web analytics

Progress during Phase 1 Negotiations with the EU

A Joint Report, consisting of 15 pages covering 96 points, has been released by the teams involved in the negotiations between the UK and EU regarding the UK’s withdrawal from the EU. The EU has demanded that discussions are held in 2 phases with no progression to the 2nd phase of negotiations (primarily the future relationship between the UK and the EU) until topics defined under their Phase 1 agenda have been concluded.

Both parties have reached agreement in principle in the areas under consideration in the first phase of negotiations, with the UK having conceded to all the demands from the EU.

  • Protecting the rights of UK citizens in the EU and EU citizens in the UK
  • A framework for addressing the unique circumstances in Northern Ireland
  • The financial settlement

Citizens Rights

The role of the CJEU in maintaing Citizens Rights remains unclear. Does the following indicate that the UK will have to refer to CJEU rulings for 8 years after the UK leaves the EU?

Page 6, Paragraph 38

In the context of the application or interpretation of those rights, UK courts shall therefore have due regard to relevant decisions of the CJEU after the specified date. The Agreement should also establish a mechanism enabling UK courts or tribunals to decide, having had due regard to whether relevant case-law exists, to ask the CJEU questions of interpretation of those rights where they consider that a CJEU ruling on the question is necessary for the UK court or tribunal to be able to give judgment in a case before it.

As regards the European Health Insurance Card (EHIC) scheme, it looks as though this will only apply to UK citizens who are in an EU country (and vice-versa) on the “specified date of leaving” and will not be carried forward in the future when UK citizens are travelling abroad.

Page 5, Paragraph 29,

Rules for healthcare, including the European Health Insurance Card (EHIC) scheme, will follow Regulation (EC) No 883/2004. Persons whose competent state is the UK and are in the EU27 on the specified date (and vice versa) – whether on a temporary stay or resident – continue to be eligible for healthcare reimbursement, including under the EHIC scheme, as long as that stay, residence or treatment continues.

Ireland and Northern Ireland

The UK confirms the committment that NI will remain an integral part of the UK.

Page 7, Paragraph 44

The United Kingdom continues to respect and support fully Northern Ireland’s position as an integral part of the United Kingdom, consistent with the principle of consent.

The UK hope to ensure that there is no hard border created between Northern Ireland (NI) and Ireland following discussions between the UK and the EU in the next Phase of negotiations. The wording in this Joint report has been carefully constructed to ensure acceptance by representatives of NI and the Irish Government. “full alignment with those rules of the Internal Market and the Customs Union” would appear to come into effect if there is no agreement reached during Phase 2 negotiations.

Page 8, Paragraphs 49,50

49. The United Kingdom remains committed to protecting North-South cooperation and to its guarantee of avoiding a hard border. Any future arrangements must be compatible with these overarching requirements. The United Kingdom’s intention is to achieve these objectives through the overall EU-UK relationship. Should this not be possible, the United Kingdom will propose specific solutions to address the unique circumstances of the island of Ireland. In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all island economy and the protection of the 1998 Agreement.

50. In the absence of agreed solutions, as set out in the previous paragraph, the United Kingdom will ensure that no new regulatory barriers develop between Northern Ireland and the rest of the United Kingdom, unless, consistent with the 1998 Agreement, the Northern Ireland Executive and Assembly agree that distinct arrangements are appropriate for Northern Ireland. In all circumstances, the United Kingdom will continue to ensure the same unfettered access for Northern Ireland’s businesses to the whole of the United Kingdom internal market.

Financial Settlement

The UK and EU have agreed a methodology to determine the financial settlement demanded by the EU.

