Brexit is a fact - What now? The view from Brussels

The UK has voted to leave the European Union (EU). With this vote, Article 50 of the Treaty on the European Union (TEU) comes into play. This provision reads as follows:

1. _Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.
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2. _A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.
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3. _The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.
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4. _For the purposes of paragraphs 2 and 3, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it. A qualified majority shall be defined in accordance with Article 238(3)(b) of the Treaty on the Functioning of the European Union.
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5. If a State which has withdrawn from the Union asks to rejoin, its request shall be subject to the procedure referred to in Article 49.

Launch of the Article 50 TEU negotiation process

The outcome of the referendum will lead to a formal decision from the UK to leave the EU. According to Article 50(2) TEU, once this decision has been made, the UK is obliged to notify the European Council of its intention to withdraw from the EU. Article 50 was introduced with the Lisbon Treaty and it is the only available legal instrument in the Treaties for a Member State to withdraw from the EU. The process of Article 50 is unprecedented and untested and it is consequently expected that both the UK and the EU will have a long and winding road of negotiations ahead of them.

When the UK has notified the European Council of its intention to withdraw from the EU, the European Council will, by unanimity, approve guidelines for the negotiations between the EU and the remaining 27 Member States (i.e. excluding the UK). On the basis of these guidelines, the Council will agree, by qualified majority voting, on a mandate for a negotiator to conduct the negotiations on behalf of the EU. This negotiator is most likely to be the European Commission, but the Council is entitled to appoint another Union negotiator.

The two parties to the negotiations under Article 50 will be the EU, (probably) represented by the Commission, and the UK. For the purposes of the withdrawal negotiations, the UK will be treated as a non-Member State, and it will consequently not participate in any discussions concerning its withdrawal in the European Council or the Council.

At the end of the negotiations, the European Parliament will need to give its consent to the draft withdrawal agreement by a majority of votes cast, after which it will be signed and then agreed on by the Council by qualified majority voting. If the withdrawal agreement concerns a mixed agreement - an agreement covering areas where not only the EU, but also the Member States are competent - it will also have to be ratified by the Member States. This ratification process can take several years.

The scheme below summarizes the different steps in the procedure.


Since Article 50 does not set out any procedure for the negotiations, the outcome thereof is very uncertain. It can also not be determined which institution will have the most influence during the negotiations. It is, however, to be expected that the procedure will be largely intergovernmental, even with an EU negotiator being appointed. In fact, a Committee of National Representatives will monitor the work of the EU negotiator. Moreover, the Council - consisting of Member State representatives - will have to conclude the agreement. On the other hand, the European Parliament - acting on behalf of the people of the EU - has to consent to the withdrawal agreement, which will put it in an influential position.

Position of the UK during the notice period

In principle, during the notice period, the UK will remain a Member State of the EU. EU law will continue to apply fully to the UK and its nationals will be entitled to exercise their rights based on EU law. UK nationals will also continue to serve in all EU institutions and bodies.

However, Article 50 does entail some restrictions in this regard. Article 50(4) TEU provides that the members of the European Council and of the Council representing the UK cannot participate in the discussions of these two institutions relating to the UK withdrawal.

There is no similar provision to be found with regard to the European Parliament. This supports the position that the Treaties do not prevent Members of the European Parliament (MEPs) elected in the UK from participating either in debates in the Parliament and its committees and from exercising their voting rights, even on the Parliament’s motion to consent to the withdrawal agreement. An additional argument can be derived from the role of MEPs as representatives of the Union’s citizens as a whole and not only of the citizens of the Member State in which they were elected.

This view is not unanimously shared, and some take the view that the UK withdrawal process will almost inevitably affect the weight and influence of the MEPs elected in the UK, especially since the outcome of the proceedings within the European Parliament is unlikely to have any future impact within the UK. If this option prevails, it may at least lead to the reshuffling of European Parliament committee chairs during the Article 50 negotiation process.

Another important issue to be taken into account is the fact that the UK is scheduled to hold the presidency of the Council in the second half of 2017. As already indicated, the UK will be disqualified from participating in any Council meeting that involves discussions on the withdrawal. To the extent that the Council addresses other topics, the UK could still take up the presidency. However, there would again be a credibility issue and it is hard to conceive how a Member State that has given notice to leave can give a meaningful dimension to the presidency. This is all the more so since one of the roles of the Council presidency is to act as a catalyst for the work done at Council level. The UK Government may therefore wish to consider alternative arrangements for its upcoming presidency next year.

Nature of the withdrawal agreement

The withdrawal agreement will be an international agreement concluded between the EU and the UK. Unlike an accession agreement with a new Member State, the withdrawal agreement will not need to be ratified by the remaining Member States.

