Faced with a cliff, jumping is generally considered one of the least pleasant solutions. Yet we are racing towards the edge of the Brexit cliff. Miracles excluded, the UK and EU will not be able to finalize the necessary Brexit agreements in time. Effectively, there is less than a year left, and we have not even moved beyond the Brexit bill. As an extension of the two-year term seems politically impossible in the UK, we seem left with one unlikely and one disastrous possible outcome.
The unlikely outcome is that at some point the UK decides to remain a full member, for example after a second referendum or a revolt in Parliament. Legally, in my analysis, the UK could successfully revoke its Article 50 notification. Ultimately, both the UK Supreme Court and the Court of Justice of the EU (CJEU) would accept a revocation, and the UK would remain an EU Member. Politically, however, this seems unlikely, not to mention the political dog house the UK would find itself in within the EU. Serving divorce papers rarely improves the relationship, no matter how heartfelt their revocation.
The likely but disastrous outcome would be a so-called hard Brexit: an exit without any agreement between the EU and the UK. In a legal second, the UK would go from full membership to virtually no legal relation with the EU at all. Legally, the UK would be less connected to the EU than Burundi. Planes, trains and trucks would grind to a halt and supply chains with them. A hard border would arise in Northern Ireland, anti-terrorism cooperation would stop, and in the financial sector alone at least 35.000 jobs would disappear overnight, with tens of thousands to follow. As a conservative estimate, the UK would loose 2.4% of GDP, or 63 billion dollars per year. Political bluster aside, the chaos and damage of a hard Brexit would be inconceivable, for all parties involved. Nevertheless, this is the default option that time is slowly pushing us towards.
Yet I believe two legal tools may jointly help to avoid a hard Brexit: delayed exit and decreasing membership. Jointly, these legal solutions allow a controlled, phased exit by providing a legal set of steps down the Brexit cliff. Such a phased exit, or phexit to add to the growing stable of exit terms, would buy the necessary time and avoid the impossible task of designing a completely new interim regime from scratch, and having it ratified by all national and regional parliaments, within the next year.
First the delayed exit. Article 50 TEU, which governs the withdrawal process, explicitly prescribes a hard Brexit unless a withdrawal agreement enters into force before the two-year period expires. Article 50, however, does not require that this withdrawal agreement leads to the immediate exit of the withdrawing Member State. Consequently, I believe Article 50 allows an agreement with a delayed exit: an exit which only takes place several years after the withdrawal agreement entered into force.
For example, imagine a withdrawal agreement that enters into force on 29 March 2019, but which determines that the UK will no longer be an EU member per 29 March 2021 at the latest. Because the agreement enters into force before the two-year deadline expires, no unilateral exit occurs and a hard Brexit is avoided. The two years until the actual exit can subsequently be used to finalize the different agreements required for an orderly Brexit. At the same time, a firm date will have been set for the UK’s exit, which may be further entrenched in UK legislation. If no agreement has been reached on a new EU-UK relationship post-exit by this time, a hard Brexit still follows. Contrary to an extension under Article 50(3) TEU, a delayed exit therefore allows the UK government to deliver on its Brexit promise. Brexit will mean Brexit, only at a later stage. Delayed exit therefore avoids a cliff edge without requiring the UK to surrender its commitment to Brexit. Similar to an extension, however, the UK would remain within the EU, including the internal market and the customs union. Consequently, no separate transitional agreement is necessary to bridge the period between entry into force of the withdrawal agreement and a future agreement on the new relation between the EU and the UK.
A delayed exit may therefore solve the problem of transition, but the very solution of continued membership obviously also creates a new problem: the UK would remain a Member State, with rights and obligations. This may cause a Groundhog-like emotion in some Brexiteers: no matter what you do, you wake up an EU member state. In other words, could continued membership ever be politically acceptable in the UK? Here the second legal construct of decreasing membership may offer a solution.
