The Institutional Consequences of a Hard Brexit – Key Findings

by Federico Fabbrini (Dublin City University)

The European Parliament’s Committee for Constitutional Affairs (AFCO) recently asked Prof. Federico Fabbrini, Director of the DCU Brexit Institute, to write an in-depth report on the Institutional Consequences of a Hard Brexit. The report has just been published and is available here. This is a summary of the report’s key findings.

Abstract

This in-depth analysis, commissioned by the European Parliament at the request of the Committee of Constitutional Affairs, considers the institutional, budgetary and policy implications that a so-called ‘hard Brexit’ would pose on the EU. It analyses from a legal perspective how a withdrawal of the UK from the EU without a withdrawal treaty, transition deal and framework on future relations would affect each specific EU Institution, the EU budget for the remaining years of the current MFF, and EU policies in the crucial fields of trade, security and justice. While the study does not endorse a ‘hard Brexit’ it provides guidelines for the EU to be prepared in case such scenario were to materialise.

Background

Since the notification of the United Kingdom (UK) decision to withdraw from the European Union (EU) on 29 March 2017, the EU and the UK have made progress on the terms of an orderly withdrawal of the UK from the EU. Nevertheless, negotiations are stalled on a number of important issues and therefore, it cannot be excluded that on 29 March 2019 the UK may leave the EU without an withdrawal agreement, a transition deal and the framework for future EU-UK relations (‘hard Brexit’).

Aim

This in-depth analysis examines from a legal point of view what would be the institutional, budgetary and policy implications for the EU in the case of a hard Brexit.

KEY FINDINGS

• The institutional implications of a hard Brexit will not be different than those inevitably following the withdrawal of the UK from the EU. However, the implications of Brexit differ from one EU institution to another.
• The withdrawal of the UK produces immediate effects on the European Council, the Council of the European Union and the European Commission – with UK representatives no longer sitting in the European Council and the Council and the British European Commissioner ceasing his function on the day of Brexit.
• The withdrawal of the UK produces diluted effects on the European Parliament and the European Court of Justice – as the principles of representative democracy and good administration of justice require that MEPs elected in the UK should be allowed to conclude their mandate until the next European Parliament elections, and that British-appointed judges and advocate generals at the ECJ should remain in their judicial posts until the end of their terms.
• The withdrawal of the UK produces hardly any effect on the European Central Bank as the UK is not part of the Eurosystem.
• The budgetary implications of a hard Brexit would be highly disruptive. If the UK were to leave the EU without a withdrawal agreement, this would pose major challenges to the discharge of the EU budget for the two remaining years of the current MFF 2014-2020.
• The EU however will have a stronger legal case against the UK in asking it to honor its financial commitments. Since at the conclusion of the first phase of the Brexit negotiations the UK government has eventually acknowledged its duty to continue to contribute to payments jointly undertaken in the framework of the current MFF, a subsequent about-face by the UK would constitute a breach of good faith, which could be sanctioned under international law.
• The policy implications of a hard Brexit would be important – particularly for trade and for security and justice cooperation.
• If the UK were to leave the EU without an agreement that maintains it closely connected with the EU single market and customs union, commerce between the EU and the UK would be governed by WTO rules. Free movement of goods, services, people and capital would come to a halt and customs controls would need to be set up at the border between the EU and the UK to levy tariffs and verify rules of origins and standards of imported and exported goods.
• If the UK were to leave the EU without an agreement that maintains it closely connected to the EU AFSJ, criminal justice and law enforcement cooperation would bounce back to classical instruments of international law. Mechanisms of police and judicial mutual assistance like the European Arrest Warrant and the sharing of information would be immediately suspended, and much more cumbersome instruments like extradition requests and so-called ‘letters rogatory’ would have to be used to secure cooperation in the field of security.
• A hard Brexit would pose vital challenges particularly for the Republic of Ireland, and the EU should identify in advance legal tools to address this contingency.
• On the side of trade, the EU could invoke the frontier traffic exception under Article XXIV(3) GATT to declare the whole territory of Northern Ireland as a border region to the EU customs union, thus excluding the need for a customs border. But this solution raises problems and could lead to abuses.
• On the side of justice and security, the EU could try to replicate vis-à-vis the UK some of the cooperation agreements it has put in place with other non-EU countries. But this solution faces limits, notably connected to compliance by third countries with EU human rights law, and the jurisdiction of the ECJ.
• A framework of future relations would represent a better scenario than a hard Brexit for EU-UK cooperation on commerce and trade, as well as security and justice.

 

Federico Fabbrini is Full Professor of European law at the School of Law & Government of DCU and the Principal of the Brexit Institute. He holds a PhD in Law from the European University Institute and previously had academic positions in the Netherlands and Denmark. He regularly engages with EU institutions and national governments, and has presented his work to among others, the European Parliament, the European Central Bank, the European Commission, the European Court of Justice and the UK Financial Conduct Authority.