While the Uk dithers, the EU makes contingency plans …
(FT paywall) Brussels seeks emergency powers to prepare for hard Brexit
https://www.ft.com/content/af7451e2-423a-11e8-93cf-67ac3a6482fd
Brussels is issuing dozens of legal proposals on Brexit over the next 10 weeks,
in a flurry of lawmaking to prepare the EU for a sharp break from the UK,
partly by giving emergency powers to the bloc’s institutions.
The European Commission has drafted 30-40 proposals to amend laws
and give special powers to regulators
so that the union can deal with a no-deal scenario, either on Brexit day on March 29 2019 or after a transition period.
EU diplomats have been told the measures would cover a wide range of areas,
with particular significance for trade quotas, the car industry, transport companies, the bloc’s space programme, financial services and professional qualifications.
The push is intended to reduce uncertainty for business by granting more powers to Brussels
and other EU authorities so they are better able to cope with sudden complications.
The initiative also shows the commission’s determination to press on with preparing for a worst-case scenario
- even if it involves using the EU legislative process while the UK remains a full member with voting rights.
“This is all inevitable and necessary,”
said one EU diplomat working on Brexit.
“Most of the work of preparing for Brexit is for governments and the private sector. But there are issues with EU law that we have to sort out.”
EU officials say most of the amendments are legal housekeeping, which would address anomalies that arise from the exclusion of the UK.
However, the proposals would also give the commission and other EU regulators specific “emergency powers”, for a limited period, to handle the fallout from an abrupt UK exit.
The details remain unclear but one EU diplomat suggested that it could include waivers for companies in areas such as financial services.
The diplomat said it could also give a grace period for lawyers or professionals based in Europe who rely on UK qualifications.
Such provisions could offer reassurance to some banks and financial services companies,
because they would provide more flexibility for regulators in dealing with post-Brexit adjustments.
One measure is likely to set restrictions on Britain’s continued involvement in the EU’s Galileo satellite programme.
A separate decision will also be required over the operational headquarters of Operation Atalanta, an EU counter-piracy naval effort that is run from Northwood in the London suburbs.
The commission told EU diplomats that it would take 40 weeks to move the headquarters to an EU location.
The first burst of legislation will cover two specific topics:
the tariff rate quotas that govern the import of farm products into the EU and approvals for car parts.
Legislation on both areas is expected as early as next month.
Britain and the EU have reached an agreement on how to split the EU’s existing tariff rate quotas under World Trade Organization rules,
but that preliminary deal has faced resistance, including from the US.
The commission’s proposal would make clear that the quotas for food imports would be adjusted to take account of the UK’s exit
- regardless of the outcome of talks at the WTO or with Britain over the terms of Brexit.
Planned revisions to the laws controlling the authorisation of cars for sale in Europe would seek to deal with the stock of vehicles
- such as the Czech Republic brand Skoda -
that were approved in the UK by the Vehicle Certification Agency.
Such authorisations allow cars to be sold elsewhere in the bloc but have been complicated by Brexit.
Dozens more proposals will be issued separately throughout June and July.
The commission sees the measures as the next phase of its “preparedness” effort, which has included releasing 62 “notifications” warning companies of the legal consequences of a no-deal Brexit.
The commission noted that,
although EU leaders have agreed an outline transition deal with Britain,
they have still asked for “preparedness at all levels for the consequences of the UK’s withdrawal, taking into account all possible outcomes”
The EU has already adopted legislation in some specific areas to cope with a hard Brexit,
including amendments to the EU’s carbon emissions market so that a possible glut of UK permits would not lead to a price crash.