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Brexit in perspective article 50 notification

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Navigating the Article 50 procedure against a backdrop of elections

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Brexit in perspective article 50 notification

  1. 1. Brexitinperspective Episode3:ThetriggeringofArt.50 AninsideviewfromBrusselsandLondon March 2017
  2. 2. © Brunswick 2017 | 2 What has happened?  The UK Government has formally notifiedthe EuropeanCouncilof its intention to withdrawfrom EU membershipunder Article50 of the LisbonTreaty. Thisprocessstartsan officialcountdownto the UK leaving the EU in two years’time.  The EuropeanParliamentand EuropeanCommissionwill now feed into EU negotiatingguidelines,but the remaining 27 Member States(EU27) will actasthe ultimatepower broker. What does the lettersay?  The UK Government reiterates a desirefor parallelwithdrawal and futurerelationshipnegotiations.  The UK will upholdall EU membershipobligationsuntil it is formallyoutsidethe EU (i.e.29 March 2019)  The UK wantsa deep and special partnership ineconomicand security cooperation.The implicitlinking up of thesetwo issuessuggestsa negotiatingstrategywhichleverages the UK’s security prowessagainstits desirefor open accessto EU markets.  In acknowledginga “need to discussa fairsettlement of the UK’s rightsand responsibilitiesasa departing member state”the Government acceptsthere will be a bill to be paid on Brexit.  The UK calls fora collaborative approach to minimizedisruptionand provideasmuchcertainty aspossible to “investors,businesses and citizens in both the UK and EU27.” What is missing?  The LancasterHousespeechindicated the UK wouldseek some sortof associatemembershipof the EU CustomsUnion.Thisappearsto have been dropped,in acknowledgement thatit wouldrequire oversightfrom the EuropeanCourtof Justice.  There is no mention of immigration,a cornerstoneof UK Government rhetoric thusfar.EU leadershavesaid thatfree movement rightsfor their citizenswill be a key red line. This suggestsa Government shiftin thinkingfrom reassuringdomestic votersaboutthe merits of Brexit,to gearing up for negotiationswith the EU27. What are the nextsteps?  The buildup to these guidelines has been ongoing sincethe UK referendum,and formal processes shouldtakeplacequickly. The Member Stateswill adopt someshort guidelineson April 29,on whichthe EuropeanCommissionwill make recommendations. Afterthis,we can expect Member Statesto adopt avery long and detailednegotiatingmandate for the Article50 TaskForce.  If everythingproceedsat a reasonable pace,the firstnegotiationmeeting will takeplacein mid-June,followed by subsequentmeetings (or “rounds”)on a monthlybasis. How long will it take?  In totalwe expectthere to be 14-16 roundsbefore agreement isreachedin October2018, when the final withdrawal agreementratification process begins.Everythingshould concludewithina two-yeartimeframe.  There is an optionto extend the two- year withdrawalperiod,but it requiresunanimousagreement from all EU Headsof State and Government and appearsunlikely. On 29 March, nine months after the Britishelectorate called for a withdrawal from the European Union, the BritishGovernment formally notifiedits intentionto invoke Article50 of the Lisbon Treaty. The stage is now set for a two-year divorce proceeding, and – if there is mutual support for it – further negotiations on a newrelationship withthe European Union. This two-year negotiationperiod willbe one of high politics, focusing on financial liabilities and citizens’rights in the early stages and sectoral agreements later on. Businesswillneedto use this periodto strengthen tiesin national capitals, in preparation for sector by sector negotiations.
