Brexit in perspective Episode 1: Keep calm and negotiate An inside view from Brussels January 2017 Europe is edging closer to an event once unthinkable in post-war politics – the possible retreat of arguably the continent’s greatest triumph. With the unilateral triggering of Article 50, expected in March 2017, the United Kingdom would However unprecedented, 2016: The year of revolt. present itself as the the mechanics for 2017: The year of first Member State to withdrawal are now uncertainty? declare its intention underway. The road will Postulating outcomes over the next to withdraw not be easy for either party. few months highlights that uncertainty It remains to be seen remains the elephant in the room for membership of the many factors in a Brexit negotiation. whether the motto ‘united Europe is hosting numerous elections European Union. in diversity’ will hold true in its Member States over the course of over the course of any 2017. These range from local elections to elections for President in all parts of future negotiations but, as Europe; North to South, East to West. things stand, the European Of key importance will be votes in institutions are holding France and Germany, the traditional firm on a resolute position ‘driver states’ of the European Union. towards an exit partner Just like in the British referendum vote on EU membership, and the recent that is setting no clear Presidential elections in the United negotiations objective. States, there is a question mark over There are to be no likely outcomes in almost all of these popular votes. negotiations before the Whereas a solid lead in the polls formal notification of traditionally meant guaranteed wins, Article 50 of the Treaty on today’s political climate seems like European Union (TEU), and shakier ground. once negotiations start the What we can be sure of however is European institutions will that, whether in March or later on, the UK Government will trigger Article 50. work to preserve the There is then a clear process for this interests of the remaining withdrawal of EU membership, with Members. Decades of equal the expectation of a very strict – and tight – timetable, unless the parties partnership amongst agree to extend it as set out in European nations are set to paragraph 3 of Article 50. be unravelled as discussions pit the United Kingdom against the remaining Member States. © Brunswick 2016 | 2 Brunswick Group Brexit in perspective The official “Brexit” procedure UK Supreme Court Case: Triggering Article 50 Who can trigger Article 50? OR Prime Minister Westminster Donald Tusk European Council The UK formally notifies the European Council of its intention to withdraw from EU membership (“triggers Article 50”) Phase 1: March 2017 ? European Council to adopt broad, principle based guidelines for Article 50 framework (which can be revised if needed) Article 50 Task Force Representative of the Council Presidency will also sit in the At the recommendation of the negotiating team European Commission, the Council will open negotiations and nominate the Union negotiator Michel Barnier Phase 2: March – June 2017 Phase 3: June – August 2017 European Council formally nominate Barnier as chief negotiator and agree procedural working relationship between institutions Phase 4: Guy Verhofstadt will act as “observer” for the August 2017 – October 2018 European Parliament Negotiations begin with the UK (topics Interinstitutional cooperation include the EU budget, financial settlement, acquired rights of citizens A dedicated Council The Article 50 Task Force (European Working Group will Commission) will keep the EU27 and the and business and borders) provide guidance for the European Parliament informed. negotiator and EU’s Representatives of Donald Tusk will be negotiating team on a European Council present in a supporting role. regular basis Phase 5: October 2018 – March 2019 European Council Phase 6: March 2019 - ? European Parliament, European Council and the UK to agree to any Article 50 OR Agreement or decide to extend the negotiations. The agreement process Transitional arrangement Hard Brexit? depends on whether it is an EU or “mixed” and new relationship competency agreement. © Brunswick 2016 | 3 Brunswick Group Brexit in perspective Intelligence update Immediately following the 1/ European Commission Netherlands and Ireland, Nordics and Baltics, Southern periphery: but these announcement of the UK The wider European Commission will groups will likely shift and change referendum result, the feed input into the Article 50 Task depending on the issue being Force through heads of European discussed. European Council took Commission departments (so-called charge. The day after the Director-Generals) and specific “single referendum, a Council Task contact points”, one additional official 2/ Member States for each Directorate-General Force was created to plan (department). (European Council; Council the upcoming negotiations. of the European Union) On 6 December, the European It has been agreed that a Commission’s Chief Brexit negotiator, The EU27 Member States will set up a specific ‘Brexit’ Working Michel Barnier, delivered his opening dedicated committee (Council Working Group) of dedicated officials from their Group will be set up but press statement on the preparations underway at EU level for any Permanent Representations (which act only start after formal notification of Article 50 by the UK. He as Member State footprints in notification of Article 50 by took the time to outline the process Brussels) to cover Brexit matters. Chief Negotiator Barnier will then regularly the United Kingdom. In which would dictate the future negotiations. update and discuss issues with this September, European Working Group over the course of the Commission President According to Barnier, if the UK notifies Article 50 negotiations; and Sherpas Article 50 in March 2017, then (who inform the Heads of Government Jean-Claude Juncker agreement must be reached on the and States). announced the creation of leaving arrangement by October 2018. This date would then allow for On 15 December, the European an Article 50 Task Force to ratification by the EU27 (depending on Council President Donald Tusk made a lay the ground work for which competences the agreement statement after a meeting of the EU27. impending negotiations to covers), the UK Parliament and with Tusk outlined that the Union the consent (a simple majority) of the negotiating team will have a begin. Former Internal European Parliament before the March representative of the rotating Council Market Commissioner, 2019 deadline. Presidency, and that representatives of European Council President Donald Frenchman Michel Barnier, Any future transitional arrangement Tusk will have a supporting role in the is to head operations with a would then depend on whether the negotiations themselves. There will German trade expert EU27 think that it would be useful to also be broad political guidelines, and pursue one. Their decision will depend more detailed directives, drafted by the deputy, Sabine Weyand, on what sort of relationship the UK Member States to give the Union guiding him through the asks for after “Brexit” (and what the negotiating team guidance over the process. The Union other EU27 are prepared to give). course of negotiations. negotiating team will then Any post-Brexit agreement will have to be concluded as with a third country. be Commission led (by This means that new negotiations Barnier) with involvement cannot start until the final Brexit from Council process is completed (i.e. after March 2019). Outside the timing issues, we representatives. can expect a degree of balkanisation – Germany, France, Visegrad, © Brunswick 2016 | 4 3/ European Parliament that Brexit talks will be completed The largest political Group, the EPP, is before the 2019 European Parliament known to be less enthused about Guy Verhofstadt was appointed by the elections. upcoming negotiations – particularly European Parliament’s political Groups Members coming from non-Eurozone The European Parliament’s elections to report back on the negotiations once countries. They fear that without a they get underway. This will be a for President (a role with increased strong non-Eurozone voice like the UK powers over the years) will come up restricted dialogue between alongside them, their clout risks being Verhofstadt and the political Group for grabs in January 2017, which may reduced in EU debates. heads. The Parliament’s far right EFDD see some shifting in alliances to try and Group (Europe of Freedom and Direct secure the top spot. Expectations so far The resolution will be an important Democracy) nominated Nigel Farage point to the centre-right EPP Group indicator of what the European as its own Brexit observer, causing candidate, Italian Antonio Tajani, Parliament will expect in any final some political complications. taking the position. The European discussion (it has a veto over any Parliament is set to adopt a resolution agreement) but ultimately it will only On 15 December, it was agreed in Spring 2017 which is expected to influence the European Commission’s between the institutions that feed into the negotiating guidelines recommendations to the Member Verhofstadt will have access to the offered by the European Council. States about what to mandate in same briefings as the Council sherpas. Issues such as the UK’s external discussions. It is unlikely the Member The United Kingdom’s “Brexit borders (particularly with Ireland) are States will take kindly to any Minister” David Davis, was recently in expected to feature. There are perception they are being held to Strasbourg to discuss negotiations however some indications that ransom by the European Parliament. with the Members of the European tensions between political Groups are Parliament. During Davis’ talks with not as unified over the Brexit issues as Verhofstadt the official line stood for, Verhofstadt’s rhetoric implies. © Brunswick 2016 | 5 Brunswick Group Brexit in perspective Assumptions about the Article 50 process The “negotiation period” under implications. Even within the Article 50 will not take up the full 2 mainland UK, many constitutional years.