Seven Lessons for Theresa May as Brexit Talks Resume

  • U.K. prime minister can learn from predecessors’ efforts
  • Thatcher was high point in British attempts to get concessions
Brexit Repeal Bill a U.K. Power Grab, Says Falconer

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Negotiating with the European Union is never easy. Particularly when you’re up against its most powerful governments and a hulking bureaucracy that represents the world’s largest single market.

U.K. Prime Minister Theresa May is already finding that to her cost, with talks over Britain’s withdrawal barely a month old. Negotiations resume in Brussels on Monday, with the EU’s chief negotiator, Michel Barnier, warning that Britain’s ambitions remain unclear and that progress needs to accelerate.

These seven EU negotiations from the bloc’s recent past could give May clues in how to get what she wants on Brexit. It won’t make for easy reading though, the EU usually wins.

1. When Cameron fell short

In February 2016, former Prime Minister David Cameron had just reached the end of his ill-fated negotiation to change the terms of the U.K.’s EU membership to help persuade the British people to remain with the bloc.

David Cameron after a meeting of EU leaders in Brussels on June 28, 2016.
Photographer: Jasper Juinen?Bloomberg

The EU went some way to meeting Cameron’s demands, agreeing to an “emergency brake” on migration and a written acknowledgment that the U.K. was exempt from joining an “ever closer union,” but nowhere near enough to convince voters when the referendum came along about four months later.

EU officials close to the talks now say the bloc couldn’t have gone further than it did and, although Cameron heralded his negotiation a success, the result was a far cry from the wide-ranging reforms he had laid out in a speech at Bloomberg in London in 2013.

Lesson: Manage expectations – yours and the public’s – because the EU won’t give much away.

2. When getting the bill halved just didn’t add up

Cameron learned the hard way how difficult it is to negotiate with the EU when in 2014 the U.K. tried to reduce the amount it owed the bloc’s central budget.

Much to the chagrin of the former prime minister, who called it “an appalling way to behave,” Britain had been asked to make a one-time payment of 2.1 billion euros ($2.4 billion) to cover accounting adjustments.

After long negotiations, Chancellor of the Exchequer George Osborne left Brussels proclaiming “a real result for Britain,” because “we have halved the bill,” a narrative that immediately found its way into the newspapers.

But it didn’t take long for the story to unravel. “The U.K. will pay the whole amount,” Osborne’s Irish counterpart Michael Noonan said as soon as he left the meeting. And sure enough it would. The only concession being that it could be paid in installments, which the commission was ready to offer all along.

Lesson: Rules are rules. Plus, you shouldn’t pretend you’ve won when 27 other governments will say you haven’t.

3. When Cameron blocked the euro’s rescue treaty

In 2011, as the global financial downturn plunged Europe into its worst economic crisis and the future of the euro hung in the balance, Cameron used a late-night Brussels summit to wield Britain’s big stick.

The EU wanted to draw up an emergency treaty with tougher national spending rules to safeguard the single currency, but Cameron demanded it include concessions to protect the U.K.’s financial services industry. He didn’t get them, so at 2:30 a.m. in the Belgian capital he vetoed the whole thing.

The result was a souring of relations that lasts until this day, and the EU did just what it wanted to all along, with an intergovernmental treaty that amounted to the same thing.

Lesson: Grandstanding for a domestic audience is counterproductive.

4. When Thatcher wielded her handbag

Britain’s euroskeptics look back at the moment Prime Minister Margaret Thatcher demanded “our money back” as the high watermark of the U.K.’s European negotiations.

Thatcher and Mitterrand in 1984.
Photographer: Gamma-Keystone via Getty Images

At a summer summit in a French royal palace hosted by President Francois Mitterrand, Thatcher won a “rebate” on Britain’s payments to the central EU budget, complaining that, despite being one of the biggest contributors, it didn’t benefit as much as other countries (notably France, whose farmers enjoyed plentiful European subsidies). Thatcher, whose handbag famously became a symbol of her resolute style, had been preparing for this battle for four years.

The rebate remains to this day. It currently allows the U.K. to claw back about 6 billion euros a year. When Thatcher died in 2013, Cameron said: “When you negotiate in Brussels, it is still her rebate you’re defending.” Nothing has been as successful for the U.K. since.

Lesson: Be tough, prepare and know your enemy.

5. When May got her way

A small success story for the prime minister herself. When May was home secretary she convinced the other EU governments to allow London to pursue only those policies that suited the U.K. The country had formally opted out of justice and home affairs matters but in 2014 was allowed to opt back into about a third of them.

May referred to this negotiation in a meeting with EU chiefs in April, raising concern that she will attempt similar cherry-picking tactics in Brexit discussions. In truth, the EU was never too bothered about the U.K.’s fickleness within the confines of home affairs. But when it comes to Britain’s wholesale future relationship with the bloc, officials have made clear they’re not having any of it.

Lesson: Just because it worked last time, doesn’t mean it’ll be successful again.

6. When a deal with Canada took seven years and almost failed

Not all EU negotiations pit the U.K. against the bloc’s other members. Sometimes traps can appear in the most unexpected of places. Canada’s free-trade agreement with the EU serves as a warning to the British government when it, too, will seek a similar arrangement once it exits the union.

The first round of talks with Canada took place in October 2009, the two sides reached “agreement in principle” in 2013, the text was finalized in 2014 and then in 2016 it all nearly collapsed when the tiny Belgian region of Wallonia refused to give even interim consent.

Finally ways were found to give the French-speaking Belgians some assurances, but the agreement is still not even provisionally applied, and the thorny matter of ratification by each country is still to come.

Lesson: Be ready to play the long game and use diplomacy to keep all parts of Europe onside.

7. When the Greeks went to the brink and then capitulated

Greece entered a phase of almost uninterrupted negotiations with the EU in 2009 when its government admitted it had been understating it deficit and its debt burden was unsustainable. A first bailout of 110 billion euros in 2010 was followed by a further 130 billion euros in 2012.

Graffiti at the central bank of Greece in Athens in 2012.
Photographer: Simon Dawson/Bloomberg

Then in 2015, radical left party Syriza swept to power on promises to renegotiate terms of the rescue, and end the austerity the euro area had imposed.

It didn’t succeed. Despite months of talks and a 17-hour summit of leaders in Brussels when, according to officials, Greece came within hours of being forced out of the euro, Prime Minister Alexis Tsipras blinked and accepted more spending cuts and economic reforms in return for another 86 billion euros.

Greece’s finance minister in 2015, Yanis Varoufakis, understood first hand how difficult it was going up against the EU. “May has opted for a Brexit negotiation that will immediately activate the EU’s worst instincts,” he wrote in the Guardian in May. “The only way May could secure a good deal for the U.K. would be by diffusing the EU’s spoiling tactics.”

Lesson: Game theory can’t help if your opponent holds all the aces.

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