The European Union (EU) has been created and evolved as a strong politico-economic union, designed to put together the powers of the Member States through a system of supranational and intergovernmental decision making (CIA - The World Factbook). However, in order to reach those goals, it was necessary for each of the Member States to make some sacrifices as far as national sovereignty is concerned, in favour of common decisions that involved all Member States.
In recent years, however, euroscepticism has increased in some areas. In the United Kingdom (UK), the diminishment of national sovereignty, mentioned above, as well as a certain amount of distrust in the EU institutions and the fact that a significant part of the population was unhappy with the way the EU handled the economic issues that have been developing for almost a decade (Mauldin, Forbes 2016) were some of the reasons that led to the political decision to host a referendum in June 2016 at national level, in order to decide whether or not UK would leave the EU. On June 23, 2016, 51,89% of the voters decided to leave.
Based on that, the purpose of the present article is to analyse the consequences of the referendum mentioned above and the way the UK could leave the EU, from a judicial point of view. The process, generally referred to as “Brexit”, will be explained through the lens of Article 50 of the Treaty on European Union, while analysing the processes that could take place, as well as their consequences.
A series of consequences unveiled quickly after the referendum, not only at national level, but in international relations as well, as Brexit had significant consequences for the international economy, and will likely impact trade, immigration and, to a certain extent, for the relationship between states. A significant element is, for instance, the fact that Scotland and Northern Ireland decided against leaving the EU (Kirk, Dunford, the Telegraph 2016) through the referendum, which might lead to internal disputes, as it will be explained below.
From a judicial perspective, Brexit had two major consequences: the first one concerned whether or not UK should actually leave the EU following the referendum, as many have quickly pointed out that it was not legally binding according to the national law. That point was also made in an open letter signed by more than 1000 lawyers and addressed to the Prime Minister David Cameron (Yeung, the Independent 2016). Since the referendum is not legally binding, the Parliament has to pass the necessary legislation in order to leave the EU (Wheeler, Hunt, BBC 2016).
While both pros and cons of actually acting on the referendum have been discussed at length (see, for instance, Foster, Express 2016, and Siddique, The Guardian 2016), it was decided to respect its result, and consequently, the decision of the majority of the citizens - which leads to the second major consequence, related to the fact that it was the first time when Article 50 of the Treaty on European Union would be used.
Article 50 allows a Member State to notify the EU of its decision to leave the Union and obliges the EU to negotiate a ‘withdrawal agreement’ with that state (Ruparel, Open Europe 2015). The steps described in the article can be summarised as follows: firstly, any Member State that wishes to leave the EU must notify the European Council. As a consequence, the European Council will negotiate an agreement with the State, which should comprise the framework of its future relationship, in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. The agreement must be negotiated on behalf of the EU by the Council, which votes on a qualified majority, after obtaining the consent of the European Parliament.
When the agreement enters into force, or two years after the official notification was made, the EU Treaties will stop being applicable to the withdrawn State – unless the European Council and the Member State unanimously decided to extend that period.
Another important point to remember is that the member of the European Council and of the Council representing the withdrawing Member State will not be allowed to participate in the EU discussions concerning it, as well as its withdrawal. Moreover, if the state later wants to re-join the EU, the request will be subject to the general procedure of admission, referred to in Article 49 of the Treaty.
Thus, based on process explained above, there are a few conclusions that can be reached: firstly, even after the Member State decides to leave the EU, it is still obliged to respect the EU laws during the negotiation period – the only difference being that it would not participate in internal EU discussions and decisions regarding its own withdrawal. Consequently, there will be no rapid changes as far as the UK’s legislative situation is concerned, which, while it might seem counterintuitive taking into account the reasons for which UK decided to leave the EU, might actually be beneficial to the state. That is because, if there is no transition period, the UK would need to quickly legislate on all the issues that are now governed by EU provisions. Taking into account the importance of this change, it would be wiser to take enough time to create an action plan – which can be also done during the two years of negotiations, based on the content of the agreement with the EU. As far as the negotiation is concerned, the need to have the agreement of the European Parliament, as well as of the European Commission, who takes part in the discussions, means that reaching a compromise might be more time-consuming than anticipated – but it is, nonetheless, in the best interest of both parties, as it will be explained below.
