USA: Back on the World’s Leading Positions in Financial World

A small number of people could have expected such a rapid recovery of the United States financial system and the return of its banks to the world’s leading positions. According to information from the New York Stock Exchange, on July 12, 2013, Wells Fargo Bank (estimated market value of $ 236 billion) surpassed, according to the market capitalization criterion, leading the Industrial and Commercial Bank of China (ISBC) to become the world leader. In addition, other financial institutions from the United States, such as Bank of America, Goldman Sachs, AIG and others, record fantastic results. It is particularly interesting that these banks only a few years ago were part of the government’s aid program and received a huge amount of funds (Wells Fargo 25 billion, Bank of America 45 billion, Goldman Sachs 10 billion and AIG 40 billion dollars).

In the past period, the stock indices indubitably spoke in favor of the thesis that the financial crisis in the United States has, in fact, been overcome. The shares of the aforementioned companies made steady growth and reached record levels for a period of five years, that is, from the beginning of the crisis. Given that this is a low base that compares today’s value of shares of these companies, it should be cautious when making conclusions about the final outbreak of the crisis. In addition, it should also be noted that most of these banks have survived because a huge amount of liquid assets has been pumped up through the Trouble Asset Relief Program (TARP) program to enable their smooth functioning. Out of the initial $ 750 billion, as originally planned, a $ 450-billion-dollar program has been put into the financial system through various programs. This move by the government came to the justified disapproval of taxpayers whose money was used to cover the losses of financial institutions incurred as a result of gambling operations in the mortgage and market derivatives.

Financial derivatives or as Voren Buffett calls them “Weapons of Massive Financial Destruction” were a real attraction in the pre-crisis period. One of the main reasons for this is the complete lack of regulation. The debate on the regulation of this market was initiated in 1998 when an independent commission for the control of the derivatives market noticed the first irregularities and wrote a detailed report to Congress. However, the main apologists for the liberal market, the then director of the Fed, Alan Grinspen and the Secretary of the Ministry of Finance, Robert Rubin, managed to lobby Congress in setting a moratorium on the introduction of regulations to the Dodd-Frank Wall Street Reform and Consumer Protection Act.
In order to overcome the consequences of the crisis more quickly and painlessly, but also eliminate the possibility of re-emergence, the aforementioned TARP stabilization program had to be accompanied by a new, tougher and better regulation of the financial market. As early as July 21, 2010, President Barack Obama signed a proposal sent by Chris Doda and Barney Frank, thereby giving legal force to the new regulations. The main motive, as it is said, is to provide financial stability through improving the accountability and transparency of the financial system. as well as to break off with “too big to fail” practice. By achieving this objective, taxpayers, and on the other hand, investors and other participants in the financial market, would be protected from the irrational behavior of financial institutions. The new regulation consisted of sixteen points, each of which individually processes a certain financial sector and controls the work of supervisory authorities. Dodd-Frank Akt has come across various criticisms in the process of adoption and entry into force. Interestingly, criticism is often diametrically opposed, from being too strict and impractical to those that are loose and that it does not bring about any major change in the system. In addition, the proposal for the return of the Glas-Stigl Act, introduced in 1933 after the Great Depression, can be heard more and more often, which would completely separate the affairs of commercial and investment banks. The main purpose is to limit commercial banks ‘commercial activities to less risky transactions, making citizens’ deposits more secure. Given that this is the worst recession since the thirties of the last century, such proposals are completely justified because extreme situations require radical systemic and institutional changes.

An extremely important link in the chain that contributed to the collapse of the US financial system was the rating of the agency. This conclusion can only come intuitively, but every dilemma is eliminated by getting acquainted with the procedure for ranking securities. Namely, prior to the ranking of a certain HOV, the financial company issuing a rating refers to the agency with a request for giving it a monetary compensation. Since it is in the interest of the issuer to keep the paper as well as possible because it’s market value will be higher, it can indirectly exert pressure on the rating agency to achieve this. It is very easy to conclude that as a product of this relationship on the basis of the issuer-rating agency, we get a huge number of high-quality securities with low risk and high yield.

