European Council declares sufficient progress in Brexit talks

Andrew Gilmore15th December 20177min
The European Council has authorised the opening of the second phase of negotiations in the UK’s withdrawal from the EU. This blog outlines the agreements reached in Phase One of the UK’s EU withdrawal, as well as some of the unresolved issues for the next stages of the negotiations.

On Friday, 15 December 2017, the European Council, meeting in the Article 50 format of 27 Member States, signed-off on the European Commission’s recommendation that sufficient progress had been made in Phase One of the UK’s withdrawal negotiations.

The Council has now authorised the opening of the second phase of the negotiations in January 2018. As stipulated in Article 50 TEU, this phase will seek to define a framework for the UK’s future relationship with the EU.

The negotiators will also hope to find a suitable format for the transitional period between the official date of the UK’s departure, on March 29 2019, and the final agreement on its future relationship with the EU, which is expected to take at least two years, and quite likely longer.

More work remains to be done under each of the three headings for Phase One (issues pertaining to Ireland and Northern Ireland; the UK’s financial settlement; and rights of EU and UK citizens post-Brexit), but for now provisional agreement has been reached on a broad set of key issues.

This blog outlines some of the key agreements in Phase One, under each of the three negotiating headings.

The specific issue of the Irish border and the Good Friday Agreement is dealt with in more detail in this IIEA blog.

 

The UK’s Financial settlement

After months of deadlock, largely arising from UK domestic political sensitivities surrounding the size of the ‘Brexit bill’, the UK last week provided a concrete commitment on the methodology for calculating its financial liabilities upon leaving the European Union.

There is no precise figure outlined in the joint negotiators’ text released last week, as only the methodology for the calculation was required to be agreed in this phase. However, the settlement has been estimated at up to €45 billion – significantly higher than the UK’s original offer of €20 billion, but falling short of some of the upper estimates of the bill.

As part of the agreement, the UK will be required to continue contributions to the EU budget up to the end of 2020 “as if it had remained in the Union”.

A further component of the deal is a commitment that the UK will remain liable for its share of the Union’s contingent liabilities at the date of the UK’s withdrawal, including: financial and other arrangements for the EIB, the European Central Bank, the European Development Fund and the Facility for Refugees in Turkey, among others.

It is worth noting here that the settlement will be largely comprised of payments the UK would have been obliged to make as part its EU membership, and it is not a one-directional relationship: UK recipients will continue to benefit from payments from the EU budget until the end of the budget period in 2020.

It is also important that these commitments are seen in the context of the UK’s desire for a 2-3 year transition period after March 2019, one possible option for which would involve an extension of its current relationship with the EU (though any such extension would likely come without voting rights in the European Council).

 

Citizens’ rights

While this heading has not been as troublesome as the financial settlement, it has nonetheless presented difficulties in recent months, some of which remain to be fully resolved.

Notably, though, the negotiators have defined a cut-off date of 29 March 2019 for EU citizens moving to the UK to enjoy the protections afforded to them by the withdrawal agreement. Rights of EU citizens arriving after that point will not fall under the scope of the agreement.

Also agreed under this heading is the future role of the Court of Justice of the EU (CJEU) in enforcing the rights of EU citizens in the UK. The CJEU’s ultimate role will be slightly weaker than the EU’s initial position suggested, providing the EU court with a more indirect role in upholding EU citizens’ rights in the UK. Specifically, the agreement states that in areas relating to the “application or interpretation of [rights of EU citizens], UK courts shall have due regard to the decisions of the CJEU” post-Brexit. In addition, in cases where relevant EU case-law doesn’t exist, the UK’s courts will be able to refer questions to the CJEU for before giving a judgement.

These procedures will only be available for eight years from the point of the UK’s withdrawal.

 

Other key points include:

  • Those who are yet to be granted permanent residency, or “settled status”, in the UK will have their rights protected, so they can still acquire this status after withdrawal.
  • New procedures will be implemented for allowing EU citizens to apply for settled status after Brexit (though the process remains to be spelled out in full).
  • Reunification rights will be extended to relatives of EU citizens covered by the agreement to join them in the UK in the future. These rights also extend to future spouses or partners.
  • EU citizens in the UK at the time of withdrawal will have equal access to social security, health care, education and employment.
  • Recognition of qualifications for those EU citizens covered by the withdrawal agreement will be grandfathered into UK law.

Note that the specific rights of Irish citizens in the UK are dealt with separately from this, and are linked both to both the continuation of the Common Travel Area, and the protection of the Good Friday Agreement.

Ireland and Northern Ireland

The Irish issues have been at the fore of the debate in recent weeks. The specific issues relating to the border are dealt with in a separate blog, which can be found here. Agreement was also reached on a number of other key issues germane to the Irish interest.

The Common Travel Area

As the situation currently stands, agreement has been reached on the principles for preserving the Common Travel Area, and the rights that Irish and UK citizens currently enjoy in this context.

These principles essentially aim to mimic the recognition of the CTA in Protocol 20 of the Treaty on the Functioning of the European Union, while recognising the new context that Brexit presents. The text notes:

The United Kingdom confirms and accepts that the Common Travel Area and associated rights and privileges can continue to operate without affecting Ireland’s obligations under Union law, in particular with respect to free movement for EU citizens.  

This should allow for Irish citizens to continue to live and work in the UK after Brexit, in the same manner as today. However it is worth noting that the Common Travel Area is not currently defined in any one piece of legislation in the UK or Ireland. The change of context that Brexit entails does not necessarily endanger these arrangements, but if they are to be safeguarded in the long-term, it could be argued that a separate agreement on the Common Travel Area between Ireland and the UK might be needed at some time in the future.

EU Rights of Irish Citizens in Northern Ireland

The negotiators’ text also notes one of the most important stipulations of the Good Friday Agreement: that the people of Northern Ireland are entitled to be recognised as UK or Irish citizens, or both, and that those who are recognised as Irish citizens should continue to enjoy the rights they currently enjoy as EU citizens.

This is quite significant. A disorderly Brexit had the potential to create an unprecedented situation in which several hundred thousand Irish citizens would, overnight, and in most cases against their will, have found themselves outside the European Union and deprived of the rights they currently enjoy under EU law. The withdrawal agreement intends to address this:

The people of Northern Ireland who are Irish citizens will continue to enjoy rights as EU citizens, including where they reside in Northern Ireland. Both Parties therefore agree that the Withdrawal Agreement should respect and be without prejudice to [this].

However, the precise detail of how this will be given effect remains to be worked out. The matter will be more fully addressed in the next phase of negotiations.

 

Next Steps

While some work remains to be done on the Phase One issues, the guidelines for the next phase of the negotiations have now been published, and they indicate that the EU will task its negotiators with finding a consensus on the UK’s transitional relationship by the time of the European Council of 22-23 March 2018. The negotiators will also focus on the framework for the future relationship between the EU and UK.

The above will be crucial issues for Ireland. The Phase One agreements sketched the broad-strokes of a deal in relation to the Northern Ireland border and the Good Friday Agreement, but the granular, practical details of how a hard border will be avoided will be tethered to the results of the talks over the next few months.