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On Wednesday 29th March 2017 the Prime Minister, Teresa May, triggered Article 50, thereby commencing the negotiations with Brussels by delivering a letter to Mr Donald Tusk. Later she set out her vision as to what she hoped would happen over the course of the next two years. If the journey towards triggering Article 50 has been anything to go by, then the negotiations and political and economic fallout thereafter are going to be just as equally tricky.
The road to triggering Article 50
Following the UK Referendum, many including the Prime Minister, may have thought that triggering Article 50 would be a formality. It had initially anticipated that this could be allowed under governmental prerogative allowing her to instigate the process at her will. Unfortunately, a legal challenge was mounted which suggested that without an Act of Parliament this was impossible. The Government at the time had thought that his was nothing more than a nuisance and that the Courts would kick such a legal challenge into touch. Little had they anticipated that the High Court would actually find that an Act of Parliament was indeed required.
Fast forward a number of months an Appeal lodged by the British Government resulted in the Supreme Court sitting for the first time with a full Chamber. After much deliberation, they too concluded that indeed an Act of Parliament was required.
A swiftly prepared Bill followed, with doomsayers from the Labour Party and the SNP indicating that they would table numerous amendments to the Bill so as to force a revote. The Liberal Party for their part suggested that it would be necessary for the deal eventually agreed to be put back to the people of the United Kingdom in a further Referendum. In reality, little became of such talk, as when it came down to the vote few MP’s were prepared to be publicly seen to be flouting the “will of the people”.
The matter then went to the House of Lords who were much more boisterous than the House of Commons. They, after a substantial debate tabled two amendments, the first that there should be a vote in Parliament at the end of the negotiation period and secondly, that the UK Government should come out and make it clear that EU migrants in the UK would be allowed to stay. The Government however stood firm and stated that it was not prepared to have its hands tied in relation to negotiations, as to do so would weaken rather than strengthen its position. They simply rejected the House of Lords amendments and sent the Bill back to the House of Lords for them to pass. They capitulated. The Bill then obtained Royal assent, thereby becoming an Act of Parliament allowing the Government at least to be able to trigger the divorce with Europe.
Just when the Prime Minster thought however that things were about to settle down so that she could get on with negotiations, the SNP announced that they would be seeking a further (2nd) Scottish Referendum on the basis that the Scottish people had voted to stay in the UK on the basis that the UK were part of Europe. The SNP stated the 2nd Referendum should occur between the Autumn of 2018 and Spring 2019 prior to the negotiations with the EU having been ratified.
Even though Miss Nicola Sturgeon may have thought that this would have forced the Governments hand, little did she know that the Prime Minster would simply dismiss the Scottish call for a further Referendum and suggest that it was simply too soon and that any such talk about a 2nd Referendum would have to wait until the Brexit deal had been negotiated and concluded before even being contemplated.
The reality is that the Scottish Government are unable to hold a “LEGITIMATE” second Referendum without the consent of the Westminster Government as to do so otherwise would carry no legal weight.
Unperturbed by this however, Miss Sturgeon stated that the SNP put would still push ahead with a 2nd Referendum and voted to conduct such a Referendum on Tuesday 28th March 2017; a day before the Brexit process was triggered. Whether or not the SNP have the legal right to do so they do have the political support. Legal weight may be redundant but political will there most definitely is. Can Westminster simply ignore this?
From the brief sumamry above it is quite clear that the road to triggering Article 50 has been anything but smooth. So, will the next two years be a further roller-
The next 2 years
A meeting of 27 other EU States has been hastily arranged for the end of April 2017 in order to allow them to discuss the joint bargaining position in relation to the UK. This in itself will be a very interesting meeting as it will show whether individual member States are going to take a unified approach or whether they are going to protect their own sovereign position. The weaker countries would clearly want to support a strong stance being taken against the UK Government however, many of the larger EU States have more to lose, and a trade war with the UK could damage them more than it would damage the UK. The extent of the German and French trade balance with the UK clearly shows who would be worse off, should a harsh stance be taken. Would they really call the UK bluff?
In addition to this, there is the small subject of the alleged 60 billion Euro divorce settlement that the EU will want the UK to pay. Should the UK be forced to walk away from the negotiations, and should they be forced to rely upon world trade rules there is little doubt that they would refuse to pay the 60 billion Euro divorce settlement, that the European Union would want paid. It is quite clear therefore that the first issue in Europe’s mind may well be this payment and securing its payment at all costs. This on the other hand would be potentially the last thing that the UK would want to discuss after all of the other issues have been resolved.
The jockeying has already begun, as the UK Foreign Minister, Boris Johnson, has already made it clear that as far as he is concerned, there is no question that the UK would be paying 60 billion Euros to the EU. Such a stance would have done little to appease the anger and annoyance that many in Europe have felt.
In addition, to the above, sounding’s from the UK have been clear, that should the EU play hard ball and should they punish the UK, the UK would use their Fiscal Policy to attract substantial businesses away from Europe by having the lowest corporation tax as well as business subsidy’s in any developed market. Would the EU really want that?
Mr Michel Barnier, the EU’s chief negotiator has also suggested that the negotiations need to be concluded by the Autumn of 2017 so as to allow sufficient time for each of the EU member States to be able to ratify such an agreement in their own country. Is this really realistic?
Given the 27 different stand points in relation to the negotiations; the UK’s undisclosed position as to what its priorities are; the limited amount of time to negotiate and reach an agreement; and the huge issue in relation to the amount of money to still be paid – it is unsurprising why many feel that the road ahead will be even more turbulent than the road that has just been travelled.
Uncertainty and volatility are likely to be the by-
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