Blog Post

The UK / EU separation: how fast does it happen?

Up until the British rebuff on 23 June 2016, the European Union had always been in expansion mode, also known in EU parlance as enlargement. The UK vote to leave the EU marks the first-ever case of this process being reversed.

By: Date: June 25, 2016 Topic: European Macroeconomics & Governance

In the past, there have been a number of situations where a country could be outside the union legally, but inside politically. It was common practice in the early 2000s to invite ex-Communist candidate countries to attend votes in the Council of the EU in anticipation of their formal accession in early 2004. Yet in this case, a country, the United Kingdom, is inside the EU legally, but now firmly outside of it politically. From now on, the EU will routinely hold substantial intergovernmental discussions without the UK being represented, even though the formalities of membership will be maintained in parallel.

An additional layer of complexity derives from the fact that two component parts of the UK, Northern Ireland and Scotland, seek to remain politically inside the EU even though, for the moment, they remain legally tied with England and Wales. Nicola Sturgeon, Scottish First Minister, declared immediately after the Brexit vote, that “Scotland voted overwhelmingly to remain in the EU” and that “Scotland faces the prospect of being taken out of the EU against our will. I regard that as democratically unacceptable. (…) Starting this afternoon, [Scottish] ministers will be engaged in discussions with key stakeholders – particularly in the business community – to emphasise that as of now we are still firmly in the EU. (…) Scotland has voted to stay in the EU – and (…) I intend to discuss all options for doing so.”

In a strictly legal sense the referendum of June 23 is binding neither on the UK nor on the EU. In the UK, Parliament has supreme authority, but it is highly unlikely to reverse the mandate delivered by the voters. In the EU, the procedure for separation is set out in some detail in Article 50 of the Treaty on the European Union (TUE), and places the responsibility for initiating the process in the hands of the relevant member state’s government: ”A Member State which decides to withdraw shall notify the European Council of its intention.”

Article 50 TUE further implies that the government’s notification to the EU sets a clock ticking, which incentivizes the parties to find an agreement on the terms of separation within the following two years. If no such agreement is found after those two years, and in the absence of unanimity of all EU member states to extend the negotiation period, the EU membership of the member states is terminated automatically, which would be so disruptive for the country concerned that any sane government is expected to work hard to find mutually acceptable terms.

A key question for the UK, therefore, is this: when does its government notify its decision to withdraw under Article 50 following the vote on June 23? Prime Minister David Cameron explained in February at the House of Commons that “the British people would rightly expect that to start straight away” after a vote to leave. In his resignation speech, however, Mr Cameron made it clear that he would leave that notification on the to-do-list for his successor, probably not before the end of summer. “In my view we should aim to have a new prime minister in place by the start of the Conservative Party conference in October,” he declared. “A negotiation with the European Union will need to begin under a new prime minister and I think it’s right that this new prime minister takes the decision about when to trigger Article 50 and start the formal and legal process of leaving the EU.”

By contrast, a joint statement of the heads of all relevant EU institutions on June 24 asked for the negotiation to start quickly: “We now expect the United Kingdom government to give effect to this decision of the British people as soon as possible, however painful that process may be. Any delay would unnecessarily prolong uncertainty. We have rules to deal with this in an orderly way. Article 50 of the Treaty on European Union sets out the procedure to be followed if a Member State decides to leave the European Union. We stand ready to launch negotiations swiftly with the United Kingdom regarding the terms and conditions of its withdrawal from the European Union.”

Among other concerns, the EU institutions’ leaders want the consequences of leaving to be clear and unambiguous to all. They understandably fear that a membership referendum may be pressed in other member states on the questionable premise that exit can be almost painless, as the UK Leave campaign has argued. They thus desire to establish the actual precedent as quickly as possible. It is too early to prejudge the outcome of such negotiation, of course. One may expect the EU stance to be not punitive, but unforgiving.

In practice, there is little the EU can do now to force an acceleration of the notification process. Article 50, as quoted above, leaves no room for interpretation as to how the process will be triggered. So the EU will have to wait until the domestic political consequences of the vote are sorted out in the UK before the actual business of negotiation can actually start. Just as during the referendum campaign, the EU institutions and all other member states must for the moment remain the spectators of a dramatic development in which they have a huge amount at stake.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.

Read article More on this topic More by this author
 

Blog Post

New EU insolvency rules could underpin business rescue in the COVID-19 aftermath

Corporate bankruptcies are set to rise in the context of COVID-19. EU countries should speed up adoption of recent insolvency reforms and, in addition, offer consistent treatment to restructuring finance.

