European Union And United Kingdom: What Investors Should Know

  • Nov 15, 2018 AEDT
  • Team Kalkine
European Union And United Kingdom: What Investors Should Know

The senior ministers of the British Prime Minister are now backing the draft European Union Brexit deal. It’s been more than two years that the United Kingdom has decided to leave the European Union. According to Theresa May, the plan was for the benefit of the United Kingdom.

After March 29 of the next year, the agreement of the Brexit withdrawal would be Britain’s only legal one with the European Union or EU. Britain had shared sovereignty with the European Union since 1973. The Brexit deal needs to be approved by: 

  • UK Cabinet
  • EU Summit
  • The House of Commons
  • European Parliament

The approval has to be taken in the same sequence as it is mentioned above. The commitments which have been made are for a long-term basis. In addition to determining the nature of the exit of Britain from the European Union, the agreement would also be influencing the future leadership with the European Union. Let us now discuss about the financial settlements. The Britain has plans that it would be meeting all the financial commitments to the Brussels. This has been decided by the Britain so that nothing extra can be paid by any of the EU countries to the common budget because of the Brexit. After considering the conservative assumptions, the net British outlay is expected in the range of €40 billion-€45 billion and this estimation has been made by UK Treasury. As per the National Audit Office, the public payments are expected to reach €60 billion and also €14 billion (in addition) related to the contingent liabilities.

The United Kingdom would be paying into the budget of the European Union for the 2019 and 2020 years as if they are still a part. As and when the EU liabilities would be falling due, the UK would be contributing their share of the financing. However, a large number of contributions would be done by 2025, and some of the payments might take time and extend till 2064. The agreement also provides the period of transition for the United Kingdom until 2020 end, and this can be extended. The extension can be for an unspecified one-off period which needs to be set up by the mutual agreement. At the time of this period, the Britain would be leaving the European Union’s political institutions and, as a result, it would lose the say with respect to the decisions as well as rules. However, if the United Kingdom and European Union extend the period of transition and they go beyond December 2020, the Britain would be required to do the negotiations in regard to the additional payments to the budget of European Union.


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