Brexit alert no. 2: Hard Brexit more likely than not

The Brexit clock is ticking

Brexit is a ‘separation’ in a highly difficult political and legislative environment involving many actors & decision makers at many levels, with at times conflicting interests.

With only 8 months to go BEFORE BREXIT on 30 March 2019 both the EU Commission and the different EU governments (including the UK) have asked business to prepare contingency plans (for a hard Brexit) and in any case to be ready for new trading and border arrangements between the EU and the UK.

So why is time running out to agree on an orderly withdrawal?

  • Still no political agreement between UK – EU on the withdrawal itself: Northern Ireland and role of European Court of Justice continue to be points of contention
  • The transition itself is part of withdrawal so if agreement is not reached on all these withdrawal issues there is no transition period at all
  • Even if an EU–UK political solution is reached, the Brexit framework is quite different from a national framework: approval is needed on both sides :
    • UK parliament (which has set out its own requirements in the Withdrawal Act):  internal UK politics are divided as “Brexiteers” and “Remainers” want different outcomes of the negotiations, jeopardizing the ratification of a potential Withdrawal Agreement at UK level after the negotiations
    • EU approval process: if an agreement at negotiators level is reached, the EU Parliament needs to approve by a simple majority (30% of the members must be present, 50% +1 of the votes need to be in favor) after which the governments of the member states need to agree by an enhanced majority in the Council of the EU (72% of Council Members representing at least 65% of the total population of these States)
  • After almost two years the UK only published its first proposal for the framework of the future relationship, making an EU-UK agreement on the framework on the future relationship for the inclusion in the Withdrawal Agreement difficult
    • Mr. Barnier questions the proposal fundamentally: “Thus, the UK wants to take back sovereignty and control of its own laws, which we respect, but it cannot ask the EU to lose control of its borders and laws.”
  • Also for the future relationship Northern Ireland and role of the European Court of Justice are points of contention
  • Any free trade agreement can only be concluded after Brexit

What can and should a business do today?

  • Contingency planning
    • Mapping your potentially affected supply chain
    • Reviewing your contracts
    • Checking your IP, your GDPR plan to be “Brexit proof”
    •  …
  •  New investments in the UK must take into account the Brexit impact

Is your company already preparing?

Please complete our Brexit survey on the Brexit preparedness on business.


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Karolien Vandenberghe

Karolien Vandenberghe

Senior Managing Associate, PwC Legal BV/SRL

Tel: +32 472 90 08 79

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