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Speech by Michel Barnier at BusinessEurope Day 2018

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Speech by Michel Barnier at BusinessEurope Day 2018

Brussels, 1 March 2018

Ladies and Gentlemen,

2018 is an important year. Not only for BUSINESSEUROPE – congratulations on your 60th anniversary – but also for the European Union. As President Tusk told you this morning, 2018 should be a year when the EU makes progress on many fronts:

  • deepening the Economic and Monetary Union
  • building a European defence in coherence with our allies
  • modernising the rules for a Digital Single Market
  • addressing Europe’s social dimension more strongly
  • to name but a few.

    2018 is also the year when we need to conclude the negotiations with the United Kingdom on its orderly withdrawal and define the framework for our future relationship. The outcome will have an impact on millions of citizens and many of your businesses.

    So, ladies and gentlemen, it is a great pleasure for me to speak to you at the end of your day. Thank you, Madam President, Emma MARCEGAGLIA, and Markus BEYRER for this invitation to continue our dialogue about Brexit.

    On 23 June 2016 the British people made a choice to leave the EU.

    We regret the decision but we respect it and now we have to implement it.

    Our responsibility is to make sure that the UK’s withdrawal is orderly. Because a disorderly withdrawal would be a very bad outcome. And I recommend that everyone, on both sides, measures the consequences of a “no deal”.

    So we have worked on this orderly withdrawal, step by step, since the opening of negotiations in June last year.
    In December, we reached agreement on our three priorities: citizens’ rights, the need to avoid a hard border on the island of Ireland, and the financial settlement. We are now in the second stage of the negotiations, and we have three tasks to pursue in parallel. Let me illustrate this with a slide.

    First, we need to draft the Withdrawal Agreement, which should deal with all consequences of the UK’s departure. For business, important separation issues include customs procedures, the movement of goods, intellectual property, public procurement, data protection and Euratom.

    Yesterday, the European Commission presented a draft text – a complete text – which we will now discuss with Member States, in close coordination with the European Parliament. We needed to publish this draft because we have to move forward. In 13 months the United Kingdom will leave the European Union. It is time to start negotiating on the basis of a legal text.

    Donald Tusk speech at BusinessEurope 2018

    An extract, related to Brexit, from the speech given by Donald Tusk at Business Europe on 1 March 2018

    Brexit is indeed, as your programme puts it, the “one big question” that hangs over everything. Yesterday, Michel Barnier published a draft Withdrawal Agreement, which will be discussed by Member States in the coming days. But I am absolutely sure that all the essential elements of the draft will be accepted by all. I would like to underline here again that Mr Barnier has the full support of both the EU institutions and the EU27.

    Recently, London has definitively confirmed its red lines, including “no customs union” and “no single market”. We acknowledge these red lines without enthusiasm and without satisfaction. But we must treat them seriously. With all their consequences. And one of the possible negative consequences of this kind of Brexit is a hard border on the island of Ireland. The EU wants to prevent this scenario. Hence, if no other solution is found, the proposal to “establish a common regulatory area comprising the Union and the United Kingdom in respect of Northern Ireland”. And, until now, no-one has come up with anything wiser than that. In a few hours I will be asking in London whether the UK government has a better idea, that would be as effective in preventing a hard border between Ireland and Northern Ireland.

    Everyone must be aware that the UK red lines will also determine the shape of our future relationship. Next week I will present the draft guidelines in this respect. Here I want to stress one thing clearly. There can be no frictionless trade outside of the customs union and the Single Market. Friction is an inevitable side effect of Brexit. By nature. Thank you

    Keynote speech by President Donald Tusk at the BusinessEurope day

    EU citizens arriving in the UK during the implementation period

    Following the release of the Draft Withdrawal Agreement by the EU, a policy paper has been released by the Home Office regarding EU Citizens arriving in the UK during the proposed implementation period.

    https://www.gov.uk/government/publications/eu-citizens-arriving-in-the-uk-during-the-implementation-period

    The UK and the EU are currently negotiating the terms of an implementation period to commence after our withdrawal from the EU. The purpose of such a period is to give people, businesses, and public services in the UK and across the EU the time they need to put in place the new arrangements that will be required to adjust to our future partnership.

