The UK has made its decision. On 29th March 2019, we will be leaving the European Union. But what does this really mean? After Hayley Hughes declared she ‘seriously didn’t have a clue’ about Brexit on Love Island last week, the nation gasped in horror. But how many of us really know what’s going? UNiDAYS break it down... Hayley, are you listening?
What is the EU?
The European Union is an economic and political union between 28 European countries, which allows member states to trade and travel freely, with relatively few boundaries. It began after World War 2 to foster economic cooperation, based on the idea that countries which trade together are less likely to go to war with each other.
The EU makes it much easier for member states to buy and sell goods and services as well as live, work and travel abroad in Europe, basically as if the member states were one country. This is what is called the Common or Single Market. The EU has its own currency, the euro, and policies in a wide range of areas. These policies include working to reduce regional inequalities, drive rural development, promote human rights and invest in education and research across Europe, among other things.
Sounds great, right? So why did people want to leave the EU?
People voted to leave based primarily on the issues of sovereignty (who should be running the country) and migration. Critics of the EU believe Britain is being held back by the EU, gets little in return for the money it pays in and would be better taking back control of its borders. Some say the EU has taken too much power from the UK government, its regulations are costly to the British economy and without them, Britain would be able to sign other trade deals with growing economies like China and India. They also say that the EU wastes taxpayers’ money on excessive bureaucracy (all the complicated administration stuff).
A poll on the day of the referendum questioning over 12,000 people who had voted showed that nearly half of leave voters said the biggest reason for wanting to leave the European Union was “the principle that decisions about the UK should be taken in the UK”.
While the ‘Leave’ campaign focussed on these key issues of sovereignty and migration, the ‘Remain’ campaign focused on the economic impacts of leaving the EU, which Britons were less bothered about according to survey data collected by Ipsos MORI.
So… What now?
The UK is set to leave the European Union at 11pm UK time on Friday 29th March 2019 after 51.9% of the UK voted ‘Leave’. Since then, negotiators have been working out a transitional deal. The ‘transition’ period refers to the time from 29th March 2019 until the new post-Brexit rules are made official. The UK wants a transition period lasting around two years to allow businesses and others to prepare for the moment when the new post-Brexit rules between the UK and EU begin and to allow time for the new deal to be straightened out.
Negotiations over future relations are ongoing between the UK and EU.
So what’s going to change?
People now talk about ‘soft’ and ‘hard’ Brexit in reference to how connected the UK will be to the EU after separation. Theresa May has made it clear that ‘Brexit means Brexit’, in other words, she believes it is the government’s duty to deliver ‘hard’ Brexit and pull the UK entirely out of the Single Market in order to reclaim control of immigration and shake off the authority of the EU’s judges. This would mean huge changes to how easily people can travel, work and live abroad, as well as how easily goods can be traded with European countries. As a result, it is likely that the UK will be forced to pay tax and customs on goods, as is customarily levied on non-EU members. However, Theresa May has declared that Brexit will make a “truly global Britain”, allowing us to pursue other trade deals with countries like China, whose economy is growing rapidly. Therefore, while some doors may close, others may also be opening.
However, as Barack Obama said, Brexit puts the UK at the “back of the queue” for trade talks. He said, in a plea to Britons to vote in favour of ‘Remain’, that while there may be a UK-US trade agreement down the line, “it’s not going to happen any time soon because our focus is in negotiating with a big bloc, the European Union, to get a trade agreement done”. Obama also commented on Britain’s domestic considerations, arguing that if he were a British voter he would be wary of cutting himself off from the market that takes 44% of British exports and is “responsible for millions of jobs and an enormous amount of commerce upon which a lot of businesses depend”.
But some believe that Theresa May is now plotting a soft Brexit in light of recent difficulties to arrange a deal with the EU that is satisfactory for Britain, according to Thomas Colson for Business Insider. In other words, Theresa May wants us to keep as many of the benefits of being an EU member, such as the Single Market, with as few obligations as possible - and the EU isn’t having any of it. In light of this, some say Theresa May may be forced to follow a softer Brexit deal.
What does the government want to try and negotiate?
