The Brexit showdown

Few days only and UK will

theresa may finger

Theresa May

trigger the article 50 of the Lisbon treaty, activating the formal Brexit procedure and officially starting the negotiation with the EU counterparts. We’ve been through it earlier, but the context has deeply changed. Meanwhile the government released the famous White Paper to share a priority list on Brexit top issues. Then major observers, like the Economist Intelligence Unit, reshaped their forecasts on economic performance: GDP is expected to grow in 2017 by +1,2% yearly. A relevant increase compared to the earlier forecast of +0,6%.

The document confirms the interest in active dialogue with the EU institutions and the UK companies during the negotiation, assuring a full parliamentary control on the common interest sensitive issues, even if the positions in the negotiate will be keep undisclosed. The Brexit procedure is then explained: there will be a Great Repeal Bill to convert all the existing European laws into domestic ones and modify them easily. Even if the negotiation process details will be undisclosed there will be a final vote bey both the houses of the Parliament.

It’s also very important the confirmation that all the projects approved in the European Structural and Investment Fund will be kept active by a complete government financial coverage. Institution, universities and companies as well will keep on scouting the funding opportunities available in the EU Commission. Treasury will also provide funds to agriculture covering the expected amounts in the Common Agricultural Policy until 2020 included.

net migration

A quick glance to UK net migration across years…

On immigration and access/visa controls we have several important issues, while on free trade the attitude is quite open to negotiation. UK government stresses how the trade balance with the EU market is mainly characterized by EU exports to the UK, while British exports have a wider range and international destinations. There will be plenty of target markets to avoid negative impact on UK sales abroad. The UK government won’t struggle for remaining into the EU single market, trying to negotiate an easy access of goods and services abroad with a specific free trade agreement or a customs agreement with EU institutions. It’s very interesting that UK won’t pursue a pre-existing model, like the Norway status or other ones, but will aim to reach a brand new agreement tailored on UK specific and unique needs. It’ll be crucial to understand the actual relationship thet the negotiations will shape, because current regulations involve 27 EU countries and 50 extra EU countries which signed specific trade agreements with EU institutions.

uk trade balance

…and the current trade balance with EU markets

Polls are also important: the big match is on immigration that drove relevant vote trends during the Leave or Remain campaign. The future of the City depends on the capability to hire international talents without many boundaries, like Sadiq Khan mayor of London often stated. However, only a small share of the 3 millions EU citizens currently living in UK are empl

sadiq khan

Sadiq Khan, mayor of London

oyed in the financial industry. Recent polls show how the great majority of Britons would agree to a residence permit to all EU citizens currently living in UK if there’s a mutual right recognized to UK citizens living in EU countries. While among those who voted leave there’s a strong interest in it, with a tie on the whole negotiation process on this issue.

It’s complicated, but everything will begin to have a more definite shape from the next month. It’ll be a crucial challenge, with strong negotiating positions in several issues more or less balanced. Hoping that the populist winds won’t shake further more the EU destiny, waiting for the Dutch election results next days…

[header picture by David Dibert via Unsplash]


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