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EU preparations for a no-deal Brexit

Published Thursday, May 30, 2019

The EU and the other 27 Member States have been preparing for a possible no-deal Brexit. The European Commission has had a no-deal preparedness plan which is now complete, and the EU27 have also been implementing their own preparations which will take effect if the UK leaves the EU without a withdrawal agreement at the end of October. This paper looks at the EU programme and at some of the EU27 measures, particularly in the area of citizens' rights.

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A no-deal Brexit is not wanted but is still possible

The UK Parliament has not approved the Withdrawal Agreement endorsed by the Prime Minister and the other 27 EU Member States (EU27) in November 2018, and without this approval and ratification of the Agreement, the UK could leave the EU without a deal. The Prime Minister asked for, and was granted, first a short extension of the Article 50 period to 12 April and then a longer one. Under a European Council Decision of 11 April 2019, the UK has until 31 October to complete ratification of the Withdrawal Agreement or leave without it. The European Union and the Government and Parliament of the United Kingdom agree that a no-deal (or ‘disorderly’) Brexit is not what they want, but it cannot be ruled out and therefore needs to be prepared for. The EU insists that there will be no renegotiation of the 2018 Withdrawal Agreement.

The EU’s no-deal preparedness programme

If the UK leaves the EU without a withdrawal agreement there will be repercussions for the EU as well as the UK. European Commission preparations to mitigate the impact of a disorderly or no-deal Brexit began in December 2017, and on 25 March 2019 the Commission declared that its no-deal ‘Brexit preparedness’ programme was complete. The Commission has published 93 ‘preparedness notices’ and 46 legislative measures have been proposed or adopted - for example, legislation amending EU Regulation 2018/1806 will allow short-stay visa-free travel for UK citizens in the EU27 States, on the basis of UK reciprocity (this will also apply in Norway, Iceland, Liechtenstein and Switzerland, which are in the Schengen area).

The Commission’s programme is one of damage limitation in areas that would be most seriously affected and could create problems for the EU27. It includes measures in the financial sector, transport and travel, customs and the export of goods, climate policy, agriculture and fisheries, social security coordination, the ERASMUS and PEACE programmes, cooperation in the export of dual-use items, international trade in services and foreign direct investment. The new measures will, for example, facilitate road haulage, rail and aviation continuity between the UK and the EU27, or compensate fishermen for Brexit-related losses. The measures are mostly temporary (around 9-12 months) and a future EU-UK relations agreement is expected to provide long-term arrangements.

The EU has also taken steps to prepare for a shortfall in the EU Budget if the UK does not honour commitments to payments.

Some industry groups are still concerned that preparations in EU Member States and in many individual companies are not enough to mitigate the impact of a no-deal Brexit at the end of October.

The Irish border issue

The ‘Irish backstop’ has been a major obstacle to UK endorsement of the Withdrawal Agreement. The EU insists there should be no hard border on the island of Ireland, that the integrity of the Single Market must be respected and that checks on goods will have to take place somewhere, if not directly on the border. There are no details yet as to how this could be achieved. The EU would also help maintain the Belfast/Good Friday Agreement in the event of ‘no deal’ with technical and financial resources, including continued funding and support for the PEACE programme in Northern Ireland.

EU27 provisions on citizens’ rights

The Commission has not legislated for residence rights (which are subject to national laws on third-country entry and residence) but has asked Member States to take a “generous approach” to the rights of UK nationals already living in their territories, as long as the UK does likewise. In response, the EU27 have agreed to continue many existing residence, employment and travel rights for a temporary period. In some case, UK citizens have been offered special conditions that other third-country nationals do not enjoy, in particular where UK tourism is important (e.g. Portugal and Spain). Several Member States (e.g. Austria, Bulgaria, Croatia, Denmark, Cyprus, Italy, Malta, Romania and Slovakia) have offered permanent national ‘regularisation’ for UK citizens already living in the country. Most other Member States have implemented at least some citizens’ rights legislation, but not everything currently provided by the EU’s 'free movement Directive'.

Most Member States (Belgium, Czech Republic, Estonia, Finland, France, Germany, Greece, Hungary, Latvia, Lithuania, Luxembourg, Netherlands, Poland, Portugal, Slovenia, Spain and Sweden) have planned or adopted temporary legislation providing a ‘grace period’ for UK nationals, during which they will need to regularise their status under national immigration laws. Several states (including Belgium, France, Netherlands and Poland) explicitly make this legislation conditional on UK reciprocity. Some Member States have said they will guarantee rights if there is no deal, but have not yet done so formally.

Most Member States have launched information campaigns via the British Embassy in their territories, encouraging UK citizens to check their residence status and take any necessary action. They provide online information on government websites, explaining how UK citizens’ legal status might change and how to get the documents they need to stay in the country; most also link to UK Government policy and advice on ‘settled status’ in the UK.

Other no-deal preparations

In addition to implementing the EU’s no-deal preparedness legislation, Member States have also made their own plans to mitigate the impact of ‘no deal’ on their economy, trade, business, services, transport and a range of other sectors. Many have planned border and customs adaptations, for example. Those with major ports (e.g. Belgium) and significant trade with UK (e.g. the Netherlands) have provided extra border infrastructure and new technology systems, and recruited extra customs or veterinary staff (e.g. France, Ireland, Poland, Netherlands, Spain). Portugal is planning to open special lanes for UK tourists at airports.

Recent developments

Several things have happened which have added to the Brexit uncertainty: cross-party talks in the UK broke down; it was announced first that the Withdrawal Agreement Bill would be introduced in Parliament and then that it wouldn’t; Theresa May said she would step down as Conservative Party leader on 7 June, and the Conservative and Labour parties did badly in the European Parliament elections on 23-26 May. Prospective candidates for Conservative Party leader (and probably prime minister) include some who are not averse to leaving the EU without a deal, and others who want to rule out ‘no deal’, or renegotiate parts of the Withdrawal Agreement or hold another referendum. The EU maintains its position that there will be no renegotiation of the November 2018 Withdrawal Agreement - although several Conservative Party leadership candidates have pledged to reopen talks with the EU.

Both the UK and the EU will shortly be appointing new leaders. But it is likely that whoever takes over in the UK and the EU institutions will face much the same Brexit scenarios as now: the UK leaves on the basis of the 2018 Withdrawal Agreement, or revokes Article 50 and stays in the EU, or leaves without a deal on 31 October. The European Council will “review progress” at its meeting in June 2019.



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