    EU citizens and their family members will be able to move to the UK during the implementation period on the same basis as they do today, which will be given effect through the Withdrawal Agreement. This means that there will be no new constraints on working or studying in the UK in the implementation period. This will
    also be the case for UK nationals moving to the EU during this period.
    We will put in place a registration system for EU citizens and their family members who arrive in the UK during the implementation period and choose to stay for more than three months. This will help the Government to prepare for our future immigration framework by developing a better understanding of those coming to the
    country longer term. The registration system will be straightforward and streamlined, and compatible with EU Directive 2004/38/EC (Article 8).

    These proposals are without prejudice to Common Travel Area arrangements, including the rights of British and Irish citizens in each other’s country. Irish citizens will not be subject to the agreement and therefore will not need to register.

    The UK will offer EU citizens and their family members who arrive, are resident and have registered, during the implementation period:

    – eligibility after the accumulation of five years’ continuous and lawful residence to apply for indefinite leave to remain

    – a temporary status in UK law that will enable them to stay after the implementation period has concluded. This means that they will be able to remain lawfully in the UK working, studying or being self-sufficient for the five years needed to obtain settlement.

    – an opportunity to secure this temporary status during the implementation period, with an additional three month window for applications after the period, ensuring that there is no cliff-edge.

    – the ability for these EU citizens to be joined by family members after the implementation period on a par with British citizens

    – for those EU citizens frontier working in the UK during the implementation period, the opportunity to obtain permission to continue this after the period ends.

    These rights will be enforceable in the UK legal system. They will apply equally to all EU citizens who arrive during the implementation period, and the UK will not treat citizens of one Member State differently to those of another.

    The arrangements that will apply to UK citizens who move to EU Member States during the implementation period will be for determination by Member States and we encourage Member States to mirror the UK’s offer in their own arrangements.

    This seems to be a concession accepting the demands by the EU that the agreement covering Citizens Rights be extended to the end of the Implementation (Transition) period rather than the date of withdrawal, but does not concede to the demand for gorvernance by the ECJ (European Court of Justice).

    Draft Article 50 Withdrawal Agreement

    The European Commission has today (28 February 2018) published a draft document on the Withdrawal Agreement between the European Union and the United Kingdom as a Position Paper from the EU Commission to the EU 27.

    This document will ultimately form a Treaty between the UK and the EU

    The draft Withdrawal Agreement translates into legal terms the Joint Report from the negotiators of the EU and the UK Government on the progress achieved during phase 1 of the negotiations, published on 8 December 2017, and proposes text for those outstanding withdrawal issues which are mentioned in, but not set out in detail, in the Joint Report. It also integrates the text on the transition period, based on the supplementary negotiating directives adopted by the Council (Article 50) on 29 January 2018.

    https://ec.europa.eu/commission/brexit-negotiations/negotiating-documents-article-50-negotiations-united-kingdom_en

    The document is a basis for negotiations with the UK and reflects the EU position which has not (necessarily) been agreed to by the UK for example, on the role of the ECJ (European Court of Justice). So compromise is still required but to-date there doesn’t not appear to have been much (if any) compromise from the EU side.

    The Draft Withdrawal Agreement sets out the arrangements for the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and from the European Atomic Energy Community. It will now be discussed over the coming weeks with the Council (Article 50) and the Brexit Steering Group of the European Parliament before transmission to the UK authorities for negotiation.

    The document is almost 120 pages long and contains 168 paragraphs (Articles). It wraps up previous discussions into a formal legal text.

    There are six main parts

    • Common Provisions (articles 1-7)
    • Citizens’ Rights (articles 8-35)
    • Separation Provisions (articles 36-120)
    • Transition (Implementation) (articles 121-126 )
    • Financial Provisions (articles 127-150 )
    • Institutional and Final Provisions (articles 151-168 )

    Also included are a Protocol on Ireland/Northern Ireland and a Protocol relating to the Sovereign Base Areas in Cyprus and various Annexes, some of wich are yet to be completed.

    The role of the Court of Justice seems to continue after the Transition (Implementation) period, as in Article 4

    In the interpretation and application of this Agreement, the United Kingdom’s judicial and administrative authorities shall have due regard to relevant case law of the Court of Justice of the European Union handed down after the end of the transition period.

    I also noted a lack of Reprocity in certain articles e.g.

    Article 7 – Access to network and information systems and data bases

    At the end of the transition period, the United Kingdom shall cease to be entitled to access any network, any information system, and any database established on the basis of Union law. The United Kingdom shall take appropriate measures to ensure that it does not access a network, information system, or database which it is no longer entitled to access.

    Fair enough but should it also state

    At the end of the transition period, the EU and member states of the EU, shall take appropriate measures to ensure that it does not access a network, information system, or database which it is no longer entitled to access.

