Brexit Institute News

Event Report: Brexit by Design or by Default?

Event Report: Brexit: By Design or By Default? Assessing the State of the Withdrawal Process

Chloé Papazian (DCU Brexit Institute)

On 6 September 2018, the Brexit Institute organized the kick-off event of the academic year assessing the state of the United Kingdom’s withdrawal from the European Union. The event featured an opening debate by Members of Parliament of different EU Member States, followed by an expert panel discussion and a closing keynote speech by Danuta Hübner, the Chairwoman of the European Parliament Constitutional Affairs Committee.

The programme for the event can be downloaded here. The following is a summary of the event.

 

Opening MPs Debate

The event started with a debate chaired by CaitríonaPerry (RTE) involving different MPs from various Member States, namely MP Stephen Gethins (House of Commons – United Kingdom), Senator VáclavHampl (Senat – Czech Republic), Senator Ian Marshall (Seanad – Ireland) and MP Anne Mulder (Tweede Kamer – the Netherlands).

Senator Ian Marshall, affirmed that it must be a ‘by default Brexit’, since the UK withdrawal process has been so badly managed. Despite two years of negotiations, a solution still needs to be found, which is complicated further by the complexity of the UK internal situation with Northern Ireland. The White Paper presented in July constituted at least a first proposal on paper although it takes the form of cherry-picking. The senator also questioned whether a second referendum should be organised.

MP Stephen Gethins first underscored the gross irresponsibility of Brexiters to lead a campaign that was based on a blank piece of paper. Linked with this first major issue, he deplored the lack of preparation on the UK side to exit the EU. He was also dismayed by the absence at the UK political level of a sense of the current realities. In particular, he reported that the Brexit leaders and the UK Government may not have grasped the severe economic consequences of Brexit.

MP Anne Mulder drew the attention of the audience to two reports published by the Tweede Kamer and drafted by the Dutch Rapporteurs on Brexit. The objective of these two reports was to prepare the Netherlands should there be no agreement between the EU and the UK after Brexit. The rapporteurs organized roundtables and issued recommendations to better prepare the Dutch economy. The speaker also highlighted that the problem posed by Northern Ireland constitutes a priority for the EU and that the Netherlands fully supports Ireland. The MP closed his talk underlining the need for future new alliances within the EU post-Brexit, such one between Ireland, the Netherlands, the Nordic countries and the Baltics.

Senator Václav Hampl stressed the interest for his country to do its best for a smooth transition and divorce which lies on historical, economic and defence and security grounds. The senator also highlighted that Brexit will entail considerable difficulties in terms of human resources: both the EU and the UK will need to recruit a significant number of people to deal with the consequences of Brexit. The EU has an advantage, nevertheless, for it would be able to engage a reasonable workforce to stick together.

 

Panel

Kevin Doyle (Irish Independent) chaired the afternoon debate gathering Tom Hall (AIB), David Molloy (Arthur Cox), Mary Murphy (UCC) and Federico Fabbrini (DCU).

Tom Hall recalled the complex situation posed by Brexit for financial services as London constitutes a enormous financial hub within which the majority of the EU assets are based. As Brexit takes place, the free movement of capital may completely disappear. The temporary permission regime will allow financial institutions to continue doing business. Yet the economy must prepare for post-Brexit. So far, the level of preparation has remained very low. In this respect, financial institutions are in need of more guidance on how to deal with various issues post-Brexit.

In his presentation David Molloy focused on the consequences of Brexit for the legal profession and for Irish law. First, he underlined that the percentage of solicitors enrolled in Ireland but based in the UK has significantly reduced in the last year. Second, over the last 18 months, some international firms have planned to set up shop in Ireland. Yet, their establishment in Ireland depends on various factors. Third, post-Brexit we may see a movement from English law to Irish law for international transactions. Fourth, a question mark lies with the enforcement of judgment and recognition of judgment between jurisdictions under the Brussels Convention. He stressed that, in a no-deal scenario, the Convention will likely continue to be applicable. Fifth, many financial institutions established in the UK are looking at other jurisdictions to continue passporting in the event the UK cannot do so anymore, due to the absence of reciprocation of the commission regime.

