The EU’s Verdict on the Government’s Brexit Plan

While figures in the UK have made no secret of their thoughts on the European Union, it’s slightly less clear what the EU thinks of Brexit negotiations as they develop. But it’s important to keep abreast of what EU diplomats make of the UK’s approach, particularly if you’re expanding your business abroad, so you can use the reactions as an early sounding-board for how cooperative the EU will be when the UK leaves.

Overall, the official response of EU diplomats has been one of regret, and a determination to not let any deals undermine the bigger EU project in the long-run.

For the EU, a soft Brexit would be the most difficult outcome to negotiate, and diplomats have said that the full complexities of such a Brexit wouldn’t be fully ironed out until after the UK has left the EU in March 2019, when formal trade talks can commence.

The EU has always held the view that the UK should not be able to cherry-pick parts of EU rules and regulations. As a consequence, it has been made clear that the four freedoms underpinning the EU’s international market – goods, services, capital and people – have been declared indivisible, because leaders fear that any other option would risk unravelling the EU.

The EU has worried that the UK wants something close to the Swiss model, which means being in the single market for goods, but not services, and which the EU does not like because Switzerland isn’t accountable to the European Court of Justice. Diplomats argue that goods and services cannot be disentangled, because many goods are sold in a package with services which are bundled with them.

On the plus side, the EU Commission had been getting increasingly frustrated with May’s inability to take on hard-Brexit colleagues and come up with a defined plan, so the deal at least shows the EU she has the ability to do so. All 100-plus pages of the Chequers deal are to be assessed by the EU in detail, but initially the European officials were guarded in their reaction to May’s proposals. The EU is well aware of the tensions within May’s own party, and they are concerned that a swift rejection could topple May and lead to a pro hard-Brexit UK government.

In recent days however the EU has given more details of its response. Ultimately, many in the EU suspect that any scheme that allows the UK to collect customs dues on behalf of the EU is unworkable. Michel Barnier, the EU’s chief negotiator for Brexit, has now rejected May’s proposals for this very reason.

Over the summer the UK is trying to appeal directly to EU heads of government to bypass Barnier and the EU, as the prospect of the UK crashing out of the EU with no Brexit deal grows ever larger.

Ultimately, both businesses who plan to go global, and citizens alike, should proceed with caution, since just one year ago the EU rejected the UK Government’s customs offering as “magical thinking”. Some sources have said the new customs compromise looks similar to this.

How Galvin International Can Help Your Business

In uncertain times, having the right guidance can be crucial to the success of your international expansion. The experts at Galvin International have the experience and in-depth knowledge to help steer your company through the choppy waters of Brexit. We advise on your situation, and can also assist with on-ground implementation such as setting upa legal entity abroad.

Get in touch with us today to discover how your company can thrive overseas.

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