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Hamburg and Brexit  General Information

Perplexed by Brexit? See this page for a general Brexit overview and to learn about its expected effects on Hamburg. 

Motivbild Brexit: Puzzleteile

General Information

After the majority of the British population had voted for leaving the European Union in a referendum held on 23 June 2016 and the British parliament had given its required approval on 14 March 2017, the former Prime Minister Theresa May on 29 March 2017, formally informed the President of the European Council Donald Tusk about UK’s intention to leave the EU.  As a consequence, Article 50 of the Treaty on European Union was invoked starting a two-year exit process which formally ends all the legal ties between the EU and the UK.

On 14 November 2018, EU´s chief negotiator Michel Barnier announced that the EU and the UK had mutually agreed on a draft withdrawal agreement.

The withdrawal agreement was rejected in the British House of Commons three times in total, most recent being on 29 March 2019.

A substantial point of criticism pertained to the so-called “Backstop” clause, which should had come into effect if no alternative arrangement regarding the border between Northern Ireland and the Republic of Ireland is to be found within the transition period (until the 31st of December 2020, once renewable for another two years). According to the clause, a “hard” border between the EU and the UK should be prevented by establishing a common customs territory governed by the European Union’s customs rules. Moreover, Northern Ireland should continue to operate as per the regulations of the EU single market.

In further votes on 13 and 14 March 2019 the British parliament opposed a “no-deal exit”, a second referendum and approved a postponement of the initial Brexit date. At the EU special summit held on 10 April 2019, the EU27 and Mrs. May agreed to extend the Brexit-date until 31 October 2019.

On 24 May 2019, Theresa May, who had been under constant pressure, announced that she will resign as the leader of the Conservative Party on 7 June 2019. Boris Johnson, the former foreign minister, became her successor on 23 July 2019. As the new leader of the Conservative party, he was therefore nominated as the new British Prime Minister. Already in his first parliamentary speech, Johnson called for a renegotiation of May´s negotiated withdrawal agreement with the EU.

The EU and the United Kingdom agreed on 17. October 2019 on a partially new package of a withdrawal agreement. One major change to the withdrawal agreement concerns the Northern Ireland Protocol. The "Backstop" rule has been deleted. It is now envisaged that Northern Ireland will remain part of the customs territory of the United Kingdom but that EU customs rules will de facto apply. This means that Northern Ireland retains unhindered access to the EU internal market and relevant EU internal market rules relating to goods in Northern Ireland remain dynamically applicable. The Northern Ireland Protocol also provides for a democratic say for the Northern Ireland Parliament: Four years after the Protocol enters into force, which will be at the end of the transition period, Parliament must vote by simple majority for the rules to continue to apply. If the vote is in favour, there will be a four-year period of continued validity. If the vote is negative, the rules will continue to apply for two years and then cease to apply.

Another amendment concerns the Political Declaration on future relations with the EU, in particular future economic relations. The basis is now explicitly a free trade agreement. A "free trade area" and the possibility of a closer relationship are no longer mentioned. Due to geographical proximity and close economic ties, robust and comprehensive agreements for fair competitive conditions should be reached ("level-playing field").

On 21 October 2019, the British government submitted the implementing legislation for the domestic ratification of the Withdrawal Agreement Bill to the House of Commons. On 22 October 2019, the Johnson government initially achieved an interim success, i.e. approval to refer the law to the committees. At the same time, however, there was a rejection of the government's ambitious timetable for the legislative process. The government then announced that it would pause the ratification process.

On 28 October 2019, the EU27 agreed to extend the UK's withdrawal period until 31 January 2020.

On 29 October 2019 the British House of Commons decided on new elections for 12 December 2019. With the election the conservatives gained 47 seats and now have an absolute majority in the House of Commons with 365 mandates. The Labour Party lost around a quarter of its mandates in the election and now has 203 MPs. 

On 20 December 2019 the British House of Commons voted 358 to 234 for the United Kingdom’s exit from the EU on 31 January 2020. At the same time, Prime Minister Boris Johnson introduced the relevant ratification law for the Withdrawal Agreement negotiated with the EU. The law states that an extension of the transition period envisaged until end of 2020 is excluded.

What happens next? 

There are currently several different possible scenarios for the relationship between the European Union and the United Kingdom resulting from these negotiations:

  1. The most likely one is that the EU and the UK are ratifying the amended exit agreement until 31st of January 2020. Thereafter, an interim arrangement would come into effect according to which the UK will leave the EU. However, it would be treated as a member of the EU, for the most part of the transition period (until the 31st of December 2020, once renewable for another two years). The negotiations on the future relationship will continue and be concluded based on the joint political declarations during the transition period.
  2. If the UK leaves the EU without any transitional arrangement in this case, legislative and administrative contingency measures have been and are being taken at EU, federal and state level. They should ensure the smooth functioning in the areas of residence, of social affairs, (including transitional arrangements concerning social, pension and health insurances), of transport and freight transport (further information can be found on www.hamburg.com/brexit under the respective category). These contingency measures are not to be understood as replacement of a permanent regulation, but it should mitigate the most severe consequences of a hard Brexit for all persons affected.
  3. The withdrawal of the UK will be postponed either by extending the Brexit date consensually in accordance with Article 50, or it will be suspended if the UK unilaterally withdraws the notice of resignation. 

The future relationship between the EU and the UK are outlined in the co-called “political declaration” which formed part of the negotiations so far. It is highly probable that a free trade agreement would be sought which would facilitate the access to the European single market without being its member.

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