That this is an extremely important problem and a significant factor of the emergence of the crisis can be concluded from the views of members of the Financial Crisis Inquiry Commission (FCIC). The unanimous conclusion of the commission is that the rating agency disastrously performed its basic task, timely and accurate informing the investor about the quality of certain HOVs. As the main critic of the commission, the unrealistically high ranking of financial derivatives emitted in 2007 based on mortgage loans, which since the beginning of 2006 showed significant instability. In addition, the entire chapter of the aforementioned regulations (Dod-Frenk Act) deals exclusively with rating agencies. Protecting investors through more stringent and quicker control of their business is one of the pillars on which the prevention of the emergence of a new crisis is based. Within the same point, the Investor Protection Bureau was established to monitor market developments and control the quality of HOVs that are the subject of trading.

European Union Anti Tax Avoidance Directive

The Effects of EU Anti-tax Avoidance Directive after Brexit

United Kingdom is expected to leave the EU by the end of October – after the recent suspension of the UK parliament, the “no-deal” end seems to get more and more inevitable by the day. Yet, little is known about what will happen on 1st November- we will be publishing a series of articles every week and try to enlighten those which will affect UK businesses the most. Now let’s have a look the EU Anti-Tax Avoidance Directive which might end up having large effects on the biggest of the UK companies.

European Union Anti Tax Avoidance Directive Explained

EU bloc is increasingly worried about having a “tax-haven” at its doorstep. That is why, the European Parliament has discussed ways on how to prevent UK from turning into a refuge for those European companies who want to engage in tax avoidance and that the EU should continue to meet EU’s standards on tax avoidance prevention. The anti tax avoidance directive full report can be found on the EU website for those who wants to do further reading..

Is UK going to comply with he EU anti tax avoidance directive?

As most people would know, EU had a tough stance on multinational companies benefiting from tax loopholes. Until the Brexit, UK also followed a similar policy to prevent multinational companies from shifting income to other jurisdictions and having a negative impact Exchequer’s income.

HMRC published Controlled Foreign Companies and EU Anti-Tax Avoidance Directive on 7 November 2018. In summary this directive ensures that the HMRC will follow EU Anti-Tax Avoidance Directive in the post Brexit scenario.

HMRC’s policy objective is is to make sure the UK Controlled Foreign Company (CFC) rules continue to discourage potential tax planning by large multinational groups. The changes will comply with Council Directive (EU) 2016/1164, also known as the EU Anti-Tax Avoidance Directive (ATAD)

Who is affected by the Anti Tax Avoidance Directive ?

EU bloc is increasingly worried about having a “tax-haven” at its doorstep. The EU Anti Tax Avoidance package is quite comprehensive. That is why, the European Parliament has discussed ways on how to prevent UK from turning into a refuge for those European companies who want to engage in tax avoidance and that the EU should continue to meet EU’s standards on tax avoidance prevention.

The ideal Brexit Britishers want

The UK’s political situation has altered significantly in the aftermath of the Brexit referendum. Even after two years of this referendum, Britain is still in a complex and unpredictable situation. Experts are having difficulties to know about the ideal Brexit the Britishers want. A number of discrete-choice trials or experiments were carried out. These experiments were conducted on the very same group of the people who were surveyed a year ago. The British people in the survey firmly rejected the no-deal Brexit. They now want to have a softer or less harmful Brexit. However, in 2017, more people were supporting a no-deal Brexit. This shows a shift in their ideology.

A brief of what happened till date

In the referendum of 2016, the citizens of the UK were asked to vote whether they intended to stay with the EU or not. Out of the people who voted, 51.9 percent voted in favor of leaving the EU. However, from such type of referendum, we can’t come to a conclusion as to what actually the British people want. We cannot get a clear idea of what they were expecting and what they would want now from the Brexit. But a study done by the University of Cambridge made it somewhat clear as to what the British people anticipate with Brexit. Also, the study made it clear that what the people of Britain are willing to negotiate for the deal with the European Union.

It’s been more than a year and still, the negotiations are going on between the UK and the European Union. This article will tell you how the ideologies of people have changed with time. There is a shift in their mindset as to what is beneficial for Britain and what is not. They want a better relationship with the EU in the future, especially after last year’s political debate and incidents.

