post-Brexit EU Research Articles

Third country central counterparty (CCP) supervision as a catalyst for more centralized EU CCP supervision?

ABSTRACT In early 2022, a UK CCP cancelled some $4 billion of transactions in the war-affected nickel market, triggering outrage from market participants that were in the money. The ‘nickel debacle’ illustrates that CCP risk management and loss absorption mechanisms may result in value redistribution among stakeholders. With CCP stakeholders located in multiple jurisdictions, crisis management decisions from a single-jurisdiction CCP supervisor may not pursue multi-jurisdictional financial stability or a fair balance of stakeholder interests across jurisdictions. Although the case for centralised supervision of EU CCPs thus appears strong, national concerns have persistently blocked increased centralisation. This article re-examines decentralised EU CCP supervision in light of the much-debated post-Brexit centralised EU supervisory regime for systemically important third country CCPs. Two new arguments emerge from this juxtaposition, revealing a dichotomy between the named supervisory regimes that appears hard to justify. First, a decentralised supervisory regime for EU CCPs is difficult to logically square with the policy arguments underpinning the post-Brexit EU supervisory system for systemically important third country CCPs. Secondly, the controversial location policy for ‘too systemically important’ third country CCPs could be more justifiable if the EU were to adopt centralised EU supervision of systemically important EU CCPs.

Investment Protection in Post-Brexit EU–UK Relations

Abstract With the United Kingdom’s withdrawal from the EU, in particular from its internal market, the customs union and all of the EU’s international agreements, a new chapter in Europe’s legal, economic and political history has begun. This note sets out the consequences of Brexit for investment protection and arbitration, focusing on EU-UK investment relations. In a first step, it addresses the EU-UK Trade and Cooperation Agreement’s investment protection provisions and its unique dispute settlement mechanism before turning to the fate of the United Kingdom’s bilateral investment treaties with EU Member States as well as the Energy Charter Treaty. Even though these investment treaties are likely to remain in force, the article concludes that, from the point of view of EU investors in the UK and UK investors in the EU, it can overall be seen as a clear omission that the Trade and Cooperation Agreement does not regulate investment protection in a comprehensive manner. The current situation leaves significant gaps in treaty protection, especially for investments from and into the Western EU Member States.

Proposed alcohol tax reform in the United Kingdom: Implications for wine-exporting countries

AbstractA proposal to reform the United Kingdom's excise duty on alcohol is under consideration during 2022. The proposal would change the tax base from volume of product to volume of alcohol, which would see a fall in the tax on sparkling wine (by about one-fifth), a rise in the tax on fortified wines of 18% alcohol by volume (ABV) (by about one-sixth), and table wines with more (less) than 11.5% ABV would become dearer (cheaper). With taxes on most beers unchanged and taxes on spirits lowered slightly, the pattern of UK wine consumption and imports would alter considerably. This article draws on a global model of national alcoholic beverage markets to estimate the likely bilateral trade effects of this proposed reform to UK excise duties. It compares them with the trade effects of the United Kingdom's first two bilateral free trade agreements (FTAs), following the post-Brexit EU–UK Trade and Cooperation Agreement, which allows Australian and New Zealand vignerons tariff-free access to the UK wine market. Those two FTAs are estimated to cause the United Kingdom to import far more wine than is lost by the proposed changes in UK excise duties.

Differentiated Integration: The case of the European Banking Union

The European Banking Union (EBU), a system of unified financial supervision, regulation and resolution, arguably represents the biggest transfer of national sovereignty in Europe since the launch of the euro. Participation in the EBU is mandatory for the Eurozone states and voluntary for the non-Eurozone states, which makes it an example of differentiated integration (DI). This article analyses the implications of DI in the context of the EBU. The central question is whether the current EBU arrangements are going to result in uniform integration or continued differentiation. After outlining the main pillars of EBU, the article discusses whether we can envision more non-Eurozone states following the examples of Bulgaria and Croatia by opting into EBU before adoption of the euro, or whether there is a risk of more division between the EBU members and non-members. The focus is on the main economic and political considerations that affect the EBU in the medium term. The article shows that only the non-Eurozone states willing to relinquish their national sovereignty in financial supervision seek to join the EBU and that in the post-Brexit EU the differentiated EBU can potentially move towards more integration.

