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The UK on the Way to Exit

Wednesday, October 5, 2016 22:23
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From the moment the referendum result was declared the UK’s relationship with the rest of the EU changed in an important way. Whilst it is true the government has not yet formally notified the rest of the EU of our intention to leave, the EU has known for three months that we are going to leave. Few on the continent now doubt it.

The rest of the EU have already altered their behaviours. They have started holding the odd EU meeting without us – a violation of the Treaty which seems reasonable, and would be defended on the grounds that it was not a proper EU meeting. They have given more public prominence to polices like the EU army that they know the UK opposes. The Commission has postured over their response to Brexit, whilst trying to warn member states off from talking about it or even discussing it with the UK. We will discover with Brexit, as with other crises and big changes for the EU, international politics takes over from Treaty clauses and EU laws. One notable feature of the EU and the Euro area under crisis is its flexibility when its Treaty based dirigisme creates yet another disaster.

Some advisers in the UK want to make a lot of money or media capital out of interpreting Treaty rules in particular ways and claiming the UK will have to confirm to them to its own cost. This misunderstands both what we are embarking on, the assertion of independence, and the way the EU will in practice have to respond. The EU has always had a very partial or lop sided approach to enforcement. Most member states have continuously flouted the central state debt rule, and many have broken the fiscal deficit rules. Many sign up to carbon reduction targets which they fail to hit. The no bail out rule and the rule against the ECB helping with monetary financing of member states have been sorely tested by ECB QE programmes and bank recapitalisations. Consultants may wish to earn large sums by being literal in a skewed direction, but in practice there will be an arrangement as it is in everyone country’s interest to have one.

The UK needs to think through what it intends to do during the transitional period. Any new Regulation will be directly acting and will have to be governed by the same approach as the rest of EU law. New Directives need not be transposed into UK law in future if we do not agree with them. Other member states have poor records at getting on with the task of transposing EU measures. Why would we bother to transpose ones we do not like?

Once we are out we should ensure there is no residual ECJ jurisdiction. All will agree no-one can bring a new case to the ECJ against us once we are out. There is the issue of what should be done about outstanding infraction proceedings against the UK on leaving? Again the sensible thing would be to discontinue them, as the UK would not be inclined to pay a fine for a past failure to transpose a Directive.


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