The methodology of knowing about ideal Brexit

The objective of the study was to attempt and determine what kind of association British people are hoping for with the EU. We wanted to evaluate what elements of this association Britons believe are most crucial and what trade-offs the citizens would be prepared to engage in Brexit agreements.

In the study, people were asked to choose between a number of hypothetical situations. The situations were describing the different scenarios of the possible UK’s relationship with the EU. The British people were concerned with the following aspects-

  • Freedom of movement across countries for recreational activities or holidays
  • Freedom of movement for employment
  • Liberty to have trade deals with non-member countries of EU
  • Freedom to access the single market for the services sector
  • Freedom to have access to the European market for the goods sector

The Findings

  1. The British people still want an agreement centered on a strong relationship with the European Union with the most favored choice representing EEA’s membership. People’s views in terms of the comparative significance of distinct elements of the UK’s partnership with the EU have not significantly altered in the past year.
  2. Over the previous year, people have observed a ‘ softening ‘ of the kind of connection Britons want from the EU. Also, there was a boost in the number of individuals who want to stay in the EU.
  3. Those with higher educational qualifications tend to put greater importance on the liberty of movement for job and work. They particularly do not like the need for having work visas. They want an uninterrupted movement for jobs across European countries.
  4. The importance British people position on the suggestions laid out in the Chequers scheme is hard to quantify. This is due to its lack of transparency on important problems of interest. The Agreements were favored by people, especially which offered the following:
  • A bilateral visa-free transport agreement between the EU and the UK
  • Enables the United Kingdom to conclude trade agreements with nations outside the EU on its own terms
  • Helps the UK to continue trading products with EU members at no extra cost at all.


UK’s political situation has altered significantly in the aftermath of the Brexit referendum. Britain proceeds to discover itself in a turbulent and unstable scenario for two years. The British people oppose this no-deal situation much more strongly than they did in 2017. The public opinion, even among the people who voted for Leaving the European Union, is moving to a softer Brexit.

Of important concern is that presently, none of the mainstream political parties advocate what is the most common decision. The rest of the 42 percent of people chose the decision of joining the EEA.

In the time period left for negotiation, it is of utmost significance that political leaders consider British people’s priorities for the future partnership with the EU. Also, they can also have the ideal Brexit.

Record 4 million signatures for petition: Protest against Brexit, tens of thousands of people on London streets

Hundreds of thousands of people from all over the UK are expected on the streets of London on Saturday to seek a new referendum on Brexit. More than a million people are expected to seek a second referendum on Britain’s withdrawal from the EU, after a similar gathering attracted to estimates of 700,000 people.

A protest march in London began with which citizens of the city want to announce that Brexit should give up or at least allow another referendum.

The greatest danger to the UK if it does not come to an agreement is that the European Union will have to leave without any agreement that could have a devastating effect on the country’s economy and political stability.

Layla Moran, a spokeswoman, said the petition that has gathered more than 4.18 million signatures to “give the wind to the cradle” requests for yet another Brexith referendum.

The mayor of London, Sadiq Khan from the Opposition Labor Party and the head of the Scottish National Party, Nicola Sturgeon, are also in the process.

“I will go tomorrow with people from all corners of our country, to urge the British people to decide on Brexit,” Khan said. Sturgeon said she was proud of what to speak in the procession.

Prime Minister Theresa May has repeatedly rejected calls for a second referendum despite parliament’s agreement on leaving the European Union so far.

EU leaders and May agreed on Brexit’s postponement this week and removed the possibility of Britain leaving the block on March 29.

On Saturday morning, the number of petitioners calling for the British government to withdraw Article 50 on the withdrawal of Britain from the European Union has risen to more than four million.

Since the opening of the site on which the incentive can be signed, the server has been demolished several times due to overload. Namely, too many people at the same time wanted to sign an incentive.

The British Parliament’s Petitions Committee said 96 percent of the signatures came from the United Kingdom, but also those overseas because anyone who is a British citizen has the right to sign a petition, regardless of where he lives.

This petition has currently collected three times more signatures, but all pro-Brexit petitions together.

Margaret Anne Georgiadou, organizer of the petition, wrote that “the government claims that leaving the EU is the will of the people. We need to put an end to this false claim by showing support for staying in the EU!”

