Brexit Bulletin, 16 October 2020

Oct 16, 2020

Another deadline, another Brexit deal not agreed upon yet again. As UK Prime Minister Boris Johnson’s self-imposed 15 October EU Summit deadline passes by, the ball is in the UK’s court, as EU27 leaders have called for the EU chief negotiator to continue talks with the UK, with the onus on the UK to make the necessary moves to make an agreement possible. Read today’s Brexit Bulletin for the conclusive outcome of the EU Summit on Brexit. Also, take a look at our summary of Brexit measures made available in Ireland’s Budget 2021. Additionally, read about the EU’s adopted legislation to safeguard the Channel Tunnel – the main railway connection between UK and mainland Europe.

 

UK Prime Minister Boris Johnson says it time to prepare for a no-trade deal Brexit

UK Prime Minister Boris Johnson has stated that the UK should get ready for an Australian-style exit from the EU for the end of the current transition period, meaning an exit without a comprehensive deal on future relations. "Unless there's a fundamental change of approach, we're going to go to the Australia solution, and we should do it with great confidence," Mr Johnson said.

This announcement comes on the foot of no agreement being reached between the two blocs on their future trade and political relationship. However, i, EU27 leaders have called for EU chief negotiator to continue talks with the UK, with the onus on the UK to make the necessary moves to make an agreement possible.

The statement also urges the EU and its member states to step up preparations to protect their interests in the event the UK leaves the single market without a deal. Taoiseach Micheál Martin has also said there had been strong support for Ireland from other EU leaders over the UK's decision to override parts of the Northern Ireland Protocol.

Speaking at the EU Summit, Michel Barnier has firmly stated, “we are absolutely determined to reach a fair deal with the UK. We will do everything we can, but not at any price”. He also further reiterated that the divergence on the three key issues of fisheries, level playing field, and governance framework continue to hold back the negotiations.

In response to this, UK chief negotiator David Frost has responded saying that he is “disappointed” by the Summit’s conclusions on the EU-UK negotiations. With UK Prime Minister Boris Johnson set to made his approach to the future negotiations clear today, it still remains unclear yet again whether a deal can be agreed upon before the end of the 31 December 2020 transition period deadline.

Budgeting for a disorderly Brexit

An expectation of a no-deal Brexit is the backdrop against which Budget 2021 is set, with a range of supports announced to help the most vulnerable sectors of the economy to prepare for a “hard” Brexit. Measures covered include:

1. Supporting the most vulnerable sectors
New funding of approximately €340 million has been set aside to get Ireland ready for the new trading environment that January 2021 will bring. These funds will be used to support Ireland’s economy over the coming year and will be allocated as the need arises to ensure Ireland remains competitive and resilient to the changes ahead. €100 million is already earmarked for the Revenue Commissioners, Department of Enterprise, Trade and Employment and Department of Agriculture to help prepare for Brexit.

In addition, a €3.4 billion Recovery Fund has been established to address the dual challenges of Brexit and COVID-19.

2. European Funding

In July, the European Council agreed to establish a €5 billion Brexit Adjustment Reserve, a fund which will offer funds to countries and sectors that will be worst hit from Brexit. More details on this fund will be released in due course.

3. Shared Island Fund
A new multiannual capital funding for the Shared Island Initiative (part of the Programme for Government) of €500 million is to be provided over five years to create new investment and development opportunities on a North/South basis and support delivery of key cross border initiatives. €50 million is to be made available in 2021.

Read our full analysis in our special Budget 2021 newsletter here.

 

Withdrawal Agreement Joint Committee to meet on 19 October 2020

The next meeting of the Withdrawal Agreement Joint Committee will take place in London on 19 October 2020, with delegations attending in person and by video conference.

The meeting will be co-chaired by UK Cabinet Minister Michael Gove, and Vice President of the European Commission, Maroš Šefčovič.

The agenda will include some important item such as:

  • Updates on Implementation of the Withdrawal Agreement
  • Citizens’ rights
  • Protocol on Ireland/Northern Ireland

 

 

European Council adopts “Chunnel” safety measures

The European Council MEPs have adopted rules to safeguard the Channel Tunnel’s (“Chunnel”) safety and cooperation. The legislation was agreed upon on 14 October 2020, to ensure the safe and efficient operation of the railway connection between continental Europe and the United Kingdom after the end of the Brexit transition period. Agreement on the continued smooth operation is important, as the tunnel carries high-speed Eurostar passenger trains, the Eurotunnel Shuttle for road vehicles—the largest such transport in the world—and international freight trains used for moving goods from UK to mainland Europe.

The main aim of this legislation would be to maintain the same set of rules governing the whole railway tunnel once the UK has the status of a third country.

 

Brexit Bites

 

For all Brexit updates, visit our Brexit webpage.