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The EU Facing Brexit

Published on: 31/03/2017

It’s finally happening: after talking about Britain’s referendum decision to leave the EU for over half a year, the United Kingdom has finally triggered Article 50, starting the 2-year countdown for negotiations on the divorce.

The European Union is sorry to see one of its strongest members go and will certainly drive a hard bargain with the UK. It already reached out to the Kingdom about discussing future options for a free trade deal, but stipulated that Britain must accept the EU’s conditions if they want to get a deal.

What may those be? According to the information provided to the remaining EU states by Donald Tusk, these demands include the obligation of the UK to keep many of the laws and regulations established by the EU (contrary to UK’s stated intentions of revoking some of them), paying fees in the billions (perhaps over 60 billion euro, though this number is still up for speculation), and providing visas for the millions of EU citizens that currently reside in the United Kingdom, whose status has been uncertain ever since the decision to leave the EU became known. Even though these demands are still subject to change before they are formally submitted, it is clear that the EU wants to first establish the rules of Britain’s withdrawal before it can attend to the kingdom’s future ambitions.

The rights of British citizens in the EU after 2019 are also up for negotiation. However, Tusk was firm that such concerns come into account after all of the conditions of the Brexit are clear and EU demands are satisfied.

In fact, some of the things the EU demands are basically what’s required of member states – free migration of labor, paying into the EU’s budget regularly, and abiding important EU laws. These were some of the main concerns of EU-skeptics and the reason why they won the Brexit vote. If it turns out that Britain would have no say in this, then leaving the EU in a way defeats the point.

Furthermore, even if the UK eventually gets a free trade deal with the EU, it would still not be able to apply it selectively, but would have to open up to all economic sectors. Europe knows that the UK needs to export to its market in order to sustain the British economy.

The person who will be handling the Brexit deal is Michel Barnier, former Minister of Foreign Affairs of France. He has the tough job of showing European unity, thereby countering the efforts of the UK to target “weaker” EU members. There will be more news about this epic battle of diplomacy in June when it officially begins.

Stay alert for Brexit-related news as any new information will likely impact both the EUR and the GBP, as well as their related pairs.

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