  • The UK will contribute to, and participate in, the implementation of the Union annual budgets for the years 2019 and 2020 as if it had remained in the EU
  • Outstanding commitments at the end of 2020, Reste à liquider (RAL) 1. The UK will contribute its share of the financing of the budgetary commitments outstanding at 31 December 2020 (RAL).
  • Liabilities, contingent liabilities and corresponding assets. The UK will contribute its share of the financing of the Union’s liabilities incurred before 31 December 2020 except for liabilities with corresponding assets and any assets and liabilities which are related to the operation of the budget and the Own Resources Decision

Many questions remain unanswered with no specific figure mentioned or when payment(s) will be demanded.

Will the UK will still receive the rebate from its “GNI based Own Resources” gross contributions?

It is interesting to note that the EU have already specified their own repayment program of 12 YEARS! regarding repayment of funds (paid-in capital) due to the UK from the European Investment Bank. Perhaps the UK should suggest a long repayment period of small amounts each year over a similar time period.

European Investment Bank.
The UK will provide a guarantee for an amount equal to its callable capital on the day of withdrawal. The EU will take 12 years to return the UK’s share of the paid-in capital (3.5 billion euro) at a rate of 300,000,000 euro for the first 11 years and a final payment of 195,903,950 euro in year 12, 2019 – 2030.

There is no mention of a share of the accumulated profits of the EIB which are worth a total of around 44.5 billion euro (cfr. https://politick.co.uk/the-uk-and-the-european-investment-bank-eib/ ) and would provide a share to the UK worth around 7.0 billion euro. In fact, the report specifically excludes any further remuneration.

Page 13, Paragraph 77

77. Apart from these reimbursements, the EIB will not make any other payment, return or remuneration on account of the withdrawal of the UK from the EIB or on account of the provision by the UK of a guarantee.

There is also mention about paying towards the relocation of the EU Agencies currently based in London. (Typical of the EU attempting to screw as much money as possible from the UK)

Page 14, Paragraph 86

86. The Commission welcomes the UK Government’s offer to discuss with Union Agencies located in London how they might facilitate their relocation, in particular as regards reducing the withdrawal costs.

At least the final item does mention that the report is dependent on an overall agreement on the UK’s Withdrawal and a framework for the future relationship between the UK and the EU.

Page 15, Paragraph 96

This report is put forward with a view to the meeting of the European Council (Article 50) of 14 and 15 December 2017. It is also agreed by the UK on the condition of an overall agreement under Article 50 on the UK’s withdrawal, taking into account the framework for the future relationship, including an agreement as early as possible in 2018 on transitional arrangements.

The document can be found in it’s entirety at

Joint report on progress during phase 1 of negotiations under Article 50 TEU on the UK’s orderly withdrawal from the EU

With a copy that can be downloaded from HERE (pdf)

What’s next?

This report summarises the key points which can be used in a formal Withdrawal Agreement when the UK leaves the EU.

It appears highly likely, that following publication of this report, there is a strong possibility of the negotiations being allowed (by the EU) to progress to the next Phase (2) of negotiations where the future relationship between the UK and the EU will be decided (by the EU) discussed. One of the important discussions during the next Phase will, of course, be a Future Trade relationship between the UK and the EU.

References

In order to understand some of the details mentioned in the section of the Financial Settlement there is an interesting post

The UK’s Brexit bill: what are the possible liabilities?

which was written in March 2017 and contains a description of some of the terms used in the Report.

Bruegel is a European think tank that specialises in economics.

Notes:

  1. What is the “reste à liquider” (RAL)?
    The RAL is the sum of outstanding commitments, commitments agreed to but that have not yet translated into payments. Long term budgetary commitments lead to the existence of amounts of commitments remaining to be paid out (RAL). The phenomenon is similar to when a contract is signed, e.g. to build a house, the commitment is being made, but the construction company will only be paid according to the progress of the work.

Documents related to Brexit from the EU Parliament

I came across a number of interesting documents related to Brexit that have been produced following various Events, Workshops and Committee meetings held by the European Parliament. They provide interesting reading and background to positions held by the EU regarding the Brexit negotiations and the future relationship between the UK and the EU after Brexit.

