As widely trailed, today saw Prime Minister Theresa May announce the activation of Article 50 of the Treaty of the European Union, beginning the process of the UK’s departure from the EU. The letter, delivered to the office of EU Council President Tusk, set out some key aspirations for the UK’s terms of departure, and the future relationship with the EU.
The formal response of the EU Council was short and focused on process, with the upcoming adoption of guidelines for the negotiations by the European Council as the first formal step. A draft set is expected in the course of the next 48 hours. Like May’s letter, today’s statement mentioned “minimising uncertainty” as a first priority in the course of an “orderly withdrawal”. The EU Council will meet on 29 April to formally agree the positions and principles that the European Commission – representing the EU – will adopt for the negotiations, and little movement is expected in the interim.
Overall, today’s announced brought few surprises and saw little lasting market reaction. The UK’s aspiration to discuss the exit terms in parallel with the new agreement has been communicated in the past, but may be at variance with the EU’s preference to take a sequential approach that deals with exit-related issues before discussing a future relationship. More surprising and conciliatory was a hint that the UK may be open to a discussion of an “exit bill”, with a “fair settlement of the UK’s rights and obligations” mentioned in May’s letter. But with the same sentence indicating this is contingent on the “spirit of the UK’s continuing partnership with the EU” and the letter also bringing up the potential withdrawal of existing security cooperation, the eventual outcome of the negotiations remains no clearer following today’s long-awaited opening gambit.