Deal or No Deal: Brexit on the Horizon
On June 23, 2016, citizens across the United Kingdom (UK) narrowly voted to leave the European Union (EU), the economic and political union involving 28 European countries that allows free trade, and movement of people to live and work in whichever country in the bloc they choose. The UK had been a member since 1973 and if it leaves as planned on October 31, 2019 (at time of publication), it would be the first member state to withdraw from the EU. Brexit — as the referendum has become commonly known as a portmanteau for “British exit” — has since been the hot topic of rigorous political debate and a prime source of economic uncertainty in Europe.
With deadlines passed, deals deadlocked, and a revolving door of Prime Ministers and Parliament members seeking to bring the chaotic process to an end, the UK currently faces a crucial decision with the EU: to leave the union with — or without — a “deal.” No matter what comes to pass, one thing remains certain: Britain and the Eurozone will never be the same.
Three Long Years
Following the 2016 EU referendum, in which 51.9 percent of voters decided for the UK to leave the EU, Prime Minister David Cameron resigned and Teresa May took over, ushering in the formal Brexit process.
May triggered Article 50 of the Lisbon Treaty, which formally kicked off a two-year clock for the UK to officially leave the EU on March 29, 2019. But after a series of difficult negotiations, snap elections, and growing concerns over the Irish border, the two-year Brexit timeline clock became infeasible. As such, May was twice forced to ask EU leaders to extend the deadline for Britain’s “divorce,” moving the current date for departure to October 31, 2019.
Prior to the October 31 deadline, UK lawmakers must determine whether or not to negotiate what the country’s relationship with the EU will look like after leaving the union. This remains the biggest stumbling block in Parliament: agreeing on a deal with the EU, which would likely include set agreements over customs, trade, and immigration — or exiting without such a deal in place.
What if There’s a Deal?
Once a Brexit deal has been approved, a nonbinding political declaration will be in place to define the relationship between the EU and UK moving forward. The deal would cover rights of EU citizens in the UK as well as the rights of UK citizens in the EU, an agreement over the Irish border, and the amount of money the UK owes the EU for its divorce. Proposed Brexit deals, many of which have been rejected by Parliament, could also include wider agreements over issues such as free trade.
What if There’s No deal?
Without a deal in place, the UK will leave the EU on October 31 with no agreements about work and trade. This could greatly impact the lives of those living in both the UK and EU, with the possibility of border checks being re-introduced, and transportation and trade coming to a standstill. In worst-case scenarios, the UK risks border delays, hikes of food and fuel prices, medicine shortages, and widespread political unrest.
Contingency exercises outlined by the British government highlights the major issues posed at the Irish border. Specifically, Northern Ireland, which is part of the UK, and the Republic of Ireland, which would remain part of the EU, wish to avoid a hard border that would recall the tumultuous political struggles the island encountered during “The Troubles” for three decades in the late 20th century (1968-1998). But without a deal in place, no resolution between the EU and UK means Northern Ireland and the Republic of Ireland may be forced to reckon with the return of a hard border.
What Happens Now?
In early September, lawmakers voted to block a no-deal Brexit plan to prevent current Prime Minister (at time of publication) Boris Johnson from pulling the country out of the EU without a plan in place. As a result, Johnson is now required to seek a three-month Brexit extension (until January 2020) unless he manages to get a Brexit deal through Parliament by October 19 or unless Parliament has voted to leave the EU without a deal beforehand.
Johnson called for new elections in an attempt to get as many voters to decide to leave the EU with his version of Brexit (without a deal) or Parliament’s approach to continue with the negotiations process, but was ultimately rejected by Parliament.
Unsurprisingly, what happens next is anyone’s guess. Whether an agreement is reached or a no-deal Brexit is carried out, the repercussions of the “leave” vote will continue to reverberate for years to come.