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Governo Italiano

Brexit

 
Brexit

 

I. Introduction

 

In the referendum of 23 June 2016, the majority of British voters expressed the will that the United Kingdom exit the European Union, 43 years after it joined the European Economic Community, as it was called at the time.

Following up on the vote, on 29 March 2017, the British Government activated the withdrawal mechanism provided for under Art. 50 of the Treaty on European Union (TEU). The activation of the procedure officially kickstarted negotiations to agree on the terms of the Brexit on the basis of a Withdrawal Agreement, the first step in a complex process leading to the formal exit of the United Kingdom from the European Union, scheduled at the end of the 2-year negotiation period, on 29 March 2019. The term was later extended twice between March and April and again, for the third time, late October by January 31, 2020   (see Part IV below, “Latest developments”).

II – The Brexit negotiation (2017-2018)

The first phase of negotiations was closed on December 15, 2017 and the European Council subsequently certified that sufficient progress had been made to open the second phase of negotiations.

The second phase of negotiations began at the very start of 2018, under Bulgaria’s 6-month rotating Presidency of the EU Council, On March 19, 2018, the parties reached an agreement on the rights of citizens, on the regulation of outstanding financial commitments, on the transition period and on other aspects of the separation, thus covering almost 80% of the scope of application of the Withdrawal Agreement.

Thanks to the efforts made between April and November 2018 (third negotiation phase), on  November 25, 2018, the “Art.50” Special European Council meeting (in 27-EU format) gave green light to the Withdrawal Agreement and the Political Declaration on future EU-UK relations, following the political approval of the Agreement by the British Government on 14 November 2018.  

The Agreement provides for a transition period lasting until December 31, 2020. During this period, the status quo would continue, except for small corrections: the United Kingdom shall comply with EU law and all the obligations deriving therefrom but - in its new Third State status - without the right to participate in the European Union’s decision-making process.

Within the framework of the Brexit negotiations, there are some issues of primary importance for Italy. One of these is undoubtedly the status of EU citizens – and, among them, the status of Italian citizens - residing in the United Kingdom, as well as the status of British citizens residing in Italy. In this respect, the Government deems it to be essential that the Withdrawal Agreement concretely assure, after the withdrawal, the utmost protection of the acquired rights of Italian citizens who live, study and work in the United Kingdom. More generally, Italy, together with all its other European partners, has committed to assure as orderly a transition to post-Brexit as possible, in the interest of citizens and enterprises.

III. Withdrawal Agreement ratification process - Difficulties and new prospects

Despite the positive developments issuing from the November 2018 agreement and the Political Declaration on future EU-UK relations, between January and March 2019 the British Parliament rejected for three times the ratification, thus contributing to triggering an internal political process that finally led to the resignation of the Conservative Prime Minister, Theresa May, on June 7 last.

The former Foreign Secretary, Boris Johnson, won the race for succession to the Tories’ leadership on July 23 last, and immediately started his government action on the promise to implement Brexit "without strings attached". 

In the meantime, at the European Council of June 20-21 June, the Heads of State and Government and Ptesident of the EU Council Tusk discussed developments on the dossier and defined some key messages addressed to the public and to the British counterpart. The twenty-seven Member States reaffirmed they did not wish to withdraw without a deal and instead hoped for a future relationship with the United Kingdom that was as close as possible. They also expressed their willingness to renegotiate the Political Declaration on future EU-UK relations, should the UK position evolve, as well as their desire to work together with the new UK Prime Minister.

Subsequently, the EU and UK negotiating teams defined new, intense and complex negotiations on the Withdrawal Agreement to find alternative mechanisms to the so-called "backstop" for Ireland/Northern Ireland. After Brexit, in fact, in Ireland there would be the only land border between the United Kingdom and the European Union, a situation capable of putting at risk the sensitive peace process underway between the unionist and the republican communities. Hence the backstop clause, contained in a special Protocol annexed to the Withdrawal Agreement, was in any case intended to prevent the creation of a "rigid" border between the two parts of the island. But it was precisely the wording negotiated and accepted by Theresa May that had contributed to the failure of the Agreement ratification process, due to the opposition of some Parliamentary forces that deemed it likely to tie the United Kingdom indefinitely to the EU customs territory and to create a separate status for Northern Ireland from the rest of the United Kingdom.

