The 8 December UK-EU Agreement: A victory for pragmatism, logic and a sensible Brexit
The joint report from the EU and UK on their Brexit negotiations is a positive step forward by any reasonable measure. It shows significant progress on the rights of foreign citizens and on the financial settlement, and while practical challenges remain, the principles for addressing the Northern Ireland conundrum are now established.
EU citizens exercising their rights to live in other parts of the EU as at 30 March 2019 – whether Continentals in the UK or UK citizens living in the remaining EU – will have these rights guaranteed to continue. Furthermore there are allowances for family members to join the right-holder in their country of residence even after 2019, and the right-holder can be absent from the country for up to five years without losing their rights
(So, for example, a French person living in Britain in 2019 could leave in 2020 and would have the right to return anytime up to 2025 to reclaim their residence rights).
There are also important provisions for claiming pensions and social security benefits. Essentially this agreement creates a high degree of “freedom of movement”, at least for those resident abroad on 30 March 2019. What happens to citizens who wish to move abroad after that date will be a matter for each government’s immigration laws to decide.
The UK will continue to pay in to the Commission’s budget until the end of 2020 as if it were still an EU Member State. While there are some concessions on both sides, in the main the UK has agreed to most of the financial demands of the EU side. While the document today sets out principles, not figures, we can expect that the final figure will be close to the upper estimates for the “divorce bill”.
The financial settlement will be drawn up and paid in the Euro currency. During the Exchange Rate Mechanism (ERM) fiasco of 1992, the British currency was manipulated by currency speculators betting that the Bank of England would be unable to meet its ERM commitments. Today’s situation is of course different, but there is the potential for currency speculators to once again “game the system” and bet on Sterling’s value movements as the exit date looms.
The Good Friday peace deal of 1998 set out principles including for an open border with the Republic of Ireland and a “whole island economy”. With Northern Ireland now leaving the EU, this presents a challenge. The UK will have an open border with the EU, and if UK and EU market rules and customs arrangements diverge, Belfast will have to either break from the UK market rules (this is anathema to the Unionists) or follow the UK rules (breaking the “whole island economy” principle).
Today’s agreement essentially establishes the paramountcy of the Good Friday agreements. The document released today states that “any future arrangements must be compatible with these overarching requirements [of the Good Friday deal]”.
Importantly, the document states that “in all circumstances, the United Kingdom will continue to ensure the same unfettered access for Northern Ireland’s business to the whole of the United Kingdom internal market” and “in the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market [of the EU] and the [EU] Customs Union which, now or in the future, support North-South cooperation, the all-island economy and the protection of the 1998 Agreement.”
In other words, the whole of the UK will stay under EU market rules if it has to do so, in order to preserve the Ulster peace deal. This is a sensible solution, but one that might raise the ire of those hard Brexiteers who thought we could wave goodbye to EU market rules forever. This clause also could possibly help the UK’s market access and compatibility with the EU.
This is good news for the economy, and an admission that the ideology of an absolute divorce from EU rules is simply not a feasible option for an integrated, open, modern economy such as ours.
In short, the deal is practical and thoughtful and should buy Theresa May some genuine political credit.