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No-deal Brexit: is the EU prepared well enough?

No-deal Brexit: is the EU prepared well enough? 17 septembre, 2019

“The [Brexit] Withdrawal Agreement is dead”, announced the UK Prime Minister Boris Johnson, while pledging for an exit of the EU on October 31st, deal or no deal. Even after the UK House of Commons made it illegal for Boris Johnson to exit without a deal next month, he announced he would prefer to die rather than to further delay Brexit. Hence, we may get a “hard Brexit” next month, which would have dreadful consequences for both the UK and the EU. With that in mind, it seems important to see how the EU has prepared itself in case of a no-deal Brexit. Which measures did the EU take to limit the impact of a hard Brexit, and are they enough?

 

EU Brexit preparedness

19 legislative proposals, 63 non-legislative acts, 100 preparedness notices and 6 communications, this is what the EU has done so far to protect the continent in case of a hard Brexit. But what do all these measures contain? We cannot describe them all (the entire list of actions can be found on the Commission’s website), so let us start with the most important.

Legislative proposals include many amendments to current EU laws. Indeed, many pieces of legislation take into account the number of Member States. One example is the European Maritime and Fisheries Fund: in case of a hard Brexit, the UK would no longer be eligible for this fund. Another consequence is that some money of that fund would need to be further allocated to EU fishing boats that would be financially affected because they would no longer be able to fish in British waters. In a nutshell, EU laws have been updated to an Union of only 27 Member States and to take into account the consequences of the UK’s departure. 

As such, even without a deal, the EU has taken measures to grant UK civilian airplanes access to European airspace, to facilitate freight by temporarily allowing UK trucks and trains in the EU, to strengthen cross-border support for peace in Northern Ireland until 2020, and has started the relocation of the two EU agencies out of the UK (the European Medicines Agency and the European Banking Authority). 

All of these measures seem appropriate, but what does that mean concretely for us, the European citizens? First of all, the EU intends to use several European funds to financially help businesses and citizens impacted by a no-deal. Moreover, the EU has assured the continuation of Erasmus+ for Europeans in the UK and for British students in the EU, even if the UK leaves the EU. The Union will also allow British citizens to enter the EU without a visa after Brexit (as long as the UK doesn’t introduce a visa requirement for EU nationals though). Likewise, the EU is trying to make sure that EU citizens living in the UK would keep their social security benefits after a hard Brexit (at least temporarily). 

Furthermore, the Commission has published 100 sector-specific preparedness notices. They provide guidance to the sectors affected by Brexit (e.g. environment, justice, employment, communication, energy). These notices are directed to the EU itself in order to explain to the Commission departments how Brexit will impact their work. For instance, the method calculating the average specific emissions of CO2 in the EU would change since we would no longer need to take into account British cars. Finally, there are six EU communications explaining the consequences of a no-deal Brexit, the latest state of play of negotiations and how the contingency measures can help citizens and businesses.

 

Has the EU done enough though?

“For now all we can do is keep calm and prepare for all scenarios. [The Union is] protected from a no-deal Brexit” claimed an EU Brexit official (Wall Street Journal, 2019). But is this accurate? As the Commission said, these are “contingency measures [that] cannot mitigate the overall impact of a “no-deal” scenario” as they are temporary, limited in scope and unilateral”. Taking this into account, has the EU done enough?

Some key elements concerning trade are missing from the Union’s plans, such as the authorisation of British financial services firms to operate freely in the EU. Particularly, more needs to be done to help small and medium enterprises (SMEs) to adapt in a no-deal scenario. Big companies are already “hiring consultants, shifting headquarters, stockpiling merchandise, preparing alternate transport methods and determining [new] tariff rates,” according to the Wall Street Journal. But SMEs do not have the means to do so: a hard Brexit would have a disproportionate effect on them. 

The largest UK business group, the Confederation of British Industry (CBI), recently published a study assessing the preparedness of the UK, the EU and businesses. In their analysis, they claim that the EU is less well prepared than the UK because the Union’s measures are less extensive than the UK’s. 

To improve its readiness, the CBI recommends the EU, among other things, to allow UK companies to apply for special licenses before Brexit, harmonize mitigation in different areas such as data and customs and take a pragmatic approach when it comes to liability of citizens in case of no deal.

Overall, the CBI made over 200 recommendations for improving contingency procedures against a hard Brexit. The full report by the CBI is available for reading.

 

In summary…

With a possibly imminent no-deal Brexit, the EU did well to prepare in advance a significant number of measures to ensure some important trade and social connectivity between the UK and the EU. However, the proposed measures, albeit numerous and detailed, remain limited and only aim at remedying some of the negative impacts of a disorderly withdrawal. They obviously cannot replace an entire treaty such as the Withdrawal Agreement, and it seems the EU could do better, and prepare more initiatives in the sphere of connectivity, trade mitigations and licenses. With two more months to go before October 31st, the task is difficult – but not impossible – for the EU to further increase its readiness against the potential upcoming no-deal.

 

Robin Vanholme is a student of the Specialised Master in European Law at the ULB’s Institute for European Studies.

 

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