Academic journal article Global Economic Observer

Brexit: The Economic and Political Impact of a Possible Withdrawal of Great Britain's from the European Union

Academic journal article Global Economic Observer

Brexit: The Economic and Political Impact of a Possible Withdrawal of Great Britain's from the European Union

Article excerpt

1. Introduction: Brexit and the Problem of the Right of Voluntary Withdrawal under the EU Treaties

Until the adoption of the Lisbon Treaty (2009)1, voluntary withdrawal from the European Union was not explicitly stated neither in the constitutive treaties of the EU nor the accession treaties of the Member States. The lack of regulations on the right to withdraw from the Union, most likely, a deliberate omission to not weaken the Member States' commitment to the political project of EU. Before the adoption of the Lisbon Treaty, given the absence of any express provision regarding the withdrawal from EU, there were two approaches to the problem (Mihes 2012):

1. According to the first approach, there was a unilateral right of withdrawal, even if there were no explicit stipulations in this respect -by the right of any sovereign state to withdraw from concluded international treaties. This approach was not universally accepted, particularly given that the European Court ruled for EU member states, that the accession to the EC brings a permanent limitation to sovereign rights.

2. Therefore, before Lisbon Treaty, the main way of withdrawal from the EU was consensual withdrawal. In very restrictive conditions, it would have been possible also for member states to exit the union under the Vienna Convention (1969), mentioning as the main reason the fundamental change of circumstances about the time of contract.

The Lisbon Treaty established the right of Member States to withdraw voluntarily and unilaterally. Currently, to terminate its membership of the EU, the UK could invoke, from a legal point of view, Article 50 of the Treaty on the European Union (TEU). Thus, according to par. 1, art. 50 of the TEU "any Member State may, by its constitutional rules, to withdraw from the Union". Formally, a Member State who intends to withdraw from the EU must make known the withdrawal request to the European Council. Further, the European Union must negotiate and conclude a withdrawal agreement with the state that wants to give up the EU member status. The negotiation of the withdrawal agreement is under Article 218, par. 3 of the Treaty on the Functioning of the European Union (TFEU). The agreement is concluded on behalf of the EU by the Council of Ministers which approve the agreement by a qualified majority after it has been voted in the European Parliament.

Article 50 of the TEU stipulates that EU Treaties shall cease to apply to the Member State, which has withdrawn from the EU or, if negotiations failed and did not reach any agreement, two years after the EU Member State sent the notification. The constitutional rules in force in each Member State and have the freedom to determine the withdrawal procedure, must take the decision to withdraw from the EU.

EU Member States option to withdraw from the European Union draws the attention of European politicians and analysts for the first time several years ago, when Greece was unable to pay its foreign debt. From that moment, the legal provisions on the right to withdraw from the EU were analyzed and debated extensively. The second country questioning its EU membership is the UK.

In January 2013, David Cameron, the Prime Minister of Great Britain, has asked for the renegotiation of terms and conditions for Britain's membership of the EU and a referendum is to be held by the end of 2017, given the fact that the Conservative Party won the general elections in May 2015. If British exit from EU will take place, a process of deliberation regarding the desirability of preserving certain laws and regulations imposed by EU will be held at the national level.

2. Agreements and Trade Treaties - the Main Choices for Great Britain in the event of a Withdrawal from the EU

In the case of British exit from EU, the UK main options regarding the conduct of foreign relations with the EU Member States and also with other countries are the following:

* The Norwegian model - following terms and conditions of the Agreement on the European Economic Area (EEA). …

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