  3. 3. © Brunswick 2017 | 3 What was the tone?  In the monthsfollowingthe referendum result,hardrhetoric has been usedon both sidesof the Channel – culminating, onthe UK side, with the LancasterHousespeech outliningthe UK Government prioritiesfor the withdrawal.  Today’s notificationletter strikesa muchsoftertone.The letter balancesa need to appearconciliatory to EU leaderswhile preparinga British audiencefor the realities of whatwill be a compromisefinal agreement.  TheresaMayis clearin the letter that she wantsto concludeboth the exit agreement and futurerelationship withintwo years.Thisissomething the EU leadershaveconsistentlyruled out. Domestic considerations  The letter envisagesa return of powersnot justto Westminster,but to the UK devolvedinstitutions ina move to temper pressurefrom nationalist parties aroundBritain. The Europeanresponse?  DonaldTusk,EuropeanCouncil President, reiteratedthatneither side will “win” from Brexit.Instead,work mustnow begin on divorce proceedingswhichminimize disruptioncausedby the decisionfor citizens,businessesand Member States.  Unsurprisingly, theEuropean Parliament’sdraftresolutiontakesa hardview on EU principles and sequencing.  The key aim for the EU27is to preservethe integrityof the EU – at the moment member statesremain united on this. What will be discussed?  Earlyroundswill focuson settling contributionsto the EU budget,status for EU citizenslivingin the UK and viceversaand on the EU’sexternal borders(particularly onthe island of Ireland).Once agreement hasbeen reachedon these,sectoraldiscussions can start. Who is at the tablefrom the EU side?  The Article50 TaskForce,headedby Michel Barnier,will leadthe formal negotiations,with representatives from both the Member State ministerialbody (Council Presidency) and the Presidencyof the European Council(whichreportsto the Headsof EU27Governmentsand States) keeping tabson what ishappening. Are both sideson the same page at present?  The perceptiongap between UK Government and EU institutional thinkingis wide,but narrowing.The UK wants to negotiatewithdrawaland a new agreement simultaneously, somethingEU leadershaveruled out. Barnier’slimitedmandateand the UK’s insistenceon parallel negotiationscouldstilllead to an early collapseof talks, withthe UK walking awayfrom the negotiationtable. Politicalpressureand economic necessityimpliesthatall partieshave an incentiveto reachagreement. The compromisecouldbe a limitedUK paymentinto the EU budget and informalparallel negotiationson the futurerelationship. Boththe UK Government and EU leaders have outlined a needto prioritise certainty and minimise disruption for investors, business and citizens throughout the process. Bothparties have assessed that there is a politicaland economic necessity in reaching an agreement, reflected by the soft tone of the letter. May’s more conciliatory and realistic letterwillbe receivedmuch better in Brusselsand European capitals than the Lancaster House speech, giving hope that negotiations can proceed amicably. The key disagreement willbe over the sequence of negotiations, and whethera future or interim relationship – crucial to business and trade – can be negotiated at the same time as the withdrawal.
  4. 4. Brunswick Group Brexit in perspective © Brunswick 2017 | 4 Article 50 Timeline NavigatingtheArticle50procedureagainsta backdropofelections 9-10 March 29 March UK notifies intent to withdraw from EU (Art.50) EU 28 Informal Meeting “Conclusion of a political reflection on the future of the EU” (Rome); 60th Anniversary of the Rome Treaty May UK local elections 15 March Netherlands general election 23 April First round of French Presidential election 7 May Second round of French Presidential Elections 11/18 June French legislative elections September German Federal elections EU Level EU 27 UK European Council Meeting (Brussels) 25 March 28 January Finnish Presidential elections 9 September Swedish general elections April/May Hungarian legislative elections TBC October Czech Presidential elections TBC October Irish Presidential elections 29 March Presumed date Brexit takes effect 2017 2019 EULevelUKEU27 Circulation of revised EU draft guidelines 19 April 4 April European Parliament Plenary (Strasbourg) - Adoption of Brexit resolution 26 April Meeting of EU Ambassadors (EU27) European Council Meeting (excl. UK) - Adoption of negotiating guidelines 29 April 22-23 June European Council (Brussels) Withdrawal agreement negotiations October TBC Czech legislative elections December Review of deal by lawyer linguists 19-20 October European Council (Brussels) 14-15 December European Council (Brussels) 2018 September European Commission presents outcome of negotiations to the European Council October EU27/UK Brexit deal needs to allow six months for ratificationWithdrawal agreement negotiations 31 March EU 27 issue draft negotiating guidelines May European elections 30 March UK Government White Paper on Great Repeal Bill presented May (tbc) Introduction of Great Repeal Bill (Queen’s Speech) 29 March (tbc) Great Repeal Act enters into force
