News & Insights

Countdown to Brexit: 1 Day - CRACK…. The Sound of Nerves Breaking

12 Apr 2019

Brexit countdown will re-set once the formalities of changing “exit day” are complete – both under the Treaty on the European Union and in UK domestic law.

The European Union, now fully in control of the timetable, will decide the date when it suits best interests of the 27 remaining EU member nations. There are a couple of dates built in as checkpoints, but the next major milestone is 31 October 2019.

It is no coincidence that both the German Chancellor, Angela Merkel, and European Commission chief Brexit negotiator, Michel Barnier, spent time in Dublin in the last week. Protecting the interests of Ireland – and mitigating the evident risks to both commerce and public order along the border arising from a no-deal Brexit – came first. Irish Prime Minister visited Paris ahead of yesterdays’ European Council summit meeting, and this may have tipped the balance in persuading French President Macron to step back from his hard-line stance with the UK and join the 27 leaders in a unanimous vote in favour of a limited and conditional Brexit extension.

We will look at the costs incurred to date across Europe in preparing for a no-deal Brexit – costs which the other nations and European Commission will need to recover, one way or another. Costs which they believe have been incurred by the inability of Theresa May to get a deal through Parliament. A deal that was 2 years in the making. A deal that was openly negotiated at every step and fully agreed and signed up to by the UK Government in November 2018. A deal that allowed the UK to exit the European Union in an orderly manner on 29 March 2019 – well ahead of the long-scheduled European Parliament elections for the coming 5-year fixed-term Parliament. A deal that meant the UK would not need to participate in the next 5-year round of European budget setting. A deal that meant that the UK would not be faced with appointing a new European Commission and the voting in of a new European President.

When Theresa May said in the early hours of this morning in Brussels, following the marathon 6 hour European Council meeting that: “the next few months will not be easy” is somewhat of an understatement.

Broadly, the Prime Minister has six options to break the deadlock and allow the nation to progress, pick up some of the lost momentum on domestic and global issues and plan for a post-Brexit world.

1. A pact with Labour: Jeremy Corbyn says that the government is “engaging seriously” in the cross-party negotiations, begun last week after the third defeat of the ‘meaningful vote’ on Theresa May’s deal.

It is unclear whether ‘leave-supporting’ cabinet ministers - or even the Prime Minister herself - are ready to accept the compromises that would be required to win a majority in Parliament – and in particular the adoption of a customs union as a legal requirement to be build into the future ‘Political Declaration’.

If – and it’s a big if - the two sides could strike a deal, they could agree a timetable for parliamentary acceptance of the ‘Withdrawal Agreement’. In theory, in time to Brexit before the 23 May participation in European Parliament elections.

2. Agree a plan for Commons votes with Labour: Mrs May has said that if she cannot reach a Brexit deal with the opposition, she hopes to persuade them to sign up to some process of parliamentary votes, which both sides would then agree to abide by.

It is unclear whether a majority would emerge for any option. If a softer deal, including a customs union, did win through, the Prime Minister could justify a climb-down on being forced on to ‘obey the will of Parliament’ - and go with it.

3. Bring the ‘deal’ back to Parliament for a fourth time: Mrs May continues to believe that her deal is better than any compromise agreement she is likely to strike with Labour – and unlike any other deal - it does has the backing of her cabinet.

There were whispers at Westminster that a fourth vote on her deal could be as early as Friday. The unpalatable prospect of fighting European elections might tempt more colleagues to support it. We won’t know until the Leader of the House, Andrea Leadsom decides whether to hold ‘meaningful vote 4’ or whether to release Parliament to its postponed Easter break instead.

Our view is that rather than bring the deal back in its original form, it could come back as one option in a process of votes.

4. Call a general election: when the ‘deal’ was rejected by MPs for a third time last month, Mrs May appeared to hint that she would consider calling a general election to break the impasse at Westminster, telling MPs: “I fear we are reaching the limits of this process in this house.”

The Cabinet was warned last week that the Tory party was ill-prepared to fight a general election and struggling in the polls. Tory head-office has made no secret that the pool of prospective parliamentary candidates is just as divided on Brexit as the current crop of MPs - even a solid majority wouldn’t necessarily solve the conundrum.

Under the fixed-term Parliament Act, the Prime Minister can only call an election with the backing of two-thirds of MPs. Many on her own side would view with dread the idea of once again boarding the Maybot’s “strong and stable” battle-bus roughshod through the Brexit chaos around the nation.

5. Call a referendum: Mrs May believes her deal – which would allow the government to control migration – is closer to what Brexit voters want, than any other option.

Ardent supporters of the ‘remain’ cause have said they would be willing to vote for the Prime Minister’s deal – provided she allow the public to re-affirm via a “confirmatory” referendum. They anticipate it would either overturn the result of the 2016 poll – or end the discussion once and for all. The Prime Minister has never seemed the slightest bit tempted by that a way forward – and has suggested that “social cohesion” could be threatened by second ‘Peoples’ Vote’.

