brexit image

What is Brexit?

At the European Council (Art.50) of 10 April 2019, the 27 remaining EU countries and the British government have decided to postpone once more the exit of the United Kingdom from the European Union until 31 October 2019 at the latest. If the UK parliament approves the Withdrawal Agreement earlier, Brexit will take place the 1st of the following month. This means that if the United Kingdom remains member of the EU on the 23rd May, the UK will have to take part in European elections between 23 and 26 May. In case the UK does not organise elections for the European Parliament and has not ratified the Withdrawal Agreement, Brexit will be on 1st June 2019.

Decision of the United Kingdom to exit the European Union

On 29 March 2017, the United Kingdom notified the European Council of its intention to leave the European Union, in accordance with Article 50 of the Treaty on European Union. This triggered the start of a two year negotiation, also known as the Article 50 process. The objective of the negotiations was to agree the terms of the UK’s departure from the EU in an orderly manner.

Withdrawal Agreement

The Withdrawal Agreement establishes the terms of the UK’s departure from the EU. It ensures that the withdrawal will happen in an orderly manner and offers legal certainty once the Treaties and EU law cease to apply to the UK. The Withdrawal Agreement covers all elements of the UK’s withdrawal from the EU including citizens’ rights, the financial settlement, a Protocol on Ireland and Northern Ireland, a transition period, Protocols on Gibraltar and Cyprus, as well as a range of other separation issues.

Negotiations took place on a phased basis, with the negotiations primarily addressing three main baskets of withdrawal issues:

  1. guaranteeing citizens’ rights (EU citizens currently living in the UK and UK citizens currently living in the EU);
  2. settling the UK’s financial commitments;
  3. Ireland and Northern Ireland specific issues.

On 14 November 2018, the European Commission and United Kingdom reached agreement at negotiators’ level on the entirety of the Withdrawal Agreement and on an outline of the Political Declaration on the future EU-UK relationship. On 25 November 2018, the European Council endorsed the Withdrawal Agreement and approved the Political Declaration setting out the framework for the future relationship.

In order for the Withdrawal Agreement to enter into force, it needs to be ratified by the EU and the UK Parliaments. The European Council approved its decisions on signing and concluding the Withdrawal Agreement on 11 January, and it now passes to the European Parliament for consideration. The UK is undergoing its own ratification process, according to its own constitutional arrangements.

If the Withdrawal Agreement is approved

If the UK parliament votes in favour of the Brexit agreement before 31 October, the UK will leave the EU on the first day of the next calendar month, and no later than 1 November 2019. This will be followed by a transition period, which will last until 31 December 2020. During this period, all EU rules and regulations will continue to apply to the UK. Virtually nothing will change for businesses or for citizens. This transition period may be extended once by two years, meaning it could remain in place until 31 December 2022.

If the Withdrawal Agreement is not ratified (‘no deal’ scenario)

There is still a possibility that no agreement will be reached on Brexit. A no-deal Brexit is therefore still possible. This is also the case if the UK does not organise elections for the European Parliament and has not ratified the withdrawal agreement. In that scenario the UK will leave the EU on 31 may 2019 at midnight (23:00 local time). In that case, repercussions on all member-states and the United Kingdom will be important across the board. Cyprus government is working hard to limit to the extent possible the problems that will arise by a ‘no deal’ scenario. In the meantime, the business community, public institutions and members of the public need to prepare for every eventuality, including the possibility of a ‘no deal’ scenario.