Mary Murphy focused on the Brexit negotiating process, pointing out the uniqueness of these negotiations which are very different from the ones the EU has conducted in the past. The Brexit negotiations are driven by internal and external factors that significantly diverge from the factors that usually typify political negotiations. The absence of a consensus as to the broad tenets of the final agreement, the public and political character of the talks, as well as the constraints posed by rigid deadlines constitute internal factors rendering the Brexit negotiations very specific and complex. Moreover, a range of external factors may further complicate the Brexit negotiations process. The political difficulties in the UK and the existence of other pressing issues for the EU 27 Member States may considerably affect the outcome of the negotiations. In the UK, a conceivable change in the Conservative Party may have consequences on the substance and form of a final Brexit deal. Support by the Labour Party for a second referendum may put additional pressure on the British Government and change the dynamics of the negotiations. On the EU side, other pressing issues must be dealt with in parallel to the Brexit negotiations.

Federico Fabbrini focused on the EU future beyond Brexit. He first mapped the multitude of challenges the EU is facing today. Economically, the EU is still coping with the consequences of the economic crisis. Politically, the EU experiences a political crisis mainly caused by migration. Legally, the EU is confronted with the rule of law crisis. These challenges may mark the end of an ever-closer Union. Second, he identified national sovereignty and tensions on the finality of the EU project, as the major causes of these crises. He highlighted the existence of a division between a market and political vision of the EU. In the absence of a consensus on the substance of the EU project, the equilibrium reached by the EU seems unsustainable. Thirdly, he presented a process of disintegration and reintegration as a possible future scenario for the EU. A Europe of concentric circles might emerge and ironically, Brexit might offer an opportunity to attain this reorganisation of Europe. In the mid- to long-term, we may witness a differentiation in Europe between a real political union with a much more explicit polity dimension and a much looser common market. Professor Fabbrini pointed out that should such a common market be re-created, the UK might find a place within it.

 

Closing Keynote Speech

Danuta Hübner, chairwoman of the European Parliament Constitutional Affairs Committee started sharing her concern as to the future of the EU. She admitted that Brexit is only one of the main issues that Europe currently has on its agenda and that may undermine the state of the Union. Yet, she acknowledged that Brexit negotiations take an enormous amount of time for all the European institutions.

The speaker also deplored the decision of the UK government to organise a referendum. The absence of a strategic impact assessment as to the consequences of an exit from the EU crucially lacked within the organization of the referendum. Political leaders who triggered the whole referendum did not foresee the many consequences Brexit would have. Ms. Hübnerthus qualified Brexit as an accidental event.

Furthermore, the speaker expounded a list of pivotal issues regarding the process of the UK withdrawal from the EU. First, she underlined that time constraints have shaped the whole process from the outset. Ms. Hübnerrecognised that it is theoretically possible to extend this period. Various pressures, however, render such extension difficult. It is hard to imagine that an extension could occur under Theresa May’s government. Additionally, the future elections of the European Parliament and the last session of the Parliament on the 18th of April constrain the possibility of an extension.

Second, Ms. Hübnerhighlighted the numerous issues which remain to be solved before October. Data protection, unfinished procedures related to criminal matters, the future role of the European Court of Justice, and of course a backstop solution for Northern Ireland all represent major issues that are left on the agenda. Moreover, the future framework in the political declaration will constitute another issue difficult to finalise. Indeed, there is a misunderstanding and expectations from the UK that the political declaration could take the form of a legal text, including some guarantees. Furthermore, while issues related to foreign policy on security and defence as well as to internal security seem almost settled, the future framework governing the economic partnership between the two blocs remains to be designed. The European Commission is still studying the White Paper and picking up elements which can fit into a structure which the EU knows.

Third, the speaker emphasised that the EU and the UK cannot afford a no-deal Brexit. Yet, both blocs must prepare for such a scenario. At the EU level, the European Commission is working on this scenario since December 2017. The institution is going through the European legal framework to identify the threats, the risks and what needs to be changed. Preparedness at the national level is also an issue. The European Commission recently addressed a questionnaire to assess the level of preparation across the EU. The institution was struck by the high level of human and capital engagement within Member States to prepare for a no-deal scenario. In particular, preparedness can be seen at the governmental level and within administrations responsible for customs, as well as for other checks and controls. In addition, multinational companies have started the contingency planning immediately after the referendum. SMEs operating exclusively within the EU, nevertheless, remain an important issue as they often do not have the capacity to prepare for the consequences of a no-deal scenario.

Ms. Hübner concluded her speech recalling that the Committee she chairs in the European Parliament will be responsible to vote and approve any withdrawal agreement which the EU and UK negotiation will reach.

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