The Brexit agreement with the European Union gives companies more time – nothing else

Crisis cannot be prevented

The Brexit deadline delays the blowout – but the tenth day will come

Thursday, 10/08/2023 | 12:26

The Cabinet of Great Britain has approved the negotiated settlement with the European Union on Brexit. But events have escalated since then, British Prime Minister May is under tremendous pressure in her party, and a vote of no confidence is imminent.

But what did the deal announced by the negotiating teams on November 14th do for the companies? From a legal point of view, this is a small victory over politics, because in Great Britain it has always been eager to present Brexit as a political event. On the part of the European Union, on the other hand, the legal question was important because all points must comply with European Union law – also in order to preserve European unity.

The transition period is at the end of 2020

The draft agreement, now nearly 600 pages long, is in line with the EU negotiators’ approach: on both sides of the English Channel, citizens and the economy in particular are given a similar transition period to put their future relations on a legally secure footing. Although the United Kingdom will leave the European Union on March 30, 2019, EU law will continue to initially apply to Great Britain. As long as the current agreement remains in effect, companies should not expect any major legal changes until December 31, 2020.

After that, however, Britain and the EU will differ legally. Among other things, companies should expect to reintroduce tariffs and new regulatory barriers. Although Great Britain has declared that it will make border control easier, for example with new technologies, this is not possible without financial resources and planning. And on the more pressing question of a future border opening between the Republic of Ireland and Northern Ireland, there is still no technically credible solution. For companies, at least one thing is certain: The smooth trading we’ve known for over 25 years will end. However, it is unclear when Day X will happen.

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Given the planned transition period, no one can seriously expect that future relations between the British Isles and Europe will be completely resolved within a few months. Therefore, the earlier deadline at the end of 2020 is also a bit of a gamble for both sides. Extending the transition is absolutely necessary.

Parliament must approve the agreement

In the British House of Commons, the lower house of Parliament, a simple majority now decides on the draft exit agreement that has been approved by the Cabinet. The first members of the resistance have already spoken out prominently. If the House of Commons smashes the draft, the drama moves on to the next round. For example, it would be conceivable to renegotiate the Withdrawal Agreement or Prime Minister May’s resignation, which would not necessarily involve new elections. And the future of the UK will then be in the hands of Tory members and, almost more worryingly, in the hands of some 70,000 party members with an average age of over 65. New elections or even a second referendum on Brexit would also be possible, but not expected due to the currently uncertain political majority.

It is still possible to imagine the economic nightmare scenario of a hard and uncontrolled Brexit, which will automatically take effect at the end of March 2019 without a deal and permanently damage all supply chains, and the political change that will be required to get out of the European Union. , any. Withdraw the British Declaration of Withdrawal. Therefore, even with Brexit, businesses must still plan and prepare for emergency measures.

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