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EU27 and UK Agree on Extending Brexit Deadline Until 31 October 2019

Following repeated rejections of the Brexit deal in the UK Parliament, the European Council scheduled a special Brexit summit for 10 April 2019. At the special summit, the EU’s heads of state and government decided to once more extend the Brexit deadline. The new deadline, allowing the UK to put into place an orderly Brexit, is now 31 October 2019. The President of the European Council has also commented that this period will even allow the UK to re-think its Brexit strategy, or cancel Brexit altogether.

On 10 April 2019, the EU Council held a second special Brexit summit. As Hong Kong traders may recall, the UK government and the EU27 unanimously agreed on a withdrawal agreement (“the Brexit deal”) and a political declaration on the future relationship during the first special summit in November 2018. Since then, the withdrawal agreement has been put to a vote – and overwhelmingly rejected – in the House of Commons three times.

The expected date for the UK’s departure from the EU, which was originally set for 29 March 2019, had already been extended once at a regular EU summit dated 21 March 2019, which was overshadowed by Brexit. The EU leaders offered an extension to Article 50 – the process that defines the Brexit date. Two dates were then on the table:

  • an extension until 22 May 2019 to allow necessary legislation to pass should the UK Parliament approve the withdrawal agreement by 29 March 2019; or
  • a shorter extension until 12 April, in the event that the UK Parliament fails to approve the withdrawal agreement by 29 March 2019. The EU Council required the UK to indicate a way forward before this date for consideration by the European Council to avoid the highly feared and by now much castigated “no-deal Brexit” scenario.

The UK Parliament voted against Mrs. May’s deal, but also against leaving without a deal. To prevent this from happening, in the face of the looming deadline of 12 April 2019, the UK Parliament passed a bill which obliged May to request an extension to Article 50. The proposed deadline was 30 June 2019, i.e. before the first meeting of the new European parliament for which elections will be held in May 2019.

At the EU summit on 10 April 2019, May asked for this short delay for Brexit, to allow the UK time for its orderly departure, with the option for the UK to leave earlier in case the Brexit deal is ratified.

The EU however considered that the delay until 30 June 2019 will still be too short and that, in addition, any new short extension might result in yet another request for a further extension, thereby taking the EU hostage in its decision-making processes. Due to the recent votes in the UK’s House of Commons, there is very little confidence in a stable majority for a Brexit deal happening so soon.

In the run-up to the summit, EU leaders were expected to offer a delay of up to a year, with certain conditions attached. Such conditions included the UK holding elections to the European Parliament in May 2019 if it remained a member of the EU as well as a commitment to not disrupting EU business due to concerns that the UK might be a difficult partner during the extended period of time.

Jean-Claude Juncker, the President of the European Commission, stated that the EU does not want to kick out a Member State. Donald Tusk, the Polish-origin and well-respected President of the European Council, proposed a year-long extension to Article 50 with the option of allowing the UK to leave earlier, if the withdrawal agreement were ratified earlier. This flexible period was also being referred to as a “flextension”.

Finally, after five hours of discussion, the European Council agreed to review the new given deadline of 31 October 2019 in June 2019 at the next regular EU Council summit to take stock of progress made. It is important to note that, despite preliminary announcements to the contrary, the European Council granted this extension without hearing a convincing plan of Brexit action from May, and without any safeguards or imposition of conditions to prevent disruptive action from the UK.

Now, the ball is in the UK’s court. It can ratify the deal, and leave in an orderly manner as soon as the ratification is done. Should this take longer than May 2019, the UK will be required to hold elections for the European Parliament or, if it fails to do so, leave in June 2019 without a deal.

The European Council also reiterated that there will be no reopening of the withdrawal agreement negotiations.

A key obstacle in the withdrawal agreement being voted through has been the disagreement over the type of border between Ireland and Northern Ireland after Brexit. One of the EU’s concerns is that with the Republic of Ireland as a Member State, border checks would be needed to ensure that sub-standard goods do not enter the EU from Northern Ireland. While neither the UK nor the EU want a “hard border” with physical checks, desiring a “soft border” relying on technology-enabled solutions to scan goods at factories and in trucks, the path to achieving such desire is proving to be tougher than ever.

On 25 November 2018, EU leaders had approved the withdrawal agreement which included a so-called “backstop” arrangement. Disagreement over this backstop proposal was one of the chief reasons May lost the Brexit vote in Parliament three times.

Under the backstop plan, the EU and UK agreed that Northern Ireland would follow the rules of the EU single market if another solution cannot be found by the end of the transition period in December 2020. That means that goods coming into Northern Ireland from the rest of the UK would need to be checked to see if they met EU standards. It would also involve a temporary single customs territory, effectively keeping the whole of the UK in the EU customs union.

Content provided by Picture: HKTDC Research
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