UK requests another Brexit deadline extension, furthering market uncertainties
Regulatory Updates | In-Vitro Diagnostic Devices, Medical Devices
EMERGO SUMMARY OF KEY POINTS:
- The British Prime Minister has asked to have Brexit Day moved again;
- It is far from certain the EU will allow for another extension;
- Theresa May asks for more time to negotiate with the British Parliament on how to leave the EU;
- This delay implies that the UK will take part in the elections for the European Parliament.
The UK government has requested a further delay in implementing its withdrawal from the European Union, with an April 12 deadline for a no-deal Brexit outcome fast approaching.
British Prime Minister Theresa May has sent a letter to Donald Tusk, current President of the European Council, in which she asks for another extension of the article 50 procedure. Article 50 describes how a Member State can leave the European Union, providing a two year time frame for doing so. An agreement has been struck between the EU and UK negotiators. However, when the UK Parliament was asked to vote about this proposal, it became clear the negotiators were not properly mandated; the proposal was voted down with a historical margin (202 to 432 votes). This has led to an unclear situation, where UK politicians first need to agree between about what they want, before the EU can take their process further.
Pros and cons of a delay
At this moment Brexit Day is set on April 12th. If nothing happens, the UK will leave the EU without a deal. This no-deal situation is likely to result in chaos, which is something the EU does not want so close before the elections for the European Parliament May 22nd through 26th 2019.
At the same time, the EU may appear the less strong participant in these negotiations, with the UK time and again pushing back on previously agreed terms. Although this may seem like a minor position within the Member States, it is a highly relevant issue because all Member States must agree unanimously to an extension. A delay would mean that the UK takes part in the European Elections; in her letter to Donald Tusk, Theresa May acknowledges this. This would also mean that the UK will be part of the negotiations regarding the future of the EU and although there is a promise that the UK will vote with the majority and not use their blocking vote, this is a non-binding agreement and some Member States do not trust the UK will keep that promise. Of course the UK is aware they need to keep relations with the EU good because a trade deal must still be negotiated after withdrawal.
On the other hand, some EU representatives advocate extending the article 50 timeframe by another two years. If the UK negotiators think they are ready to leave, they can leave at any moment. But this would take away the need to renegotiate an extension every few weeks. This option would create prolonged uncertainty for citizens and industry. European business networks are cutting ties with their UK partners, and UK-based companies are moving to the mainland. The longer it takes for the UK to come up with a proposal for leaving, the more the stalemate situation will start looking like the actual no-deal Brexit.
The guillotine option?
However, some Member States do not appear willing to give the UK another chance. French Prime Minister Emmanuel Macron has called for the “Guillotine Option” on April 12th, letting the UK leave without a deal. The positive thing about this option would be that we then would know what we are dealing with and can focus on the future.
However, the Guillotine Option may result in unnecessary chaos. It cannot be ruled out that the Mr. Macron’s position is just a tool to put some pressure on the process taking place in the UK. The British Parliament will only know if this guillotine option will be used on April 10th at the next EU summit; that would occur after voting on new proposals for how to move forward. This implies that the UK politicians have the initiative until April 10th, after which more leverage will be in the hands of the 27 EU Members State leaders, each with their own agenda and national priorities. The fact that the French now appear to divert from the European Commission position could be an indication all European leaders are no longer as united as they have been during these negotiations. The British have tried to split this group as part of their negotiation strategy, but they may not like what is now happening. Spain, one of the two countries sharing a land border with the UK (Gibraltar) appears to be willing to support the French.
Conclusion: inconclusive (still)
In conclusion: nothing is certain, the Brexit saga could end in the UK leaving the EU without a deal, the Cliff-Edge scenario. But it could just as well drag on for another two years. Or longer. Emergo by UL will keep you informed as to how Brexit negotiations and outcomes will impact the medical device and IVD sectors.
Additional UK and European regulatory resources from Emergo by UL:
- Brexit transition consulting and in-country representation for medical device and IVD companies
- European CE Mark strategy for medical device manufacturers
- EU MDR 2017/745 cap assessment and CE Mark transition strategy
- Whitepaper: How medical device companies can prepare for a no-deal Brexit
- Webinar: Impact of a no-deal Brexit