BREXIT: what would ‘no deal’ entails?

The recent refusal of the Chequers Plan by Theresa May’s, Prime Minister of the UK rings the alarm for european economic operators who feared the consequences of a sudden exit of the UK with no agreement at all.

The D-day for a “bye-bye UK” is due on 30th of March 2019, which means that an agreement must be quickly adopted in order to allow sufficient time for ratification by parliaments. Consequently, three scenarii could possibly take place: 1) A validated exit agreement 2) the implementation of a new referendum in the UK 3) an exit without any agreement. This last scenario seems to be most likely to come true and will definitely have serious consequences for European economic actors.

The Chequers Plan proposed a “Soft Brexit” keeping the free movement of goods but rejecting the free movement of persons. Therefore, and in order to preserve the unity of the single market, Brussels decided to reject this proposal.

If the UK does not reach an agreement, customs duties will be automatically reintroduced, putting a sudden end to the European freedom of movement.

In the midst of European inflexibility and internal divisions within the British government, there is limited chance that an agreement will be reached by October.

The consequences of the Brexit have long been identified and the agreement was intended to reduce its effects on both UK and EU economy and trade relationship as well as the UK participation to EU funding opportunities. Indeed, regarding the EU funding programmes, the deal was supposed to lead to a transition phase ensuring British participation until the end of the programming period (2020). However, if there is no agreement, British nationals would immediately lose their access to European programmes. As such, British researchers are actually worried as they will no longer benefit from EU Horizon 2020 funding programme (research and innovation programme). Indeed, if the UK actual participation will not be withdrawn from ongoing projects even after 2020, it will certainly be excluded from the EU programmes post-2020, such as Switzerland in 2014 for the H2020 programme (back in 2017).

Some EU programmes have included in their guidelines specific notice regarding the participation of UK organisation for a funding allocation:

“…If the United Kingdom withdraws from the EU during the grant period without concluding an agreement with the EU ensuring in particular that British applicants continue to be eligible, you will cease to receive EU funding (while continuing, where possible, to participate) or be required to leave the project on the basis of the grant agreement.”

Well…. The UK still have two months to conclude an exit agreement, which might avoid putting an end to European funding and projects.