Workshops are organised by the policy departments and enable members to put questions to and exchange views with experts on subjects associated with parliamentary business or subjects of current interest. They are not necessarily held in public but may be held during a committee meeting.

Hearings
A committee is permitted to organise a hearing with experts, where this is considered essential to its work on a particular subject. Hearings can also be held jointly by two or more committees. Most committees organise regular hearings, as they allow them to hear from experts and hold discussions on the key issues.

Implications of ‘Brexit’ for the EU agri-food sector and the CAP

This workshop was held on 9 November 2017 and discussed the issue of the impact of Brexit on the EU’s agri-food sector and on the CAP.

http://www.europarl.europa.eu/committees/en/events-workshops.html?id=20171114WKS01121

It looked at 3 specific aspects of Brexit:

  1. Impact on the CAP budget
  2. Impact on EU-UK agricultural trade flows and
  3. Possible transitional arrangements in agriculture in light of the future EU-UK relationship.

A number of documents were produced:

Possible impact of Brexit on the EU budget and, in particular, CAP funding – Jacques Delors Institute

http://www.europarl.europa.eu/cmsdata/132065/PPT_CAP_Financing_EN.pdf (pdf)

EU – UK agricultural trade: State of play and possible impacts of Brexit – CIREM-CEPII

http://www.europarl.europa.eu/cmsdata/132066/PPT_EU-UK%20Trade_EN.pdf (pdf)

Possible transitional arrangements related to agriculture in the light of the future EU – UK relationship: institutional issues – Trinity College Dublin

http://www.europarl.europa.eu/cmsdata/132067/PPT%20Template%20-%20A%20MATTHEWSrev.pdf (pdf)

The implications of Brexit on the Irish border

During the 28 November meeting of the Committee on Constitutional Affairs, a workshop was held on ‘The implications of Brexit on the Irish border’. This workshop was organised by the Policy Department for Citizens’ Rights and Constitutional Affairs.

http://www.europarl.europa.eu/committees/en/events-workshops.html?id=20171123WKS01141

Brexit and Ireland – Legal, Political and Economic Considerations (pdf)

Smart Border 2.0 – Avoiding a hard border on the island of Ireland for Customs control and the free movement of persons (pdf)

PowerPoint Presentation on Smart Border 2.0 (ppt)

UK Withdrawal (‘Brexit’) and the Good Friday Agreement (pdf)

PowerPoint Presentation on ‘UK Withdrawal (‘Brexit’) and the Good Friday Agreement’ (ppt)

Hearing on the Impact of Brexit on Aviation – 11 July 2017

High level representatives in the field of aviation were invited to speak in the next TRAN Committee meeting on the topic of Brexit. Stakeholders discussed ways in which the UK’s departure from the EU is likely to impact the aviation industry from the perspective of the airports, the airlines and the tourism industry as a whole. The presentations were followed by a question and answer session with Members

http://www.europarl.europa.eu/committees/en/events-hearings.html?id=20170705CHE02242

Hearing on the impact of Brexit on aviation (docx)

Kevin Toland, Dublin Airport (pdf)

Michael O’Leary, Ryanair (pptx)

Ralf Pastleitner, TUI Group (pdf)

Exchange of Views with Associations of Citizens on Brexit

held on 21 Nov 2017

http://www.europarl.europa.eu/committees/en/events-other.html?id=20171123EOT01882

Statement from British in Europe (pdf)

Statement from the 3 million (pdf)

Brexit and the issue of the jurisdiction

During the AFCO meeting of 21 November, the Committee heard from two experts during the workshop ‘Brexit and the issue of the jurisdiction over the Withdrawal Agreement and the future relationship agreement between the EU and the UK’ organised by the Policy Department for Citizens’ Rights and Constitutional Affairs.

http://www.europarl.europa.eu/committees/en/events-other.html?id=20171123EOT01881

The Settlement of Disputes arising from the UK’s withdrawal from the EU (pdf)

Professor Steve Peers presented a briefing on “Jurisdiction upon and after the UK’s withdrawal: the perspective from the UK constitutional order” (I couldn’t find a copy of this – politicker)

MEP’s press release, Brexit: progress but not enough

It is often unclear who is actually driving negotiations on the EU side of the debate. Could it be MEPs making all the decisions ?