    Other points worthy of note:

  • The EU wants to extend Citizens Rights to the end of the Transition (Implementation) period rather than from the Withdrawal Date as agreed in December.
  • Transition (Implementation) Period will end on 31 December 2020. (Art 121)
  • Union law shall be applicable to and in the United Kingdom during the transition period. (Art 122)
  • Unless otherwise provided in this Agreement, during the transition period, any reference to Member States in the Union law applicable pursuant to paragraph 1, as implemented and applied by Member States, shall be understood as including the United Kingdom.(Art 122)
  • Notwithstanding paragraph 3, during the transition period, the United Kingdom may not become bound by international agreements entered into in its own capacity in the areas of exclusive competence of the Union, unless authorised to do so by the Union.(Art 124)
  • Financial – Payments by the UK to the EU

  • For the years 2019 and 2020, in accordance with Part Four, the United Kingdom shall contribute to and participate in the implementation of the Union budgets. (Art 128) [no mention of the rebate in payments]
  • The applicable Union law concerning the Union’s own resources relating to financial years until 2020 shall continue to apply to the United Kingdom after 31 December 2020, including where the own resources concerned are to be made available, corrected or subject to adjustments after that date. (Art 129)
  • Unless otherwise provided for in this Agreement, the United Kingdom shall be liable to the Union for its share of the budgetary commitments of the Union budget and of the budgets of the Union decentralised agencies outstanding on 31 December 2020 and the commitments made in 2021 on the carryover of commitment appropriations from the budgets for 2020. (art 133)
  • In particular, the United Kingdom shall contribute to its share of the Union liability for the pension and other employee benefits as it stands on 31 December 2020. Payments related to this liability shall be made when the amounts fall due. [forever] (art 135)
  • Participation in the European Development Fund (art 145)
  • Commitments toward the Trust Funds and the Facility for Refugees in Turkey (art 148)
  • The United Kingdom’s obligations from the date of entry into force of this Agreement Until 31 December 2020, the United Kingdom shall contribute to the financing of the European Defence Agency, the European Union Institute for Security Studies, and the European Union Satellite Centre, as well as of Common Security and Defence Policy operations, on the basis of the same contribution key as before the date of entry into force of this Agreement. (art 149)
  • Payments from the EU to the UK

    These payments are all staged over a number of years. Why not pay in full?

  • Article 138 – The Union shall be liable to the United Kingdom for its share of the net assets of the European Coal and Steel Community in liquidation. The relevant amount shall be reimbursed to the United Kingdom in 5 equal annual instalments.
  • Article 139 – The Union shall be liable to the United Kingdom for its share of the Union’s investment in the paid-in capital of the EIF on 31 December 2020. The relevant amount shall be reimbursed to the United Kingdom in 5 equal annual instalments.
  • Article 142 – The European Central Bank shall on behalf of the Union reimburse to the Bank of England the paid-in capital provided by it. The date of the reimbursement and other practical arrangements shall be established in accordance with Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Bank.
  • Article 143 – The EIB shall pay to the United Kingdom on behalf of the Union an amount equal to the share of the United Kingdom of the paid-in subscribed capital of the EIB as it stood immediately prior to the date of entry into force of this Agreement. The payment shall be made in accordance with Protocol No 5 on the Statute of the European Investment Bank. It shall be made in twelve yearlyinstalments. The first eleven instalments, each equal to EUR 300,000,000, shall be due on 15 December of each year starting in 2019. The balance of EUR 195,903,950 shall be due on 15 December 2030. The payments made in accordance with this paragraph shall not release the United Kingdom from its liability in accordance with paragraph 5. The obligation to pay the amount not yet paid pursuant to this paragraph shall lapse in the event that the EIB enters liquidation.
  • Article 144 – Participation of the United Kingdom in EIB group after the withdrawal date As from the date of entry into force of this Agreement, the United Kingdom, entities established in the United Kingdom and projects located in the United Kingdom shall not be eligible for new financial operations from the EIB group reserved for Member States, including those under Union mandates.
  • Disputes

