Angela Merkel and Nicola Sarkozy teamed up to set up a fiscal union so the EU could bypass Britain’s veto on the revision of the Lisbon Treaty.
During the first round of face-to-face negotiations between the EU and the UK in early March, the two sides were cordial but faced “very serious divergences”, according to the bloc’s chief Brexit negotiator Michel Barnier. The second round of trade talks, scheduled for March 18, was postponed in light of COVID-19. Mr Barnier announced last week that he had coronavirus, while Britain’s negotiator David Frost entered self-quarantine the following day after showing symptoms.
Despite the logistical challenges of conducting sensitive discussions via video conference, the Prime Minister’s official spokesman said talks with the EU will continue in the upcoming days.
Last week, the EU drafted a post-Brexit trade deal proposal, covering areas such as security, foreign policy and fisheries.
The 441-page draft legal text was sent to the 27 EU states, ahead of being presented to the UK.
However, according to political analysts, much of the draft will be outright rejected by the UK because of references to EU law and fishing.
Brussels still insists on maintaining its current fishing rights in British waters and wants London to agree to a number of EU regulations, including environmental standards, workers’ rights and state aid rules.
On the other hand, Prime Minister Boris Johnson is demanding the right to diverge from the bloc’s rules and is accusing Brussels of “intransigence”.
According to former EU ambassador Sir Ivan Rogers, Britain learnt in 2011 that the EU was not willing to compromise and engage with its concerns and objections.
In 2011, as the crisis in the eurozone reached its peak, the bloc needed to make urgent institutional changes to prevent financial disaster and change to the Lisbon Treaty was proposed.
However, institutional changes to the primary law had to be agreed and ratified by all member states and former Prime Minister David Cameron only agreed to the revision if other EU leaders guaranteed to protect the position of the City of London.
Former French President Nicolas Sarkozy strongly opposed giving concessions to Britain and reportedly told European Council President Herman Van Rompuy that the treaty was not negotiable.
He was also reported to have told the British Prime Minister that he should “shut up” during the meeting of the European Union’s 27 leaders.
He was quoted as saying by EU officials: “We are sick of you criticising us and telling us what to do.
“You say you hate the euro and now you want to interfere in our meetings.”
When the EU eventually rejected Mr Cameron’s demands, he decided to use his veto to block the EU-wide treaty, claiming he had to protect key British interests – including its financial markets.
It was that same day that Mr Sarkozy hailed a “historic” breakaway “euro plus” bloc that would pursue fiscal and economic union via a new treaty outside the EU, leaving Britain isolated and not part of the negotiations.
With at least 23 countries signing up for a deal conferring intrusive rights on European institutions to enforce budgetary policy in countries breaking the euro’s debt and deficit rules, Germany Chancellor Angela Merkel appeared unconcerned by the British veto.
She said: “The breakthrough to a stability union, a fiscal union has been achieved.
“I really don’t believe David Cameron was ever with us at the table. We’re very pleased with the result. [The deal] was no weak compromise for the euro.”
Sir Ivan Rogers noted how both France and Germany effectively circumvented Britain on the issue.
Speaking at a lecture at Hertford College, Oxford, in November 2017, he said: “Berlin and Paris essentially went round him. A couple of days before the December European Council, Angela Merkel and Nicolas Sarkozy, at a European People’s Party meeting in Marseilles decided to circumvent a potential British blockade of the amendment of the Treaties by doing the deal at 17 via a partly intergovernmental treaty process, which would not require UK ratification.
“The resulting fiscal compact is now known as the Fiscal Stability Treaty.
“That decision was not notified to London and it only really became clear during the night of the Council that a deal had been stitched up to bypass the UK, that the Council’s lawyers’ reservations had mysteriously evaporated, and that all other member states had been squared, so Cameron was on his own.”