By: Alexander Lehmann Topic: Finance & Financial Regulation Date: March 24, 2021
Read article More on this topic More by this author
 

Blog Post

Financial services: The Brexit dust begins to settle

The phase of greatest Brexit-related uncertainty for the European financial sector ended on 1 January. Although too early to discern more than the broadest contours of the future landscape, it is increasingly apparent that London will be less dominant than before.

By: Nicolas Véron Topic: Finance & Financial Regulation Date: March 11, 2021
Read about event More on this topic
 

Past Event

Past Event

The economics of biodiversity

Join us in conversation with Sir Partha Dasgupta and Frans Timmermans to mark the publication of The Economics of Biodiversity: The Dasgupta Review

Speakers: Sir Partha Dasgupta, Maria Demertzis, Frans Timmermans and Guntram B. Wolff Topic: Energy & Climate Date: March 3, 2021
Read article Download PDF More on this topic
 

Working Paper

COVID-19 credit-support programmes in Europe’s five largest economies

This paper assesses COVID-19 credit-support programmes in five of the largest European economies, and examines how countries have dealt with trade-offs raised by the programmes.

By: Julia Anderson, Francesco Papadia and Nicolas Véron Topic: European Macroeconomics & Governance Date: February 24, 2021
Read article More on this topic More by this author
 

Blog Post

The double irony of the new UK-EU trade relationship

The Trade and Cooperation Agreement signed between the European Union and the United Kingdom goes against six decades of UK efforts to avoid being economically disadvantaged in Europe. Tracking the evolution of the EU-UK relationship over the last 60 years can help in understanding this.

By: André Sapir Topic: European Macroeconomics & Governance Date: January 12, 2021
Read article More on this topic More by this author
 

Podcast

Podcast

The future of EU-UK relations (again!)

At the eleventh hour of negotiations, what will the future of the EU-UK relationship look like?

By: The Sound of Economics Topic: European Macroeconomics & Governance Date: October 13, 2020
Read about event More on this topic
 

Past Event

Past Event

The Sound of Economics Live: The future of EU-UK relations (again!)


At the eleventh hour of negotiations, what will the future of the EU-UK relationship look like?

Speakers: Maria Demertzis, Giuseppe Porcaro, André Sapir and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: October 13, 2020
Read article More by this author
 

Opinion

The EU’s Opportunity to Turn Its Markets Toward the Future

Meeting the fiscal demands of COVID-19 will require the European Union to borrow on capital markets more than ever, and for European pension funds and households to look more widely for ways to build their nest eggs safely. The EU should take the challenges of the pandemic and Brexit as a chance to get its financial infrastructure house in order.

By: Rebecca Christie Topic: European Macroeconomics & Governance, Finance & Financial Regulation Date: July 16, 2020
Read article More by this author
 

Podcast

Podcast

One rule to ring them all? Europe's financial markets after Brexit

What effect will brexit have on Europe's financial markets?

By: The Sound of Economics Topic: European Macroeconomics & Governance, Global Economics & Governance Date: June 26, 2020
Read article More on this topic More by this author
 

Opinion

A tale of two pandemics

The two narratives briefly examined here cast light on different aspects of the EU in the times of Covid-19. Euroskeptic nationalists typically propagate claims of EU failure but have been rather subdued during the pandemic as mainstream governments have taken over their trademark policy of closing borders to foreigners. Nonetheless, the grip on power of several pro-EU mainstream leaders, including President Emmanuel Macron in France, Prime Minister Conte in Italy and Prime Minister Pedro Sanchez in Spain, remains tenuous.

By: Michael Leigh Topic: European Macroeconomics & Governance Date: June 23, 2020
Read article More on this topic More by this author
 

Opinion

How will COVID-19 impact Brexit? The collision of two giant policy imperatives

The United Kingdom left the European Union on Jan. 31, 2020. Now, the U.K. must decide whether and how to extend the transition period, currently set to expire at the end of 2020.

By: Rebecca Christie Topic: European Macroeconomics & Governance Date: May 19, 2020
Read article Download PDF
 

Policy Brief

Rebooting Europe: a framework for a post COVID-19 economic recovery

COVID-19 has triggered a severe recession and policymakers in European Union countries are providing generous, largely indiscriminate, support to companies. As the recession gets deeper, a more comprehensive strategy is needed. This should be based on four principles: viability of supported entities, fairness, achieving societal goals, and giving society a share in future profits. The effort should be structured around equity and recovery funds with borrowing at EU level.

By: Julia Anderson, Simone Tagliapietra and Guntram B. Wolff Topic: Energy & Climate, European Macroeconomics & Governance Date: May 13, 2020
Load more posts