Brexit is an abbreviation for “British exit,” referring to the UK’s decision in a June 23, 2016 referendum to leave the European Union (EU). The vote’s result defied expectations and roiled global markets, causing the British pound to fall to its lowest level against the dollar in 30 years. Prime Minister David Cameron, who called the referendum and campaigned for Britain to remain in the EU, resigned the following month. Home Secretary Theresa May replaced him as leader of the Conservative party and as Prime Minister.
UK Citizens in the EU
Conservative opponents of the amendment argued that unilateral guarantees eroded Britain’s negotiating position, while those in favour of it said EU citizens should not be used as “bargaining chips.” Economic arguments also featured: while a third of British expats in Europe are pensioners, EU migrants are more likely to be in work than native-born Brits. That fact suggests EU migrants are greater contributors to the economy than their British counterparts; then again, “Leave” supporters read these data as pointing to foreign competition for scarce jobs in Britain.
On Dec. 8, British and EU negotiators presented an agreement laying out the basic structure of the citizens’ rights agreement. It promised, “reciprocal protection for Union and UK citizens, to enable the effective exercise of rights derived from Union law and based on past life choices.” It places limits on the cost and difficulty of the verification processes national governments can impose. It requires Britain to introduce a Withdrawal Agreement and Implementation Bill to Parliament, which will supercede other national laws pertaining to EU nationals in Britain before the withdrawal date. And it gives EU citizens in Britain the right to appeal to the European Court of Justice, whose jurisdiction Brexiteers have long been determined to escape.
The “Brexit bill,” or financial settlement the UK owes Brussels following its withdrawal, has been a major point of contention for both sides. During the campaign, “Leave” supporters often cited the money that British taxpayers pay into EU coffers, though the figure they used was inflated (see below). A large financial settlement would, therefore, rankle many Brexit supporters, some of whom believe the UK should refuse to pay anything.
According to the Dec. 8 agreement, the UK and EU have agreed to a methodology whereby Britain will participate in and contribute to the 2019 and 2020 EU budgets and pay outstanding commitments through 2020 (the “reste à liquider”). The payments will be denominated in euro. Downing Street estimated that they would amount to the equivalent of £35 billion to £39 billion.
The agreement resolves a long-standing sticking point that threatened to derail negotiations entirely. Barnier’s team launched the first volley in May with the released of a document listing the 70-odd entities it would take into account when tabulating the bill. The Financial Times estimated that the gross amount requested would be €100 billion; net of certain UK assets, the final bill would be “in the region of €55bn to €75bn.”
Davis’ team, meanwhile, refused EU demands to submit the UK’s preferred methodology for tallying the bill. In August he told the BBC he would not commit to a figure by October, the deadline for assessing “sufficient progress” on issues such as the bill. The following month he told the House of Commons that Brexit bill negotiations could go on “for the full duration of the negotiation,” adding that the UK would not necessarily accept the “legal basis” for the settlement.
Davis has presented this refusal to the House of Lords as a negotiating tactic, but domestic politics probably explain his reticence. Foreign Secretary Boris Johnson, who campaigned for Brexit, called EU estimates “extortionate” on July 11 and agreed with a Tory MP that Brussels could “go whistle” if they wanted “a penny.”
In her September speech in Florence, however, May said the UK would “honour commitments we have made during the period of our membership” and offered to make an “ongoing contribution” to any educational, cultural and security programs Britain might continue to participate in. The statements helped to cool tensions with Brussels, but domestic tensions over the bill are likely to continue in the UK.
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