The Analysis of Impact of Brexit on the Post-Brexit EU Using Intervented Multivariate Time Series

The Analysis of Impact of Brexit on the Post-Brexit EU Using Intervented Multivariate Time Series

Internal Investigations in Compliance Matters: What Role for Legal Professional Privilege in Europe?

Information is key to understanding possible wrongdoing in corporations. When allegations of wrongdoing occur, management often invites external counsel to conduct internal investigations because legal professional privilege is seen as crucial in protecting information. In the post-Brexit EU, the objective scope of such privilege is under debate while there is little alignment with developments in the UK. This paper will explore what the deepening divide in the understanding of legal professional privilege may mean. It proposes a policy model, summarizes recent developments in England and Germany and comes to some refined conclusions to serve a broader comparative analysis of internal investigations.

An Old Couple in a New Setting: Franco-German Leadership in the Post-Brexit EU

What are the implications of Brexit for the nature, role, and potential of Franco-German leadership in the EU? Brexit, we contend, is both an expression and a further cause of two broader underlying developments in the contemporary EU: First, a stronger and more prominent German part and position, and second, disintegrative tendencies in several EU policy fields and the EU polity as a whole. This, in turn, has major implications for Franco-German bilateralism and for Franco-German leadership in the EU. In light of a stronger Germany, a relatively weaker France, and significant centrifugal forces, the two largest EU member states must not only realign their bilateral relationship but must also act as a stabilizer in and for the EU. We show that during the EU’s recent crises, not least during the Brexit negotiations and the recovery from the Covid-19 pandemic, France and Germany did exercise joint leadership. We also show, however, that major discrepancies persist between the two countries in particular policy fields and with regard to longer-term European objectives. Brexit, with its numerous calamities and implications, thus once again moves Franco-German leadership—and its shortcomings—to center stage in Europe. When it comes to leadership in the EU, there remains no viable alternative to the Franco-German duo. Yet, in order to provide constructive leadership and successfully shape the EU, the two countries must bridge substantial differences and be ready to carry disproportionately high burdens.

The Ordinary Legislative Procedure in a Post-Brexit EU: The Case of Social Europe

This article assesses the political and power dynamics of the Ordinarily Legislative Procedure (OLP) in social Europe and the likely impact of the UK’s departure in the field for future integration. It provides a detailed analysis of the OLP in social Europe during two recent periods of integration in the field—the first Barroso Commission (2004–2009) and the Juncker Commission (2014–2019). It finds the dynamics of the OLP have shifted from intergovernmental deadlock during the Barroso Commission to the characteristics of a new intergovernmental core state power during the Juncker Commission, even though the policy area is not a core state power <em>per se</em>. Despite the use of qualified majority voting policy agreements can only be achieved when there is near unanimity support in the Council, the Commission remains a neutral broker, and the Parliament shifts its position to that of the Council. As a result, continued opposition to integration in social Europe by Northern and Eastern Members means the removal of UK political agency will have only a marginal impact on the slow and piecemeal approach to integration in the field.

Considering EU External Relations after Brexit: Introduction

This special issue of Europe and the World: A law review consists of selected articles that were presented at a workshop on External Relations in the post-Brexit EU, University of Strathclyde, Glasgow in October 2018. The workshop was generously funded by the James Madison Charitable Trust and the New Professors Fund of the University of Strathclyde. The purpose of the workshop was to consider the multifaceted dimensions of Brexit on the European Union’s external relations, and in particular to consider how interdisciplinary perspectives can enrich our understanding of the law underpinning the subject. This includes the EU’s externally facing institutional frameworks; law and policy on foreign, security and defence policies; trade and the Common Commercial Policy; and bilateral agreements with third countries or regions. The workshop was held around the mid-point in time from the referendum of June 2016 until the eventual departure of the UK on 31 January 2020 (although the final departure date and exit arrangements were unknown at the time). As such, the workshop contributors based their analyses on what the future impact of Brexit might be. Drawing on the extensive scholarship on EU external relations that has blossomed over previous decades, the authors of this special issue have been able to comprehensively analyse what future EU external relations might look like.

