The EU Referendum part 2.

Robert Curtis

Part II – The Legal Position after the Vote
I will mainly be talking about the legal position, and not getting too far involved in political, economic or social debates about the effects on a particular sector, or our relationship in general if we decide to leave the EU – or indeed our new relationship if we remain. I do use a couple of current examples to illustrate the hyperbole that’s built up on both sides – but the examples are not trying to influence the debate or the ways people may vote.

1. Vote Remain.

Friday June 24th 2016 – the country wakes to the news that 52% of those eligible to vote have decided that the UK should remain part of the EU. Big sigh of relief from Prime Minister David Cameron and all who backed the Remain campaign. So we all go about our business as usual and nothing changes….

….but then we start to realise that we haven’t voted for the status quo, we’ve voted for “fundamental reform” of the EU, or at least a very different relationship within the EU. Let’s briefly remind ourselves of the 4 key principles which formed the basis of the vote. Yes, I know there are five below, but the last two were originally together, and I think they are fundamentally different.
• Protecting the single market for those outside the Eurozone:
• Writing competitiveness into the DNA of the whole European Union
• Exempting Britain from an ‘ever closer union’
• Tackling abuses of the right to free movement
• Enabling us to control migration
Of course it’s still debatable what all these actually mean, and they are subject to a great deal of interpretation. However, let’s take them at face value and assume they are to become the basis of new treaties in the fullness of time. The Government would, I am sure, prefer to forget the whole thing and simply say “we voted to stay in” but some clever lawyer might actually say “no – had we not had these 4 (or 5) principles in front of us we may have voted otherwise”. We weren’t asked whether we wished to have the same relationship with the EU but one that would be fundamentally different.

So let’s just think through what would happen. Firstly the European Parliament has given itself the authority to validate (or otherwise) the agreement. Just a little diversion here… I know you know there are actually 4 presidencies within the EU, but I can guarantee that only a very few people outside the university know that. Fewer could name them, and fewer still could say what their particular remit is, or where their authority derives from. Law students at Staffordshire University won’t have any problems here, of course, but for anyone else reading this, below are the 4 presidents.

• President of the European Council. Donald Tusk. He has been in charge of the negotiations to date.
• President of the European Commission. Jean-Claude Junker
• Presidency of the Council of the European Union. Currently held by the Netherlands
• President of the European Parliament. Martin Schultz.

You can find out what they do and the composition of the bodies they represent from the link below. You might like to ask yourself how many of them have been elected as “president” and what is the relationship between them, and between each and relevant leaders of each participating country – but that’s for another time.

http://europa.eu/about-eu/basic-information/eu-presidents/index_en.htm

Back to the main agenda. The European Parliament could ratify the agreement as it stands – in which case the various terms and conditions would (in time) come into effect. There would be no immediate changes but as the treaties were altered the various provisions would be incorporated, and until that time the parties would (hopefully) honour the spirit of the agreement. However, treaty change requires the consent of all 28 members – and one wonders how likely the other 27 are to agree to incorporate all the provisions. Remember that David Cameron has stated that we get the best of both worlds – we gain a competitive advantage over our friends by opting out of the bits we don’t agree with. How likely is it that every single country will agree to us having that advantage set in stone for ever….? It’s also an interesting point to consider what would happen if, say in 5 or 10 years when the treaties come up for renewal, there were a government in the UK other than a Conservative one. It may well be that the competitive advantage written into the agreement would be unpalatable for another political party (and they have argued strongly against many of the negotiating points adopted by the current government) so we could actually veto the agreement ourselves….. Either way, if another country vetoed it, or we did so ourselves, there would be no changes at all to the current relationship and all David Cameron’s “tough negotiation” would be to no avail. Perhaps he actually already knows this, so it didn’t really matter what was written into any agreement – it would never come into force.

