Brexit Deal in Brussels: What the Fine Print Says and What It Means

U.K., EU Ready to Begin Work on Brexit Transition

Theresa May got her Brexit breakthrough, ending six months of negotiations with the European Union. But celebration could be short-lived as the agreement she signed up to contains political booby traps down the line.

The technical and legal language of the 15-page document published Friday gives clues as to where conflict may arise between the two sides as they prepare for the next step in talks.

Here is our analysis of the three priority issues where the U.K. needed to make “sufficient progress” -- how to keep the Irish border open, the U.K.’s financial obligations and the rights of EU citizens living in the U.K. and vice versa.

Irish border

There is still precious little in the way of solutions in the Ireland section. But what’s key is that the U.K. has guaranteed there will be no hard border between Northern Ireland and the Republic of Ireland.

The expert view of Guntram Wolff, director at the Brussels-based think tank Bruegel: “The decision on Ireland actually offers a backdoor option. If the U.K. was serious about its commitment and given that I don’t see any other solution than a pretty hard border either in Ireland or the Irish sea, we could end up with the UK having to stay in the Customs Union.”

  • Britain said it wants the relationship the U.K. has in the future with the EU to help it avoid a hard border through with Ireland -- but there’s no certainty the U.K. will be able to achieve this
  • If the U.K.’s future relationship with the EU, which will negotiated over the coming years, isn’t close enough to prevent the setting up of a hard border with Ireland, the U.K. says it will come up with “specific solutions to address the unique circumstances of the island of Ireland”
  • If even those solutions can’t be agreed with the EU, the U.K. says it will “maintain full alignment with those rules of the internal market and the customs union which, now or in the future support North-South cooperation.” The inclusion of the word “alignment” as a last resort doesn’t please the Northern Ireland’s pro-Brexit Democratic Unionists that props up May’s government in London but was probably the only way to satisfy the government in Dublin
  • To keep the DUP happy though, the U.K. says it will preserve “the integrity of its internal market and Northern Ireland’s place within it.”

The bill

The U.K. has agreed to pay most of what the EU asked for and on the surface it’s significantly less than the figure of 100 billion euros bandied months ago. It’s almost impossible to calculate a precise figure at this stage because Friday’s agreement leaves door open for further negotiation but we do now have some official estimates. Tellingly, the U.K. has come out with its own estimate for the final sum: around 40-45 billion euros -- 35 billion pounds to 39 billion pounds ($53 billion). The EU hasn’t given its estimated figure.

  • As we knew, Britain will pay its full budget commitments in 2019 and 2020 despite leaving the bloc in March 2019. This amounts to about 17-18 billion euros
  • The deal also says the U.K. will pay its portion of the EU’s unpaid bills. Officials estimate this could run to about 21-23 billion euros
  • The U.K. said it will pay its share of EU liabilities. Net, they will run to about 2-4 billion euros. This includes pensions for EU officials (worth 9-10 billion euros) and money that the U.K. gets back (including about 3.5 billion euros from the European Investment Bank). The U.K. has agreed to pay its share of the EU’s international aid and EU projects such as the EU’s fund to help refugees in Turkey
  • The U.K. will not pay this as a lump sum but rather when the payments come due, meaning, in the case of pensions, the U.K. will probably be sending money to Brussels for several decades

Citizens’ rights

This protects the 1 million British citizens in the EU and the approximately 3.5 million EU citizens in the U.K. at the time of Brexit. Citizens moving after that cut-off date won’t be protected. At one stage, the U.K. was pressing for an earlier cut-off date than March 2019.

  • The U.K. and the EU’s 27 countries won’t be allowed to discriminate against those people or their family members in favor of their own citizens
  • U.K. courts will have to take “due regard” of European Court of Justice decisions on the issue. This is a compromise: The EU wanted a bigger role for the ECJ, the U.K. wanted the ECJ to be completely sidelined
  • U.K. judges can -- but don’t have to -- ask for rulings on citizens right for eight years after Brexit, where case law doesn’t already exist. These rulings would be binding once requested
  • The contentious issue of whether these citizens will be allowed to be joined by family members has been settled by some delicate wording (the U.K. currently has tougher rules than the rest of the EU.) It will cover partners in a “durable relationship” after Brexit as long as “the relationship existed and was durable on the specified date and continues to exist at the point they wish to join.” But future spouses aren’t covered -- but future children are
  • There must be a “transparent, smooth and streamlined” procedure for these 4.5 million citizens to obtain settled status
  • Citizens will lose this status if they leave their country of residence for more than five years. The U.K. had initially wanted to give a lifetime guarantee but had wanted the EU to reciprocate by giving protection to British citizens moving between EU countries. It didn’t do so

— With assistance by Nikos Chrysoloras

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