Both the UK Government and the EU have said that their overriding objective is to reach a Brexit deal that delivers a smooth and orderly exit from the EU. However, the Government has also consistently said that it is willing to leave the EU with no deal if necessary, and has set out in recent months the work that will be required to prepare for such an outcome.
However, the UK would not be the only country affected in this scenario. In this explainer we look at what EU member states likely to be most affected by Brexit are doing to minimise the impact of a no deal outcome.
Other than the UK, the country that faces the biggest challenges in adapting to a no deal Brexit is Ireland. If the UK leaves the EU with no deal, Ireland will need to decide how to square its pledges not to introduce a hard border with its obligations as a member of the EU’s Single Market and Customs Union sharing a land frontier with a non-member state. The UK is Ireland’s second largest export market, after the US, and Irish businesses use Great Britain as a land bridge to the rest of the EU.
Other nearby EU member states, particularly those with significant ports, will also be affected. If there is no deal, EU countries will need to conduct checks on goods coming from the UK, to ensure they comply with single market standards and meet customs requirements. This could cause delays for freight crossing the English Channel in both directions.
The most immediately affected countries are France, Belgium and the Netherlands – although the President of the northern French region that encompasses Calais has warned that any hold-ups to trade will also affect businesses from further afield whose goods travel through his region.
If there is no deal, the rights of British citizens living in EU countries will not be protected at the EU level, meaning individual member states will have to take steps to protect them (if indeed they decide to do so). This will be particularly important for countries like Spain and France, who have many British residents; it will be less relevant for smaller and Eastern European member states.
Member states are also keen to protect the rights of their citizens living in the UK – this is a priority for all of the EU27, but particularly important for countries with many of their citizens living in the UK such as:
- Poland – over a million Poles live in the UK
- France – the French Embassy estimates that between 350,000 and 400,000 French citizens live in the UK
- Lithuania – around 212,000 citizens live here, representing almost 10% of their population.
Those member states with significant UK-facing ports have already begun contingency planning for no deal. The UK is a significant trading partner for these countries, but ports such as Rotterdam, Antwerp and Hamburg are also a transit point for trade between the UK and more distant EU member states. These ports still need to invest in additional capacity at the border, in terms of both staff – customs officials and vets to do animal health checks – and infrastructure.
Plans announced so far include:
- France: an additional 700 customs officials by 2020 – largely concentrated in UK-facing ports, such as Le Havre, Calais, Dunkirk and the Channel Tunnel;
- Ireland: an additional 1,000 staff: up to 700 staff for customs controls, 200 veterinarians for sanitary and phytosanitary checks and 120 additional officials for export certification.
- The Netherlands: over 900 customs officials and an additional 145 veterinarians for the Port of Rotterdam.
Infrastructure at ports will also need to be expanded to accommodate the additional officials and customs checks:
- France: The Government is planning for border inspection posts to be either expanded or constructed for the first time in Cherbourg, Calais and the Channel Tunnel among others. This may require new roads, car parking areas, buildings, control areas and equipment to deal with delays caused by customs checks.
- Ireland: Dublin Port Company is also expanding its infrastructure to enable checks on goods arriving on ships from Holyhead, Liverpool and Milford Haven. Reintroducing checks in Dublin could require an additional three hectares (approximately four Wembley-sized football pitches) dedicated to holding the lorries arriving on boats.
- Ireland: The European Commission is planning measures to facilitate Irish maritime access to EU markets between Dublin and Cork to Zeebrugge, Antwerp and Rotterdam, meaning hauliers will not have to cross the UK land bridge. Extra shipping routes are also launching, allowing direct transit between Ireland and Spain and Ireland and the Low Countries.
If there is no deal, the UK will no longer be part of the EU’s regulatory regime. The UK Government has said that it will recognise many EU standards and qualifications, at least for a limited time, but the EU is not currently planning to reciprocate. This means that EU companies that use UK goods in their supply chains will face friction and increased costs in using these UK components. As noted, delays at ports and other transit points will also increase the cost of doing business with the UK.
A number of EU governments have launched campaigns to raise awareness amongst businesses in their countries of the potential impact of Brexit, including a no deal exit. These include:
- Ireland’s ‘Getting Ireland Brexit Ready’ website, which provides a central location where businesses (and individuals) can find information from a range of government bodies setting out what Brexit might mean for them, including on a sector-by-sector basis. The Irish government has also run a series of roadshows, providing information in different regions of the country to businesses
- The Netherlands’ ‘Brexit Impact scan’, which provides tailored advice to Dutch businesses based on a series of questions about their business model and relationship with the UK
- Belgium’s own version of the ‘Brexit Impact Scan’, which also provides a ‘Brexit communication kit’ with resources for businesses
- Denmark’s ‘What does Brexit mean for your business?’ website, which asks businesses a series of questions to help them identify how different Brexit scenarios, including a no deal exit, could affect their organisations
- France has also produced a Q&A for businesses worried about how they might be affected by Brexit, including a no deal outcome. The French Customs Authority have also organised a series of regional meetings to answer questions from businesses on what Brexit could mean for how customs procedures might change.
