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EU implements Brexit ‘no deal’ contingency plans

Making plans for ‘no deal’ getting real © AFP / Tolga AKMEN

BRUSSELS, Belgium, Dec 19 – The European Union on Wednesday adopted backup plans to protect air transport and financial markets in the event Britain leaves without a Brexit deal in 100 days.

And the bloc promised that British citizens living in Europe would continue to enjoy residents’ rights “provided that this approach is reciprocated by the UK”.

EU officials insist the measures would not mean Britain can quit the union painlessly, but that it is important for “time-limited” measures to “mitigate” the harm.

“The best, if you talk in terms of the economy and avoiding disruptions, is to stay within the EU,” European Commission vice-president Valdis Dombrovskis told reporters.

“Then, if the decision on Brexit is taken, of course, withdrawal or Brexit with a deal is better than withdrawal with no deal,” the former Latvian prime minister said.

“In case of no deal scenario, doing some preparation to minimise damage is better than no preparation at all.”

‘Major disruption’

The European Commission said it was acting “to ensure that the necessary contingency measures can enter into application on 30 March 2019 in order to limit the most significant damage caused by a ‘no-deal’ scenario”.

The package covers 14 areas where a “no-deal” Brexit “would create major disruption for citizens and businesses” including in financial services, air transport, customs and climate policy.

Brussels hopes it will not have to activate its plan if Prime Minister Theresa May persuades a sceptical British parliament to endorse a broad withdrawal deal she struck with European leaders last month.

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But the bill’s passage is far from certain and on Tuesday Britain announced its own contingency plans to prevent shortages and economic instability in the event it crashes out of the bloc without a deal.

Under the plan, the European Union will allow UK-based financial operators to continue to access European markets for 12 months under a “temporary and conditional equivalence” period to prevent disruption.

Europe will allow British flights to continue to access the “Single European Sky” air traffic control area for 12 months and extend some aviation licences for nine months after March 29.

There will also be measures to allow UK firms temporary access to the EU emissions trading market and new customs regulations to oversee trade with Britain as an outside party.

While Dombrovskis would not confirm the plans add up to what pro-Brexit politicians in Britain have started referring to as a “managed no-deal”, the decision will fuel the debate in London.

The announcement in Brussels came as May was under withering fire in London for delaying a parliamentary vote on the Brexit withdrawal deal that her negotiators hammered out over 17 months.

The main opposition Labour Party has demanded a no-confidence vote against May while pro-European groups, including the Scottish National Party, seek a motion against the government as a whole.

Neither initiative is likely to come to a vote, meaning that the withdrawal plan will probably be put before lawmakers in mid-January.

May survived a separate confidence vote tabled by members of her own Conservative Party last week but she came out of the process badly bruised and the Brexit vote could still go against her.

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Businesses ‘watching in horror’

European leaders insist they will not renegotiate the terms of the divorce, and the deadlock in Westminster has raised the prospects of either a second referendum or of a no-deal Brexit.

On Tuesday, May’s government announced no-deal plans, including drastic measures such as stockpiling imported chemicals to ensure safe drinking water and special flights to ensure supplies of medicine.

But Britain’s five leading business associations warned that companies have been “watching in horror as politicians have focused on factional disputes rather than practical steps that business needs to move forward”.

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