Current debates assume EU membership is binary: you are either fully in or fully out. Brexit may require a more quantum-inspired approach. Without going as far as Schrodinger-membership, decreasing membership entails increasingly lighter stages of membership until exit. Based on the special status of the UK as a withdrawing state, decreasing membership would see the rights and obligations of the UK gradually decline until its actual departure. Hence, rights and obligations would increasingly fall away as the UK gets closer to its exit. This transforms membership itself into a transitional regime, and would flip the negotiations on withdrawal on their head. Instead of negotiating about what rights and obligations the UK will acquire under a new status, the question becomes what rights and obligations will be gradually removed, whilst the UK remains a member of the EU.
Instead of requiring a separate transition agreement setting out an interim status for the UK, therefore, an agreement on declining membership could form part of the delayed withdrawal agreement itself. As decreasing membership forms part of the withdrawal process and takes place within EU law, I would argue that Article 50 TEU provides a sufficient legal basis for such decreasing membership. Declining membership would therefore remove the need for a separate interim agreement altogether, and with it the need for a separate ratification by all national and regional parliament of a mixed interim agreement. Ideally, furthermore, the withdrawal agreement would set out the full schedule of decreasing rights and obligations, up to the moment of exit, although some issues may be reserved for later agreement if they cannot be solved in time. At the same time, the withdrawal agreement setting out the decreasing membership does not have to agree on the final status of the UK after the delayed exit kick in. After all, the purpose of decreasing membership is solely to provide time and a stable interim regime for an agreement on the new relation to be properly negotiated, not to determine that new relationship itself.
To make decreased membership acceptable for the UK, some opt-outs and concessions could be given to the UK as soon as the withdrawal agreement enters into force. Such concessions could, for instance, build on the opt-outs already given to Cameron before the referendum and concern limits on free movement, access to welfare and a certain reduction in the UK contribution to the EU. Other, more far reaching reductions in rights and obligations could follow according to a schedule to be negotiated, leading up to the eventual exit and new relationship between the EU and the UK.
For the EU, decreasing membership should be at least as acceptable, if not more so, than a transitional agreement which grants certain membership-like rights to the UK. After all, decreasing membership retains the link between membership and rights. Any rights granted to the UK during transition will still be based on the UK’s membership, reaffirming the key importance and value of membership, and disallowing the UK to have its EU pie without paying the membership price for it. Moreover, decreasing membership is inherently limited in time and fully premised on a firm and binding commitment to exit. If no agreement is reached on the new EU-UK relation, which may look very different from decreased membership, hard Brexit still follows. Decreasing membership, therefore, does not mean that the UK will retain membership-like rights after exit, or that the UK could choose to linger in a ‘membership-light’ model. In addition, there is no risk that other Member States may claim a ‘membership-light’ status based on the UK example, as this status is only available after they commit to exit by notification and signing a delayed withdrawal agreement.
A gradually decreasing membership would therefore allow the UK government to honor several of its Brexit promises domestically without requiring a hard Brexit. For the EU, it could prevent cherry picking and ensure the entire transition takes place squarely within the realm of EU law. In addition, it would take away the need to design a completely new interim status for the UK from scratch, or to fall back on completely unsuitable existing arrangements such as the EEA or EFTA. Instead, the EU and UK would only have to agree on what rights and obligations to gradually strip away. This would remain a major challenge, there can be no illusions there, but one less herculean than designing and ratifying a new interim regime that is acceptable for both parties. In addition, a system of decreasing membership, following to a fixed schedule, would also offer much more legal certainty to businesses and citizens. As an interim period in which the UK retains certain rights and obligations is foreseen anyway, a model of decreased membership may therefore be the best, if of course not perfect, solution available.
