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THE STATE OF THE EUROPEAN UNION
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vices, requiring that any future framework must
safeguard financial stability in the Union and
respect its regulatory and supervisory regime
and standards and their implementation.
In relation to home
security issues, the
European Council expressed its readiness to es-
tablish agreements on the effective exchange of
information, operational cooperation between
police authorities and judicial cooperation in
criminal matters with built-in safeguards that
ensure fundamental human rights are fully re-
spected and effective enforcement and dispute
settlement mechanisms. It is also looking to es-
tablish cooperation in areas such as foreign, se-
curity and defence policy. Keeping in mind the
UK’s future status as a third country, the
European Council notes that appropriate dia-
logue, consultation, coordination, exchange of
information and cooperation mechanisms as
well as a security of information agreement
would need to be negotiated to this end. Last,
but not least, the European Council notes that
any agreement on the future relationship be-
tween the UK and the European Union must
contain provisions for management and super-
vision and dispute settlement and enforcement
(including sanctions and cross-retaliation mech-
anisms) that take into account the content and
depth of the relationship, the need to ensure
effectiveness and legal certainty and the
re-
quirements of the autonomy of the EU legal or-
der, including the role of the Court of Justice of
the European Union.
The negotiating positions of the two parties
have now been made clear, albeit in general
terms. As we have seen, some of them are quite
close but much remains to be done on others. It
is logical to assume that negotiation and con-
sensus will be easier on intergovernmental is-
sues than on community issues. What should
not be forgotten as negotiations begin once
more is that the party with the most to lose
should talks break down and trade relations end
up governed by WTO rules is the UK.
The preservation of the standing relationship
between the UK and the EU now depends on
the strength of the UK’s commitment to main-
tain regulatory convergence. Divergence will
mean the loss of its current level of access to the
Single Market. The pendulum swing between
regulatory convergence and divergence will be
determined by which force proves stronger –
the UK’s desire for greater political sovereignty
or its economic interest in continuing to play by
the current rules. A key and especially delicate
point yet to be negotiated is
the governance of
the agreement. Provisions on this topic would
serve as a guarantee that the UK would uphold
its commitment to convergence going forward,
something only independent entities not sub-
ject to political pressure can ensure.