Press

“The new Italian government will give Germany every excuse not to do what Macron would like and it will destabilize the markets,” said Charles Grant, director of the Centre for European Reform, a research institution. “It will increase the risk of another eurozone banking crisis, not reduce it.”

Charles Grant, the director of the Centre for European Reform, agreed that the UK should not necessarily expect to win the argument with Brussels, even if that meant the EU taking a financial hit through the UK being excluded. "It is true that Germany takes a slightly more pragmatic line than France on Galileo, but ultimately [Angela] Merkel does not appear to care enough to over-rule the French and risk fracturing EU unity,” he said after a recent trip to Berlin.

Samuel Lowe of the Centre for European Reform is not convinced that the EU will go for a whole UK backstop. He argues that the sensible thing for the UK would be to accept something closer to Mr Barnier’s original proposal for a special status for Northern Ireland.Mr Lowe says: “If a border does go up between Northern Ireland and the rest of the UK, there is much greater scope for the use of technology and ‘innovative’ solutions, since, unlike on the land border, the infrastructure already exists at the ports and airports … The DUP might not like it, but they may be forced to live with it.”

Samuel Lowe at the Centre for European Reform tells the Brits it’s finally time to swallow the EU’s “special status” for Northern Ireland and accept a border in the Irish Sea: A serious British response to the commission, focused on improving the backstop rather than rejecting it out of hand, will move the Brexit negotiations forward. More importantly, it will help to ensure that no matter what happens with Brexit, the UK’s departure from the EU does not make the Irish border a focus of conflict again.

Rules of origin have been a feature of free-trade accords for decades. The goal, according to Sam Lowe, a trade policy expert at the Centre for European Reform, a London think-tank focused on EU policy, is to prevent one party to a trade agreement passing off cheap imports as homemade, in order to qualify for preferential access to another party’s market.

John Springford of the Centre for European Reform also doubts whether EEA is the way forward.“I’ve always been of the view that EEA is the best outcome economically, but a non-starter politically,” he says. He adds: “You are in the single market, but you are essentially a rule-taker. And for a country with a big financial services sector, it is unlikely that we would put up with that. I could see the EEA as a sensible and perhaps elongated transition period, but not a solution for the long term.”

“The only way you avoid the costs of rules of origin entirely is to remain in a customs union with the EU, but even then you might have some problems in relation to trade agreements with third countries,” Sam Lowe, a trade researcher at the Centre for European Reform, said in a phone interview. “Absent the UK remaining in a customs union with the EU, it’s very difficult to see how in the long run, complex manufacturing in the UK remains viable.”

"We are in a period in paralysis," said John Springford, deputy director of the Centre for European Reform. "The reason for that is all of the various bits of Brexit that are hardest to deal with are coming together at once."