6. Resign: Mrs May said before the last Brussels summit that “as Prime Minister”, she did not want to see Brexit delayed beyond 30 March 2019. Some Tory MPs read it as a promise to resign, rather than accept a longer extension to article 50. The Prime Minister has now had to ‘swallow her pride’ and accept a further six-month delay. She had already agreed to step down once Brexit is over in order to win the support of Boris Johnson and others for her deal. He, amongst others, have been positioning to take over ever since.

Whatever else, Theresa May’s resilience and staying-power will go down in history as ‘legendary’.

Whatever comes next, the nation deserves a re-set in politics. Positions and egos are so entrenched it seems there is no pathway to recover the reputation of Parliament and the country. It was summed up after the European Council by Spain’s Prime Minister, Pedro Sánchez. He said that the EU had fulfilled its fundamental obligation to safeguard the unity of the 27 - while also working to build the best possible relationship with the UK after Brexit. He renewed his criticism of the Brexit campaign: “The most important lesson we need to learn from what’s happening in the UK is that when decision-making processes, based on lies, are put in the hands of the people, societies – in this case British society – wind up down a blind alley”.

We were planning to report on Tuesday’s update from European Commissioner Thyssen, on Brexit Preparedness in the area of Social Security Entitlements in the event of a no-deal Brexit tomorrow. Until the formalities are completed, it may yet be needed – and will come back again on 1 June, if the EU has any concerns about the seriousness with which the UK is behaving in the latest grant of a stay of Brexit.

It is another illustration of the time, cost and efforts that Europe has been subjected to by the shambles that has been the UK Brexit management process. Rather than precis to our usual ‘5-minute read’ – this time we’ll publish it in full:

Free movement of workers is one of the cornerstones of the EU Single Market. Many EU and UK citizens have made a choice to exercise that right. Almost 4 million EU citizens live or work in the UK and 1.3 million UK nationals are living or working in the EU.

It is our collective duty to make sure we respect the life choices and protect the social security rights of those mobile EU and UK citizens.

For the Commission, it has been a clear guiding principle from the beginning that citizens should not pay the price of Brexit and we have been working hard for the best possible protection of citizens' rights.

The substance of the matter is complex: Social security coordination consists of a very detailed set of rules built up over a long period of 60 years; different situations of mobile workers, pensioners and students are covered. Even an EU tourist who breaks his leg in Trafalgar Square has his health care rights protected by EU law.

The Withdrawal Agreement offers clearly the best possible protection of mobile citizens' rights. It foresees that the EU social security coordination rules and mechanisms will continue to apply during the transitional phase - until the end of 2020 or even 2022 – until a definitive agreement on the future relation is in place.

If the Withdrawal Agreement is ratified, citizens' rights are legally secured in the EU and in the UK.

Conversely, in the absence of a ratified Withdrawal Agreement – this means in case of a “hard Brexit” - there will inevitably be a degree of legal uncertainty. The Commission is working hard with the other EU institutions and the Member States to minimize the uncertainty.

In the first place, we have put in place a Contingency Regulation at EU level to ensure minimum of protection also in case of hard Brexit. The Contingency Regulation ensures that the periods you have worked as an EU citizen in the UK or as a UK citizen in the EU before Brexit, will be recognized, also after Brexit. This can be relevant for example for your entitlement to an old age pension at the end of your career.

Secondly, we are giving guidance to Member States and we are coordinating their unilateral contingency measures. Concretely, we have encouraged Member States to continue providing certain social security rights to those UK and EU citizens who have exercised their free movement rights prior to Brexit.

In particular, we have discussed with Member States that they will continue to allow citizens to export their pension benefits to the UK. And that they will continue to compensate the UK for medical expenses incurred in the UK by EU citizens who legally reside there. When a citizen residing in the UK is undergoing a medical treatment in the EU, that patient will be able to continue his or her treatment. Tomorrow, the Commission will publish a package of guidance documents, including one on citizens' rights where you will find further information on this.

To be noted, however, that the contingency measures do not apply to tourists. We have been advising citizens to take out private health insurance for tourist or business trips to the UK after Brexit.

And this brings me to our third type of contingency measures, we have been informing citizens about their rights: we issued detailed notices, have a free call-in number where people's questions get answered 7 days on 7, in all official EU languages. The free number is 00 800 6 7 8 9 10 11. And we are providing information via our representations in the Member States and via our website.

It must be underlined that – contrary to the Withdrawal Agreement - our contingency measures are unilateral measures. They only cover the rights of EU and UK citizens in the EU27. They do not and cannot cover the rights of EU citizens in the UK. This being said, the UK Government has repeatedly committed politically to equally protect citizens rights in the UK and our representation in London closely follows the preparation of such measures.

Contrary to the Withdrawal Agreement also, the contingency measures do not guarantee a uniform treatment across the EU. Notwithstanding our coordination, each one of the EU27 Member State has its own contingency measures in place and some are more comprehensive than others.

For concrete situations, citizens are therefore well advised to contact the relevant Member State for precise information. The Commission services can help pointing citizens in the right direction.

Our contingency measures cannot replace the Withdrawal Agreement.

This article first appeared on the website for Brexit Partners (www.brexit-partners.com). 

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