Opinion

Brexit will change millions of lives. Our leaders must do more than posture

From the land border with Ireland to expats’ pension rights, there is much to negotiate.

By: Date: May 8, 2017 Topic: European Macroeconomics & Governance

This blog post was originally published in The Guardian.

guardian logo

Brexit negotiations have got off to a bad start: that much at least is clear. The leaking of details about May and Juncker’s dinner conversation was unhelpful. Domestic elections in the UK, France and Germany leave negotiations trapped in a damaging cycle of tail feather-shaking. But it will soon be time to move beyond the absurdities and negotiate on what really matters.

Contrary to the claims of the commission president, English will remain an important language of Europe. And despite accusations by the UK prime minister, the EU is not maliciously meddling in the general election. Rhetorical attacks might seem harmless, but goodwill is a precious resource in these negotiations.

At least the ensuing war of words and public emotion shows that both sides realise just how much is at stake. The truth is that the upcoming negotiations will be incredibly complicated, for both technical and political reasons.

For example, how can we deal with the land border in Ireland? The new arrangements will have major implications for business and trade but also for the hundreds of thousands of people in the north with a passport from the republic. Nearly 20,000 workers commute across the border. These are not technical issues but questions with far-reaching political consequences, including for the peace process.

And Northern Ireland is only one of many such issues, where technical complexity meets political tension. Perhaps most important is the need to reach a deal that defines the rights of expats on both sides. But which rights should these migrants keep? A British citizen living in Spain currently has the right to vote in local elections. Should this be preserved? What about the French student who pays domestic rates at a London university? And how do we process the pension rights accrued by a Polish worker who spends six years in the UK but then leaves? The EU has mechanisms for these situations, and lives were planned around the existing rules.

Whatever the agreement on citizens’ rights, they must be enforceable and protected. So who will watch over them, and what will be the relevant jurisdiction? Theresa May talks of escaping oversight by the European court of justice (ECJ), while the EU wants the ECJ to adjudicate. All of these questions are technically fraught and politically charged, but both sides have repeatedly insisted that citizens’ rights are a priority. So now they must deliver. The UK and European public rightly expect politicians to sort out the mess and minimise the damage to people’s lives.

A second issue is future trade relationships. On a technical level, this should actually be easy to agree. We are not talking about a trade deal between two vastly different economies: on the contrary, the Great Repeal Act will translate the current body of EU law into British law. Thus, on the day of Brexit, standards and regulations will essentially be identical. The questions here are whether either side imposes tariffs, and how to deal with future regulatory divergence. These are standard topics, often negotiated in trade agreements, and they are less complex than the fine detail of migrant citizens’ lives.

With political will, a sensible trade agreement is in reach. A deal that primarily covers goods, rather than investment and services, could easily be passed on the EU side. More elaborate agreements would require unanimity, and the recent near-collapse of the EU-Canada Ceta agreement shows that this can be tricky to achieve. But still, it is in both sides’ interest to avoid a no-deal scenario and a fallback to WTO rules.

A final big issue is the infamous “Brexit bill”. Although economically insignificant, politically this might be the most toxic issue. It is important to understand that even a sum of €60bn would not be at all threatening to the UK’s economic fortunes – it is around 3% of UK GDP, and it would be spread over a number of years. But for politicians the bill is extremely explosive, mostly because of the emotional headlines it will trigger on both sides.

After Brexit, economic and political links between the EU and the UK will be weaker. But the UK will still be the EU’s closest neighbour and an important ally. It is time to discuss in earnest how to soften the damage of Brexit for citizens and business on both sides. And it is time to explore how to structure future cooperation in fighting terrorism. Brexit will not be a success, but aiming for failure serves no one. Goodwill and a sense of perspective are the way to protect the EU and UK alike.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint.

Due to copyright agreements we ask that you kindly email request to republish opinions that have appeared in print to communication@bruegel.org.

View comments
Read about event

Upcoming Event

Jul
6
12:30

Is there a way out of non-performing loans in Europe?

At this event we will look at the issue of non-performing loans in Europe. The event will also see the launch of the latest issue of "European Economy – Banks, Regulation and the Real Sector."

Speakers: Emilios Avgouleas, Giorgio Barba Navaretti, Giacomo Calzolari, Maria Demertzis, Martin Hellwig, Helen Louri and Laura von Daniels Topic: European Macroeconomics & Governance, Finance & Financial Regulation Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read about event More on this topic

Upcoming Event

Jul
7
08:00

Europe's global positioning and its trade implications for Asia

This event, taking place in Hong Kong will discuss Europe-Asia relations in the context of global developments.