Trump has an interesting message for Brits: “They have to do it”

US President Donald Trump said the UK should refuse to pay Brexit’s 39 billion pounds and “quit” negotiations on Brexit if Bruxelles does not give London what it wants.

Trump, in an interview for Sunday Times, said ahead of a state visit to Britain on Monday that the next British prime minister should send Nigel Farage, a fierce advocate of Britain’s EU entry, to negotiate with the EU.

Trump said Britain must leave the EU this year. “They have to do it,” he said. “They have to complete the negotiations,” added Trump.

“If they do not get what they want, I would go to their place. If you do not get a fair deal, you go,” the US president said.

Trump reiterated his support for those candidates for the British prime minister who said Britain should leave the EU by October 31, regardless of the outcome of the negotiations.

Candidates for this are former Foreign Minister Boris Johnson, whom Trump boasted in a Sun newspaper interview on Friday, former Minister for Brexit Dominic Raab and Interior Minister Sayyid Javid.

Trump also said that the conservative mistake had not included Farage, party leader Brexit, in negotiations with Brussels after the party’s success in European elections.

“I like Nigel very much. He has a lot to offer, he is a very smart person,” Trump said. “They will not engage him, but consider how good they can do it, they have not yet understood,” he added.

The US president said he needed to “meet” the leader of opposition laborers Jeremy Corby before sharing the most sensitive US intelligence data with the radical left-wing government.

The United Kingdom, the United States, Canada, New Zealand and Australia have concluded an agreement for sharing intelligence, five-eye agreement.

Is Brexit really a big deal?

PUBLIC LOANS in the UK could double in case of exiting from the EU without agreement, claims the UK Bureau of Budgetary Accountability (OBR).

In the case of Brexit reached without an agreement, the public debt could rise to 60 billion pounds, while in the case of Brexit, the deal would amount to 29.3 billion pounds, the BBC reported.

Possible recession

The above scenario is based on the assumption that going without a deal would lead the UK to a recession.

Britain officially leaves the EU on October 31 this year.

The chances of going out without an agreement have recently increased after both candidates for the post of Conservative Party have supported such an option.

OBR prognosis

OBR, which was set up with the goal of independent analysis of British public finances, used the IMF’s analysis of the first scenario of exit without agreement, according to which the British economy will be weakened by 2% in 2020, in order to recover in 2021.

This will follow the introduction of tariffs of 4% on products from the EU.

“Increased insecurity and a decline in self-confidence” will damage investment, while “trade barriers will make it more difficult for exports”, the OBR report says.

“These two factors together lead Great Britain into a recession, with substantially falling property prices and the value of a pound,” it added.

There is also a risk of inflation and an increase in the indebtedness of the public sector by 12% by 2024.

OBR added that this is not the most likely scenario, as is the worst possible case, and that both conservative candidates offer suggestions that “in the case of implementation, increase the government’s indebtedness by tens of billions of pounds.”

Opinions of politicians

The OBR forecasts proved to be milder than those of Bank of England and Britain’s treasuries, according to which Britain is threatened by a 8% fall in GDP and a recession from 2008 as well as a blow to the economy of £ 90 billion by 2035.

Eurosceptic politicians, such as Jacoba Rees-Mogg, call these forecasts “fools” and even predict the growth of the British economy after leaving the EU.

The head of the British treasury, Philip Hammond, argued, “that even the smallest form of going out without a deal would be a big blow to the British economy,” criticizing the leading Brexit people who “want to make it even harder.”

Fierce criticism at the expense of the conservative government was made by people from the two leading opposition parties, with Labusist John McDonnell saying “Brexit will, without agreement, leave an indelible mark on the British economy and public finances, and that it comes as a result of a failed approach to the economy in the last 9 years “.

Jeremy Hunt and Boris Johnson, candidates for successor Therese May at the post of Prime Minister, have tightened their stance on Brexit over the border, arguing that the only solution is the “hard border” between the UK and the EU on the island of Ireland.

The EU’s leading negotiator on Brexit’s issue, Michel Barnier, said that “the proposal of the agreement offered by Theresa May and how it was rejected three times was the only way for Britain to leave the EU properly.”

