What Are EU Countries Doing to Prepare for a No-Deal Brexit?

Since Boris Johnson took over as Prime Minister in May, the UK government’s tone on Brexit has shifted.

On October 17th, 2019, the EU and the UK reached an agreement on the Exit Agreement, a treaty that defines the conditions of the UK’s withdrawal from the EU and Euratom. The House of Commons had previously rejected it three times, prompting Theresa May’s resignation.

On January 24, 2020, the treaty was finally signed.

But how is the EU and its member countries preparing for a no-deal Brexit? This article will explain how the EU Commission (EC) and some key EU member states are preparing.

WHAT IS THE WITHDRAWAL AGREEMENT?

The European Union and the United Kingdom reached a withdrawal agreement, which outlined the conditions of the UK’s exit from the EU. It went into effect on February 1st, 2020.

The agreement contains two primary texts, according to Article 50 of the Treaty of the European Union:

• The Withdrawal Agreement itself, including a Protocol on Ireland and Northern Ireland
• A Political Declaration setting out the framework for the future relationship between the United Kingdom and the European Union.

WHAT DOES THE TREATY COVER?

The comprehensive treaty addresses various areas of mutual importance for both parties:

• Common provisions: standard clauses for the adequate understanding and operation of the treaty.
• Citizens’ rights: protects the life choices of over 3 million EU nationals who live in the UK and over 1 million UK nationals that reside in EU countries. It safeguards their right to stay and continue to contribute to their communities.
• Separation issues: ensure that there is an orderly withdrawal of the UK from other arrangements with the EU. For example, protecting intellectual property rights including geographical indications.
• A transition period: during this period the EU will continue to treat the UK as if it were still a Member State, excluding the UK’s participation in the EU institutions and governance structures.
• Financial settlement: the EU and UK must honour all financial obligations agreed upon while the United Kingdom was still a member of the European Union.
• Ireland: a solution to the border on the island of Ireland, which should protect the economy and the Good Friday Agreement fully.
• Cyprus: a protocol will be set ton the Sovereign Base Areas in Cyprus, designed to protect all citizens who work in the base areas.
• Gibraltar: a protocol will be established to facilitate the cooperation between Spain and the United Kingdom and the protection of citizens’ rights.

Both the EU and the UK should carry out the Withdrawal Agreement’s implementation. During the transition phase, the UK and the EU will negotiate a future relationship deal.

POST-BREXIT STATUS OF EU AND UK TALKS

Negotiations between the United Kingdom and the European Union have proven difficult to date. A settlement must be reached by October (2020). Both parties will have to make concessions.

There are numerous distinctions between the EU and the United Kingdom. Priorities do not appear to be matched at the moment. The UK is battling for sovereignty, while the EU is trying to keep its single market intact.

So yet, it appears that little progress has been accomplished. On July 23rd, 2020, a senior UK official was quoted as saying, “I can quite see how we could make a breakthrough relatively quickly if they (the EU) adjust their position.”

However, the EU’s top negotiator, Michel Barnier, stated that “the UK renders a trade agreement – at this moment – improbable by its continuing reluctance to commit to conditions of open and fair competition and to a balanced accord on fisheries.”

Barnier stressed that the EU’s position is intended to safeguard the region’s long-term interests.

While the UK had hoped to make headway in recent months, the EU has been preoccupied with dealing with the epidemic. The EU leaders met for a record five-day meeting to agree on a post-coronavirus recovery plan.

Germany, which now holds the rotating EU Presidency, has stated that trade discussions with the UK will take place in September and October.

Downing Street believes a trade agreement may still be struck in September.

The issues dividing them include competition regulations, fishing rights, and how a settlement would be implemented.

It was reported on August 19th, 2020, that the UK has ruled out extending the December deadline to negotiate a deal.

The EU and UK had negotiations in Brussels from August 17th to August 21st. This is the sixth round of talks between the two sides.

While the EU wants an agreement, it will not compromise at any cost. France is anxious that Barnier may be tempted to give too much away, while Germany’s Angela Merkel has stated that any agreement will jeopardise or harm the EU’s single market.

ARE EU COUNTRIES PREPARING FOR NO-DEAL BREXIT?

While UK and EU negotiators continue to negotiate an agreement, several EU nations are preparing for a no-deal scenario when the UK’s transition period expires in December 2020.

What steps are being taken by the EU and its member countries to prepare for a no-deal Brexit?

HOW IS THE EUROPEAN COMMISSION PREPARING FOR A NO-DEAL BREXIT?

The European Commission has declared that it is prepared for a no-deal Brexit. It has frequently stated that basic services will be maintained (such as air, travel, supplies, and financial services).

The EC stated: “These suggestions are of a transitory character, have a restricted scope, and will be implemented unilaterally by the EU. They are not “mini-deals,” and they have not been arranged with the United Kingdom “.

It stated that the EU would be “forced to immediately impose its regulations and tariffs at its borders,” and that the United Kingdom would be recognised as a “third nation” like all other non-EU countries.

However, no official stance on the Irish backstop has been declared.

WHAT PREPARATIONS ARE EU COUNTRIES MAKING TO PREPARE FOR A NO-DEAL BREXIT?

Here are outlines of important EU nations’ no-deal Brexit preparations. The data comes from the EU Commission’s website, which includes links to guidance from all EU member nations.

GERMANY

The German government has formed a special Brexit cabinet and stated that it is ready for any scenario. It has hired an additional 900 customs officers and approved new legislation concerning social security, taxation, and financial services.

However, no publicly published forecasts of the likely impact of Brexit on the German economy are available.

The government enacted the “Brexit Residence Transition Act,” which gives British residents residing in Germany nine months to apply for residence cards before being forced to leave.

Joachim Lang, executive director of Germany’s BDI industrial group, stated in July 2020 that the EU and UK must “prepare for bilateral commerce without an agreement under WTO (World Trade Organization) standards.”

FRANCE

France is in a unique position in terms of commerce due to the Channel crossing. Despite its preparations, the administration has stated that it does not anticipate trade to function as smoothly as it does presently.

France is spending €50 million to upgrade port infrastructure to allow for customs inspections, wants to hire 700 additional employees by the end of 2020 to assist deal with the crisis, and is building a new IT system to speed up the process of vehicles crossing the border.

The French Parliament enacted legislation to provide the government more powers in the event of a no-deal Brexit. This includes authority over British people living and working in France.

IRELAND

Because of the Irish border and the Irish Sea, the Republic of Ireland is in a unique situation. For a long time, the government has been planning for Brexit.

Ireland enacted no-deal Brexit legislation in February, which addresses a number of critical problems such as travel, social security, and pensions. However, the legislation does not address the issue of the land border with Northern Ireland.

The government calculated in June 2019 that a no-deal Brexit would cost 55,000 jobs within two years and another 30,000 in the long run.

SPAIN

Officially, almost 300,000 British nationals live in Spain, the biggest number in Europe. The government has said that it will continue to provide healthcare and other entitlements to British citizens.

In March, the government approved measures to maintain current arrangements, which will become law if there is no deal. However, if the UK passes laws that have a negative impact on the rights of Spanish citizens living in the UK, this could put pressure on the Spanish government to change their position.

Gibraltar is a major source of contention. The contested British territory employs 9,000 Spanish nationals, and the Spanish government feels it should be a part of Spain. Future plans would have to be worked out.