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And Michel Martin will address the other 26 leaders at a meeting of the Council of Ministers. And he will address and the other leaders and explain the consequences for Ireland of what's going on. And yesterday, the commission president, Ursula von der Leyen, announced that the EU were beginning legal proceedings against the UK because they had breached the withdrawal agreement and by the internal markets legislation that is going through the House of Commons and the House of Lords. We're joined from Brussels now by Naomi O'Leary, who's the Irish Times Europe correspondent also today.


And Naomi, Mairead McGuinness has been addressing her peers because her confirmation as the European commissioner and is under way and it's an important day for her but will deal with the Brexit business first. The threat issued yesterday was not a threat. It's the fact that the European Union is going to begin a legal action over the UK's breach of good faith. Where will this legal hearing take place? Who will decide?


So what happened is that the European Commission formally informed the British government that it was starting infringement procedures. And the basis on which it's doing that is it's saying that Britain has breached the good faith provisions of the withdrawal agreement that was agreed last year. Under that agreement, Britain was required to enact everything that had been agreed in good faith and by introducing the internal markets bill, which reversed would reverse parts of the withdrawal agreement. The commission is arguing that it's breached the good faith aspect of that and of course, that the internal market spell is confirmed and becomes official law in the UK parliament, then that will be an additional breach because it would it would override aspects of the withdrawal agreement, particularly related to border management, essentially avoiding a border across the island of Ireland.


What happens next is this is quite a long, lengthy process and there's a lot of off ramps. So the UK is given a month to respond, to give its point of view back to the commission. Then there'll be another response from the commission. Ultimately, what set out in the withdrawal agreement to that? An arbitration panel would be an independent arbitration panel would be established that could delay fines, for example, to the UK and could refer the case up to the European courts.


But a lot of the time these disputes are resolved before it gets to that point. And then the other interesting thing to ask is if the UK is as willing to break international law and break a prior agreement, would it respect or play along with any of this process? And if it doesn't, the other option that the EU has, as it itself can start breaking parts of the agreement because it says, well, our counterparts aren't respecting and so we don't respect it either.


And then it could put up things like tariffs or make retaliatory measures, but that would be a trade war. So that would be a really serious development and negative all round for both the EU and the UK.


Now, the issues that divide the two parties to this dispute are fishing, state aid and governance. And we can come to them perhaps in a little more detail. But at the heart of it all is the protocol on Northern Ireland, isn't it? That is what Michel Martin has to. Explain or at least talk to the other leaders about and just before we get into the detail of that, is it fair to assume that when Boris Johnson met Leo Varadkar last year, they had a one on one meeting on the way in Liverpool outside Liverpool, assurances that Johnson gave to Varadkar or broken as well by this entire markets bill.


So he kind of socked Proctor in to break a log jam at the time. Is that an accurate description of what happened?


Well, it depends whether they go ahead with this thing. There's a lot of confusion about what the UK's government intention is. Yes. So if it does go back on this, then it would seem to have. Well, it would be it would be breaking prior agreements. But from what I'm hearing from the Irish government, the Irish government doesn't actually think that the UK wants a no deal. Yes. And the signals coming out from London are they're they're briefing the British press.


A lot of optimistic stuff that a deal is close and there's going to be a breakthrough and all this kind of stuff, to be honest, a kind of it's not really reflected in Brussels, but that kind of briefing is coming out of London and that's being interpreted as the British government may be kind of thinking again and a signal that they do want a deal and maybe they don't want to tear everything up with this agreement. So basically, what the Irish government is doing now is trying to make that case to the other EU member states to just say, OK, guys, just stay the course.


We're going to keep calm. We're not going to walk out of negotiations. We've got to just do everything we can to try and get this deal and get the UK to also implement the withdrawal agreement as agreed. But really, what the UK has done has made the whole thing more difficult. There's no getting around that.


And also, from its own perspective, the behaviour of the British government, the bullishness of Johnson, Michael Gove in particular, their bullishness have that they've set themselves up for a big fall and a possible humiliation associated with what they call in the newspapers a climb down, haven't they?


That is the really difficult thing, because a deal can only be reached if they climb down not just on the internal market spell, but also compromise on the three sticking points that you mentioned. And that's just inevitable. That's always been the case. But they haven't done any sort of preparation for that political maneuver. If anything, they've done the opposite. They've continually raised the stakes. And what we've seen throughout the Brexit process is that British governments have been thwarted by internal opposition again and again.


