December 8, 2017 / 9:18 AM / 7 days ago

Factbox: What's in the Brexit divorce deal?

BRUSSELS (Reuters) - The European Commission said on Friday that enough progress had been made in Brexit negotiations to allow a second phase of talks on future relations to begin.

The following is a summary of a joint EU-UK report showing the agreements on three key topics:

CITIZENS’ RIGHTS

Refers to British citizens, including spouses and children, living in an EU state and other EU nationals living in Britain on date of its withdrawal. It does not give British citizens a right to move from one EU state to another and retain the same rights, while rights for EU and British citizens lapse if they leave their original host country for five years.

Negotiations may continue in the second phase, with Britain looking for “onward movement” rights for its citizens on the continent and the EU interested in citizens keeping permanent residence rights even after longer spells absent from the host country.

Citizens with permanent residence documents should get new ones free of charge. Equal treatment will cover rights with respect to social security, health care, employment and education. Benefits will be “exportable” as they are now.

Future spouses, children and other core family members can join citizens enjoying protected rights.

The European Court of Justice (ECJ) is the ultimate arbiter of EU law. The agreement states that “UK courts shall therefore have due regard to relevant decisions of the (ECJ)”.

The EU and Britain have agreed to set up a mechanism enabling UK courts to ask the ECJ to weigh in when necessary during an eight-year period following Brexit. Eight years is enough to build up a body of common jurisprudence, officials say. Even at present, EU courts are not obliged to allow appeals to the ECJ.

In Phase Two, the sides will negotiate on how the withdrawal treaty can be enforced - for example, if the EU believes UK courts are systematically misinterpreting EU citizens’ rights.

IRELAND AND NORTHERN IRELAND

Britain promises to preserve the integrity of its own internal market and Northern Ireland’s place within it.

It says it does not want a hard border between Ireland and Northern Ireland, saying it aims to avoid checks and controls there via a future EU-UK economic relationship.

If this is not possible, Britain says it will propose “specific solutions to address the unique circumstances”.

In the absence of such solutions, Britain will “maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all-island economy and the protection of the 1998 (Good Friday peace) Agreement.”

It pledges to ensure there are “no new regulatory barriers” and “unfettered access” for Northern Ireland’s businesses to the rest of Britain.

Both parties acknowledge that the 1998 agreement recognizes the birth right of all people of Northern Ireland to be Irish, British or both.

FINANCIAL SETTLEMENT

“Both Parties have agreed a methodology for the financial settlement ... drawn up and paid in euro.”

The settlement will be calculated in terms of a percentage of the budget for 2014-2020, with Britain contributing as if it had stayed in the EU for 2019 and 2020 and including a British rebate.

Following its withdrawal from the EU, the UK will continue to participate in the EU programs financed by the 2014-2020 budget until their closure.

Beyond then, Britain will remain liable for its share of the EU’s contingent liabilities, such as financial assistance or operations managed by the European Investment Bank (EIB):

“The UK liability will be limited to decisions on each financial operation adopted prior to the date of withdrawal.”

To avoid a disruption to the EIB’s operations, Britain will provide a guarantee for an amount equal to its callable capital. This guarantee will decrease over time.

“The UK share of the paid-in capital will be reimbursed in 12 annual installments starting at the end of 2019. The first eleven installments will be 300 million euros each and the final one will be 195,903,950 euros.”

On the European Central Bank, “the paid-in capital of the UK in the ECB will be reimbursed to the Bank of England (BoE) after the date of withdrawal”.

British officials said they estimated the final bill at some 40-45 billion euros. The EU, which once estimated the cost at around 60 billion, declined to offer its own estimate, arguing that too much is dependent on future variables, such as whether loan guarantees advanced by the EU end up being exercised.

Britain would pay 17-18 billion euros to the EU budget between Brexit and the end of the current EU seven-year budget plan in December 2020, British officials estimate, and a further 21-23 billion after that to settle ongoing commitments, plus 2-4 billion euros on net liabilities, including EU staff pensions.

Reporting by Philip Blenkinsop and Jan Strupczewski; Editing by Alissa de Carbonnel and Alison Williams

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