EU rules out reopening Brexit deal whoever replaces May
Brussels – The European Union insisted Friday that it will not reopen the Brexit withdrawal agreement with the U.K. government whoever succeeds Theresa May as British prime minister.
Jean-Claude Juncker, the president of the EU’s executive Commission, said the bloc’s leaders were unanimous in the view that the Brexit deal, which has been rejected three times by the British parliament, should not be reopened.
“We repeated unanimously that there will be no renegotiating of the withdrawal agreement,” Juncker said in Brussels after a meeting of EU leaders excluding May.
He said the 27 leaders rebuffed any call from May’s successor next month to restart the Brexit negotiations over the withdrawal agreement that deals with citizens’ rights, the Irish border and how much money Britain owes the EU.
Donald Tusk, who is the president of the European Council and chairs meetings of EU leaders, said there could be tweaks to the political declaration that accompanies the legally watertight withdrawal agreement. The declaration is vaguer but deals with a range of other matters including the outlines of a future trade relationship between the EU and Britain.
Britain was originally set to leave the EU on March 29 but because of the British Parliament’s failure to back the deal that May agreed with the EU, it has been granted an extension until Oct. 31.
Given that so much time has elapsed with little progress, it is likely that Brexit will have to be delayed further.
However, some EU leaders said any new extension should only be granted to hold general elections in Britain or a new Brexit referendum.
“It’s not possible (that) because you change the leader in the U.K. that we need to postpone decisions,” said Luxembourg Prime Minister Xavier Bettel.
Worries of a “no-deal” Brexit have swelled during the race to succeed May. Boris Johnson, the favorite to prevail in the election of Conservative Party members next month, has indicated that he’s prepared to go ahead with a “no-deal” Brexit.
Most economists think a sharp rupture with the EU, which accounts for around 50% of Britain’s trade, will lead to a deep recession.
On Thursday, British Treasury chief Philip Hammond said a “no-deal” Brexit would damage the British economy and ultimately risk the breakup of the U.K., a reference to tensions in Scotland and Northern Ireland, both of which voted to stay inside of the EU.
The head of the Bank of England on Friday dismissed suggestions from Johnson that tariffs on trade with the EU can be avoided even if the country leaves the bloc without a withdrawal agreement.
Johnson has said Britain can rely on a provision in international trade rules to make sure trade relations remain unchanged.
Carney told the BBC that was not possible if there was no deal between the EU and Britain.
He said the legal provision – in the General Agreement on Tariffs and Trade – “applies if you have an agreement, not if you have decided not to have an agreement or have been unable to come to an agreement.”
Carney says the U.K. would automatically be hit by tariffs as the Europeans would have to apply the same rules to Britain as every other country outside the tariff-free EU.
“If they were to decide not to put in place tariffs, they will also have to lower tariffs with the United States, with the rest of the world,” he said. “And the same would hold for us.”
Carney indicated there’s only so much firms can do to offset the impact of tariffs. Three quarters of firms, he said, have done as much as they can, which in some cases may not be much.
Firms built up stocks in the run-up to the initial Brexit deadline of March 29 to be able to continue to operate in case of a “no-deal” Brexit, but that only covers a few weeks, Carney said.
Businesses are far more dependent on what the government can do to keep ports open and trade flowing.
“No deal means no deal. It means a substantial change in the trading relationship with the European Union,” he said. “That may be the choice the country takes but it’s a choice that should be taken with absolute clarity in terms of what that means.”
Pylas reported from London. Danica Kirka in London and Lorne Cook in Brussels contributed to this report.