On October 17, a few days before the 31 October date set for withdrawal, the EU and UK negotiators finally reached an agreement on alternative mechanisms to the so-called backstop, immediately endorsed on the same day by the "Art. 50" Special European Council meeting. The compromise that led to the new Protocol on Ireland was based on the regulatory and customs alignment of Northern Ireland with the EU in exchange for the possibility that the North Irish Parliamentary Assembly would decide in the future not to extend the new regime (the so-called consensus principle). Hence the solution found turned the previous backstop into a temporary, but in fact permanent principle (as it required the parties’ consent to overcome it) - hence into a solution in principle permanent, but potentially temporary. Overall, it is a creative solution for Ireland’s very particular situation. The system so created is unprecedented and shall be matched by careful checks during implementation phase to ensure its proper functioning.

Together with the Protocol on Ireland, the Political Declaration on future EU-UK relations was also amended to make it clear - as the UK wanted - that the ultimate goal of the negotiations should be a Free Trade Agreement without tariffs and quantitative restrictions. Great Britain, however, shall accept clear provisions to ensure equal conditions (the so-called level playing field) in the areas of competition, state aid, taxation, environment, employment and social affairs.

 

IV. Latest developments

On October 22 last, the British House of Commons indicated - by 329 votes in favour and 299 against - that it could adopt the new agreement negotiated by the Prime Minister with the EU. Although it was not a decisive vote, it was an important development showing, for the first time, the existence of a Parliamentary majority in support of the Withdrawal Agreement. Prime Minister Johnson - determined to keep his promise of a Brexit by October 31- therefore tried to reduce the time for the internal process of ratification of the renegotiated Agreement, but he met with opposition from the Parliament, which required more time to examine the text before proceeding to ratification. Therefore the Prime Minister suspended the works on the legislation for  implementing the Agreement (the so-called Withdrawal Agreement Bill) pending a decision by the European Council on the (third) extension of Article 50 of the TEU, which he had in the meantime been obliged to request on October 19, to comply with the so-called "anti-no deal law" adopted by Parliament in early September.

On October 29, a European Council’s Decision was therefore adopted which, in agreement with the United Kingdom, provided for a "long and flexible" extension of Article 50 until January 31, 2020, with the provision that in the event of the Parties completing their respective internal ratification procedures before that date, the Withdrawal Agreement should enter into force on the first day of the month following the notification of the completion of those procedures. As a guarantee for the EU, the Decision ruled out the possibility of reopening the already renegotiated Agreement and called on the United Kingdom to comply with its obligations as a Member State to all intents and purposes until the withdrawal (including the duty to respect the “sincere cooperation” principle and the UK obligation to appoint its member for the new European Commission).

At the same time, on October 29, the UK Parliament adopted the government's proposal to hold early elections on December 12, which would result in the UK suspending all activities related to the ratification of the Withdrawal Agreement until the election date.

On its part, however, the EU started its own internal ratification process, which also envisaged the European Parliament's endorsement of the new text. In this regard, the European Parliament stressed that its "green light" to the new Agreement would not be a mere formality, but would be given after careful consideration of the substance and, in any case, only after the UK ratification.

V. Negotiation on future relations

The negotiation on future relations will only be opened once both parties have completed the procedures for ratifying the new Agreement and the United Kingdom has acquired the Third State status. The procedures set out in Article 218 of the TFEU on the conclusion of agreements between the EU and third countries will apply. Depending on the subject matter, the agreements to be concluded shall either fall within the EU exclusive competence or have a "mixed" EU-Member State competence (with the consequent need for national ratifications in addition to the EU ratification).

The main difficulty will lie in the very short duration of the transitional period, which is expected to end on December 31, 2020 and which, following the last extension of Article 50 of the TEU, shall begin no later than February 1, 2020. This has effectively reduced to less than one year the time to complete complex negotiations that would normally take years to complete. However, the transitional period could be extended to one or two years pursuant to Article 132 of the Withdrawal Agreement.

 

Additional Information

 

I. Preparing for Brexit at EU and national level

Preparations and emergency measures for a No-Deal Brexit continue both within single member States and at EU level.  

On  September 4, the European Commission published the sixth Communication on the preparation of the United Kingdom's withdrawal from the European Union, entitled 'Completing the preparation for the United Kingdom's withdrawal from the European Union on  November 1, 2019', which followed up the last one published on June 13,  before the state of the art on the Brexit dossier at the European Council held on June 20-21. In that Communication it, the Commission summarised the consequences of a possible no deal in many areas and acknowledged the completion of the preparatory measures, without failing to renew its call to all the parties concerned to prepare for any scenario.