Irish Prime Minister: Johnson’s new Brexit agreement is not possible at all

UK Prime Minister Boris Johnson’s proposal for new negotiations on Britain’s EU withdrawal agreement in the coming months “is not possible in real life,” said Irish Prime Minister Leo Varadkar.

“By listening to his speech, I got the impression that he was not just talking about erasing the backstop, but also talking about a completely new agreement – an agreement better for Britain,” commented Varadkar as Johnson’s first speech as the British prime minister.

“Any suggestion that a completely new agreement can be negotiated in weeks or months is absolutely not possible in reality,” Varadkar said in an interview with RTE television.

“It will not happen,” Varadkar said.

Red line of the European Union

The red line of the European Union will not change and its negotiating position will not change in the face of the planned British exit from the EU on October 31, the Irish prime minister added, referring to the announcement from Johnson’s inaugural speech in which he said he would take Britain out of the European Union 31 October “without but without”, but with “a new, better agreement”.

Varadkar congratulated Johnson on taking over as prime minister, saying he was looking forward to working with Johnson’s cabinet, especially when it comes to the border issue with Ireland, the main issue of brexit.

The Irish prime minister said his British counterpart would have to “add a bit of detail about the slogans and statements” about the brex.

“Confidence and enthusiasm are not substitutes for European politics,” the Irish prime minister said.

An unstable political situation in the United Kingdom

While Johnson said in his speech that he wants to leave the EU and if it does not need it, Varadkar said that it is clear to him that Johnson has no support in the parliament for such a step.

He also suggested that the political situation in the United Kingdom was very unstable, unlike Ireland. “It’s stable in our country,” Varadkar said.

European Union Anti Tax Avoidance Directive

Johnson gave an ultimatum to the EU: Start negotiations or go out without an agreement

New British Prime Minister Boris Johnson sent in his first address to the British Parliament ultimatum to Brussels to re-enter into negotiations on Brexit, or otherwise the UK would come out of the European Union without an agreement.

“We are ready to negotiate, in good faith, an alternative (a Brexite agreement),” Johnson said in addressing parliament members. “We will engage in these negotiations with the greatest possible energy and determination,” added Johnson.

“UK must leave the EU by October 31st”

The new British prime minister said he hoped that European leaders would “think about their current refusal” to renegotiate an agreement regulating British exit from the European Union.

“If that does not work, we will have to get out without an agreement,” Johnson said, adding that he asked his new ministers in the government to make preparations so that their “top priority” would become a departure without an agreement.

The new British prime minister insists Britain leave the EU by October 31, whether or not it will have an agreement with the EU at that time.

Boris Johnson also said that the so-called ” A “backstop”, a borderline solution with Ireland that sought to disable the return of a hard border between the Republic of Ireland and Northern Ireland, in order to achieve a breakthrough with Brexit.

“It must be made clear that the path to the Brexit agreement is going beyond abandonment,” Johnson told the parliament.

It will not be nominated by the EU commissioner

Johnson also said in his inaugural speech that the United Kingdom would not nominate candidates for the new European Commission despite the fact that it was requested from her as a member state of the European Union.

“We will not nominate EU commissioners under any circumstances,” Johnson told the MPs, adding that the purpose of his decision was not to “stop the European Union in appointing a new Commission.”

Johnson said many British officials were stuck in numerous meetings in Brussels and Luxembourg, and it would be better to deal with the provision of new free trade agreements.

The UK was asked to announce the name of the commission’s candidate despite the fact that it was scheduled to leave the block on October 31, the day before the body began to work.

“Today is the first day of applying a new approach that will end with our departure from the EU on October 31,” the new prime minister pointed out, which insists that the UK must leave the EU by that date, with or without an agreement.

GATT Article 24- How it can Provide a Managed Brexit

Whenever you mention ‘Article 24’, you receive much hysterical abuse from the remnants, in most cases those with big academic titles. An indication they are scared we are about to achieve something. Also, Article 24 of GATT (General Agreement on Tariffs and Trade) follows the World Trade Organization(WTO).

