A good few eyes are focused on the daily, if not hourly, developing news on the UK’s departure from the European Union. What does it mean for the London Market and in turn for those who deal with its many participants both in the EU and throughout the rest of the world?
The run-up to Brexit might have resonances of Y2K and the millennium bug but it is distinctly different. Y2K was a fear of apocalyptic events the source of which was essentially out of the control of humans. Brexit is fundamentally in the hands of human beings to negotiate and it is their arguments and decisions which will determine what will happen. Will it be a hard Brexit — the UK leaving without an agreement with the EU on its terms of withdrawal? Alternatively, will it be a soft Brexit with an agreement which allows a controlled transition with all feasible protections put in place to avoid disrupted trade and markets.
Time is running short. A lot of work has been done behind the scenes and now the process is speeding up in an attempt to get a timely agreement on the terms of withdrawal. Here are the significant dates:
On 23 June 2016 the Referendum was held in the UK on whether the UK should leave the EU resulting in a majority voting to leave.
On 29 March 2017 the UK served notice under Article 50 of the Treaty on the European Union triggering the UK’s departure from the EU automatically on 29 March 2019 unless an extension is agreed between the UK and all 27 remaining EU Member States. In principle a transition or implementation period to the end of December 2020 has been agreed.
On 20 June 2018 the UK Withdrawal Bill was passed in the House of Commons after a lot of controversy including amendments proposed by the House of Lords. The result is that, if there is no deal, Parliament will be able to consider the position and can vote on a “neutral” motion. This is a motion which cannot be subject to amendments unless the Speaker of the House of Commons allows them. Although billed as a “meaningful” vote, opponents to Brexit consider it will not be if no amendments can be allowed.
A series of formal speeches and summits have taken place and continue to do so as an ever present backdrop punctuated by significant moves such as the agreement on the “divorce bill.”
On 6 July Theresa May held her high profile and critical cabinet meeting at her country residence in Chequers in which the UK’s detailed proposal on the terms of its withdrawal was thrashed out. It left two high profile resignations and numerous others in its wake. This was probably not unexpected and swift replacements were made.
The contents of this proposal were set out in a White Paper issued on 12 July: The Future Relationship between the United Kingdom and the European Union.
A critical summit will take place between representatives of the EU and UK in October 2018 when the principles behind the terms of the UK’s departure ideally must be agreed. I.e. the proposals in the White Paper will have to be accepted, rejected, or modified — most probably in a combination of all three.
The deadline for negotiations with the EU finally to end is 21 January 2019 which takes into account the time needed for the UK’s Parliament’s approval.
On 29 March 2019 the UK will leave the EU.
For full article, refer to page 16 in the Fall 2018 issue. https://www.airroc.org/assets/docs/matters/AIRROC_Matters_Fall_2018_Vol_14%20No_2.pdf