In my legal analysis, decreasing membership is possible under EU law. In part this is precisely because of the special status of the UK as a withdrawing state under Article 50. The moment the withdrawal agreement enters into force, the UK is in an objectively different position than other Member States. This objectively different position, together with recognition of the right to leave under Article 50 TEU, would allow far reaching deviations from the acquis, including deviations from foundational principles as equal treatment, loyal cooperation or direct effect and supremacy in all fields covered by or possibly affecting the functioning of EU law.
The possibility of decreasing membership is further supported by the mirror position of acceding or recently acceded states. During the process of accession, and even after full accession, all kinds of rights and obligations do no apply, including equal treatment. The clearest case in point is the position of Bulgaria and Romania after accession. Even though both had become full Member States, temporary limits were imposed on free movement of persons. In the context of accession, therefore, direct discrimination based on nationality was temporarily allowed. A fortiori, it must be assumed that even more far reaching deviations from the acquis are allowed in the context of withdrawal, at least once a withdrawal agreement has entered into force. After all, unlike accession, Brexit is not building up to full membership, but rather to an end of membership. This also means that any special status granted to the UK during its withdrawal cannot be granted to other Member States that have not already signed a withdrawal agreement.
As a leaving member, therefore, the UK could be granted a gradually decreasing membership status that would allow it increasing freedom, even from several core principles of EU law, without necessitating a premature exit and all the risks and costs this would entail. Such an approach, moreover, might also facilitate agreement on some current stumbling blocks. The Northern-Irish border, for example, might not have to be reinstated during the transition, nor would a parallel internal market regime or customs arrangement have to be invented. Continued payment of the UK’s financial obligations under the current MFF would no longer be a ‘fine’ for leaving, and the total sum of the ‘Brexit bill’ could subsequently be reduced. The current rights of UK citizens in the EU and other EU citizens in the UK could be easily respected, as they would remain EU citizens, whereas any limits would apply as per entry into force of the delayed withdrawal agreement.
Decreasing membership would, however, not offer a full solution for the disagreement over CJEU jurisdiction. The autonomy under EU law, as inter alia defined by the CJEU in Opinion 2/13, would still require that the CJEU retains jurisdiction during the period of the UK’s decreasing membership. At the same time, the UK already seems to have accepted the inevitability of some form of CJEU jurisdiction during a transition period. In addition, declining membership might actually be the best option the UK might have to at least exclude CJEU jurisdiction in certain specific areas. Such an exclusion, if limited, may be an acceptable deviation from the core principle of autonomy in the context of withdrawal.
In addition, institutional challenges will arise. It can be defended that, as a withdrawing member, the UK loses its commissioner yet retains its judges in the CJEU, its participation in most European Council and Council meetings and its member of the Court of auditors. The representation in the European Parliament may require a more creative phasing mechanism. On the one hand, the continued EU citizenship of UK citizens would require a certain form of representation in the European Parliament. On the other hand, the unique status of a withdrawing state and the reality of a popular vote in favour of Brexit could justify decreasing representation here as well.
Clearly the suggestions above raise at least as many questions as they answer, and much more work is needed to fully flesh out the legal constructs of delayed exit and decreasing membership. In addition, the vitriolic politics of Brexit will make any kind of agreement extremely hard, and pose a major challenge to any acceptance of prolonged membership, even in a time-limited and decreasing form, on both the UK and the EU side. Amidst the complexity and chaos of Brexit, however, no perfect solutions exist. Yet when the alternative is a hard Brexit, delayed exit and decreasing membership may just provide the legal leeway to let reason and responsibility prevail, and avoid a self-inflicted and inexcusable failure of historical proportions. Why jump of a cliff when there may be a legal set of steps down allowing a much more civilized descent?
Armin Cuyvers, Leiden Law School
(Suggested citation: A. Cuyvers, ‘Two Legal Tools to Avoid Hard Brexit: Delayed Exit and Decreasing Membership under Article 50 TEU’, U.K. Const. L. Blog (24th Nov. 2017) (available at https://ukconstitutionallaw.org/))