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The following guest post is courtesy of Adinah Brown, content manager at Leverate.
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What’s it like to have the most expensive divorce in history? Ask the people of Britain, as Westminster finalises the cost of leaving the European Union.
Anyone that has not been watching closely the machinations in Europe will find it surprising that there is anything to discuss. Surely they just pack up their offices, hire some cleaners and painters and hand over the key before they move out, right?
Unfortunately no. Leaving Brexit is not at all like vacating an apartment, thanks to a little document called Article 50.
What is Article 50? Article 50 is the plan signed by all the EU states which outlines the mechanisms which allows a country to leave the EU. To leave the EU, the member country must formally notify the European council and negotiate its withdrawal. Its also requires the exiting nation to take part in EU internal discussions about the process of its departure.
Whilst it all seems simple, the reality is proving challenging and difficult at best. In Britain, a challenge to the supreme court heralded the first stage of internal processes to invoke article 50 without consulting parliament, delaying the start of the two year time clock for the EU negotiations. After a fierce fight, it is expected that Parliament will pass its decision into law in March.
Then the negotiations begin in earnest, with a significant gap between expectations held in Brussels and that of the British public. At the time of the referendum in Britain, the savings resulting from a Brexit was estimated at £350m per week. In some parts of Britain there is an expectation that all payments will stop when Britain exits.
However, the bill in Brussels paints a very different picture, expecting Britain to pay its dues for several years. Alex Barker, in a report from the Centre for European Reform, puts the exit figure of the disengagement bill at between €24.5bn and €72.8bn. The bill centres on three main aspects. The first relates to the 7 year budgetary commitment approved by all EU governments, including Britain. The second relates to investment commitments post 2019, whilst the third involves liabilities associated with the as yet unfunded pension scheme.
With the gulf between the British public’s perception of the EU payment commitments and that of Brussels, there is not a lot of wiggle room domestically for the British government to negotiate. For the EU, Britain’s bargaining position has shifted from partner to external nation, impacting relationships and their negotiation stance. To alleviate this somewhat, it is expected that Britain will work to improve ties with individual EU nations, hoping to create a favourable environment for negotiations and departure. The current desire by Brussels to finalise the bill before undertaking further trade discussions, against the wishes of the British position, also puts further pressure on an already emotional debate. It has been reported that informal meetings between the two sides has descended into acrimonious behavior. Some suggest a third party mediation will quell tensions somewhat, allowing a more effective negotiation and transition.
The challenges ahead have undoubtedly prompted Theresa May to call for an early election in June, the third general election in less than two years. In order for May to wield the most political power possible throughout her negotiations with Brussels, she is going to require the full support of her parliament. While her working majority currently stands at 17 seats, more seats will give her a freer hand in her negotiations as well as improve her ability to set the agenda at home.
With all the makings of a wonderful public battle, the great Brexit battle has already shown the potential to be the nastiest divorce in recent memory. With the division of the assets of a continent at stake, and many different competing interests and agendas, it is sure to be epic.