EU leaders have gathered in Brussels for a meeting where they are expected to rubber stamp the Brexit transition deal and clear the way for trade talks. Dr Andreas Kokkinis of the School of Law comments.
"The prima facie political agreement on a 21 month transition period after March 2019 will temporarily reduce pressure on Theresa May. However, it must be kept in mind that there is still no legally binding agreement and therefore it is doubtful whether companies and especially banks can rely on the expectation of the 21 month transition period or whether they will have to prepare for the worst case scenario and start applying for overseas licences for their operations in other member states. The latter approach is the one recommended by German regulators which means that some UK financial institutions may have to start preparing for such applications immediately.
"Furthermore, the agreement is still conditional on a resolution of the thorny issue of the Northern Irish border and also of Gibraltar. Overall, one thing has become clear over the last few weeks: that the UK is prepared to commit to a form of regulatory alignment with EU law after Brexit which will probably mean that UK law will mirror any changes to EU law. This means that from a legal perspective the UK will have little more ‘policy space’ than if it remained part of the Single Market with the notable exception of free movement of people, which will not apply and the ability of the UK to have its own external trade policy and enter into bilateral free trade agreements. Whether this will be satisfactory for those envisaging full national control of the country’s laws remains to be seen. On the other hand, it is also doubtful to what extent such regulatory alignment will convince Brussels to provide UK firms with broad access to the Single Market either under a Brexit deal or unilaterally based on the principle of equivalence."
Dr Andreas Kokkinis, School of Law