The largest group within the European Parliament, the European People's Party has come forward in the past few days to request the British government to extend the Brexit transition period amidst the renewed threat to the economy from the coronavirus pandemic. The United Kingdom and the European Union had on 31st January 2020 parted ways after being together for forty-seven years. The negotiations, however, for an orderly Brexit could not be completed by the tentative date and it was agreed to keep the negotiations ongoing so that business interests on both the sides could be protected. The advent of the coronavirus pandemic, however, in the middle week of February 2020 brought about an abrupt end to the furtherance of negotiations. By the middle of March 2020, it was evident that the entire European economic region was in a healthcare emergency. The request forwarded by the European union MPs has thus been made to be in the best interests of both the economic blocks.
Both sides have in the past three years, been engaged in prolonged and sometimes bitter negotiations regarding the modalities of the pullout. It was because of the disagreements between both sides that the whole region had been thrust into a period of economic slowdown during that period. Now, as the painful part of implementing the negotiated agreements has arrived, the threat of the pandemic came to the fore. It threatened to pull the entire region into a prolonged downturn. It could be very difficult, if not impossible, in these circumstances to implement the deal without suffering massive economic shocks. Under the circumstances the members of the European parliament believe will be in the best of interest of the economies on either side if the tentative pullout is extended by between one and two years.
It is to be remembered here that massive logistical bottlenecks had emerged after the British withdrawal from the European Union. Engineering goods, components and general merchandise manufactured in the low-cost European countries were finding its way into the United Kingdom that was helping the country to stay competitive. With the Brexit withdrawal in place, the movement of these goods across the border was restricted, forcing British producers to look for alternative destinations like China to source these materials. Now that the situation in China being tentative and shipments of any kind from the country delayed indefinitely, the British manufacturers and traders are in a fix as to how to circumvent the problem. In these circumstances extending the Brexit date will open up the pipeline for the companies and will help them restore production immediately while the situation continues to improve in China. The European suppliers will not only prove a ready replacement for the suppliers from China but will also provide the British companies with enough opportunity to develop alternative procurement sources so that situations like these can be avoided.
It is likely that, if circumstances permit, the Brexit negotiations will resume again on 1st July 2020. Earlier it was scheduled to be held in the month of March 2020 but given the way the pandemic situation was developing it had to be put off. It seems the idea of putting off the tentative date of Brexit has more supporters in European union than in United Kingdom. While the gravity of the situation is well understood on both sides, the British side is more adamant on the pullout as it has drawn up massive expansion plans to drive its economy to new highs. The current prime minister, an ardent supporter of Britain’s exit from the European Union, has promised the country a far more lucrative deal than Brexit to be drawn up with United States of America, which will take the country several years ahead of where its contemporary European countries are. In this regard, the government has presented a massive public expenditure in its budget presented on 11th March worth £640 billion to be spent on rebuilding the infrastructure in the country that will make it future-ready to place the country at the forefront of all economic and technological advancements being made.
Given the dramatic turn of events that have taken place in the past few weeks, it could now become very difficult for the British government to implement any such plans as it will be primarily focused on protecting the economy from sliding further. Under such circumstances, any move to postpone the Brexit process will give its industries much-needed breathing space so that they may very well deal with the problem at hand and when things improve on this front, the Brexit process can resume. What's important here is that the pandemic outbreak and its immediate aftermath needs the urgent and undivided attention of the government; pushing through the Brexit agenda under these circumstances could very well lead to less than optimal results. At this time when trade and manufacturing have suffered the most, easing of restrictions will go a long way in aiding the recovery process. It is also to be remembered at this time that trying to push through the Brexit agenda could only result in an extended agony for the industry which is fighting its own battle for survival.
In the recent past, the government has taken a slew of measures to protect the British businesses and jobs from the onslaught of the pandemic. The measures range from providing cash injection in the form of partial payment of salary for the staff of small and medium-sized businesses to providing guarantees for large corporates so that they may continue to pay their bills and salaries to their staff members, including a measure of forgoing VAT payments for a quarter so that the British businesses have enough elbow space to fight the pandemic. Because of the above, It wouldn't inconvenience the British government at this time to extend the Brexit date as it would lead to relieving of a little more pressure from the economy. Facilitating business recovery in every possible manner is the need of the hour and extending the Brexit date could provide a significant boost in this regard.
The coronavirus pandemic has created an unprecedented situation in Europe. While almost all countries have been trying at their level best to keep the economic fallout of the breakout to as minimum as possible, a coordinated international effort will go a long way in ensuring that the whole region recovers from it quickly. The British Response to the European Union on this proposal will be something to watch out for. The decision taken by the British cabinet will determine what shape the immediate and future economic scenario of the country assumes.