The BREXIT Bulletin: The dates have changed, but the circumstances haven't
It's 11 April, and the UK is still in the EU. Indeed, it is likely to remain in the EU for some months yet.
There are some who have said all along that the UK would actually never leave, since untangling the legal and political bonds which have built up over 46 years would just be too complex - yet the UK government has always pledged to obey the referendum result.
Last night the Brexit can was kicked yet again further down the road, but this time rather far - over six months down the road in fact, to 31 October. This is the new "29 March 2019" and replaces "10 April 2019" as the new line in the sand. If the UK (or the EU for that matter) has failed to ratify the Withdrawal Agreement by this date, no-deal is the consequence.
That the EU just wants shot of the UK was also evidenced by the provision that, if by some miracle the Withdrawal Agreement is ratified before 31 October, the UK can leave the EU on the first day of the following month. No-one wants this dragging on any longer.
And then there is the additional complexity of the EU elections. Holding the vote in the UK is anathema to some, and for good reason, since it could well lead to the highest ever turnout for the EU elections in the UK, and perhaps parties standing on a Remain platform end up doing particularly well.
With revoking Article 50 still a possibility, albeit one that would result in political suicide for whoever presses the button, there are three options left open for the UK:
- Leave under the terms of the Withdrawal Agreement
- Leave with no deal
Option 1 has to be the most likely option of these three, though it is still unclear where Theresa May will get the additional votes from. No-deal has, at least for now, been ruled out by both the EU and the UK, which leaves Remain as another outside bet.
Revocation, it is worth remembering and as referenced by the ECJ, is not like pushing the pause button - it involves pressing stop, eject, and never use again. Revocation means remaining in the EU for the foreseeable future.
So in this scenario, when will the UK "brexit"?
A lot can happen in six months - for example, another referendum - but if you are careless enough to want to place bets on anything Brexit-related, the "smart" money must be on an exit either on 31 October, or possibly a few months later (another extension can still be requested by the UK). This would involve the deal being agreed by London as well as the European Parliament (possibly the newly re-elected version) in the next six month period.
Another option could be a softer Brexit, one that goes against Theresa May's red lines of leaving the Single Market and the Customs Union. This option would also solve much of phase 2 of the negotiations "the future relationship" and would mean that business would be able to continue trading "frictionless" (relatively) . But as long as May stays as Prime Minister, this, too, looks rather unlikely given her strict adherence to the red lines.
As we wrote to clients today, the dates have changed, but the circumstances haven't. There is still no sign of how the UK will resolve this, and whilst the EU has shown patience until now, as President Macron was suggesting, this will soon be in short supply.
In this context, businesses would be highly recommended to continue putting in place their contingency measures for a potential no-deal on 1 November.
If you have any suggestions about the Brexit Bulletin or want to find out more about a specific aspect of Brexit, please do let us know. Please visit the Grayling Brussels website, follow us on Twitter @TheEULobby, and don't forget to check out our Brexit Papers.
If you'd like to subscribe to the Brexit Bulletin or Grayling's other intelligence and information newsletters, please click here.
This week's content:
The view from Brussels