  • A Joint Committee is hereby established, comprising representatives of the Union and of the United Kingdom. The Joint Committee shall be co-chaired by the Union and the United Kingdom. (art 157)
  • The Joint Committee may, at any point, decide to submit the dispute brought before it to the Court of Justice of the European Union for a ruling. The Court of Justice of the European Union shall have jurisdiction over such cases and its rulings shall be binding on the Union and the United Kingdom. (art 162)
  • Suspension of benefits during the transition period. Notwithstanding Article 126 of this Agreement, if during the transition period the Union considers that the United Kingdom has not fulfilled, during the transition period, an obligation under Union law as found in a judgment rendered pursuant to Article 126 of this Agreement in accordance with Article 258 TFEU, or that the United Kingdom does not respect an order rendered pursuant to Article 126 of this Agreement in accordance with Article 279 TFEU, and where the functioning of the internal market, of the customs union, or the financial stability of the Union or its Member States would be jeopardised as a result, the Union may suspend certain benefits deriving for the United Kingdom from participation in the internal market.(art 165)
  • The subject of the Withdrawal Agreement on Ireland and Northern Ireland is worthy of a specially devoted article and will be discussed/summarised in a separate post.

    The European Commission also produced a Fact Sheet related to this document titled:

    Questions & Answers: Publication of the draft Withdrawal Agreement between the European Union and the United Kingdom

    Brexit: EU publishes draft Article 50 Withdrawal Agreement

    The European Commission has today published a draft Withdrawal Agreement between the European Union and the United Kingdom.

    http://europa.eu/rapid/press-release_IP-18-1243_en.htm

    Press Release:

    The draft Withdrawal Agreement translates into legal terms the Joint Report from the negotiators of the European Union and the United Kingdom Government on the progress achieved during phase 1 of the negotiations, published on 8 December 2017, and proposes text for those outstanding withdrawal issues which are mentioned in, but not set out in detail, in the Joint Report. It also integrates the text on the transition period, based on the supplementary negotiating directives adopted by the Council (Article 50) on 29 January 2018.

    The draft Withdrawal Agreement consists of six parts – including introductory provisions, citizens’ rights, other separation issues such as goods placed on the market before the withdrawal date, the financial settlement, transitional arrangements, and institutional provisions – and a protocol on Ireland / Northern Ireland. This protocol operationalises the third option outlined in the Joint Report, in order to avoid a hard border on the island of Ireland. This is the fall-back solution of the Joint Report, which applies in the absence of other agreed solutions. This draft protocol does not prejudge discussions on the other two options.

    The draft Withdrawal Agreement is published online in accordance with the Commission’s transparency policy. The Commission has presented the draft Withdrawal Agreement now to first allow for time for consultation with the Member States and the European Parliament and, subsequently, for negotiation with the United Kingdom. Given that the Withdrawal Agreement needs to be agreed and ratified before the withdrawal of the United Kingdom, it is important to leave sufficient time for negotiation.

    Next steps

    The draft Withdrawal Agreement will now be sent to the Council (Article 50) and the European Parliament’s Brexit Steering Group for discussion, before being transmitted to the United Kingdom for negotiation.

    The European Council (Article 50) has called on the United Kingdom to provide further clarity on its position on the framework for the future relationship, with a view to its meeting on 22 and 23 March, where it is expected to adopt additional guidelines.

    The overall Article 50 Withdrawal Agreement will need to be concluded by the Council (Article 50), the European Parliament, and the United Kingdom according to its own constitutional requirements.

    The United Kingdom will leave the European Union on 30 March 2019.

    Background

    On 15 December 2017, the European Council (Article 50) welcomed the progress achieved during the first phase of negotiations as reflected in the Commission’s Communication and the Joint Report of 8 December 2017.

    It called on the Commission as Union negotiator and the United Kingdom to complete the work on all withdrawal issues, including those not yet addressed in the first phase, to consolidate the results obtained, and to start drafting the relevant parts of the Withdrawal Agreement. It stressed that negotiations in the second phase can only progress as long as all commitments undertaken during the first phase are respected in full and translated faithfully into legal terms as quickly as possible.

    The European Council (Article 50) guidelines of 29 April 2017 as well as the general principles and the procedural arrangements for the conduct of the negotiations established in the Council negotiating directives of 22 May 2017 continue to apply in their entirety to this phase of the negotiations.

    References

    Draft Withdrawal Agreement

    Joint Report from the negotiators of the European Union and the United Kingdom Government

    Negotiating Directives adopted by the EU Council

    The European Council (Article 50) guidelines of 29 April 2017

    European Council (Art. 50) Guidelines for Brexit negotiations, 15 December 2017

    Questions & Answers: Publication of the draft Withdrawal Agreement between the European Union and the United Kingdom

    EU negotiating documents and position papers

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