This is quite an interesting point from the legal perspective (though I guess by that time not many people would be bothered by the legal niceties) in that the vote to stay in was based on “fundamental change” or at least a fundamentally changed relationship, so if the provisions underpinning that change are not enacted in European law, do we get another vote, this time “in” or “out” based on the status quo rather than on a potential future changed position? Somehow I doubt it, and the government of the day (of whatever perspective) would simply say that this was an “in or out” referendum, once in a lifetime, and you chose “in”. That’s why several commentators have suggested we wait until the agreement has been ratified by the European Parliament (though of course not enacted in Treaty change as that would take too long) before having the vote. And that’s why you can understand David Cameron’s desire to get it out of the way as quickly as possible, because if the European Parliament said “no” then we’d have to go back to the negotiating table.

The scenario of other countries not accepting any treaty change is very real, and not some theoretical construct. The basis of the agreement is flexibility or “special considerations” which would then create expectations in other counties. The Financial Times on February 22nd 2016 puts it very eloquently “By transforming the right for a state to leave the EU into the right to blackmail partners with the threat of leaving, Mr Cameron has opened Pandora’s box.”

2. Vote Leave.

Friday June 24th 2016 – the country wakes to the news that 52% of those eligible to vote have decided that the UK should leave the EU. Does David Cameron resign in shame and embarrassment? Does Boris Johnson mount his challenge to become Prime Minister? Let’s leave these questions to the politicians and concentrate on the legal framework.

Firstly, let us remind ourselves of the commitment made in the Conservative Party manifesto before the election in 2015 “We will honour the result of the referendum, whatever the outcome.” Similarly, in early discussions surrounding the debate when the date was announced, there was talk of the referendum leading to a second vote on different terms. Let us assume that this will not happen – and the government has been very clear that the result is binding for a generation. So essentially we wake up to the UK leaving the EU. This blog discusses how that would happen. Remember that a lot of rhetoric has been given by both sides of the debate – on the one hand that it would take 10 years to get any decisions at all (well, that would be a fast turn-around compared to most EU negotiations….!) and on the other that there would be no problems or difficulties in extricating the UK from the EU – clearly there would, and these problems would have to be addressed practically.

I am sure you have come across reference to “Article 50” and whether or not (or how soon) it would be invoked. The principal provisions of Article 50 are copied below – you can find a link to the full Lisbon Treaty at the end, but this is one time I’d suggest NOT reading the whole thing – the “reader-friendly” version runs to 384 pages.

The language of Article 50 is quite straightforward but as always, the devil is in the detail of how it would work in practice – which is a very interesting discussion as no-one has ever invoked article 50 so it would be setting precedents all over the place, and we’d all be genuinely navigating in unchartered waters.

“1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.”

This is the basic statement – but I would like to alert you to the fact that there is no provision for a state to be excluded from the club. So all the talk of Greece being forced out in 2014 and last year was really so much hot air – only Greece could have decided to leave, no other country or group of countries, nor any of the EU institutions, could have forced them to do so.

“2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be………concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.”

“3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.”

“4. For the purposes of paragraphs 2 and 3, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it.”

So (for once) the language is quite straightforward and clear. Once Article 50 is invoked there is a two year negotiating period during which time a date for final withdrawal is agreed. In that two-year period nothing changes and all the same rules apply, but there is a change in the negotiation position between the country leaving and those remaining, as paragraph 4 makes clear that the country leaving will not take part in the discussions of the Council about its leaving. This is pretty obvious but has been erroneously misinterpreted by some to mean that the country leaving would be unable to take part in any negotiations. That is not the case, just that (as would be expected) the country leaving can’t sit on both sides of the table at the same time.

This two-year period is where the detailed negotiation of the type of relationship the country would have with the EU talks place, and covers a range of interesting topics that have been put before the public already in the referendum debate (though one has to say with rather more emotion and divergence from reality than we could have expected). These topics would include our relationship regarding trade, whether we still allow free movement of people from the EU, cross-border security and information sharing, the position of those already resident in each other’s countries, health-care arrangements for those travelling etc…

I know I said I would steer clear of politics and opinion, but I’d just like to burst a couple of bubbles – one on each side of the debate – which are, in my opinion, quite far from reality.