However, any changes to the Treaties or international agreements that might be necessary as a consequence of the withdrawal will need to be ratified by the remaining Member States in accordance with Article 48 TEU. At the very least, Article 52 TEU on the territorial scope of the Treaties, which lists the Member States, would need to be amended, and Protocols concerning the UK revised or repealed.

The Council decision to conclude the agreement can be challenged before the Court of Justice of the EU (CJEU) through an action for annulment by means of Article 263 TFEU. The domestic courts of the remaining 27 Member States will also be able to refer questions regarding the withdrawal agreement for preliminary ruling to the CJEU.

Content of the withdrawal agreement

There has been considerable speculation about the possible content of the withdrawal agreement with the UK. The withdrawal agreement will need to address in the first instance the immediate consequences of the UK leaving the EU. It could, however, also address the future relationship between the EU and the UK, even if this seems to be ambitious given the limited amount of time that the parties will have to negotiate such an agreement (see below). The more likely scenario is therefore that the scope of the withdrawal agreement will be limited to an orderly exit arrangement.

The withdrawal agreement is likely to contain a number of transitional rules. One of the items to be addressed in the withdrawal agreement will probably be some recognition of the vested rights of the roughly two million UK citizens living in the remaining Member States. It would not be possible for them to retain the advantages of EU citizenship if the UK leaves the EU, because the Treaties state that one must hold the nationality of a Member State in order to be a citizen of the EU. There is nothing to be found in the EU Treaties or in the case law of the CJEU which could be used to establish a theory of vested rights for the citizens of a State withdrawing from the EU. It is by means of the withdrawal agreement that these rights should be dealt with and guaranteed.

Time-line - end of the negotiations

Article 50(3) TEU provides for a maximum term of two years for the withdrawal agreement to enter into force. The two-year period starts to run as from the notification by the UK of its intention to leave the EU. In the absence of an agreement within the two-year time-limit, the Treaties will cease to apply to the UK.

There is no time-limit for the UK Government to notify its intention to leave the UK. In practice, there will be pressure, both within the UK and at the level of the other Member States, to make the notification within a reasonable time frame. David Cameron has said that he will stand down in time for his replacement to be in place by the beginning of October 2016 and that he will leave the decision to serve the Article 50 notice to his successor. If that is the case, the two-year time-limit will expire towards the end of 2018.

The two-year period can be extended by agreement between the European Council, acting unanimously, and the UK. There is no limit to the length of the extension, nor the number of times an extension can be granted.

In view of the complexity of the matters to be settled, the two-year time-limit is generally considered to be very short. In addition, the time frame puts the UK in a weak negotiating position. It can also be expected that the chances of getting a unanimous approval for an extension will decrease over time. Over time, pressure will also increase to conclude the negotiations.

The UK Government may therefore be well advised to consider an extension request early on in the process, possibly already at the stage of the notification of the intention to withdraw. A “natural” time-limit could be mid-2019, which would coincide with the next five-year term of the European Parliament, to be followed by the appointment of a new European Commission. The next European Parliament elections will be held in May 2019, meaning that, starting from 01 July 2019, the newly elected MEPs will take up their position in the European Parliament. Even if the UK and the European Council agree on a longer time frame for the withdrawal negotiations, it would indeed be hard to conceive that the UK citizens would still participate in the 2019 European Parliament elections and that the new European Commission would count a UK delegate among its members.

If the UK and the EU cannot come to an agreement before the end of the two-year (or extended) period, the UK may still negotiate and conclude an agreement with the EU at a later stage. However, in that case, the UK will no longer be a Member State of the EU and the ordinary rules of the EU negotiating association treaties with third parties will then apply, making such an agreement subject to unanimity in the Council on the basis of Article 218(8) TFEU. Thus, the UK has a strong interest in reaching a deal while it is still a Member State.

What if no withdrawal agreement is reached?

In the worst case scenario, ie the UK leaves the EU after the set deadline without any agreement, the fall-back position of the UK are basically the WTO terms. Besides the WTO rules, there might be the possibility to rely on certain mixed Free Trade Agreements to which the UK is signatory in its own right. However, this would arguably only apply to the areas covered in these agreements which fall outside the EU’s exclusive competence.

What about the future relationship between the EU and the UK?

Unless the withdrawal agreement also regulates the future relationship between the UK and the EU, which appears to be unlikely, that relationship will have to be negotiated at a later stage. Several models have already been discussed, such as a bespoke relationship with the EU or a variety of options, known as the Swiss, Canadian, Norwegian, Turkish or even the Albanian model.

In any event, it is to be noted that if the UK wants to join the EEA or EFTA, the UK and the members of these organisations will have to negotiate and conclude a new treaty.