Why do companies fail in the UK

Brexit how? What is it currently about?

Brexit will definitely come on January 1st. But how? And what is currently the problem? Five questions and answers about the current status of Brexit, the negotiations and the possible consequences of the failure.

Brexit has long been a done deal. So what is it currently about?

Great Britain left the international community at the end of January, but is still a member of the EU internal market and the customs union until the end of the year. The British will still have free access to the EU internal market during this transition period and exports from the EU to the UK will not be subject to any restrictions. Only at the turn of the year does the economic break come - the real test for Brexit. And what this break should look like is hotly debated between Great Britain and the EU.

If no agreement is reached, there is a risk of serious economic upheaval. Customs duties and fees would place a heavy burden on trade. The trade pact is supposed to prevent that. The negotiations have not made progress in some areas for months. And time is of the essence.

Why are the negotiations failing?

The main points of contention are the access of EU fishermen to British waters and the demand of the international community for equal competitive conditions for the economy, i.e. equal environmental, social and subsidy standards. In return, Great Britain should be able to deliver goods to the EU internal market without customs and quantity restrictions.

The third important point for the EU is arbitration rules
in the event that one side violates the agreement. The
last came to the fore because parts of a British law
of the already valid EU withdrawal agreement. It goes
there are special rules for the British part of Northern Ireland. Brussels
reacted indignantly to the so-called internal market law.

But also the fisheries question is politically extremely delicate. It is “only” about an annual turnover of around 700 million euros. But for French President Emmanuel Macron, whose fishermen get 25 percent of their catches in British waters, any yield two years before the presidential election would be poison. Accordingly, Macron threatened before the beginning of the summit: “Under no circumstances should our fishermen be victims of Brexit. There won't be an agreement at any price. "The possibility of a no-deal is real:" We have prepared for it. France is ready for it. "

The British industry association CBI appealed to both sides on Sunday to come to an agreement. A no-deal Brexit and a second corona wave are impossible to cope with for most companies. On Friday, the US rating agency Moody's already lowered Great Britain's creditworthiness. The agency named the decline in economic strength as the main reason. After the graduation, the country is still in the area of ​​safe systems.

What is the current state of negotiations?

The British government recently threatened the failure of negotiations on the Brexit trade pact. The chances of a deal have decreased. Brussels is not willing to compromise, said Minister of State Michael Gove on Sunday the broadcaster Sky News. He had last estimated the chances of an agreement after the Brexit transition phase at the end of the year at 66 percent. Now Gove said, "It's less."

So Britain is trying to increase the pressure on the EU. It is up to EU negotiator Michel Barnier whether a deal will come about after all. "The ball is in his field," said Gove, who is in charge of preparing for a breakdown in negotiations. The EU must change its attitude.

Skeptical tones also came from the European Parliament, which would have to approve a post-Brexit deal. The vice-president of the EU parliament, Katarina Barley, said on Saturday that it was "becoming more and more difficult" for a trade deal. "The fishery will probably stay outside," said the social democrat NDR Info. Like her conservative colleague Manfred Weber, she raised serious allegations against Premier Johnson. Weber told the newspapers of the Funke media group that he was facing the shards of his policy. "In the coming months he will have to explain to the British why the Brexit promises were dishonest. The buck game from London is pure show and does not get anyone any further," said Weber.

What is the further schedule?

The time pressure that both sides are under is enormous: a treaty between Brussels and London still has to be ratified. Johnson had set October 15 as the deadline for an agreement, which Brussels ignored. The EU wants to negotiate until the end of October.

EU Commission Vice-President Maroš Šefčovič met the British Cabinet Minister Michael Gove in London. In the afternoon, EU chief negotiator Michel Barnier and his British counterpart David Frost should at least phone instead of a personal meeting. After the EU summit, Frost announced that Barnier should not come to London for talks on Monday. Does that mean the door has slammed shut for further negotiations? Gove said in the Sky News interview: "It's ajar."

A classic solution to the conflict would be a special summit in Brussels, at which a carefully choreographed agreement could be presented as heroically achieved at the executive level. Johnson would certainly like to bring such a trophy to London, alone: ​​This currently very unlikely scenario assumes that Barnier and Frost reach an agreement on the details.

What if the EU and the UK don't agree?

An end to the transition phase without a trade pact - the Europeans want to avoid this scenario at almost any price. The economic consequences of such a rift in the dense trade network with the British would be serious - and they would fall in the middle of the corona recession. As of January 1st, up to 7000 trucks are in constant danger of being stuck in traffic jams on the English Channel, according to official documents.

On Thursday, for example, the European car manufacturers' association warned that a Brexit without an agreement would cost manufacturers up to 110 billion euros. The German Chancellor, Angela Merkel, listens to these voices very carefully. It will therefore endeavor to guarantee to the end that it is not the Europeans who get up from the negotiating table. In short: a break in negotiations by the Union is almost certainly not to be expected.

Prime Minister Boris Johnson, on the other hand, has stressed several times that Great Britain is prepared for a no-deal Brexit. Many commentators see the harsh tones from London as a muscle game. Because Great Britain is facing very hard times: The country has to fear strong economic upheavals not only in the event of a no-Brexit deal, but also because of the pandemic.

The Brexit chronology

1st February 2020 - The European Union only has 27 member states. The UK will leave the EU on Saturday at midnight (Friday 11pm London time).

February 25, 2020 - The 27 EU countries accept the mandate to negotiate future relations with Great Britain. This means that negotiations on a trade agreement can begin in March.

June 12, 2020 - Great Britain rejects an extension of the Brexit transition phase beyond the end of the year.

September 7, 2020 - British Prime Minister Johnson is putting pressure on the European Union shortly before the next Brexit round of talks. An agreement on a trade agreement should be on the table by October 15. Otherwise there will be no free trade agreement between Great Britain and the European Union, said Johnson. EU negotiator Michel Barnier is concerned.

29th September 2020 - The EU and Great Britain start another round of negotiations for the trade pact. At the same time, despite all warnings from the European Union, the British House of Commons passed Prime Minister Johnson's controversial internal market law. It is intended to undermine parts of the resignation contract that is already in force.

October 1, 2020 - The European Union is taking legal action against Great Britain for violating the EU Withdrawal Treaty. The negotiations are at an impasse due to a dispute over future British state aid and future fishing rights.

October 2, 2020 - The stalled negotiations go to the boss level. British Prime Minister Johnson and EU Commission President Ursula von der Leyen discuss together.

October 15, 2020 - The EU summit demands movement from Johnson, which means that the 27 heads of state and government are ignoring the British prime minister's ultimatum. The EU summit calls on the UK government to "take the necessary steps" to facilitate a trade deal. The summit does not set a deadline for an end to the talks. French President Emmanuel Macron would rather let the negotiations on an EU trade pact with Great Britain fail than compromise at the expense of French fishermen.

October 16, 2020 - The British Prime Minister is preparing his country's economy for a hard break with the EU: If the European Union does not fundamentally change its approach in the negotiations, there will be a Brexit without a trade agreement, says Johnson. The EU does not negotiate seriously. His country will therefore have to adapt to a new situation from January 2021.

(APA / dpa / Reuters / Red.)