EU Terms for Brexit

On March 29, 2019 the United Kingdom will officially no longer be a member of the European Union. Accordingly, the European Union’s special summit in Brussels on the U.K.’s exit of the Union was all but a cheerful occasion. Jean-Claude Juncker, President of the European Commission, stressed that “it’s a sad day” not fit for “glasses of champagne,” and German chancellor Angela Merkel simply called the entire operation tragic.

The leaders of the 27 remaining member states of the EU now agreed on the terms of the Brexit in a 585 page document. This will still have to be ratified by both the British Parliament and the European Parliament to become effective, and so the responsible leaders endorsed the withdrawal agreement emphasising “that this is the only deal possible”. These are the core terms the EU’s state representatives agreed on:

TRANSITION PERIOD

The United Kingdom officially leaves the European Union in March 2019, but a transition period of 20 months follows, meant to ease the Brexit’s impact on the economy. During this transition period the U.K. will remain part of the single European market and the European customs-union, and so EU laws continue to apply to it.

Thus, there will be no customs control, no import restrictions and no entry restrictions. However, this means that also new EU laws automatically apply to the U.K. during the transition period, even though it no longer has the right to vote in the European Parliament, as it now will officially be a third party country. The transition can be extended one time for up to two years, so up until the end of 2022.

RIGHT OF RESIDENCE

According to the latest UN census there are 3 million EU citizens currently living in Great Britain, and 1.3 million British citizens living on the mainland of the European Union - close to a tenth of those in Germany. The treaty assures the residents of both the U.K. and the EU of their right to continue living as they used to even after the transition period, which particularly concerns their own and their families’ right to remain, their occupation, their education and the recognition of qualifications. This specifically also applies to citizens still changing their residence during the transition period.

TRADE AFTER BEXIT

Goods with a product permit such as clothes, cosmetics, medicine or childrens’ toys can be sold even after the transition period without a special label. This does not apply for livestock or animal products however. Trademarks remain untouched on both sides, and 3000+ protected goods such as champagne, feta cheese or Bavarian beer have to keep their status as regional specialities in accordance with EU law.

BRITISH PAYMENTS TO THE EU

The United Kingdom is obliged to hold true to its financial responsibilities such as pension payments from the years of its membership of the European Union - the estimated total amount currently still due lies somewhere between 40 - 45 billion Euros. Even so, the European Parliament will be short of 12 billion Euros in 2019 already because of the Brexit, according to their own estimates.

THE IRISH / NORTHERN IRISH BORDER

The greatest fear of the Irish and Northern Irish public concerning Brexit is a new outbreak of violence between the two nations. In order to prevent a new civil war, the border between Northern Ireland and Ireland remains open during the transition period - no tollgates, no customs controls. The two parties will negotiate a long-term solution in the meantime, and if they should fail to agree on a solution, a guaranteed “backstop” has been arranged, which in consequence means that Great Britain remains part of the European customs union.

GIBRALTAR

The question of Gibraltar’s affiliation is a topic just as sensible the question about what happens at the Irish / Northern Irish border. While officially being under British rule, Spain claims the peninsula for itself as well. The Brexit-treaty now dictates that the possibility for commuters from Spain to work in Gibraltar must remain unhindered. Tax ambiguities and fishing rights have been solved as well. In turn, the European Parliament guarantees to obtain special consent from the Spanish government in all future legislations regarding Gibraltar.

AFTER THE TRANSITION PERIOD

The European Commission’s Brexit terms are meant to provide jurisdictional clarity throughout the transition period. However, as the Brexit’s real impact will only come to full affect once the transition period is over, the EU and the U.K. have to settle their long-term relations as trade-partners. The European Commission has signed a 26-page declaration of intent on the matter, in which it clearly states its vision of a free trade zone, with close collaboration on regulations and no customs or quotas.

THE “NO-DEAL” SCENARIO

If the Brexit-terms are not ratified by March 2019 by either the European Parliament or the British Parliament, there will be no transition period and thus a clear cut of the United Kingdom from the EU. Should this happen, economic instability and a great insecurities within the public of both sides would follow, with the threat of a total economic crash especially on the British side. While European Parliament President Antonio Tajani already announced the parliament’s approval, British Prime Minister Theresa May turns to the British citizens in hopes of gaining their approval. On December 11 the House of Commons will decide their position on the EU’s terms.