So the big risk is, can they manage the internal politics of Westminster in such a way that can save the day?


Now, one of the rationales, if you like, they may offer and I saw this on NEWSNIGHT last night being floated as an idea. They could say that because of the covid pandemic and the crises that have emanated from that, they have decided to close a deal with the EU and a workable arrangement. Therefore, they are prepared to do it. And that sounds to me like a decent word to back to back down and to do a deal because we have enough on our plate and Europe has enough on its plate without a Brexit happening on January 1st.


Yeah, I can't pretend to sort of be in a position to really understand what would work with the British public, but possibly the government could set up for something like that. We just heard this morning that Boris Johnson is going to meet the commission president, as you have underlined tomorrow on Saturday. Yes, I think is a positive signal. Now, what Brussels is really going to look for is the substance. So last time Boris Johnson came and had a meeting, he didn't actually offer anything.


He didn't offer any change. They need to hear that the internal market still isn't going to go ahead with the contentious articles in it. And they need to hear what is the plan for compromise on the three issues that have been outstanding. And if that doesn't come forward, then, you know, all the political theatre around it is really meaningless. Yes.


And let's look at those three issues. The most important one, arguably, is state aid that goes to although it's worded that way. I mean, that goes to things like workers'. Writes the. Quality of stuff that's coming into the European Union through the U.K., which, of course brings us back to Ireland, is not the kind of thing we're talking about. And the governance issue is, I suppose, references. They continually make the British to being free of the European Court of Justice and its rulings.


Right. So the state aid issue were a level playing field. Sometimes it's called essentially what that talks about is the EU doesn't want to give British companies the same access to sell into the single market that their own companies have unless they're working by comparable rules, because otherwise the British government could give those companies an unfair advantage. So just as an example, some governments around the world intervene to help sectors by giving them really cheap electricity, for example, or give them favourable tax deals or something, and then that governments use that to nationalistically prop up their own industries and outcompete those of others, like China is a very big case where they you know, they they subsidise steel.


And then that actually has caused steel industries elsewhere to kind of collapse because they just can't compete with the subsidized steel. And the fear of the EU is that Britain could go down a path like that of subsidizing certain industries. And it just it says, OK, you can't do that, but you can't do that and have free access to the single market. So if you if you do do that, we're going to put up barriers to level the playing field with our businesses.


So that's what the whole area of state aid is about. And it does cover things like workers' rights and environmental standards as well. And then when it comes to governance, it's really important. The issue of governance now ever more so because of the internal market. Because what that what that is about is if there's a disagreement between the two sides, how does it get resolved and what's the authority that would arbitrate the issue? And the EU has said if it's anything to do with EU law, it has to come through the European courts because they're the authorities on European law.


And Britain has always had a problem with that and has asked for different things. There are other sorts of mechanisms that trade deals sometimes have for for resolving disputes, but they're very against the ECJ having the final say. But now, because the gap because Britain has already they're already in a dispute about the last deal, suddenly it's all much more real. And the EU is just really much more paranoid than ever before about getting everything nailed down on governance and just not giving the British any wiggle room because they don't trust them to enforce the agreements that they make.


And it's fair to say they are made that time is running out in a big way to resolve our huge questions. The EU have put a deadline at the end of October, if I'm not mistaken, and Michael Gove being bullish has said October 15th is their deadline. Otherwise they might break off the talks. So the stakes here could not possibly be higher because of the if they leave on WTO rules that World Trade Organisation tariffs, it's a nightmare for everybody.


Yeah, that's right. And time is very, very short. So if they got something, it would be convenient to get something by October 15th or some kind of movement because the EU leaders are meeting again in Brussels on that date. So they could discuss it then. So that's kind of why that works and timing. But really, I think for the very, very final deal to be agreed, it's like maybe the first week of November. That's kind of the last minute in terms of the procedures that have to come afterwards with its approval and everything like that.


Now, the big question for Ireland and for all concerned, but where is this border between the EU and the UK going to be? If it is on this island, then we have a major problem. If it is as it was in the withdrawal agreement in the Irish Sea, I don't think the Tory government can sell that to its own MPs. Is that. Fixable? Well, you know, if you look at last year, they did manage to get through the withdrawal agreement, which under which RC checks were agreed, that was part of the policy.


