DOSSIER - Brexit: Where we at and what’s next

8 minute read

United Kingdom and European Union finally seem to have reached and agreement on Brexit. What are the main points of this accord? Which scenarios is EU going to face over the next few years?

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It has been just over a week since the approval of the long-awaited agreement between the United Kingdom and the European Union on the definition of the legal, economic and commercial post- Brexit relations. After months of tension and uncertainties – especially in the event of encountering a “no-deal” and an effective “lose-lose deal” – it seems that an agreement has apparently been reached on a range of issues.

Following the extraordinary summit of the European Council held on November 25th in Brussels, the 27 EU member states have approved a draft of a 585-pages document aimed at continuing the negotiation process. Indeed, the agreement seeks to move towards the final stage of the so called “sunset clause” established by art. 50 TEU which will formalize the United Kingdom’s exit from the EU on March 29th, 2019.

Nevertheless , as regards the objective of the agreement as such, there were different reactions from Europe’s leaders. Theresa May wrote a “letter to the nation” with whom she claimed to have honored the result of the 2016 referendum. The UK Prime Minister is committed to obtaining the approval of Westminster, promising to fight to secure the still uncertain vote of the British Parliament. The President of the EU Commission, Jean Claude Juncker , spoke of a “sad moment” and of a “tragedy”, underlining how, however, it has been reached the best possible agreement given the circumstances. Angela Merkel spoke of a collective defeat both for London and the whole European Union. Nevertheless, she demonstrated solidarity with Theresa May, counting on the British PM’s ability to obtain the approval of Westminster and attempt to make the agreement a less bitter “victory”. In line with previous statements, Emmanuel Macron stressed how the challenge of Brexit urges the EU to take action and deal with its structural defects. Europe’s leaders seem to understand the need to birth a new path of profound self-reflection, with the aim of strengthening the process of European construction and to cope with the challenges of an increasingly multilateral and interdependent international system.

What are the main points of the agreement?

  1. Customs Union: the United Kingdom remains, effectively, a sort of “single customs territory” till December 2020.
  2. Why wait another year? Should no agreement be reached within the foreseen period, this would be a preventive measure to deal with possible twists and turns. Furthermore, this would be an additional guarantee to avoid a hard border between Ireland and Northern Ireland. Indeed, the latter would be part of the “single customs territory” mentioned above. For these reasons, a special safeguard clause has been established.
  3. The transition period will last till December 2020, the final month of the EU’s multi-annual budget for the period 2014-2020 towards which the United Kingdom is obliged to honor its commitments regarding European funds, budgets and programs (EUR 45-60 million). Nevertheless, the extension of the transition period to an unknown date still persists. Should the latter be prolonged, the United Kingdom would be bound to join the next European budget 2021-2017, thus becoming a third-country in the relations with the EU.
  4. The European Court of Justice retains its competence in the event of conflicts on matters governed by EU law till the end of the transition period. Nonetheless, the Court will be able to arbitrate any disputes between London and Brussels to protect EU citizens after 2020 for 8 years and for 4 years for all other areas.
  5. UK withdrawal from the EURATOM: this will involve the need to enter into a subsequent protocol aimed at ensuring the production chain and give further guarantees on the British bases on Cyprus and Gibraltar.
  6. Freedom of movement: the rights of European citizens (3.2 million) who live and reside in the United Kingdom and of British citizens living in one of EU member states (1.2 million) will be protected and preserved, as long as they submit a formal request to the competent authorities. At the end of the transition period, the freedom of movement will end and be regulated on the basis of a system of competences, where citizens will be able to travel without a visa, but only for short-stays. British citizens living abroad will be required to submit a formal request on their current resident status.
  7. Common fisheries policy: there is still no definitive agreement defining quotas and access measures to British waters following the end of the transition period. European leaders offered the customs union in exchange for a direct access to the waters of the United Kingdom.
  8. Gibraltar : Theresa May spoke with the Spanish President Sanchez ensuring concessions and opening to further bilateral negotiations. Indeed, the Spanish Foreign Minister Josep Borrel and Theresa May’s number two, David Lidington, have recently signed 4 memorandums on Gibraltar and the “most conflictual areas relating to the Peñón” which will come into force at the time of the British divorce. These agreements, relating to tobacco, environment, customs union, police cooperation and the rights of cross-border workers represent the first start of cooperation between Madrid and London on an area of secular controversy (almost 300 years). Nonetheless, as explained by El Paìs , “the Spanish government will not be able to use this framework to speak of co-sovereignty, at least until the expiration of its validity (January 2021)”. The four memorandums will be followed by a commercial and fiscal treaty aimed at limiting unfair competition. The latter will be formalized with a special parliamentary procedure afterwards.

What’s next?

The agreement reached by London and Brussels is far from over, leaving the door open for further possible twists and turns. Theresa May’s “White Paper” on immigration has been postponed. Indeed, the tricky part of the British parliamentary vote at Westminster is expected on December 11-12th. Theresa May does not seem to possess the majority necessary for the final approval of the agreement, given the Labor’s dissatisfaction and since the Conservatives consider the compromise reached with the EU as a betrayal of the outcome of the 2016 referendum.

The most intransigent supporters of the Brexit, indeed, expect a hard Brexit, feeling foolish to leave the EU and then, in some way, becoming a sort of “second-class European citizens” or otherwise bound by a customs union which, ultimately, would leave the last word to the EU. To tell the truth, the agreement has been reached in the face of the need to find a concrete and realistic compromise for the management of the border between Ireland and Northern Ireland, where there is no physical geographic border.

The issue of protecting European citizens has always been a very sensitive one. It is still difficult to predict what the future immigration rules will be. It is possible that the British government adopts an ad hoc legislation to facilitate students and young workers wishing to work in the restaurants, cafes and bars to have access to the country (the so called “barman’s visa” ). It is impossible to make any further predictions on the status of European students willing to move to the UK to complete their studies.

What to expect in the event of a rejection of the agreement by Westminster?

A variety of uncertain and worrying scenarios can be envisaged, especially for the United Kingdom:

  1. Theresa May’s resignation and consequent early elections;
  2. Possible call for a second Brexit referendum;
  3. Urgent search for a “plan B· – as proposed by Jeremy Corbyn – to evaluate a renegotiation and an extension of the art. 50 TEU, with all the economic consequences which would affect the UK;
  4. UK leaving the EU with a “no-deal”.

Should be noted that a few days ago the President of the European Council, Donald Tusk, stated that, in the event of a rejection of the agreement, only two possible solutions will be envisaged by the EU: a “no-deal” or “no Brexit at all”.

Where, on the other hand, Theresa May was able to get Westminster approval, the following steps would be:

  1. Ratification by all European governments and by the European Parliament in Strasbourg on January 2019;
  2. UK exit on March 29th, 2019;
  3. Transition period till December 2020;
  4. Further negotiations on the future political relations between the EU and the United Kingdom.


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