With British Prime Minister Theresa May failing to get parliamentary support for her plan to leave the European Union and only 100 days until the deadline, Britain is veering towards a “no deal” Brexit.
In case of a no deal Brexit, the UK will leave the EU without any formal agreement on the future relationship with the 27-member European bloc. This would mean the UK would be “treated as a ‘third country’ by the EU with commerce governed by World Trade Organisation rules,” British tabloid The Sun reported.
Currently the UK’s trade, customs, and immigration policies are subject to EU laws and regulatory bodies. Under the blueprint agreement presented by May’s government and Brussels, the EU courts will continue to have jurisdiction over many aspects of British life.
If the no deal scenario comes to pass, Britain will not be obliged to pay the $47 billion punitive “divorce bill” slapped by Brussels negotiators, a House of Commons report said.
In June 2016, Britons voted 52 to 48 percent in favor of Brexit, which set off 18 month negotiations between UK and EU officials under the Article 50 of the Lisbon Treaty.
The European Commission, EU’s executive arm, proposed 14 “contingency measures” to prepare for a possible no deal Brexit. “The proposals concern several areas the European Union’s executive believes would be impacted in the case of a so-called ‘no-deal Brexit,’ including financial services, air transport, customs, and climate policy,” the German state broadcaster Deutsche Welle reported Wednesday. According to The Sun, the authorities in Britain are also working on similar measures.
The Deutsche Welle published the details of the proposed EU contingency plan:
The European Commission on Wednesday proposed 14 contingency measures to prepare for the possibility that the United Kingdom leaves the European Union on March 29 without a withdrawal agreement in place.
The proposals concern several areas the European Union’s executive believes would be impacted in the case of a so-called “no-deal Brexit,” including financial services, air transport, customs, and climate policy.
The European Commission started implementing its “no deal” Contingency Action Plan on Wednesday. The measures include:
– Inviting “Member States to take a generous approach to the rights of UK citizens in the EU, provided that this approach is reciprocated by the UK.” This would ensure that UK citizens legally residing in the EU on the date of withdrawal would continue to be considered “legal residents,” with a “pragmatic approach to granting temporary residence status.”
– For financial services, measures to prevent disruption in the clearing of derivatives, central depositaries services and for some over-the-counter derivatives contracts.
– For transport, temporary measures to ensure air services and aviation safety licenses and road haulage into the EU.
– For customs and goods exports, EU legislation is to apply with declarations lodged in the EU.
– The EC also proposes to continue the PEACE programme in Northern Ireland until 2020.
On Wednesday, the British government issued a guidance on pensions and benefits to UK nationals in the EU in a no deal scenario. The notification assured that “[in] the event the UK leaves the EU without a deal, the UK will call on the EU and its member countries to continue their commitments to EU citizens and protect the rights of UK nationals living in EU countries.”
Both side are making arrangements to facilitate trade in case of a no deal. The British conservative blog Guido Fawkes reported Monday:
The UK has negotiated an agreement to stay in the Common Transit Convention (CTC) even if there is no Brexit deal between the two sides. This means that goods can continue to be transported freely between the UK and the EEA with customs declarations and import duties only being paid when the goods arrive at their final destination.
For many in the Brexit camp, the deal handed down by Brussels to May isn’t worth the paper it’s written on. The current proposal is devised to punish the British people and send a tough message to detractors within the EU, they argue.
Ahead of the June 2016 referendum, European Commission President Jean-Claude Juncker warned the British voters of severe consequences if they opted to leave the union. “If the British leave Europe, people will have to face the consequences,” he told French newspaper Le Monde. “I’m sure the deserters will not be welcomed with open arms.”
The EU negotiators are not interested in reaching an accommodation with the May’s government, but seek to make an example of Britain for daring to break away from the bloc, the former Greek Finance Minister Yanis Varoufakis claims.
“They want to punish Britain, even if it means a mutually disadvantageous deal for the peoples of Europe,” Varoufakis said. A mutually acceptable deal would the “greatest nightmare for Mrs Merkel and Mr Juncker,” he added.
“If Brexit proves less painful than expected, this might make Frexit, Nexit, or Czexit look more appealing,” Goldman Sachs predicted after the 2016 Brexit vote, concluding that if “the UK economy holds up better than we expect, the political risks to the integrity of remainder of the European Union have grown significantly.”
May’s critics within her party accuse her of not daring to call the EU’s bluff and reject the deal. “Leaving without a deal is not the end of the world,” Conservative MP Jacob Rees-Mogg wrote on Twitter.
The UKIP leader Nigel Farage has long urged May to walk away from the EU’s offer rather than accept a bad deal. “We have nothing to fear and that is the reason why we should only accept a clean and clear Brexit, not some fudge,” he said in September.
Brussels has every reason to maintain mutually beneficial trading ties with the UK. Any disruption in UK-EU trade will hurt European exporters as well, especially the German manufacturing and automobile sectors. In 2017, Britain imported £341 billion worth of good from the EU. The trading partners within the bloc run a huge deficit with the UK, crossing £80 billion in 2016.
The question now worth asking is will the EU risk losing billions in bilateral trade, and hundreds and thousands of jobs just to teach a lesson to the British people for voting the ‘wrong way’? Isn’t it time for the EU to come to terms with the outcome of the 2016 referendum and let the British go in peace?
Video: No deal, no problem, Farage tells EU ‘gangsters’
[Cover image via YouTube]
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