Sorry. I mean, the only way they got through it was Borrus winging it and saying you don't have to fill out those forms, just throw them in the wastepaper bin.


Maybe so, but they did pass it. And that is UK law. And so I think at this point it has more status than any kind of checks that will happen across the island. You know, it is right. International law at that point, at this point. But it is an existential conundrum for Ireland, because if the it depends how much of a rogue state Britain has decided to be like if they have decided to totally bulldoze their relations with all of the countries that surround them, with whom they're going to continue to have to deal with stuff all the time anyway.


If they do decide to totally blow up their own international reputation and and become completely rogue, then, yeah, they could just continue not to comply with any of it. And ultimately, it would force Dublin into a dilemma where, you know, it would be the Irish government who would have to decide how are we going to do this? Because they would have to somehow they would have to somehow check goods. And then it would just be a question of how and where to do that.


But that would be that would be a disastrous situation. But I think everyone's hoping that it will be it will be resolved at some point before that. And that there because there is a lot there is a lot of leverage over the UK. I mean, there's political leverage, but there's also this. The economic stakes for Britain are very, very high. And we don't really know what's going to happen. But there is there is some hope that it would ultimately get to that point.


As you pointed out earlier in the meeting, one on one between the British prime minister, Boris Johnson, and the president of the European Commission, Ursula von der Leyen is absolutely critical that they have the authority. The question, I suppose everybody will ask is, can Europe take Boris Johnson's word?


Well, it seems like no, really, he's breaking the withdrawal agreement. But, yeah, and and many, many things over a long period of time, he has, for example, told the DUP certain things and given them certain assurances, which you done broke to meet other demands. Then he broke that deal and went back to the. So he's not exactly renowned for keeping his word under labor. And the meeting is a good example of that as well.


Is it not?


I think that this this shows, you know, the EU kind of saw this coming in a way because the withdrawal agreement contained it described very precisely what would happen if either side broke the agreement. And also, they insisted all year that a deal couldn't be reached without the inaction of the withdrawal agreement. So they they insisted that they had to go in lock step and a committee was set up. A joint UCU committee was set up to oversee the implementation of the withdrawal agreement in detail.


Things like, you know, where where are the checks being built, where's the infrastructure, things like that. So they have, I think, had an attitude that they can't actually take anything on faith. And Britain has continually encouraged that attitude by by being unreliable. And that does make it more difficult for the UK to get a deal because the kind of deal they want is a more loose one. They want more loose one where more things can be taken on faith and they have more wiggle room, but they've made it much harder for themselves to get that.


Now, you wrote two pieces for the Irish Times today. One of them is really clever, very well written, in which you point out that Michel Martin today has to assume the role of Brit Whisperer. And it's a lovely piece of work and congratulations on it. Tell us what he's going to say to the other twenty six leaders, because as it appears in your piece, Mahle is saying the Brits are all right. They want a deal. How important is that address going to be?


That's essentially what he's going to say. Ireland is basically buying time for London to realize their own mistake in introducing the internal markets Bill. Because that was understood by a lot of continental capitals as meaning that the U.K. didn't want to deal, it was seen as a deliberate attempt to blow up negotiations and wreck them. And so there was a reaction from some quarters that there was no point in continuing to negotiate and that even that the EU side should walk out on a point of principle.


But Ireland's been very strongly against that and has been important in persuading the EU to stay the course to continue in the negotiations, even even because of the logic that they don't want to give Boris Johnson the satisfaction of being able to blame the EU for walking out. You know, and yes, in terms of the political theater of it. So what shirt Michel Martin will say is that, you know, he's been talking to the British government and he's been reassured that they do want a deal and he believes that they do want to deal and that they're acting strangely.


But just to stay the course and to know to keep keep the eye on the prize, because, you know, Ireland just wants, above all, to avoid a no deal. They want to they want to take every single chance available to get a deal. And that that's why that's why Michel Martin is making that argument. And he's the only EU leader that's been invited to speak about Brexit. And that reflects Ireland's special sort of status as being the state most affected among the EU 27.


And also, it's viewed as having a kind of special insight into Britain because of the long, intimate and sometimes fraught relationship over the years.