Some have been saying, “The EU cannot agree to it”, ‘’ If we will exit on bad terms, the EU will not agree to do the deal”. Also, others have been saying, “It is impossible in a no-deal case”. And, we must levy tariffs on EU goods, as well as those from all over the world”. In fact, in a discussion about Article 24 on Radio 4’s, someone made the last point.

However, all these suggestions are wrong. They are all wrong because the chief negotiator of EU, Michel Barnier, the trade advisers, and personnel have been participants of the International Trade Committee of the European Parliament undertaking trade deals. Also, the senior individuals at the WTO and the best trade lawyers like Lorand Bartels of Cambridge University, an impartial Article 24 professional has been about the suggestions.

According to them, GATT Article 24 is desirable and doable. Some facts about Article 24 are:

  1. We should not confuse the ‘no-deal’ or ‘deal’ talks. In fact, we are not looking for renegotiation on the Withdrawal Agreement, or try correction of the deal before 31st October. It has been made clear by Angela Markel and other EU leaders that negotiation on the deal is impossible.
    Thus, it is not a deal founded on the Withdrawal Agreement in the EU law like the Lisbon Treaty’s Article 50. Also, it is not a trade deal carried out in the EU’s “Political Declaration” or “Future Relationship” provisions by its legal binding legislation. Instead, it is a different deal performed under the rules of the World Trade Organization.
  2. Trade rules are not made by the EU. Instead, they are made by WTO. So, the EU operates within the global trade rules through the WTO. Indeed, many EU free trade agreements includes WTO level agreements such as GATS.
  3. The WTO’s predecessor was GATT, and Article 24 is in the global GATT rules that all WTO members are in agreement to establish.
  4. The main aim of the WTO is to enhance free trade all over the world. Thus, the WTO does not support barriers to trade, tariffs, or quotas. For this reason, the WTO will be against the UK and the EU is they will get back to impose tariffs on EU goods, and on British goods in the EU.
  5. The GATT Article 24 lets either blocs or two countries to progress to a customs union or free trade area. Actually, it lets two countries to have their tariffs and quotas lower than the “Most Favoured Nation Rules”. However, it is ironic that this is the foundation of the EU’s zero-tariff Customs Union that happened from 1957 to 1968 for enactment.
  6. Therefore, since the WTO is against tariffs, it is amenable to means of preventing tariffs without the other members getting disadvantaged.
  7. It is certain that GATT 24 requires a temporary agreement from the UK and the EU, although this might be written at the back of an envelope. By good luck, Lorand Bartels has written an effective one-page FTA that is enough to let Article 24 apply. It is a temporary FTA. However, it completely legal and manageable.
  8. What will make the EU accept?

    Apart from the UK being the 5th largest economy in the world, it is also the EU’s biggest single market. Also, more than a million German jobs depend on British consumers who buy German goods. Thus, lack of a basic GATT 24 deal will lead to goods from the EU having tariffs. Hence, their suffering would be more than that of the UK, as they make more sales to the UK. For this reason, Germany does not well this idea, as it makes almost a quarter of the entire EU trade to the UK

Further, the UK might be ready to pay a fair amount linked with the Withdrawal Agreement. However, this is in line with the basic deal.

Without the EU agreement to GATT 24, the UK may internationally and globally alter its import tariffs. Also, be ready to cut all tariff rate quotas. But, it is obvious the UK is not capable of regulating the import tariff rates from the EU.

Renegotiating the Withdrawal Agreement

On three different occasions, the withdrawal agreement which got signed by the European Union and the UK government got reviewed and rejected by the House of Commons. At the moment, there are some disputes regarding the chance of renegotiating the withdrawal agreement before the UK leaves the EU.

This article will make it clear if there is room renegotiating about the November 2018 withdrawal agreement. Further, if the UK parliament may block the UK from leaving the EU without any deal.

The deadline and extensions of Article 50

Article 50 about the Treaty on European Union(TEU) was the foundation of the initial negotiations, as well as the resultant withdrawal agreement. In fact, this explains the procedure an EU member state should follow to exit the EU.

According to Article 50(3), the EU treaties “ceases to apply to a questionable state starting from the day of entry in the force of the withdrawal agreement. Or, failure to that, then two years after issuing the withdrawal notification, unless the European Council has agreed with the concerned member state, and without opposition, it decides to prolong this duration.”

