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Deal Or No Deal: The Brexit Issue Explained

Deal Or No Deal: The Brexit Issue Explained

Remember back in 2016, when the U.K. voted to leave the European Union? It was a big deal then. Amongst the many things that happened, few things that affected people personally were – 1. A drop in the pound rate which made that holiday to the U.K. much cheaper 2. Confused and worried students about their work situation post-Brexit 3. A drop in Tata’s share prices because a lot of their revenue comes from the U.K. and EU.

And all this happened with just the  ‘announcement’ of a possible Brexit. The actual deal is yet to take (or possibly not take) place!

Ever since the announcement in 2016, several negotiations, deals, dates and deadlines have been discussed to set the terms and conditions of Britain exiting the EU. With 29th March being one of the biggest dates in this timeline, here’s all you need to know about what’s happened so far and what will happen next –

Timeline of Brexit

23rd June 2016: The U.K. announced its exit from the European Union (EU) – called Brexit
29th March 2017: The U.K. invoked Article 50 (a formal plan to exit the EU), giving them two years to negotiate terms of their exit.
29th March 2019: This is the official break-up date. But after this date, both the U.K. and the EU want some time (the transition period) to allow businesses and citizens to prepare for the new rules.
31st December 2020: Ting! Ding! Ding! The transition period ends today. Britain will finally exit the EU and all trade deals signed by them will now be allowed to come into force.

What is Brexit?

A term to describe the U.K.’s departure from the European Union. A divorce of sorts between the U.K. and the Europe Union. (Britain + Exit = Brexit).

What is the European Union (EU)?

The EU is a partnership between 28 European countries, formed after World War II to foster economic and political co-operation between these countries. Ever since then it has grown to become a “single market” allowing goods and people to freely move between these countries as if they were one country. It has its own currency – the euro, its own parliament and its own rules governing important areas.

These discussions have mostly been over the “divorce” deal (known as withdrawal agreement) between the U.K. and EU and it determines exactly how the U.K will leave but not what will happen afterwards in the future. To deal with the future relationship i.e. post-Brexit there is a much shorter deal (known as the political declaration) and it gives a brief overview of what the long-term relationship would look like between the U.K. and the EU. But note that, this deal isn’t binding and neither parties are expected to exactly stick to it. As for the withdrawal agreement (the one that decides how the U.K. leaves) even though both parties had agreed to it back in November 2018, it had to get the final nod from British Members of the Parliament (MPs). But so far they’ve voted a big fat NO, twice – Once on 15th January and then once again on 12th March after the U.K.’s PM Theresa May had gone back to the EU to get some changes made in the agreement.

Why did British MPs vote against Theresa May’s withdrawal agreement deal?

Because they’re not happy with the deal because they think it does not give UK major control of its own affairs from the EU.  And amongst their long list of complaints, they extremely disappointing over the Irish border issue. Both the EU and the U.K. are against the idea of a hard border because in the past such a border has caused serious problems. But they’re also confused about the solution because in the absence of a hard border it will become difficult to monitor the movement of people and goods between the U.K. and the EU. So every since Brexit was announced they’ve been trying to figure out the best way possible to deal with this issue  And while dealing with this issue, Theresa May has to keep in mind that all concerned parties (Irish citizens, U.K. citizens, members of the parliament) remain happy because her chances of getting re-elected depend on it.

What happens to the Irish border if no deal is agreed upon?

In the worst-case scenario, if neither agrees on a plan, there is something called the backstop – a safety net of sorts mentioned in the divorce-deal. The backstop says that, in the situation that no deal has been finalized on, an open border will remain on the island of Ireland. This would mean that Northern Ireland, but not the rest of the U.K. would still follow some EU rules on things such as food products. While some British MP’s aren’t a big fan of the backstop because they believe it would never end EU’s rules on U.K., some think this would help them stay closer to the EU and some think Northern Ireland should not be treated separately from the U.K.

Will Brexit happen on 29th March? Will it get delayed? Will it get cancelled?

Considering, there are only 15 days left till 29th May – The date, written in British law on which the U.K. leaves the EU, these situations are likely to occur –

Vote on 13th March 2019 – There will be another vote on 13th March 2019 where MPs will vote whether they want the U.K. to leave with or without a deal. Note that if the U.K. decides to leave without a deal it would mean that the 2 parties would not have been able to reach on a mutual agreement – So, the U.K. will leave the EU immediately on 29th March 2019 and there will be no transition period. This transition period is a cooling-period of sorts for businesses, consumers and citizens to deal with Brexit. But in the absence of such a period, they all would have to respond and adapt immediately to the new changes. Of course,  such a situation will lead to chaos and uncertainty in people’s lives and work, the majority believe that MP’s will not vote in favour of a No-Deal! That leads to another vote on 14th…

Vote on 14th March 2019 – In case, MPs vote for not leaving the EU without a deal in place, then on 14th they will be asked to vote again on whether the date to leave should be 29 March or it should get extended. Most likely they’re going to say that they want this date to get extended till the end of June at least. And the EU will also agree to the delay but not beyond 23rd May. If it’s beyond that date then they’d expect the U.K. to participate in their Parliament Elections.

Is there a chance of no Brexit at all?

While such a situation is possible and would not require permission from the EU member countries, it would still require a vote from the Parliament. This is because Brexit has been written in British law and to cancel it would mean, making a change in the present U.K. law, in other words, it’s a democratic process. That’s something neither the ruling nor the opposition political party in the UK wants to do. But if Parliament agrees to cancel it then the U.K., by cancelling Article 50 of the Brexit process can continue being a member of the EU on its existing terms.

Other possibilities surrounding Brexit would another referendum to vote for or against Brexit,  MPs taking control of the Brexit process from the government or even a general election where the government is toppled. Each of these options is murkier than the other and could lead to a heavy delay in Brexit actually happening!

Hope this gives you a brief snapshot of what’s going on with Brexit. If you’ve got any more Brexit related questions comment below and we will answer them for you!

Illustration by Robert G Fresson 

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Talkative, clumsy, punny, intuitive are just a few buzzes of this queen bee. An aspiring business journalist looking to find her throne in the corporate world.

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