All eyes were on the Brexit negotiations during the last weeks. The EU representative, Michel Barnier has managed to keep a composed public image of an organized person with documentation and objectives clearly set. However, Britain’s David Davies is still seen in a vulnerable position, especially because his country’s approach to the situation seems to be shifting a lot during the process. Britain has softened its stance. And its divided cabinet seems to have agreed on one issue: the need for a transitional period after the UK officially leaves the European bloc. But it is yet unclear what form this period would take. And there are debates regarding its length. Some would want it to be just a few months, others, three years.
As the discussions did not have substantial results so far, the next round of negotiations is expected to begin at the end of August. Until then, let’s take a look at the opportunities brought forward by the Brexit process.
- Brexit is one of the most powerful factors that will shape the EU’s future, pushing for the long needed reforms. The result of the British referendum on leaving the Union was a wave of shock for the continent and the entire world. It brought to surface tensions and dissatisfaction that many had swept under the carpet. Although it is time and energy consuming, Brexit is also an opportunity to address these problems. We have seen one (small) step last month. The European Commission presented proposals for a simplified access to EU funds. The document acknowledges that “the current architecture of rules is effective, but needs a good clean-up”. Therefore it needs less bureaucracy, more transparency and harmonisation of the rules applied to different EU funds. At the moment, these issues discourage many potential beneficiaries. The proposals are aimed at the period after 2020, after the UK would leave the EU. By then, the European Union will probably end up with a slimmer budget, as the other nations will not be eager to give more money, in order to compensate for Britain’s contribution. Therefore, EU financing would need more flexibility, so that more to be done with less money. Yet this is just the beginning, as the Union needs a full scale institutional reform.
- As already discussed in a previous installment of “Brexit means Business”, the Brexit shock awakened people’s interest in politics. Paradoxically, it seems to have strengthened the pro-European feeling. A survey commissioned by a Berlin Based think thank, Friedrich Ebert Foundation, in eight countries (France, Spain, Germany, Italy, Slovakia, the Czech Republic, Netherlands and Sweden) has proved just that. At the moment, participants were more likely to see EU membership as an advantage for their countries compared to how they felt before the Brexit referendum. In Germany (the biggest net contributor to the EU budget), for example, 64% of respondents said that there were more advantages than disadvantages in the EU membership, whereas in 2015, the rate was only 34%. Except for the Czech Republic, in all the surveyed countries, there were more people that favored the intensification of the EU cooperation than people who didn’t. The unprecedented negotiations for a country to leave the European Union are being followed by a substantial public on the continent. And the more erratic Britain approach seems, the more the pro-European attitudes are increasing, therefore making it less likely for other countries to follow Britain’s path.
- EasyJet has filed documents to establish a new airline company based in Vienna, Austria, to safeguard its flight rights in the EU, in case the Brexit negotiations fail to address this issue. The approval process for the new air operator is “well advanced”, with clearance expected in the near future, the media reports. EasyJet is planning to move more than 100 planes, about 40% of its fleet. In the meantime, Ryanair warned that it would start cancelling flights to European countries 6 months if a deal is not reached during the Brexit negotiations. It is a way of putting pressure on both parties of the negotiation process to make an agreement favorable to the airline industry. If no deal is reached, British airline companies would simply lose flight rights in the EU after Brexit.
- In the meantime, financial institutions continue to look and choose new European headquarters for doing business in Continental Europe. There are media reports saying that the Royal Bank of Scotland has picked Amsterdam. Citigroup and Morgan Stanley have preferred Frankfurt. Bank of America has chosen Dublin. Apparently, banks will have to have a good offer for their prospective employees, considering that in some EU cities there is a shortage of financial specialists – and de-localization for top personnel is expensive.