Yeah, we know them better than most anyway. Another very important day in Brussels for Mairead McGuinness, our new commissioner, and she is facing a committee of the parliament for her confirmation hearings. She's got the portfolio of financial and financial services and other things, I believe. Now, maybe you can add that up. And she has already been in front of this committee this morning. And one of the questions that arose was Ireland's corporate tax regime and our attitude to the possibility of a common tax levy across the EU, which I know, for example, Macron was very, very forcefully keen on.


That's right. And it was interesting to hear and read McGuinness say that she would leave her national hat at the door, which, of course, all EU commissioners have to do. They work for all the EU member states, not the one that they come from. So what she said was the preference of the EU Commission is that there should be a global agreement on digital taxation. Of course, there were talks going on in the OECD for that until earlier this year, but they were delayed because the US essentially pulled out or put them on hold.


And the Irish government also always says, you know, we want this to be a global agreement. But where McGuinness has differed then and she said, you know, if that if that isn't forthcoming, then, you know, I'm going to support and work for the commission's proposal of going ahead just as the EU, because the commission has put forward a proposal to that effect in July, that it's going to introduce a plan for this in the first months of next year and seek the support of member states.


But ultimately, you know, it can't go ahead unless Ireland agrees to it and it does have a veto. And all member states have certain political capital, though. And, you know, you can you have to be careful about what you oppose, not spend all of your political capital, because then other times you're going to want the support of other member states for things that you want. But, yeah, if it comes to it, Ireland can veto it.


And the elephant in the room, Naomi, might be the Apple tax appeal and indeed, the way that matter has played out and I it was announced earlier this week, I think that the EU is going to appeal the decision that allowed Ireland and Apple to have their way.


That's right. So the EU has argued that the judgement which basically vindicated Ireland and Apple sets an unreasonably high standard for proof. And the court had found that the commission hadn't proved that Apple got an illegal benefit through tax arrangement from Ireland. And the commission is now challenging that. We haven't seen the full case or reasoning under which the commission is making its appeal. So we can't evaluate it yet. But what it means is that we're in four years more of negociate or years more of litigation on this.


She was just going to continue and that fourteen point three billion euro is just going to stay sitting in that escrow account. OK, a final question, Naomi, about the significance of these coming weeks, including the meeting between the British prime minister and the president of the commission tomorrow, Bill, Martin's address and the attitude of the other 26 leaders. This surely must be one of the most important phases of the whole European experiment. These next few weeks could be extremely damaging if this goes pear shaped, I think.


Of course, if it doesn't go right of no deal is found, it's going to be really disastrous above all, for Britain, but also very, very serious for Ireland economics. Also economic dependence or trade. The level of trade is usually just a function of geographical proximity. So all of the countries that are closest to Britain will be hardest hit. So that the likes of the Netherlands and Belgium will be first in line for an economic hit, too.


But then, you know, other states that are further away in the EU, it's not it's not such a big issue for them. You know, they don't have as much trade with Britain. And this is why there's a couple of things going on at the moment. One is that the EU member states are totally fed up with this. I don't see why it's gone on for so long and just want the Brits to come to a rational deal like yesterday.


You know, they have too many other things that they want to be addressing. And they're they're focused quite a lot on foreign policy issues just now as it happens, and also the economic response to the coronavirus pandemic, but also the the fact that, you know, trade with Britain isn't first and foremost for everyone. That also means that the EU is not going to compromise on its fundamental self-interest in terms of what what the EU is and what's good about being a member of it, like being a member of it in the single market is supposed to be benefit and better than being outside of it.


So it's not going to compromise to give Britain an advantage as an external member because, you know, that's like that's just kind of unpicks the logic of the EU's existence. So member states are not going to compromise on something fundamental in order to do Britain a favour. And so this is just going to come to a head in the next few weeks, I think, and not a lot of goodwill at the moment for the UK position.


Unfortunately not, but a certain level of pragmatism. People just want a deal, I think. Yeah, but, you know, it's really in London's hands. That's where the compromises have to be made.


OK, Naomi, thank you very much for joining us now. Amy O'Leary is Europe correspondent of the Irish Times. She also has our podcast, which is really good. It's called The Irish Passport. And you might if you're interested in European affairs and how you get to be a Brit whisperer, that's the place to go. Thanks very much, Naomi. Thanks to all of you for listening.


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