A letter was recently sent (29 November 2017) from the Brexit Steering Group (BSG), a committee of the European Parliament, to the EU negotiator (Michel Barnier ?) and stated that, in their opinion, there had not been sufficient progress in the Brexit neogtiations so far.

Amongst other comments, it outlines the position of the BSG on Citizens Rights, that

…the CJEU must remain the sole and competent authority for interpreting and enforcing European Union law and not least the citizens’ rights provisions of the withdrawal agreement…

and

On the NI/Ireland border issue to

….ensure, by means of continued regulatory alignment between the North and the South, there is no hardening of the border on the island of Ireland ….

Which are clearly 2 of the major points of contention.

In its entirety, the letter stated:

Dear Michel,

The Brexit Steering Group today met with the chairs and coordinators of the European Parliament’s Committees on Employment and Social Affairs, Legal Affairs and Civil Liberties, Justice and Home Affairs, to assess the current state of negotiations concerning citizens’ rights.

As you know, the European Parliament has made it very clear from the beginning that the protection of the rights of citizens must be absolute and beyond any doubt.

We clearly recognise that progress has been made since the start of the negotiations, from a system based exclusively on UK immigration law to a system that reflects the preservation of EU rights.

Despite this, considerable problems remain, which pose a fundamental question as to whether sufficient progress has been achieved. These issues have already been underlined by the Brexit Steering Group in its Statement of 8 November on citizens’ rights. While all of them remain important, we wish to call your attention to the following issues.

First, we cannot accept any differentiated treatment between core family members. Bold steps should be taken now to prevent this from happening and to overcome the current deadlock. In particular, we should avoid creating a situation in which children of EU citizens born from different relationships would find themselves having a different legal status from that of children born before Brexit, therefore resulting in a possible split of families.

Second, on the administrative procedure required in order to achieve so-called “settled status”, we take note of the progress made in the last weeks, but can only reiterate that this must be an automatic, cost-free process in the form of a simple declaration, placing the burden of proof on the UK authorities to challenge the declaration.

It is also crucial for us that solid safeguards are put in place to ensure the proportionality of the process and to protect and support EU citizens, including the most vulnerable.

Finally, we can only again reiterate our position that in order to guarantee the coherence and integrity of the EU legal order, the CJEU must remain the sole and competent authority for interpreting and enforcing European Union law and not least the citizens’ rights provisions of the withdrawal agreement.

It is with great concern that we note that negotiations in this respect are stalled, and even some progress reversed.

Concerning Ireland, the BSG believes that the UK must make a clear commitment, to be enshrined in a form which would guarantee its full implementation in the withdrawal agreement, that it would protect the operation of the Good Friday Agreement in all its parts, ensure, by means of continued regulatory alignment between the North and the South, there is no hardening of the border on the island of Ireland and that there is no diminishing of the rights of people in Northern Ireland.

We trust that you fully share the above concerns and will continue working to address them in negotiations in the coming days, as their satisfactory resolution will determine Parliament’s assessment of whether sufficient progress has been achieved.

Yours sincerely,

Guy Verhofstadt

on behalf of the Brexit Steering Group

http://www.europarl.europa.eu/news/en/press-room/20171129IPR89108/brexit-progress-but-not-enough

Details of the Brexit Steering Group

Working under the aegis of the Conference of Presidents, the Brexit Steering Group’s purpose is to coordinate and prepare Parliament’s deliberations, considerations and resolutions on the UK’s withdrawal from the EU.

The Deputy Secretary-General supports the work of the Brexit Steering Group.

