The last year of EU-UK negotiations over BREXIT has been a poor exercise in negotiation strategy.  Truthfully, I would counsel both sides to take my class on negotiation and to read the book “Getting to Yes”. For its part, the UK has been hiding behind colorful language but has shockingly misjudged the situation.  It needs to get down to the business of calculating and creating a credible offer based on its contractual agreement. The problem is that leaving the EU does not make financial sense, but then again divorce often is not about logic but feeling.

Let’s be honest, BREXIT is a very emotional separation. One member state is telling 27 other members that after a long and successful relationship, it does not want this anymore. British politicians have been bashing the EU for years comparing the relationship to some form of neocolonialism, which we all know is not the case. It has not helped the negotiations that British leaders have called Brussels bureaucrats corrupt and the EU an ill-fated project. On the other side, Jean Claude Junker does not seem to know when to keep quiet and when to make strategic statements to move the negotiations forward. His ultra-personal and demeaning style reminds us that he represents an institution that itself is out of touch and undemocratic and whose power is de facto unchecked.

Every time I talk with continental Europeans about Brexit, we always end up in the same loop: denial, bafflement, and condescension. The argument goes that the British were duped into voting to leave the EU; but in their hearts, they really want to stay. It leads to a musing on why the British would want to leave the EU anyways and a reaffirmation that what the EU needs is further integration. The conversation is then rounded off by reflecting on what the UK will do when their economy crashes, as it will never be ready on time. Just in case there is any doubt of the logic of this argument, we are reminded that the EU has so many competencies that there is no one left in the UK with any skill to manage BREXIT.

Any attempt by me to argue that if negotiations are failing, there is enough blame to go around is met with a good dose of, “well the EU has to protect its interests.” There is also an eerie sense of Schadenfreude that underlies the conversation.  However, as the adage says, “careful what you wish for you might get it.”  An economically crippled UK cannot pay its debt and could reignite the financial crisis in the EU.

The EU has followed a traditional EU negotiation strategy based on 1) closing ranks, 2) dictating the agenda and 3) making “take it or leave it” demands. The EU for its part seems to treat the UK like any other third-state wishing a trade deal with the EU, but it is not like any other state. The UK is the third largest contributor to the EU budget (circa €18 billion) after Germany and France, and no other EU member state has stepped up to take its place. Does the EU have a plan to cover the loss?  I have a feeling people are expecting Germany to step up, but those days may well be long gone.  Yes, as a German citizen, the current negotiations are most worrying because a sizable volume of German exports goes to the UK, only surpassed by exports to the US and France, making Germany vulnerable.  But no…not enough to be willing to cover the gap.

The Europhiles in my circle of friends will immediately point out how professional the EU has prepared for the negotiations.  However, this argument falls when we look at the situation closer.  Yes, the EU is well prepared, the tactic is called “drowning the other side in detail, ” and maybe they will be so overwhelmed they will give up.  The condition that the EU placed on the UK that the divorce be settled before progress could be made on trade talk is misguided and wasted a lot of time.

It is classical negotiation principle that before negotiations begin one needs to agree that 1) there is a common problem and b) we want to solve it together.  Until now we have been negotiating two separate issues (divorce and trade), and neither side wants to address it together because in the end success would require both parties to admit that what is needed is “separation and mutual respect.”

Instead, the EU should follow a “strict on principles soft on people approach”.  If I were on the team, I would have proposed a framework agreement in which the parties agreed that

  1. All contractual commitments must be kept on both sides. It is a legal question.
  2. The post-BREXIT trade agreement cannot enter into effect unless there is an agreement on the outstanding debt; and
  3. No final bill will be paid unless a post-BREXIT agreement is reached.

These three principles would force the negotiating teams to reach a mutually satisfying agreement, and would allow negotiation to happen in parallel serving as a push-pull factor dragging both sides to the finish line.

The reality is that no deal on BREXIT will be a disaster for everyone: the UK, the EU, and all European citizens. The EU should better spend its time rethinking its negotiation strategy from a “lose-lose” to a “win-win” approach.  Anything less would be a loss of credibility for the EU and further question the foundation of an independent European Commission bent on punishing errant member states.

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