EU grapples with Brexit after British PM’s vote loss

British Prime Minister Theresa May will ask EU leaders to move Brexit talks to the next stage at a summit starting on Thursday, just hours after a damaging parliamentary defeat threatened to undermine her negotiating position.

The other 27 leaders are expected during the two-day meeting in Brussels to endorse an interim deal on the terms of Britain’s divorce that May sealed with the EU last week after months of torturous negotiations.

But on the eve of the summit May’s own lawmakers rebelled to demand that the British parliament have the final say on any Brexit agreement before Britain leaves the European Union on March 29, 2019.

The fresh blow to May’s authority will renew fears in Brussels about her mandate for negotiations on the second phase, which will cover a future EU-UK relationship, including moves towards a trade deal, and a post-Brexit transition period.

EU President Donald Tusk said the second phase of Brexit talks would also be a test for the bloc’s own unity, as it tries to push through a host of reforms after Britain’s departure.

“I have no doubt that the real test of our unity will be the second phase of the Brexit talks,” Tusk told reporters as he arrived at the summit.

Former Polish premier Tusk added that a “lack of unity is very visible” on two key subjects facing the EU after Britain leaves: plans for a way forward on the migration crisis, and proposals for reforms of the eurozone.

– ‘Give and take’ –
European Commission chief Jean-Claude Juncker struck a deal with May on Brexit separation issues on December 8, saying Britain had made “sufficient progress” on its divorce bill, the fate of the Irish border, and protections for EU expats living in Britain.

The deal was a rare moment of triumph for the British prime minister, who has been struggling to assert her authority since losing her parliamentary majority in a disastrous snap election in June.

May is expected to tell leaders over dinner on Thursday — she will not be at the summit for the Brexit session on Friday — that the interim deal “required give and take by both sides, but a fair outcome has been achieved”, a senior British government official said.

“She will add that she very much welcomes the prospect of moving ahead to the next phase” including a “positive and ambitious future relationship”, the official added.

But Tusk warned earlier this week of a “furious race against time” to reach a deal on a future relationship following last week’s agreement on how best to sever Britain’s membership of the EU.

The EU guidelines that leaders will approve on Friday say they will start talks on the transition in January but will not begin discussions on trade until March as it needs more clarity on Britain’s goals, while security and defence will be covered later next year.

– ‘Divisive’ migrant quotas –
The leaders of 25 EU nations will hold a special ceremony in Brussels on Thursday to launch a new defence cooperation pact, which is now moving ahead after Britain opposed it for years.

But the thorny subject of migration is set to dominate, amid a row over Tusk’s comments in his pre-summit letter that quotas for sharing out refugees around the bloc to ease the burden on frontline states were “ineffective” and “highly divisive”.

Greek Prime Minister Alexis Tsipras, whose country was worst-hit by the crisis, tweeted on the eve of the summit that Tusk’s comments were “aimless, ill-timed and pointless”.

Germany, Sweden and Italy are also big supporters of the mandatory quotas. Eastern European states like Poland, Hungary, the Czech Republic and Slovakia, whose leaders met separately ahead of the summit, are strongly opposed.

“These divisions are accompanied by emotions which make it hard to find even a common language and rational argument for this debate,” Tusk said on Thursday.

A discussion on Friday among the EU 27 about reforms to the euro single currency also threatens to expose divisions, although with German Chancellor Angela Merkel still in coalition talks limbo much of that discussion will be kicked down the road.