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Wednesday 16.01.2019 | Name days: Lida, Lidija

Brexit: a finish line with no end in sight

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUEmīls Dombrovskis for BNN

Less than 200 days are left before Britain officially leaves the European Union. The state of the agreement between Britain and EU only serves to create more chaos, from which neither Britain nor EU, or even Latvia will benefit.

Britain’s exit from EU will happen at 00:00 (Central European time) 30 March 2019. As this hour comes closer, it seems confusion on an international scale and in Britain only increases and will soon reach its highest point. Of course, Brexit is an unprecedented event in Europe’s history, and considering Britain’s role in European and world politics, it was naïve to expect both sides to smile and shake hands in exit talks. Nevertheless, even the 52% of Britain’s residents that voted in favour of this hopes to gain some clarity in regards to conditions of this agreement.

Brexit talks have entered the final stage, but no without considerable shocks in Britain’s internal politics. Prime Minister Theresa May’s ultimatum – either her plan is approver or there will be no agreement – has caused a wave of criticism in the government and society. May’s plan, called ‘Chequers’ plan, is considered by members of the Conservative Party a ‘mild’ Brexit that still provides Brussels with a lot of authority. One of the biggest points of arguments is the still unresolved Ireland-North Ireland border dispute. ‘Chequers’ plan provides that the flow of goods between Britain and EU in Ireland will be performed without customs or other checks.

May’s plan has only served to stir up the internal policy crisis, which has been on a rise in Britain ever since the day of the Brexit referendum. It is because of the ‘soft’ plan did one of the defenders of ‘strict’ Brexit – Boris Johnson – decided to step down as Britain’s Foreign Affairs Minister. Johnson said Theresa May has «wrapped a suicide vest around the British constitution and handed the detonator» to Brussels.

It is not just May’s government that has become fractured over Brexit, but society as well. Every now and then people consider organizing a second referendum. For example, Mayor of London Sadiq Khan has proposed organizing a second referendum, saying that promises of Brexit supporters have not come true two and a half years after the first referendum. Survey results show that most British would support a referendum on the final agreement between Britain and EU. The number of people who would be in favour of remaining in EU in the event of a second referendum has increased – 53%.

The mood in the EU is relatively combative. The head of EU Brexit talks delegation Michel Barnier, has voiced a strict position in relation to the main conditions of May’s plan. For example, equal requirements for goods but not services. He says such conditions would destroy the single market and Europe’s project, because third countries will likely request similar benefits and exceptions. European Commission’s President Jean-Claude Juncker has said that Britain’s exit without a relevant agreement would not be a desirable outcome. Nevertheless, Europe should prepare for it.

Latvia is also watching this political drama unfold, as are thousands of Latvian nationals living in Britain. From the very beginning, Latvia has made it clear that its interests include the unchanged status of its Britain-based citizens. May has implied that EU citizens may be applied with restrictions such as residence visas. It should be said that the ability of Latvia’s high-ranking officials to influence Brexit talks are limited. Considering that France and Germany have established a strict and unwavering position in relation to the single market, there is not much space left for compromise, which makes the non-agreement scenario all the more possible. It should be added that Latvian parties have not tried to define their position in relation to their desirable Brexit outcome in their pre-election programmes.

Economists admit that non-agreement and single market restrictions will impact Latvia’s exports. In 2016, Britain was Latvia’s sixth largest export destination with EUR 555 million in revenue and positive trade balance of EUR 348 million. Losses may come not only from declined trade turnover, but also declining European structure and investment funds after Brexit. Latvian Finance Minister Dana Reizniece-Ozola has said that «decline of these funds in Brexit case should not impede Europe’s competitiveness».

Brexit talks have entered the final stages, but the finish line itself is nowhere to be seen. With support from all EU member states, exit conditions may be discussed after March 219. Neither side has shown particular interest in searching for compromise, which makes the end even more unpredictable. Although the possibility of a non-agreement becomes more realistic with each passing day, all involved sides, including Latvia, are interested in a solution that would stabilize relations between EU and Britain as soon as possible.

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