commitment on their future rights is made whatever the outcome of negotiations.
We will continue to work with the government to ensure that UK firms can overcome the challenges and take advantage of the opportunities that a new trading relationship with the EU and the rest of the world will bring.
The EU has issued negotiating guidelines for phase two of the Brexit talks, which essentially say there will be full membership until the end of the transition period.
EU says all EU Law will apply until end of transition, assumed to be 2021, and we have to stick with all four freedoms, which means EU immigration carries on as is for five years after the referendum https://t.co/e94kyrXjTI
— Laura Kuenssberg (@bbclaurak) December 15, 2017
It has also confirmed that guidelines for trade talks will not be issued until March.
EU confirms guidlines for framework trade talks won't be issued until March. Until then the negotiations will be about the transition period. Says before March it needs more info from UK about what sort of relationship it wants.
— James Mates (@jamesmatesitv) December 15, 2017
Here’s Simon Jenkins’s immediate reaction to the news from the EU leaders’ summit:
So far, good news. But now, and before any substantive talks on future trade, a UK/EU transition deal must be negotiated, and fast. It must cover commercial relations with the EU for a period after 2019, pending talks on a permanent deal, and that cannot legally be reached before then. Here is the rub. Such a transition deal can only be asymmetrical: Britain must continue to obey EU trade regulations, treaties and jurisdictions without any role in their adjustment. Unless the UK is to fall off the proverbial cliff in 2019, it means de facto customs union for the duration.
At this point, a steam train hurtles round the bend, heading straight for a divided parliamentary Conservative party. Customs union, even as a transitional measure, comes packed with all the backsliding baggage so loathed by Brexit fundamentalists. It might tie Britain’s hands in third-party talks. It might mean a shortcut back to the single market, the Norway option or the Swiss gambit.
Leaders agree to move Brexit talks forward
The European commission president has confirmed what we were expecting:
EU leaders agree to move on to the second phase of #Brexit talks. Congratulations PM @theresa_may
— Donald Tusk (@eucopresident) December 15, 2017
Updated
Writing for Comment is Free, Jonathan Portes, senior fellow of UK in a Changing Europe, says the idea that Parliament will have a meaningful say on Brexit, following this week’s amendment requiring MPs to get a vote on any final deal with the EU, is a false one.
He writes:
By then it will be too late. The UK’s negotiating position on this all-important aspect of Brexit will have to be set out in the next couple of months. If parliament actually wants a meaningful voice on this – perhaps the most important single choice about the future of the UK economy since the mid-1970s – it needs to act now.
It should insist that, before we table anything in Brussels for the phase 2 negotiations, there should be a proper debate in parliament. Let’s settle the things we didn’t and couldn’t decide in the referendum. Do we care more about the freedom to set our own regulations or about being part of the largest single market in the world? Do we care more about ending free movement or about preserving free trade with Europe? Do we care more about “frictionless” borders in Ireland and Dover or about trade deals with the US? These are vitally important political and economic questions, with no “right” answers. And they shouldn’t be left to a weak prime minister and her divided cabinet and party.
The Press Association has details of what the EU leaders ate for dinner last night because people are apparently interested in these things.
They had B̶o̶r̶i̶s̶ ̶J̶o̶h̶n̶s̶o̶n̶ roasted langoustines for starter followed by a main course of T̶h̶e̶r̶e̶s̶a̶ ̶M̶a̶y̶ capon and D̶a̶v̶i̶d̶ ̶D̶a̶v̶i̶s̶ festive log “with a twist” for dessert.
Lithuania’s president has offered Theresa May a Christmas message, in a tweet next to the Christmas tree in the building where EU leaders are meeting:
Past is history, future – a mystery. #Brexit #EUCO pic.twitter.com/cbHrMNngwn
— Dalia Grybauskaitė (@Grybauskaite_LT) December 15, 2017
The second part of the tweet points to the fact EU leaders are still waiting to hear from the British government what it wants from Brexit.
Dutch prime minister Mark Rutte told reporters last night that the UK now had to decide what it hoped to get from its future relationship with the European Union.
Is it membership or not of the internal market, will they stay in the customs union or not? If not, what would that future relationship be, what is a Canada plus plus plus [as referred to by David Davis]? This is all for the UK to now decide on how they sketch out the future relationship with the European Union.
Here is Daniel Boffey’s story containing more reaction to Theresa May’s speech last night and details of what is expected today:
The round table on article 50 is due to commence shortly (at 10am).
Talks about #Brexit transition period should begin in January, a cheerful-looking @MichelBarnier tells me as we chat during the European Council. #Barnierbantz episode 57. pic.twitter.com/7ymA7tBred
— Adam Fleming (@adamfleming) December 15, 2017
Not everyone agrees that the applause for Theresa May last night was wholehearted.
Austrian chancellor Christian Kern perhaps a tad on the mean side says applause for May ‘not very enthusiastic’
— Daniel Boffey (@DanielBoffey) December 15, 2017
Jean-Claude Juncker, president of the European commission said it “depends on the British parliament and British people” to decide whether the UK will ultimately leave the EU.
Asked about the round of applause given to Theresa May at the end of her address to leaders at a summit dinner on Thursday night, Juncker said:
Yes. Some of us thought, including me, that she did make a big effort and this has to be recognised.
The prime minister of Malta, Joseph Muscat, said the EU was “grateful to prime minister May for her commitments” but that he hoped the UK would present its vision “in the next few weeks” to enable trade talks after a March European council summit.
Dalia Grybauskaitė, the president of Lithuania, also said she expected negotiations “on the future” to “probably start in March.
Updated
Good morning, welcome to live coverage of the EU 27 summit.
After nine months of wrangling, EU leaders are set to decide that enough progress has been made on the first phase of Brexit talks to move negotiations on to discussions about Britain’s future outside the bloc.
Stay tuned for all the developments including live updates from the joint press conference by the president of the European Commission, Jean Claude Juncker, and the president of the European Council, Donald Tusk, which is scheduled for 12.30pm GMT.
Updated