  5. 5. Brunswick Group Brexit in perspective © Brunswick 2016 | 5 EUinstitutions EuropeanCouncil:FormationofEU MemberStatesHeadsofStateand Government.Theymeetatleastfour timesayearandlargelysetthe directionforfutureEUintegration. EuropeanCouncilPresident:Donald Tusk(Term–2.5Yearsrenewedin March2017foranotherterm) Sherpa:Personalrepresentativeofa HeadofMemberStateorGovernment. CounciloftheEuropeanUnion:Co- legislatorforEuropeanlegislation, madeupofministersfortheEU MemberStates.Theytypicallysitin formationswhichcorrespondtheir portfolios.Headedby:Rotating MemberState“Presidency”ofsix monthterms.ThePresidencyroleis largelyoneofcoordinationandagenda setting.The“Presidency”country coordinatesalllevelsofactivitywithin theCounciloftheEU. COREPER:Decisionsmadebynational ministersintheCounciloftheEU formationsarepreparedbygroupsof nationalgovernmentofficials(the PermanentRepresentatives Committee).Theydivideintotwo “ranks”ofnationalofficials. COREPERII:Meetingof ambassadorswhocovertopics relatingtoforeignaffairs,justiceand homeaffairsandeconomicand financialaffairs. COREPERI:Meetingofdeputy ambassadorswhodealwithallother areasofEUpolicymaking. EuropeanCommission:TheEU’scivil servicewhichdraftsandenforcesEU legislation. CollegeofCommissioners:The EuropeanCommission’spolitical leadershipduringafiveyearterm.It compromisesonePresident,onefirst Vice-President,fourVice-Presidents andtwentyoneotherCommissioners withapolicyportfolio.Thereisalsoa HighRepresentativewhorepresents theEUinternationally. EuropeanCommissionPresident: ThePresident‘sroleistodetermine thepoliticaldirectionoftheEuropean Commission,organizetheCollegeof Commissionersandallocateportfolios toitsothermembers.Current President:Jean-ClaudeJuncker EuropeanCommissionVice- Presidents:Vice-Presidents are Commissionerswhohavea coordinationrolebetweentheworkof Commissionerswithportfoliosthat closelyinterlink. EuropeanCommissioner: A memberoftheCommissionCollege. Theyareassignedresponsibilityfora specificpolicyareaandoneormore Directorates-General(DGs)bythe EuropeanCommissionPresident. Directorate-General(DG):A EuropeanCommissiondepartment akintoanationalministry. Director-General: The most senior civil servant position heading each Commission ministry. Appointments to this position require Member State backing and are typically political in nature. Cabinet: The political staff of the individual Commissioners who set the aims to which the Commission DG thenworkstowards. European Parliament: Directly electedchambermadeupof751MEPs from all 28 Member States. These national delegates then form EU-wide political Groups which are made up from across the EU. Current President:AntonioTajani(EPP,IT) Article50TaskForce:The“EU”side ofthetableinBrexitnegotiations. Madeupof politicalfiguresandcivil servantsfromtheEuropean Commission,andrepresentativesfrom MemberStategovernments. CouncilWorkingGrouponBrexit: Formalformationfornational representativesfromtheEU27 MemberStatestodiscussspecificsof Brexitnegotiationsonarollingbasis. UKinstitutions PrimeMinister:HeadofGovernment (and“Firstamongstequals”inthe Cabinet) Cabinet:Acollectivedecisionmaking bodyformedofthemostsenior Governmentministers. CabinetOffice:Civilservice department,whichsupportsthePrime MinisterandCabinetofministers. SecretaryofState:ACabinetMinister inchargeofaGovernment department. PermanentSecretary:Mostsenior civilservantinaGovernmentministry. TheyreporttotheSecretaryofState. DirectorGeneral:Aseniorcivil servantwhoreportsdirectlytothe PermanentSecretary. ThePermanentRepresentationof theUnitedKingdomtothe EuropeanUnion(UKREP):A diplomaticmissionfromtheUKtothe EuropeanUnionandrepresentsthe MemberStateinCouncilWorking Groups.UKREPnowreportsdirectlyto DExEU.UKPermanent Representative:SirTimBarrow Glossary
  6. 6. Brunswick Group Brexit in perspective © Brunswick 2017 | 6 Brunswick Group OfferingatrulyEuropeanperspective Brunswick is an advisory firm specializingin critical issues and corporate relations. Brunswick is an advisory firm specializing in critical issuesand corporate relations. A global partnership with 24 offices in 14 countries. Founded in 1987, Brunswick has grown organically, operating as a single profit centre – allowing us to respond seamlessly to our clients’ needs, wherever theyare in theworld. Our trade expertise includes partners across our global network to ensure clients engage with key stakeholders at every level across countries and institutions. Our teams work closely with colleagues worldwide to deliver international intelligence, advice and campaigns. For more information contact our Brexit team PhilippeBlanchard ManagingPartner,HeadofOffice,Brussels SumeetDesai Partner,London ElizabethAmes Associate,London Brussels Philippe Blanchard France Jerome Biscay Milan Alessandro Iozzia London Simon Sporborg Vienna Ronald Schranz Stockholm Annette Brodin Rampe Berlin Ulrich Deupmann Munich Janos Goenczoel Frankfurt Christian Weyand LinusTurner Partner,Brussels NickBlow Partner,Brussels ContactBrunswickBrussels BrunswickGroup 27 Avenue des Arts 1040 Brussels Belgium + 32 22 35 65 10 brusselsoffice@brunswickgroup.com www.BrunswickGroup.com ContactBrunswickLondon BrunswickGroup 16Lincoln’sInnFieldsLondonWC2A 3EDUnitedKingdom +442074045959 londonoffice@brunswickgroup.com www.BrunswickGroup.com

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