29th March 2019 was the deadline of the starting two-year duration. However, the UK government plus 27 other EU member states have without opposition agreed on two extensions of this duration. So, the recent day of leaving is on 31st October 2019. It is on this date that the UK will exit the EU, with the exception of these cases:

  • Article 50 has been revoked by the government, and the UK remains in the EU.
  • The government has requested and has been offered an extra extension of Article 50.
  • After approval, correction, and establishment of the withdrawal agreement by the UK and EU within the new extension duration.

To what extent is it possible to renegotiate the withdrawal agreement?

On 7th June, the Conservative and Unionist Party leader, Theresa May stepped down. However, there are suggestions that a future UK Prime Minister might receive a better deal for the UK by renegotiating the Withdrawal Agreement.

Indeed, Article 50 allows renegotiation or amendment of the withdrawal agreement at the extended duration. Moreover, it does not specify whatever should happen or not at this time. As a matter of fact, the adoption of the Withdrawal Agreement has already taken place, to cater to the Article 50 extensions.

Therefore, the UK has room for trying and renegotiating the Agreement under Article 50. This comprises of, for instance, the task of the UK paying a financial settlement to the EU. Or, renegotiating the Irish backstop.

What is the EU saying on reopening negotiations?

There has been consistent say from EU27 leaders, Jean-Claude Juncker who is the commission president, and Donald Tusk who is the EU president. They are on record saying time and again those renegotiations on the Withdrawal Agreement cannot and will not happen. For example, on 11th June, Mr. Juncker stated that the Agreement is not a treaty between him and Theresa May. Instead, it is a treaty between the UK and the EU. So, the next British Prime Minister must respect it.

Further, the EU stated the Withdrawal Agreement remains, although they are ready for more clarifications and extensions to the Political Declaration.

Legal barriers to re-opening the Withdrawal Agreement

The renegotiation has additional barriers. Decisions that binds the EU legally got adopted by the EU27, and the UK agreed on them after they were offered extensions to Article 50. In addition, these decisions are listed on the provisions of Article 50(3), and strictly prohibits the re-opening of the Withdrawal Agreement.

Further, the 22nd March European Council Decision and the 11th April EUCO Decision stated the condition for the extension. Both of them stated the extension “does not include even a single re-opening of the Withdrawal Agreement”. Also, on 22nd March and 11th April, the UK confirmed its agreement to the extensions and set conditions by Sir Tim Barrow, the Permanent Representative of UK to the EU.

Still, the procedure of exiting the EU is under the EU law, and it is part of the EU legal order, thus applying until the UK exits the EU. Thus, these decisions are legally binding for both the UK and the EU27. However, they can be revisited, although that requires the EU27’s political will for revisiting them, as well as the Withdrawal Agreement. Nonetheless, the political will is absent at the moment.

Can the “no-deal” Brexit be stopped by the parliament?

The opposition MPs on 12th June rejected the UK exiting the EU with no deal tabled a motion on the Business of the House. Its objective was to let MPs regulate parliamentary time on the 25th of June. And, maybe debate a bill connected to blocking a “no-deal” Brexit. However, the motion got defeated by 309 votes against 298, and it is reported to be the final way of the parliament preventing a no-deal Brexit.

This was a gift to the parliament to stop the “no-deal” Brexit. Since exiting the EU is an EU law procedure, the ‘no-deal’ Brexit can be avoided at the national level if:

  • The parliament ratifies or approves the Withdrawal Agreement Or,
  • The government without opposition revokes Article 50 and remains in the EU.

Too, the government or parliament has nothing else to do, which depends upon to block the ‘no-deal’ Brexit on the 31st of October.

In fact, the parliament cannot by itself block the ‘no-deal’ Brexit, as it needs support from the government. So, it might instruct the Prime Minister to request the EU for an additional extension of Article 50, for an automatic delay of ‘no-deal’ exit. But, the parliament managed to do this as expected through the Cooper-Letwin Bill in March. Also, it made another trial of doing so on 12th June. Nevertheless, the approval of the extension and the set conditions will be decided by the EU27, and not either the UK parliament or government.