The Brexit ‘white paper’ refers to the formal policy paper, with a list of objectives, set out by Theresa May’s government on how the UK proposes to leave the EU. The three main objectives are: to regain complete sovereignty, control of UK laws and the Great Repeal Bill or Withdrawal Bill.
The two main pillars of current negotiations are: a security partnership to “work together” to “keep our people safe” and an economic partnership “to grow our economies”. Theresa May has made it clear in a speech on 2nd March that the government wants to try and avoid existing models for economic partnership, such as that with Norway and Canada, which will lead to a significant reduction in the UK’s access to European markets compared to what we currently enjoy. Theresa May also stated that she wanted to avoid changes to customs and regulatory checks at borders that would “damage the integrated supply chains that our industries depend on”.
But the hard fact, according to May, is that the UK will indeed be leaving the single market which means life is going to be different.
Our access to European markets “will be less than it is now” meaning trade and travel will both be affected. Nevertheless, EU laws and the decisions of the ECJ will continue to affect us even after we leave. This is because the UK has become so inherently connected to the EU in business, trade and many more things. If British laws are not legal under the EU’s own law, then this will affect us as the US found out when the ECJ declared the Safe Harbor Framework for data sharing invalid in light of the recent Facebook data sharing scandal.
In light of this, the Conservative government has introduced the Withdrawal Bill. It will end the primacy of EU law in the UK on Brexit Day but will incorporate all EU legislation into UK law in one go, after which the government will decide over a period of time which parts to keep, change or remove. The Withdrawal Bill means that UK courts will continue to look at the ECJ’s judgements in the forging of laws and policy audit.
But how does the EU even work? If you want to learn more about the EU, keep reading.
There are four key institutions that work together to run the EU:
Citizens of EU member states elect members directly to the European Parliament.
Together with the Council of the European Union, the European Parliament is the main decision-making body of the EU, forging laws and policy.
The European Court of Justice is the judicial institution of the European Union. The ECJ has the important function of ensuring that European law is interpreted and applied in the same way in every member state.
The European Commission (one of the four key institutions which run the EU) sets a budget each year to pay for policies carried out at European level.
How does the EU spend its money?
The EU uses its revenue to pay for policies carries out at European level. These policies include agriculture funds for farms, rural development, support for poorer regions, security including border controls, research and some overseas development aid.
The EU budget operates on the policy that total revenue must equal total expenditure. However, there is a usually a surplus of revenue, which is often paid back to EU countries’ to reduce their contributions to the budget for the following year.
The EU obtains its revenue to fund policies from four different types of own resources, which make up 98% of the EU budget:
- Own resources, such as income from customs duties placed on non-member imports.
- Own resources, by charging value added tax (VAT) on most sales and purchases within the EU.
- Own resources based on GNI (Gross National Income). Members States are required to transfer a percentage of its GNI to the EU to cover the balance of total expenditure not covered by the other own resources.
Only 2% is made up of other sources, such as taxes on EU staff salaries, contributions from non-EU countries to certain programmes and fines on companies for breaching laws, etc. National compensation mechanisms have been put in place for some countries who felt they were paying too much towards the budget. For example, the ‘UK rebate’ means that the UK is reimbursed by 66% of the difference between its contribution and what it receives back from the budget. The cost of the UK rebate is divided among EU member countries in proportion to the share they contribute to the EU's GNI.
But what is the ‘Common Market’ or ‘Single Market’?
EU countries stopped charging customs duties on goods they trade with each other in the 1960s. In 1962, EU members also agreed on a Common Agricultural Policy, a partnership between Europe and its farmers. This policy established joint control over food production with the aim of ensuring that everybody has enough to eat. The EU does so by supporting farmers to increase agricultural productivity as well as ensuring farmers can make a reasonable living by helping to keep the rural economy alive. Soon there was even surplus agricultural produce.
With the collapse of communism throughout central and eastern Europe, Europeans became closer neighbours and in 1993 the Single Market was completed with the ‘four freedoms’ of: movement of goods, services, people and money.
Millions of young people are able to study in other countries with EU support. Most European countries adopt the same currency, the euro.
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