Managing differentiated disintegration: Insights from comparative federalism on post-Brexit EU–UK relations

This article applies insights from comparative federalism to analyse different models for managing future EU–UK relations. The argument is that the stability of the EU–UK relationship before as well as after Brexit is best understood by examining the presence of federal safeguards. Drawing on Kelemen, four types of safeguards are identified as the means for balancing centrifugal and centripetal forces. During the United Kingdom’s European Union membership, the strong glue provided by structural and judicial safeguards was undone by the weakness of partisan and socio-cultural ones. However, each post-Brexit scenario is characterised by weaker structural and judicial safeguards. The most stable outcome is an indeterminate Brexit that limits the incentive to politicise sovereignty and identity concerns by ending free movement of people and reducing the saliency of European Union rules. Such stability is nevertheless relative in that, from a comparative perspective, federal-type safeguards were stronger when the United Kingdom was still in the European Union.

The importance of health security in post-Brexit EU–UK relations

This article examines the possibilities for negotiating the UK–EU health-security relationship after 2020. Health security, in the sense of measures to prevent and mitigate health emergencies, had played a marginal role in the UK–EU negotiations, but COVID-19 has greatly amplified this policy area’s significance. At the beginning of the pandemic, Brussels introduced significant measures to promote public health sovereignty, notably joint procurement and stockpiling of personal protective equipment. The UK went against the grain by limiting its involvement in joint procurement at a time when other countries were rushing to participate. UK participation in some EU health measures is possible on existing terms, but not joint procurement. This leaves the UK facing an uncertain future because of the potential risks associated with not participating in EU programmes, notably in terms of access to personal protective equipment supplies and possible market distortion resulting from new EU policies promoting stockpiling and reshoring. The politicisation of health security thus adds another complication to the post-Brexit EU–UK relationship.

Brexit: An Assessment, Implications, and Strategy for Pakistan

Currently, Brexit is a reality. How much of an impact will Brexit have on the economy of Pakistan? We address this question by analyzing Pakistan’s most recent trade data. Since in the existing European Union, Britain, France, Germany, and Italy are among the major exporting destinations, the economy of Pakistan cannot remain entirely immune to the implications of Brexit. However, our analysis shows that after the Brexit-vote in Britain on 23 June 2016, economic indicators of Pakistan remained stable, and the Brexit pressure on Pakistan’s economy has remained relatively muted so far. To maintain the ongoing stable export trends, we suggest that Pakistan needs to modernize its political diplomacy by formulating separate policies for Britain and the post-Brexit EU. Additionally, we propose that, instead of signing a free trade agreement (FTA) with the United Kingdom, Pakistan should bargain for an agreement like the ‘Generalized Scheme of Preferences Plus to access the post-Brexit UK market.

Towards an autonomous European defense? A comparative analysis of French, Polish and German perspectives in the post-Brexit era

ABSTRACT This article discusses why the EU has failed to become a defense actor independent from the US in the post-Brexit era. Applying the “supporter/spoiler/shirker” trilogy to the European context, the article highlights persistent divergences towards European integration in the defense sector in the post-Brexit EU. Accordingly, first, the article discusses the key differences between supporter, spoiler and shirker roles in world politics. Second, it focuses on France that tends to act as a persistent spoiler of NATO, while remaining an ardent supporter of an autonomous Europe of defense. Third, the article discusses the case of Poland that remains a loyal supporter of NATO and acts as a spoiler of the European defense initiatives. Finally, the article concentrates on Germany which acts as a shirker that is oscillating between NATO and the EU.