- The Polish government has produced a booklet for businesses setting out various potential outcomes, including no deal.
Other member state governments are planning to launch websites and other information campaigns to raise awareness among businesses of the potential impact of no deal. A challenge for all member state governments is how to support small and medium-sized enterprises (SMEs), who may not have the resources of their larger counterparts to plan for multiple possible outcomes.
Some governments are also providing funding for businesses, or seeking to mitigate potential costs, to allow them to make contingency plans for a variety of Brexit outcomes:
- The Irish government in particular has a number of funding schemes for different types of businesses, including cash grants for SMEs worth up to €2,250 and loans up to €1.5 million, for Irish businesses that are particularly exposed to trade with the UK.
- The Dutch government has also set up a voucher scheme to provide up to €2,500 towards the cost of professional advice for businesses seeking new markets outside the UK.
What will member states do to protect the rights of British citizens living in the EU27 if there is no deal?
In September 2018, the Prime Minister stated that the rights of the three million EU27 citizens living in the UK would be protected in the event of no deal. The EU are yet to issue any equivalent guarantee for UK citizens living in the other 27 member states. Neither party have stated how the rights of citizens, including access to healthcare, social entitlements, family reunion, and pensions, will be protected in the event of no deal.
Member states have said that a key principle covering citizens’ rights is reciprocity: they would be prepared to grant UK citizens preferential treatment (compared to non-EU citizens) if the UK committed to do the same. But the UK has so far delayed publishing what it will do to protect citizens’ rights in the event of no deal and postponed publishing an immigration white paper necessary to implement a new immigration system by 29 March 2019.
Some countries have suggested they could take unilateral action to preserve UK citizens’ rights. A draft French bill (translated here) suggests that the French Government would legislate to allow UK citizens working as French public officials to continue to do so, as well as recognising qualifications earned in the UK (if these rights are guaranteed for French citizens in the UK). Other governments are also beginning to prepare legislation to protect UK citizens’ rights in their countries if there is no deal.
There is also rising demand from UK citizens seeking citizenship of an EU27 country, with the number of these citizenships granted to UK citizens more than doubling between 2016 and 2017. Some countries restrict the ability to hold dual nationality: these include Germany, which will only grant it to nationals of EU member states. A draft German law (briefly explained here) proposes changing the regulation of citizenship applications for the purpose of ensuring that UK citizens applying for German citizenship before the end of the transition period, and likewise German citizens applying for British citizenship, can retain their original nationality.
Member states are preparing their citizens living in the UK for no deal through their consular services, or through legislation that would preserve their rights should they return to living in the EU:
- Consulates have run seminars for citizens in London, across the UK and livestreamed on Facebook to inform them of the negotiations’ progress, their legal rights on dual nationality and their British spouses’ rights to live and work in the EU; and on securing settled status in the UK. Foreign ministries are also keeping their citizens informed with dedicated Brexit portals and working with community and diaspora groups in the UK to raise awareness of the issues resulting from Brexit.
- Several EU consulates in the UK have taken on extra staff to provide information to their citizens living here.
- The draft French bill listed above proposes to ensure its citizens’ pension contributions paid in the UK remain recognised. Otherwise, French nationals paying social security contributions here in the UK would have fewer entitlements if they returned to France.
However, given the lack of clarity from the UK Government over how exactly they will protect the rights of EU citizens living here, there is still a great deal of uncertainty for these individuals.
While many member states are taking individual steps to prepare for no deal, the European Commission is leading the EU’s preparation, particularly in areas related to the Single Market. It began publishing preparedness notices in spring 2018 setting out the implications of a no deal Brexit. These make clear that if the UK leaves with no deal, UK authorisations for goods and services will not be accepted in the Single Market, making it much harder for UK businesses to export to the EU.
The Commission published a new notice in November 2018 setting out the implications of no deal for people and goods travelling from the UK to the EU. It proposes that short-term visitors from the UK will not need a visa to enter the EU on the condition that reciprocal arrangements are made for short-term EU visitors to the UK. Long-term visitors will need to comply with the rules of the individual member state they are visiting regarding non-EU citizens. The notice also brings together the Commission’s previous advice on the implications of no deal for goods crossing into the EU from the UK: without an agreement, they will be subject to the full range of EU regulatory and customs checks.
Alongside the notice, the Commission issued a press release outlining contingency measures covering residency and visa travel, financial services, aviation, customs and border checks, data and energy policy. It stated contingency measures should be only temporary, subject to unilateral decisions by the Commission and compatible with EU law, while they should not replicate the benefits of membership nor remedy delays that could have been remedied through preparedness.
The Commission is also planning a series of seminars with member states, to discuss the implications of no deal on important areas like financial services, citizens’ rights and transport. While some of these issues could be resolved bilaterally between the UK and each member state, or unilaterally in the case of citizens’ rights, several member states are keen to coordinate their response at an EU level. The Commission’s press release says that: “member states should refrain from bilateral discussions and agreements with the United Kingdom, which would undermine EU unity”.
Where possible, links to English-language sources have been provided. Given the subject of this explainer however, some links are to non-English language websites.