Brexit: what you should know, and why you should care

The implications of Brexit

March 29th 2019. At this date, the United Kingdom will officially stop being part of the EU. As the deadline grows closer and closer, we at Companow thought it would be a good idea to look back on the Brexit,and explain exactly what it is, and why you should care about it.

 

Summary:

  1. What’s the Brexit?
  2. Why the Brexit?
  3. What are the steps to Britain leaving the EU?
  4. Who are the negotiators?
  5. What’s at stake here?

 

What’s the Brexit?

The term “Brexit” is short for “British exit”. Basically, it refers to the United Kingdom leaving the European Union.

2 years ago, on June 23rd 2016, the Prime Minister at the time David Cameron organized a vote to determine if the British wanted to leave the EU. The result: 51.9% voted “leave”. When Article 50 was invoked on March 29th 2017, Brexit was set in motion; the UK and the 27 other countries of the EU only had 2 years to prepare for the country leaving. Until then, the UK will effectively remain in the EU.

Now, it is up to the new Prime Minister, Theresa May, to negotiate the terms of the Brexit with the negotiating team representing the rest of the EU.

 

Why the Brexit?

When he was running for a second term as Prime Minister in 2016, David Cameron promised that he would organize a nation-wide vote to decide whether or not the country would remain in the EU before 2017. He ended up keeping his promise, and after the European Council met in February to decide what to do in such a situation, David Cameron officially defined a date for the vote: June 23rd 2016.

In hindsight, this plan backfired immensely for David Cameron. Indeed, the “leave” camp ended up winning with 51.9% of the votes. Furthermore, voter turnout reached more than 72%, a new record for the country. As someone who had fought for the “remain” side of the debate, David Cameron resigned just a few days later, with Theresa May replacing him.

This is how the UK will end up leaving the European Union in March 2019, after 2 years of difficult negotiations.

 

What are the steps to Britain leaving the EU?

Article 50 of the Maastricht Treaty defines the conditions for a country to leave the EU. First, the country that wants to leave notifies the European Council. Then, the negotiations of the terms in which the country leaves begin. Finally, the council votes for these terms, after the parliament accepted them.

As such, when Tim Barrow, representing the UK, gave a letter stating that the UK wanted to leave for the European Council, the period of negotiations officially began.

What next? On March 31st, the now 27 countries of the EU present what their general positions are: the EU is willing to have fast and efficient negotiations with the UK, but only after enough progress is made on how much the UK will have to pay to the EU, what will happen to the European citizens living in the UK, and the difficult question of the border with Ireland.

In June, early elections cemented Theresa May as the Prime minister, after a victory from the conservative party. However, this party had to ally itself with the Unionist Irish party to keep its absolute majority. Obviously, that makes the government of Great Britain quite weaker during the negotiations with the EU, especially on the question of the border of Ireland.

It’s only after all of that, on June 19th, that negotiations could officially start. Well, the first part at least. Sufficient progress wasn’t made on the 3 fundamental issues mentioned earlier until December.

At this point, however, phase 2 of the negotiations finally started. As such, in January of 2018, it was determined that there would be a 21-month period of adaptation to allow the two parties to prepare their future relations.

And since then…  No progress has been made. We already know that Europeans living in the UK now will be able to conserve their status after Brexit, and vice versa. But what of those who want to settle after March 2019? And how to find a commercial agreement when we still don’t really know what to do about the question of Northern Ireland? After all, London has adamantly refused for it to remain in the Customs Union

 

Who are the negotiators?

Obviously, Jean-Claude Juncker, as the president of the European Commission, is quite an important figure in the negotiations. But he’s not the only one. There’s also the so-called “Article 50 Working Party”, a segment of the European Commission created in September 2016 for the express purpose of preparing and negotiating, all while keeping the future relationship of the two parties in mind. Its chief negotiator is Michel Barnier.

By the end of June 2016, Jean-Claude Juncker had also already named Didier Sewuss at the head of the “Brexit task force” of the Commission.

And from the side of the UK, there are 12 ministers from the conservative party, including the Secretary of State David Davis. The government of the UK has also officially published who constitutes its negotiating team on June 18th, 2017.

 

What’s at stake here?

The political consequences of the Brexit are incredibly difficult to predict. For some, this a complete disaster:  Not only is the EU is effectively losing one of its 3 biggest powers, but it also loses an important intermediary when negotiating with the US, and even one of the only European countries to have a substantial army!

For others, this is an opportunity to further unite the EU. Since its creation, it was one of the countries who were the least enthusiastic about European integration, so maybe the remaining countries will be more willing to move to the next step. In fact, because of the negotiations with the UK, the other 27 countries have already started thinking about the future of the EU, so structural reforms could even already be underway.

One of the hot topics of negotiation is also the question of the exit fee. For some, it should be as high as 60 billion euros, since that’s how much the UK was supposed to contribute until the end of the budget cycle, in 2020.
There’s also the question of the free movement of people between the countries after the Brexit. After all, the UK wishes to restrict immigration coming from the EU, so the situation of European citizens living in the UK (or vice-versa) still isn’t even properly defined, yet. This question is also particularly difficult because of Ireland: after the Brexit, it will have lost its one direct border with the EU. As such, it would be particularly isolated from the rest of the continent if the two parties start placing customs at their borders.
Furthermore, there’s also the question of Gibraltar. As territory owned by the UK that’s on the coat of Spain, what will happen to it? The EU wishes for Spain to be able to give its approval before the agreements of the Brexit start applying to it. But, as you might guess, London refuses.

And of course, we haven’t even mentioned the question of commercial relations. After all, it’s necessary to at least define the new context in which goods and services will be exchanged since almost 50% of the British exports are destined to Europe. Are there going to be customs? What of the different rules on health? On the environment?

Since the Brexit, England’s relationship with Scotland has also been dicey. After all, not only does Scotland want independence, but it is also pro-Europe. In March 2017, The Scottish Prime Minister Nicola Sturgeon has even officially stated that she would have the Scottish parliament hold another vote for independence. Well, this vote’s date has been postponed to autumn 2019, though.

Finally, for the UK itself, the economic consequences are impossible to predict. After all, even if after the Brexit vote, the Pound severely went down in value, and the British consumers lost a lot of their purchasing power, so far, there has not been any grave economic recession. Though, keep in mind, the Brexit hasn’t even happened yet..

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