Firstly let’s explode the myth that we wouldn’t be able to trade with the EU after leaving. Put simply, there are many countries that actually trade successfully with the EU without being part of the EU – in fact some 120 of them….. Of course there are difficulties with trading with another trading bloc but actually this happens all the time. The EU is not the only trading bloc in the world, but one of about 8. I am not suggesting that the detailed rules and regulations are not complex and often cause difficulties, but let’s take one small but very important recent example – steel. China is not part of the EU and actually doesn’t have a trading agreement with the EU yet is able to export its steel to EU countries very successfully. To quote from the EU’s own website (links at the end of the text). “The European Union and China are two of the biggest traders in the world. China is now the EU’s 2nd trading partner behind the United States and the EU is China’s biggest trading partner. The EU is committed to open trading relations with China”. So how is it that there are no trade agreements, yet trade occurs, and not only occurs, but is spectacularly large? Well, obviously, you’ve been brainwashed by the “in” campaign into thinking that as soon as we leave then we cease to trade, but that is demonstrably not the case. Many countries in Asia, South America, North America all export cars, electronic goods, clothing, food, fashion items etc… to the EU (and import them from the EU) but without a trade agreement. There would of course be changes, and these would mainly affect those currently trading (hence their reluctance to change) but trade would continue, and with it the creation of jobs in both the trading partners. Likewise, the issue of meeting standards of those imposed by another trading bloc has caused people to think “let’s not rock the boat”. But we already do meet these standards and would have to continue to do so for each and every country (or trading bloc) that we exported to. We import from the US, and we export to the US. The US has different standards to the EU – so we have to meet those standards (as we do). And remember, again, there is no trade deal with the US. As the EU website says “The EU is negotiating an ambitious and balanced trade and investment deal with the US.” (full text in link at the end). So although there would be negotiations (which actually go on all the time between different trading partners) nothing substantial would change in reality.

Secondly let’s turn our fire against the story that is commonly told by the “out” campaign about immigration being the fault of the EU and that we would gain control of the numbers of migrants. Whilst there is truth in the fact that we would be free to set our own limits on immigration, in reality we do have control of the immigration from non-EU countries but choose not to exercise it. In 2015 there were approximately 350,000 migrants coming to this country on a net basis. That is, 600,000 people came in but 250,000 left. Of those 350,000 how many were from the EU? Only 170,000. So a further 180,000 came from other countries where we do indeed have the right to control the numbers. Why would this change much if we left the EU? We wouldn’t suddenly stop many of the current 170,000 EU citizens as the vast majority are key to our economic growth. Many of these people share similar cultural and historical backgrounds and have proven that they are keen to work and to contribute to society. Talk of “benefits tourists” is a tiny sideshow. Even if we were to reduce the 170,000 by (say) 50%, there would still be 180,000 from outside the EU who would enter – based on current trends and willingness of the UK government to act. Mr Cameron stated that he wanted to reduce net migration to “the tens of thousands” per year. He has spectacularly failed, admitting nearly double his maximum target with immigrants from the category the country does indeed control. Why would leaving the EU change any of that…?

These are not arguments for or against staying in the EU, but I just wanted to use them as illustrations of the need to undertake rigorous research into each and every area of discussion, and to form your own opinion based on the facts, not on the rhetoric which is often somewhat divorced from reality.

Anyway, as one correspondent has written, it doesn’t matter which way we vote, as the fact of having a referendum has given us a golden opportunity. The “in” camp say we will be infinitely better off if we stay, the “out” camp say we will be infinitely better off if we leave. So whichever way we vote, it looks like we’ll have a wonderful future….!

http://ec.europa.eu/trade/policy/countries-and-regions/countries/china/

http://ec.europa.eu/priorities/balanced-eu-us-free-trade-agreement_en

http://www.lisbon-treaty.org/wcm/the-lisbon-treaty/treaty-on-European-union-and-comments/title-6-final-provisions/137-article-50.html

Robert Curtis April 2016. robert.curtis@staffs.ac.uk

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