Brexit: EU leaders agree to move to next phase of negotiations

Leaders discussed the issue at a European Council summit in Brussels

Commission president Jean-Claude Juncker and Council president Donald Tusk with EU leaders in Brussels (Getty)

The leaders of the European Union’s 27 other member states have formally agreed to move to the next phase of Brexit talks at a summit in Brussels on Friday – though full talks are not expected to begin until March.

European Council president Donald Tusk announced the news in the early afternoon, wishing Theresa May his “congratulations” for the new progress.

New red lines issued by the leaders to EU negotiators say that the talks can now discuss “transitional arrangements as well as the overall understanding on the framework for the future relationship” – falling short of full discussions about trade.

The Prime Minister, who flew back to the UK late on Thursday night after attending the summit, was applauded by EU national leaders when she spoke over dinner of her wish to move to the next stage of talks.

Arriving at the second day of the summit on Friday morning European Commission president Jean-Claude said the applause came because “some of us felt, including me, that she did make a big effort and this has to be recognised”.

But the PM also acquiesced to EU demands for full trade framework talks to be postponed until March, amid concern in Brussels that the UK is not prepared for them. Downing Street has said the Cabinet will discuss what sort of trade deal the UK wants before Christmas.

The agreed Council guidelines also confirm that leaders want the UK to adopt all new EU laws created during the transition period, but that the country will “no longer participate in or nominate or elect members of the EU institutions, nor participate in the decision-making of the Union bodies, offices and agencies”.

The red line potentially sets the stage for the next round of clashes, because the Foreign Secretary Boris Johnson has said in certain terms he will not accept new EU laws.

Another clause that could enrage Brexiteers is the stipulation that the UK would have to “continue to comply with EU trade policy” during the transition due to its continuing membership of the Customs Union – likely to mean Britain is not able to sign new trade deals with other countries until after the implementation period ends.

The new guidelines, which will be implemented by Commission chief negotiator Michel Barnier, were agreed by leaders within 10 minutes in a short meeting on Friday. They were largely unchanged from draft versions leaked ahead of the summit. The EU has stressed its "unity" in the negotiations, despite public rows between countries in other areas at the summit such as on migration policy and reforms to the eurozone.

The second phase will be more demanding, more challenging than the first phase.

European Council president Donald Tusk

Jean-Claude Juncker confirmed that the "real" negotiations in the second phase would start in March. He said before that point, Mr Barnier would run a small number of seminars to scope out the EU27 countries' views on a trade deal.

"I think that the real negotiations on the second phase will start in March next year. I cannot say when these negotiations will be concluded, but hope I don’t have to has an as early morning meeting with the Prime Minister than the one I had last week," he told reporters in Brussels.

Mr Tusk warned: “The second phase will be more demanding, more challenging than the first phase.”

A Downing Street spokesperson welcomed the news of the move to the second phase: “Today is an important step on the road to delivering a smooth and orderly Brexit and forging our deep and special future partnership.”