Speakers: Alicia García-Herrero, Peter Mandelson, David Tweed and Guntram B. Wolff Topic: Global Economics & Governance Location: Bloomberg Hong Kong Office 25/F, Cheung Kong Center, 2 Queen's Road, Central, Hong Kong
Read article More on this topic

Blog Post

Can EU actors keep using common law after Brexit?

English common law is the choice of law for financial contracts, even for parties in EU members with civil law systems. This creates a lucrative legal sector in the UK, but Brexit could make UK court decisions difficult to enforce in the EU. Parties will be able to continue using English common law after Brexit, but how will these contracts be enforced? Some continental courts are preparing to make judicial decisions on common law cases in the English language.

By: Uuriintuya Batsaikhan and Dirk Schoenmaker Topic: European Macroeconomics & Governance Date: June 22, 2017
Read article More on this topic More by this author

Blog Post

The size and location of Europe’s defence industry

There is growing debate about a common European military policy and defence spending. Such moves would have major economic implications. We look at the supply side and summarise some key facts about the European defence sector: its size, structure, and ability to meet a possibly increased demand from EU member states.

By: Alexander Roth Topic: European Macroeconomics & Governance Date: June 22, 2017
Read article More by this author

Parliamentary Testimony

House of Commons

Exiting the European Union Committee

On 19 April 2017 Zsolt Darvas appeared as a witness at the Exiting the European Union Committee, the House of Commons, United Kingdom.

By: Zsolt Darvas Topic: European Macroeconomics & Governance, House of Commons, Testimonies Date: June 20, 2017
Read article More on this topic More by this author

Blog Post

Brexit and the future of the Irish border

The future of the Irish land border has been thrown into uncertainty by Brexit. The UK's confirmation that it will leave the EU's single market and customs union implies that customs checks will be needed. However, there is little desire for hard controls from any of the parties involved. This is especially true for Theresa May's potential partner, the DUP. Creative solutions are needed to reach a solution.

By: Filippo Biondi Topic: European Macroeconomics & Governance Date: June 19, 2017
Read about event More on this topic

Past Event

Past Event

Substance requirements for financial firms moving out from the UK

In the run-up to Brexit, UK-based financial firms are considering how to organize their operations across the future divide between the UK and EU27. This event will discuss the regulatory requirements on how self-sustaining the operations in the EU should be, and implications for the single market and third countries.

Speakers: Gerry Cross, Simon Gleeson and Nicolas Véron Topic: Finance & Financial Regulation Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 2, 2017
Read about event More on this topic

Past Event

Past Event

Fiscal frameworks in Europe: background and perspectives

On 1-2 June Bruegel together with Danmarks Nationalbank and the Copenhagen Business School will organise a conference about fiscal frameworks in Europe. The conference will re-evaluate fiscal frameworks in Europe in light of experience gathered since the formation of the Economic and Monetary Union (EMU). The implications for the design of fiscal policy stemming from […]

Topic: European Macroeconomics & Governance Location: Danmarks Nationalbank Date: June 1, 2017
Read article More on this topic

Blog Post

How export growth achieved adjustment of massive trade deficits in the euro area

The reduction of current account deficits in euro-area countries since the 2008 crisis is strongly driven by increases in exports that dampened the effect on production of the fall in demand and imports.

By: Konstantinos Efstathiou and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: May 31, 2017
Read article More by this author

Blog Post

Pharmaceutical industry at risk from Brexit

Pharmaceuticals are a hugely important industry for the EU and the UK. The sector creates thousands of jobs, billions of euros in exports, and is Europe’s most research-intense industry. But will Brexit mean for pharma? Border delays, disruption to R&D and regulatory divergence all pose hazards.

By: Jianwei Xu Topic: European Macroeconomics & Governance Date: May 31, 2017
Read article More on this topic More by this author

External Publication

The future of globalization

This brief reviews the main features of the recent globalization, attempts to explain its persistence over the centuries and why it is likely to persist in the indefinite the future, examines the causes and prospects of the new protectionism, and concludes by drawing policy implications.

By: Uri Dadush Topic: Global Economics & Governance Date: May 29, 2017
Read article More on this topic

Blog Post

We need a European Monetary Fund, but how should it work?

Many voices are calling for the ESM to be developed into a fully-fledged European Monetary Fund. But what changes would this entail, and how could the new institution be governed? The authors see both need and hope for change.

By: André Sapir and Dirk Schoenmaker Topic: European Macroeconomics & Governance Date: May 29, 2017
Load more posts