The path to Brexit

Britain is nearing the final straight of Brexit. Reconnecting to my first letter on Brexit, the challenge that seemed impossible in February as not become more explicit now. Today, at least, some kind of schedule and succession of events is foreseeable. At 11 pm local time on March 29 2019, the UK is scheduled to leave the bloc. Still has to be decided what will happen on Brexit day, this is to say, what kind of agreement the UK will strike with the other EU member states.

Let's see what the possible succession of events that need to happen in the next five months is:

October 17-18 EU Summit. The importance of this meeting was set in September when President Macron declared that an agreement on the backstop for the Irish border had to be agreed. Today Theresa May announced that the UK would ask for more time, an extended transition period for trying to break the gridlock in the negotiation between UK and EU just on the Irish border issue. (The transition period, is said, would retain many of the features of UK EU membership, but without voting powers). While this news seems to be OK for Brussels, naturally infuriated the Eurosceptic Conservative MPs.

October 29: UK Budget. UK chancellor Philip Hammond has moved the budget date to fit in with the Brexit negotiation process. The budget itself is a big test for Mrs May’s government. Northern Ireland’s Democratic Unionist party, which keeps her minority administration in power, has threatened to vote it down if it does not get a deal on Brexit to its liking. Such a move could bring general elections. It is therefore unlikely that Theresa May will make significant proposals before having secured the vote of the budget.

November: Emergency EU Summit. The EU had been considering convoking a special summit in November to wrap up a Brexit deal. Because of the impasse in negotiations, it did not announce such a summit at its meeting in October.

December 13-14: Last European Council of 2018. It is the last practical date seen for signing an agreement on Brexit between the UK and the EU. For an agreement to be reached, the withdrawal treaty needs to be backed at an EU summit by a supermajority of leaders of member states (representing at least 20 of the other 27 EU countries and 65 per cent of their population).

Late December 2018 - Early January 2019. Once the UK and the EU have reached an agreement on the withdrawal from the EU and outlined the nature of their future relationship, the deal must go through a "meaningful vote" in the UK. The Parliament will decide on the agreement.

January-February 2019: If the Parliament vote for the agreement, this will become law, a very significant piece of legislation in the UK.

Of course, if the Parliament vote against or no agreement is reached in December, these days will be even more stress and anxiety.

Until March 2019: EU ratification. Before the Brexit deal can take effect, it must also be approved by the European Parliament in a plenary vote.

March 29 2019 - Brexit day. At this moment, serious trade talk would begin between the UK and the EU. These are not possible while the UK is still a member state.

December 31 2020 - End of the transition period? The transition period should end at this time although is now clear that the UK will, most likely, ask for an extension of this deadline

December 31 2021 - End of the Backstop and definition of the Irish border issue.

Mid 2020. Advanced technology will facilitate a plan to speed up customs clearances. The implementation of this plan will continue well into the year 20'.

At least the technology for this is on track (BBC article). Sometimes starting solving problems from the end is the best solution.

Well see

Best regards

Federico Polese

6 views0 comments

Recent Posts

See All

The (ephemeral) value of passive management

• In 2020, as in the last decade, those who invested by reproducing the performance of the indices were rewarded even if they were exposed to high volatility • The markets were once again fueled by li