Understanding Brexit: What is 'no deal'?

  1. May "begged" for help - or did she?
  2. "It's up to London how this will end" - Tusk
  3. "We're planning for everything" - Davis

A small war of words among journalists and EU officials is trivial in the grand scheme of Brexit. But it leads to the uncomfortable possibility that the United Kingdom could leave the European Union without negotiations reaching fruition. After a German newspaper claimed British prime minister Theresa May had “begged” for help at a recent dinner with EU leaders, EU commission president Jean-Claude Juncker completely denied the story. Meanwhile European Council president Donald Tusk said Brexit is in London’s hands.

The UK is due to leave the European Union, after two years of negotiations, at the end of March 2019. With less than eight months left on the clock, stakes are high in Brussels, home to the EU’s headquarters.

German newspaper Frankfurter Allgemeine Zeitung (FAZ) reported this week that May “begged” Juncker for help with Brexit negotiations at a private dinner in Brussels on October 16. The same article reported that Juncker said Theresa May seemed “anxious, despondent and discouraged.”

Juncker denied the claims. “Nothing is true in all of this. I had an excellent working dinner with Theresa May,” he said, according to The Guardian.

The European Commission said the newspaper “leak” was a deliberate smear intended to disrupt Brexit negotiations.

While the story continues to simmer in social media and in the press, ex-Polish prime minister and president of the European Council, Donald Tusk, has repeated a famous phrase of Theresa May’s regarding what kind of deal the UK will get with the European Union upon leaving.

“It is in fact up to London how this will end: with a good deal, no deal or no Brexit,” Tusk told the European Parliament on Tuesday.

No deal, bad deal, what?

On June 23 2016, 72 percent of the British electorate turned out to vote in a referendum on exiting or remaining in the European Union. 52 percent voted to leave. The two-year Article 50 process, which outlines how a member state may leave the EU, was triggered on March 29 2017, starting the formal Brexit process.

If the Article 50 process came to an end without agreement, the UK would leave the EU on March 29 2019 with no deal.

Prime Minister Theresa May first used the phrase “no deal for Britain is better than a bad deal” in January as she warned EU leaders not to punish Britons for voting to leave the EU.

Exactly what that statement meant, and whether no deal was in fact better than a bad deal, was the focus of the British media and the public for months.

May did not use the phrase in one of her most significant speeches on Brexit in Florence, according to BloombergHowever, when pushed she continues to defend that stance.

The terms “hard” and “soft” Brexit have repeatedly been used about Britain’s departure from the EU. There is no strict definition, but “hard” Brexit could mean the UK leaving the single market – the EU trading bloc requiring free movement of goods, services, money and people – and refusing to compromise on issues such as free movement. “Soft”  Brexit often refers to a Norway-like model, which accepts free movement, and remains in the single market.

“No deal” means Britain leaving the EU without a trade agreement by automatic operation of law on March 29 2019. This would require the UK to operate under World Trade Organisation rules, resulting in lengthy check-ins for travellers, tariffs on goods between the EU and UK and, possibly, Britons losing overseas residency rights and access to free emergency health care. The same would be true for EU citizens in the UK.

The UK will be required to make a payment to leave the EU in the event of a Brexit deal. But it would not be obliged to make any financial settlement if there was no deal, according to a House of Lords report.

What are they saying?

Along with May and Tusk, others have appropriated the “no deal” phrase.

“No deal will be a very bad deal,” the EU’s chief negotiator Michel Barnier said in a joint press conference on October 12. He said there had not been enough progress in talks but that the EU was ready for “any eventualities”.

In response to this, Britain’s Brexit secretary David Davis said: “It’s not what we seek, we want to see a good deal, but we are planning for everything.”

On October 17, Davis then told the House of Commons that, although reaching a deal is the “best outcome”, the government is preparing for “all the other alternatives”. This is, he said, to show the EU that the UK has the option to leave without one, therefore strengthening their negotiating position, or in the event that something goes wrong.

On the same day, however, Britain’s home secretary, Amber Rudd, said in the Commons that no deal is “unthinkable”. It is as much in the EU’s interests as it is in Britain’s to reach a deal, she said.

French President Emmanuel Macron said in Brexit talks on October 20 that the UK was “bluffing” on its no deal preparations in order to nudge the EU to soften its negotiating stance.

German Chancellor Angela Merkel told a news conference at the end of the summit that it was “very clear what additional steps need to be taken” for progress, saying movement on the financial settlement was critical for progress and for the next phase of Brexit negotiations to begin in December.

Could the UK leave the EU with no deal?

The negotiating teams on both sides are making preparations for “no deal” in the eventuality that no agreement is reached.

But Donald Tusk has been clear that he thinks no deal would be the worst deal of all for everyone, even more so for the UK.

Yet reaching an all-encompassing deal takes time and may not be achieved by the deadline.

If not enough progress on negotiations has been made by 2019, the UK could announce that it will pursue a “no deal” Brexit instead, pulling out of the EU and seeking trade agreements with other countries.


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