It is also important to note that, if the final agreement refers to policy areas within the powers of the Member States, such as elements referring to services, transport and investment protection, the document shall become a ‘mixed agreement’ and require ratification by every national parliament of the Member States (Ruparel, Open Europe 2015). On the other hand, as far as the treaties are concerned, they might also have to be modified in order to reflect the UK departure, which will lead to the need to involve all Member States in the process. (Ruparel, Open Europe 2015).
An interesting approach that can be discussed is that there is no obligation for the UK to take part in the negotiations – as Article 50 obliges only the EU to propose a negotiation, not the withdrawing Member State (Ruparel, Open Europe 2015). Consequently, in theory, it is also possible that the UK leave the EU without taking part in the negotiation period, but it is unlikely for this to happen –as it will lead to a lack of the two year transition period, which will mean, as explained above, that the UK will need to legislate immediately on a lot of issues that apply to it. Moreover, that would also mean that it would be unlikely for the UK to sign a preferential trade agreement with the EU (Ruparel, Open Europe 2015), which would profoundly damage its economy. However, this will not be the chosen method by the UK, as the prime minister already declared that article 50 will be the way to leave. The UK is also the party can control when the two year period starts, by choosing the date when it gives notice under Article 50(2).
As far as the possibility to extend the two-year period is concerned, while it is theoretically possible, if the negotiations do not end in the originally set timeframe, doing so would mean that the UK will have to continue paying taxes to the EU budget. As well, the UK will have to respect the restrictions on its freedom of action imposed by the European legislation – which were reasons that it left the EU in the first place, so extending the period mentioned above can be considered counter-intuitive and unlikely, unless it is proven to be absolutely necessary.
Regarding the possible difficulties in reaching an agreement between the UK and the EU, while the number of parties involved might lead to difficult negotiations, taking into account the interest in reaching an agreement which avoids the imposition of tariffs on the export of goods to the UK, which is one of the greatest export markets, it is unlikely that there will be difficulties in reaching acceptable terms for both parties (Lawyers for Britain, 2016). As far as the UK is concerned, while there were reasons that urged it to leave the EU, it is unlikely that its interest is to stop any kind of relationship with it – the agreement will likely try to keep a certain type of cooperation which will be advantageous to both parties. It is believed that UK will be allowed to remain part of the European Single Market if it continues to allow EU nationals the right to live and work in the UK. Despite the fact that continuing trade is something that both parties desire, immigration might be a difficult point to negotiate (Wheeler, Hunt, BBC 2016).
The last essential element that is going to be discussed in the present article is related to the possibility of the withdrawn state to re-join the EU. Even though this is unlikely to happen in the case of the UK as a whole, taking into account that Scotland and Northern Ireland voted against leaving the EU, it is possible that they might want to re-join it at a certain point. Many theories on this issue have appeared since the referendum – regarding the possibility that Scotland remain in the EU, even after Brexit (see Douglas-Scott, the Guardian 2016), or the possibility to leave the UK (see Ramaswamy, The Guardian, 2016), but this debate exceeds the purpose of the present article. However, it is important to know that, if any withdrawing state would like to re-join the EU, the procedure is as complex as for any state that would like to join it for the first time, as described in article 49. Thus, the decision to leave the EU is permanent, and being a former member of the Union is not taken into account.
Concerning the steps that have been made so far regarding Brexit, Article 50 has not yet been triggered, which means that the process described above has not started yet. After the Brexit vote, Prime Minister David Cameron resigned – leaving the new Prime Minister, Theresa May, the task to do that. On the EU front, Michel Bernier, former French minister, was selected to lead the negotiations with the UK. Meanwhile, Scotland First Minister declared that it is democratically unacceptable for the country to leave the EU when it voted to remain, which is why it is highly likely that a second independence referendum for the country will take place (Wheeler, Hunt, BBC 2016).
To conclude, since it is the first time that a country ever decided to leave the EU, the consequences of such an action are yet unknown – it is clear nonetheless that it will greatly impact not only international relations, but also economy, trade, and many other factors.
This article was originally published in Lawyr.it Vol.4 Ed 3.