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Wednesday, October 2, 2019

Anticipating a no-deal withdrawal of the United Kingdom: a necessity for the European Union

Research, Information, Citizenship, -,

"Europe will be forged in crises, and will be the sum of the solutions adopted for those crises." Jean Monnet's statement remains relevant as the EU prepares for the effective withdrawal of the UK on 31 October. To date, however, no agreement has been definitively approved by both parties, which raises questions about the various scenarios that could be considered.

I- An ongoing uncertainty about the modalities of the United Kingdom's withdrawal

Since its announcement, Brexit has known numerous developments. While it is still difficult to predict the outcome of this crisis, several hypotheses can be made. The most suita... Read more

"Europe will be forged in crises, and will be the sum of the solutions adopted for those crises." Jean Monnet's statement remains relevant as the EU prepares for the effective withdrawal of the UK on 31 October. To date, however, no agreement has been definitively approved by both parties, which raises questions about the various scenarios that could be considered.

I- An ongoing uncertainty about the modalities of the United Kingdom's withdrawal

Since its announcement, Brexit has known numerous developments. While it is still difficult to predict the outcome of this crisis, several hypotheses can be made. The most suitable would be the conclusion of an agreement before 31 October in order to allow for an orderly withdrawal of the United Kingdom and thus guarantee some legal certainty. This requires prior agreement on the backstop issue, which remains the main contentious point. Rejected by British MEPs, this safeguard clause, included in the withdrawal compromise, provides for the maintenance of a customs union between the EU and Northern Ireland to avoid the re-establishment of a physical border between the two Ireland and thus preserve the integrity of the Single Market. To overcome the blockage, a new alternative has just been proposed by Prime Minister Boris Johnson on 2 October - the question remains as to how it will be welcomed by its European partners. If no agreement is reached, it is possible to consider a further postponement of Brexit for the third consecutive time. However, this option is rejected by Boris Johnson and would also have to be unanimously approved by the European Council in order to be applicable. Yet, this may be difficult to obtain due to a lack of sufficient guarantees from the British government. Another hypothesis lies in the organisation of snap elections in the United Kingdom, in order to achieve a clearer majority and clarify the government's policy. Still, this hypothesis was rejected by British MEPs at the beginning of September. Another hypothesis would be the abandonment of Brexit, implying the prior organisation of a new referendum in the United Kingdom, despite the uncertainties associated with the result. Although neither party supports such a scenario, the prevailing confusion leads the EU to prepare itself for the dramatic hypothesis of a Brexit without an agreement: the no-deal.

II - A no-deal withdrawal of the United Kingdom prepared by the European Commission

Feared, a Brexit without any agreement would result in a sudden break in the ties between the EU and the United Kingdom. The latter would thus stop contributing to the EU budget (resulting in a net decrease in available funds, unless other countries compensate the loss) and would leave the Single Market and the Customs Union. Therefore, mutual relations would be only governed by WTO rules. This would mean the end of free movement and the consequent return of customs duties and border controls. For British project leaders in particular, a no-deal Brexit would result in their immediate ineligibility for any call for projects restricted to EU Member States and therefore in the cessation of payment of European subsidies. To avoid this risk and to continue to receive European funds, British institutions build new partnerships with structures located in other Member States, particularly in the fields of research and higher education. In the light of the stakes, the EU is speeding up its preparations in order to better anticipate the occurrence of such a scenario, which is unfortunately becoming more and more likely, as the Commission pointed out. In this context, the EU announced its intention to release €780 million to provide emergency financial assistance to states that would be most affected by a no-deal Brexit. A large part of this amount would be paid by the EU Solidarity Fund, which usually intervenes in case of natural disasters, and a smaller part would come from the European Globalisation Adjustment Fund. At the same time, the European Commission published new emergency measures to mitigate possible disruptions caused by a no-deal.

In the face of the many potential scenarios, confusion remains. It is essential to provide clarification at the forthcoming European Summit in Brussels on 18 and 19 October, at least to reassure European stakeholders.

Audrey PEAN

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14 October - 16 November 2019, Helsinki
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