EU, UK Approve Brexit Divorce Deal; Now Comes The Hard Part

  • Written by Zero Hedge
  • Published in Economics

After Spain withdrew its objections to the terms of the Brexit agreement after it received guarantees on the trade treatment of Gibraltar early on Saturday morning, today's emergency UK summit was merely a formality. And so, culminating a seemingly interminable two year period of back and forth negotiations, on Sunday the European Union, U.K. Prime Minister Theresa May and the leaders of the remaining EU members finally approved a deal on the UK’s departure from the EU during an emergency summit in Brussels.

EU27 has endorsed the Withdrawal Agreement and Political Declaration on the future EU-UK relations.

— Donald Tusk (@eucopresident) November 25, 2018

And now comes the hard part: the agreement has to be endorsed – or more likely rejected – by British MPs.

* * *

The agreement, which was earlier approved earlier by the UK government, consists of two key documents. The first, a 585-page withdrawal paper, will guide both sides all the way up to Britain’s departure from the bloc, which is set for March 29, 2019. This legally binding text covers the UK’s “divorce bill,” citizens' rights, and various measures ensuring there is no hard border between Northern Ireland and EU member state Ireland. Starting from March 2019, Britain will enter a transition period set to last until December 2020.

EC President Donald Tusk and British PM Theresa May attend a round table meeting at an EU summit in Brussels on Sunday

As part of the agreement, Britain has agreed to pay around $50 billion to the EU mainly to cover commitments it had made to the bloc’s budget. The U.K. will guarantee a broad swath of legal rights to the roughly 3 million EU citizens living in the U.K., and the EU will reciprocate with respect to an estimated 1.3 million U.K. citizens in its member states. The agreement also seeks to ensure that no physical border will re-emerge between Northern Ireland, which is part of the U.K., and the Republic of Ireland—an EU member.

The second, a non-binding document, is a political declaration that outlines aspirations for the future, including maintaining trade relationships, common foreign and defense policies, as well as close ties in law enforcement and criminal justice.

In a press conference following the endorsement, European Commission President Jean-Claude Juncker, Tusk, and EU Brexit negotiator Michel Barnier stressed that the deal is absolutely the best one possible, and that the EU will remain friends with the United Kingdom.

"This is the best deal possible, this is the only deal possible," Juncker said. That remark was echoed by Barnier, who also noted that the EU has "worked constructively with the UK, never against the UK, and the UK worked constructively with us."

However, Juncker said the biggest part of the work in the "tragic moment" of divorce still lies ahead. "Payments have to be made but the future understanding is...

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