The Brexit Steering Group consists of the following MEPs

Guy Verhofstadt, Group of the Alliance of Liberals and Democrats for Europe
http://www.europarl.europa.eu/meps/en/97058/GUY_VERHOFSTADT_home.html

Elmar Brok, Group of the European People’s Party (Christian Democrats)
http://www.europarl.europa.eu/meps/en/1263/ELMAR_BROK_home.html

Roberto Gualtieri, Group of the Progressive Alliance of Socialists and Democrats in the European Parliament
http://www.europarl.europa.eu/meps/en/96892/ROBERTO_GUALTIERI_home.html

Philippe Lamberts, Group of the Greens/European Free Alliance
http://www.europarl.europa.eu/meps/en/96648/PHILIPPE_LAMBERTS_home.html

Gabriele Zimmer, Confederal Group of the European United Left – Nordic Green Left
http://www.europarl.europa.eu/meps/en/28248/GABRIELE_ZIMMER_home.html

Danuta Hübner, Group of the European People’s Party (Christian Democrats)
http://www.europarl.europa.eu/meps/en/96779/DANUTA+MARIA_HUBNER_home.html

It is also worth noting that any withdrawal agreement at the end of the negotiations between the UK and the EU will need to win the approval of the European Parliament.

How much does the UK owe the EU

It’s a complete nightmare trying to work out the current contributions to the EU budget by the UK and money spent in the UK from the EU budget. The question of payments to the EU arises yet again as all sorts of figures are being bandied about regarding the price demanded by the EU for payment by the UK, in order to leave the EU – a leaving tax if you like.

The deadlock over the price to be paid is being used by the EU to block discussions on a future trading relationship (although Article 50 does state …. the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union).

The payment could also be interpreted as the cost of buying a trade deal with the EU.

In order to work out how much (if anything) the UK should pay the EU in order to leave the EU it is again necessary to look at current payments to and from the EU. I noticed an interesting interpretation of the contributions broken down on a country by country basis provided by the EU Parliament using actual data from 2015.

http://www.europarl.europa.eu/external/html/budgetataglance/default_en.html

We think it is important that EU taxpayers have a clear view of how EU money is spent and where it comes from. This tool has been designed to show this. It will help you to better understand the EU’s long-term budget, also known as the Multiannual Financial Framework, and how the situation in your country compares to the rest of the EU.

The figures are taken from the European Commission financial report for 2015

How much did the UK contribute to the EU Budget ?

How much did the EU spend in the UK ?

From this data, does it appear that the net amount paid to the EU was in fact around 21 billion Euro in 2015?

In 2015 the UK contributed €18.21 billion to the EU budget (after a rebate of €6.08 billion) and also collected €4.27 billion in customs and farm trade duties on the EU’s behalf, of which it retained 25%, as an administrative fee

There is more information regarding the “Exit Bill” in a Research Briefing from the House of Commons library available from

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8039

with the full report at

http://researchbriefings.files.parliament.uk/documents/CBP-8039/CBP-8039.pdf (pdf)

European Union (Withdrawal) Bill Committee Stage 1-3

The committee stage of the Bill to repeal the European Communities Act 1972 and make other provision in connection with the withdrawal of the United Kingdom from the EU ( European Union (Withdrawal) Bill) has begun in the House of Commons.

This process started on Tuesday 14 November (Day 1) then Wednesday 15th November (Day 2) and continued on Tuesday 21 November 2017 (Day 3). Further debate is scheduled for Monday 4 December (Day 4), Wednesday 6 December (Day 5), Tuesday 12 December (Day 6), and Wednesday 13 December (Day 7) with the conclusion of consideration in Committee taking place on Wednesday 20 December (Day 8).

All documents associated with the Bill can be found on the Parliament web-site at

https://services.parliament.uk/bills/2017-19/europeanunionwithdrawal/documents.html

Thus far, the bill has proceeded with no major amendments.

Complete details of the debates covering the first 3 sittings can be found at

https://services.parliament.uk/bills/2017-19/europeanunionwithdrawal/stages.html

css.php