Emerging scenarios following the UK’s decision to leave the EU, and the possible implications on businesses were the main themes discussed at a meeting of the Malta Institute of Financial Services Practitioners (IFSP), which exchange was moderated by Chetcuti Cauchi’s Managing Partner, Dr Jean Philippe Chetcuti.
Article 50 is expected to be triggered in March this year, and when that happens; two possible scenarios will inevitably emerge; the first will see the UK put forward a draft deal for the shaping of future EU – UK relations to the 27 EU Member States (EU MS), which deal would require the approval of at least 20 EU MS, with 65% of the EU population. Upon approval, the deal must then go to the EU Parliament for ratification. At the end of the process, the UK would then effectively leave the EU - repealing the European Communities Act. This process should be completed within 2 years, and if no agreement is reached within the 2 year timeframe, an extension of a further 2 years is possible – provided that all EU Member States approve.
In the event that that the EU MS do not approve the extension for negotiations, a second scenario will emerge, whereby the UK would leave the EU without any specific agreement – a scenario, which is certainly in nobody’s interest.
In view of the two scenarios, the onus is ultimately on the UK to attempt a deal which is acceptable to the European Union and its Member States. Effectively, this won’t be an easy deal to strike for Theresa May, and the extent as to how fluid the negotiation process will be, is yet to be determined.
On the post Brexit relationship between the EU – UK, PM Theresa May has already indicated her intention of a clear cut with the bloc, citing an exit from the Single Market, Customs Union and the EEA amongst her top priorities. In parallel to this, she has also communicated her objective to negotiate full possible access to the EU market – which compromise will inevitably be one of the toughest to reach.
