Understanding Brexit: What is 'no deal'?

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  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 petty stuff, but leads to the uncomfortable possibility that the United Kingdom could leave the European Union without negotiations reaching fruition. After a German newspaper claimed 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 a year remaining on the clock, stakes are high in Brussels.

 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 newspaper also 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 now-infamous 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, 52 percent of the British public voted to exit the European Union in a referendum. The two-year Article 50 process, the legislation that dictates the terms of leaving the EU, was triggered on March 29 2017, starting the formal Brexit process.

If the Article 50 process came to an end with no agreement, the UK would leave the EU on March 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 it implied that May would consider staying in the EU or completely cutting ties instead of accepting 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 on goods between the EU and UK and, possibly, Brits losing overseas residency rights and access to free emergency health care.

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.

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.

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.

There is a chance of no deal. If no progress is made on negotiations by 2019, the UK could announce that it will pursue a “no deal” Brexit instead.

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

It is likely that in this case interim arrangements would be made to allow negotiations to continue.

 

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