24.06.16

Brexit and its consequences for the EU

I. Integration regarding the single market

There are three options for the UK to preserve access to the EU single market or at least to parts of it (in order of integration with the EU from high to low):

  1. joining the European Economic Area/EFTA (UK has to adopt almost all EU legislation related to the EU single market, except laws on agriculture and fisheries)
  2. sectoral agreements with the EU that allow access to parts of the EU single market, such as in the area of free movement of persons or services (UK has to adopt all EU legislation regarding the agreements)
  3. bilateral free-trade agreement with the EU or customs union (UK has to adopt all EU legislation regarding the free-trade agreement)

The three options differ to the extent that they provide different

  • access to the EU single market (regarding freedom of establishment and free movement of goods, services and people)
  • level of influence on EU legislation and
  • financial burden for the British public budget.

 

 

II. Integration besides the single market

Besides agreements providing access to the single market, the EU has bilateral agreements with non-EU countries on savings taxation, environment, education, research cooperation, regional policy, social affairs, health policy, anti-fraud and tax information exchange. The UK has to decide whether it wants to cooperate with the EU in some or all of these fields.

1. Joining the European Economic Area/EFTA (role model Norway)

  • level of integration: nearly full access to the single market,
  • level of influence on EU legislation: low (fax democracy)
  • financial burden for the British public budget: middle

2. Voluntary alignment for certain sectors (several bilateral agreements, role model Switzerland)

  • level of integration: almost full access to the single market (in the case of Switzerland plus additional agreements on air traffic, anti-fraud and science)
  • level of influence on EU legislation: low
  • financial burden for the British public budget: low

3. Free-trade agreement (role model South Korea)

  • level of integration full: free movement of goods
  • level of influence on EU legislation: none
  • financial burden for the British public budget: none

     

Dr. Bert Van Roosebeke, Head of Division, vanroosebeke(at)cep.eu