18 November 2015

A prenup check on Brexit

A prenup check on Brexit
In their classic 1981 track, the English punk band the Clash posed the question: “Should I stay or I should I go now?” Nearly thirty-five years later and the same question – once rumoured to be about the impending break-up of the band – now occupies the minds of the Brits.  


“Should the United Kingdom remain a member of the European Union or leave the European Union?” It is the question that will be put to the British voters in the referendum on EU membership, sometime in 2016 or 2017. The responses to choose from would be: “Remain a member of the European Union” or: “Leave the European Union”.  So, the UK may well vote to leave the EU. In his Chatham House speech of 10 November 2015, Prime Minister Cameron stated very clearly: “If we vote to leave, then we will leave. There will not be another renegotiation and another referendum.”


What the consequences are of walking away from the EU is a matter for the British people to consider when determining their vote. So far, most commentators have focused on what Brexit would mean for the UK. Yet the unprecedented decision of a Member State to secede from the Union will, of course, also affect the 27 other Member States and the club they remain members of. It therefore does not seem futile to examine various scenarios of a divorce settlement when the UK slams the European family door to start a new life on its own. A check of the prenuptial agreement between the UK and the EU, so to say.


The Treaty provides limited guidance on what should happen should the UK state it wants to leave.   A lengthy and complicated process will commence. The UK government will have to negotiate a withdrawal treaty that requires approval by the 27 other countries and the European Parliament. Failing that, the membership automatically ends two years after the notification of the UK's decision to the European government leaders. If a withdrawal treaty is concluded, the membership will cease with that treaty’s entry into force. Whatever the legal instrument, there will be a period following the notification of the principal decision during which the UK is still a full Member State. Article 50 TEU only says that the UK will have to leave the room when the 27 others discuss the Brexit arrangements amongst themselves.


That may be the legal situation, yet it seems politically inconceivable that UK ministers in the Council, UK MEPs in the European Parliament and the UK Commissioner continue to function as before within their respective Institutions during this period between the referendum result and the formal divorce. 


“We are rigorously practical. We are obstinately down to earth,” said the British Prime Minister.  Well, let’s examine some very practical aspects of the functioning of the EU household with the divorcing partner still occupying rooms in the common domicile.
 
The Commission


The term of office of Commissioner Hill, the British member of the college of commissioners, runs until 31 October 2019. According to the Treaty, the duties of a Member of the Commission shall end when he resigns or is compulsorily retired, unless he dies during his mandate. So, will Mr Hill resign on the evening of the referendum, if the majority supports a Brexit?  Or will he pursue his efforts towards a Banking Union and the Capital Markets Union until the UK is formally no longer an EU-member?  Will he take part in College discussions on policy and legislative initiatives and on infringement procedures against non-compliant Member States, conscious of the fact that these proposals or decisions will no longer apply to the UK?  Will he vote in the College? Will he give instructions to the Directorate General under his authority – or will that authority evaporate?  Will he have unrestricted access to confidential information about the future plans of the club his country is set to abandon?  Whereas strictly speaking a Commissioner is not the representative of a Member State, it is clear that, for the British Commissioner, conducting business as usual from the moment the UK expresses its intention to withdraw from the EU until the final curtain falls raises many questions.
 
The European Council and the Council of the EU


Although the British Prime Minister will be asked to leave the room when his colleagues in the European Council discuss the UK’s departure, he would remain a full member and formally be involved in Council deliberations on all other agenda items at EU summit meetings. But how will Mr. Tusk, the president of the Council, distinguish between Brexit items and others, since once the UK has decided to leave, arguably all matters for discussion will have a link with the exodus. Good luck to the people in the secretariat who will have to sort out when the UK Prime Minister is allowed in or should stay out of the room – he might end up entering and leaving with the waiters who top up the tea. The same goes for the ministers and officials representing British interests in the various Council configurations. Would they speak with any authority on any issue, one might wonder? The voting on legislation in the Council would be of even more concern.  Can the UK, after the referendum, participate in votes on European laws that will be implemented after the UK’s departure? Do the votes of the UK count to establish a qualified majority? Or even more absurd, would the UK be in a position to deliver the votes for a blocking minority against measures that would obtain the majority support within the 27 remaining EU members?  It is hard to believe that the EU ministers would accept such a situation during the transition period until the UK is formally and legally out. But there are no provisions available to guide us on how the legislative process has to be conducted in such circumstances. And we haven’t even considered the most delicate situation: on foreign affairs issues, can the EU take decisions requiring unanimity with the UK dissenting while it is on its way out – for example on maintaining or lifting sanctions?  Theoretically, the country that doesn’t wish to belong to the EU any longer, could use its veto right to prevent the 27 others to move ahead with key strategic decisions. Odd?
 
The European Parliament


The fun really starts when we have a closer look at what will happen in the European Parliament the day after the referendum.  The 73 UK MEPs are elected for a mandate that extends until June 2019. Of course, once the UK’s withdrawal takes effect, their mandate would end abruptly. But will they sit and vote in committees and in the plenary until then? Some would probably resign or stay absent as soon as the decision to leave the EU is taken, whilst others would hold on to their office for as long as the UK is formally still a Member State. Should they get an observer status?


The political configuration of the current Parliament will in any event drastically change upon Brexit. Two political groups risk disappearing: without British MEPs, the anti-EU EFDD group would lose half its members and be dissolved; the ECR group, where British Conservatives sit, would lose its largest national contingent and it remains to be seen whether parties like Belgium’s NVA could stay on board when the Polish PiS takes over leadership of the remainder of the ECR. The S&D group would lose over 10% of its membership with Labour MEPs out. How will these political groups handle the transition?  In a Parliament without the Brits, the EPP will be by far the largest group.  Will the Greens accommodate the Scottish Nationalist MEPs in their ranks, since they might well be applicants for EU membership if Scotland should gain independence after Brexit?


Parliamentary committees may consider replacing British chairs or vice-presidents after the referendum. British rapporteurs cannot carry on as if nothing fundamental has happened. It is hard to imagine that the MEPs from the remaining 27 members could accept that the 73 Brits can still vote on EU legislation, let alone propose amendments to it.  And the situation becomes even more confusing for British MEPs who currently form part of the trilogue negotiating teams or of delegations for the relations with non-EU countries. The parliamentary debates on solutions to all these paradoxes promise to be highly entertaining!


In light of the many questions that arise, forward looking responsible people in the Institutions had best prepare scenarios and practical solutions to allow for an orderly exit. Chaos and blockage of decision making for what will remain the world’s largest integrated market should be avoided. Since some provisions of the Treaty would need to be adapted anyway to sort out the British exit – such as Article 52 listing the names of the Member States – the opportunity may well be seized by the 27 or by the Eurozone Member States to rapidly conclude a new Treaty, repairing some of the construction flaws that became apparent during the Greek crisis, for example, or getting rid of ambiguities that slipped into the text to reach compromise with the UK in the past – such as the “Ioannina compromise”: the possibility for a minority group of Member States to postpone the decision on a draft EU law for six months - that took much drama to be accepted, but was subsequently never invoked.


The unprecedented political shock that a UK exit would mean for the European Union, and the existential questions it will raise for all European nations, may lead to deep re-thinking of what the unique legal and political edifice of intense cooperation and integration of Europe should look like. 


Of course, these musings are all hypothetical for the time being.  The people of the United Kingdom have heard their Prime Minister warn: “I say to those who are thinking about voting to leave: think very carefully, because this choice cannot be undone.”  They may conclude that they wish to remain part of the most generous political peace and prosperity project in modern history after all.
 
Thomas Tindemans & Mathijs Peters

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