The main areas addressed by the emergency measures - both at EU level and within single Member States - span from the rights of citizens to transports, judicial cooperation and cooperation between police forces, safeguarding the integrity of the internal market, and the financial and fishing sectors.

These measures are based on three preconditions for future EU-UK discussions relating to the three principal aspects of the separation: a) protecting the rights of citizens; b) the UK respect of its financial obligations to the EU and c) its commitment to find an alternative solution to the so-called “backstop”, with a view to preserving peace in Ireland and the integrity of the Internal Market.

At national level, Decree-Law No. 22 of March 25, 2019 (converted into Law No. 41 of May 20, 2019) was adopted to ensure the financial stability and integrity of markets and to protect the rights of UK citizens residing in Italy, as well as strengthen the Italian consular network in the United Kingdom to assist the Italian community residing there.

A new meeting of the Brexit Task Force coordinated by the Italian Presidency of the Council of Ministers was also held on October 1, during which: a) the commitment to find an agreement on the so-called backstop was reaffirmed, as well as ensure a withdrawal with agreement and avoid a "no deal" Brexit; b) the emergency measures were examined in the event of a “no-deal Brexit”; c) the appeal to citizens, businesses and parties concerned to prepare for any scenario was renewed.

II – Rights of citizens

The agreement on citizens’ rights contained in the Withdrawal Agreement guarantees the acquired rights of millions of EU citizens at the date of the end of the transition period (31 December 2020), while at the same time granting ample time in which to apply for the so-called “Settled Status”, the new permanent residency certificate for EU citizens residing in the United Kingdom: the transition period (from the date of withdrawal to 31 December 2020) plus a further six-month “guarantee period” (until June 30, 2021). This is an unwonted result, mainly obtained through the initiative promoted by Italy.

The Italian Government, together with the EU and with the British Authorities, has committed to dialogue and supervise that the United Kingdom effectively apply the simplified and easy administrative procedures that it has undertaken to assure to our citizens, in order to spare them useless costs and red tape to have their acquired rights recognised in the United Kingdom. To this effect, Italy continues to monitor and survey the practical recognition of the so-called “Settled Status”, especially within the framework of the Home Office’s “User group”, to which our London Embassy belongs along with the representatives of the other 26 EU member States and of the European Commission.  

Italy and the United Kingdom have had and continue to have an intense and fruitful dialogue on the need to concretely guarantee the acquired rights of EU citizens in the United Kingdom and of British citizens in the EU, with a special attention for the most vulnerable groups.  

In line with the dialogue between the EU member Countries and the United Kingdom, there is a common commitment to afford the utmost protection to citizens’ rights also in the case of a No-Deal Brexit.

There are unilateral commitments and measures both on the part of the United Kingdom and of the EU Member States that essentially aim to maintain the rights and benefits assured up to now to the citizens residing in the UK according to EU legislation or in the EU at the date of the withdrawal.

On its part, Italy has adopted a totally open approach thanks to the legislative measures contained in the aforesaid Law Decree 22 of March 25, 2019,  which maintain the existing legal framework recognising  the need for British nationals residing in Italy at the date of withdrawal to apply for and obtain a long-term residency status in compliance with Directive 2003/109/EC and to continue to enjoy such rights as access to healthcare, employment, education, social benefits and family reunification.

 

IV – Economy

As far as economic aspects are concerned, the European and Italian measures envisage interventions in the area of financial services, transports and border controls (ports, airports and customs).

Measures have been drawn up in particular at national level – also following up on the specific meetings held in November 2018 with the representatives of the businesses in the sector – to comply with the new legal framework in the major points of entry and exit of goods between Italy and the United Kingdom, to implement EU measures in the financial services and transport sectors, to inform users and operators and to assist companies in case of a No-Deal Brexit.   

The emergency measures will not be able to completely eliminate all the negative effects of a No-Deal Brexit because the above actions will not be able to reproduce the benefits of being a EU member nor duplicate the provisions of the Withdrawal Agreement, but will materialise through temporary, unilateral and restricted interventions which will necessarily have to combine with the preparedness of the private sector.

 

Additional information

EU citizens, businesses and the people concerned wanting to be informed on the consequences of Brexit, may consult:

 

 

 

 

 

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