After Brexit: The Certainty and Uncertainty of China-EU Relations in Academic Discourse

This article examines the Chinese scholars’ perceptions of China-European Union (EU) relations in the context of Brexit, with a focus on the future of European integration, the economic and political challenges of post-Brexit China-EU relations at both unit and global levels and China’s policy choices towards the EU. In line with the views of their Western peers, this article finds that Chinese scholars hold an optimistic attitude towards a post-Brexit EU and China-EU relations in general, though they believe that Chinese policymakers must consider Chinese foreign policy dealing with a more conservative EU after Brexit. Based on the analysis, it can be concluded that China calls for a multipolar world with its close cooperation with a post- Brexit EU. Certainty and uncertainty, China-EU relations, Brexit, Academic Discourse

Exit Britain Enter the Stakeholders: Could Brexit End the Cultural Wars within the European Union Company Law and Give Birth to a Truly “European Company”?

The history of European Union company law is a very troubled one. It is a history of national conflicts and debates which resulted in the inability of the EU to create a common body of EU company law. The article will argue that national company laws are deeply rooted in national culture. Corporate governance in particular evolved into an arena where fierce corporate culture wars were fought for decades. This is why the European Company -the so-called Societas Europea- failed to evolve into a truly supranational corporate form. While all member states have their own distinctive systems of corporate governance, the failure in question has been mostly fuelled by the conflict between the two widely-opposed corporate governance systems of the UK and Germany. The UK endorses the so-called contractual model of corporate governance. Germany on the other hand employs the so-called stakeholder system of corporate governance. The rest of the member states of the EU lie between those two opposing poles. The conflict between the two European pillars of widely opposed corporate philosophies and consequently laws –the UK and Germany- has been so intense that it undermined any attempt to create a single European company. The article argues that Brexit can change that. The exit of one of the two main pillars of the conflict may pave the way for the dominance of the stakeholder model of corporate governance in the EU. A post-Brexit EU would lack the most vocal and influential supporter of contractualism. This should allow the remaining member states to converge into a standard that would be closer to the stakeholder model. Company Law, Corporate Governance, UK, Germany, European Company, Societas Europea, Culture, Brexit, Stakeholder model, contractual model, European Union

The Brexit crisis, Ireland and British–Irish relations: Europeanisation and/or de-Europeanisation?

ABSTRACTBrexit is not solely a UK crisis. Ireland, more than any other member state, stands to be deeply and profoundly impacted by the UK’s departure from the EU. The crisis which Ireland faces is multi-dimensional: economic and political, constitutional and existential in nature. The nature and impact of Brexit changes Ireland’s relationship with the EU, and this is because the UK’s decision to leave the European bloc is also a crisis for the EU. Brexit challenges the balance between intergovernmental and supranational institutions and dynamics in the EU; alters power and policy balances; and adds a degree of contingency to EU membership for all member-states. This article explores the various political, economic and constitutional crises generated for Ireland by the Brexit vote and assesses how Brexit impacts on the Europeanisation and/or de-Europeanisation of the Irish political system and British–Irish relations. This includes an analysis of the extent to which the traditional Europeanised characteristics of the Ireland-EU relationship and the British–Irish relationship will endure or perish within the confines of a post-Brexit EU.

Following, Challenging, or Shaping: Can Third Countries Influence EU Energy Policy?

Can non-EU member states influence the EU’s energy policy? The Europeanization of energy policy in third countries is often described as a one-directional process in which these countries essentially adopt the EU <em>energy acquis</em>. Our article questions this dominant view by exploring whether and how third countries can influence the formulation and implementation of EU energy policy. We argue that relative differences in third country influence depend on their access to relevant venues and actors of EU policy-making as well as their structural power resources. We develop a typology linking these two factors to the outsider, follower, challenger, or shaper roles that third countries assume in EU energy governance. We empirically probe our argument in three case studies representing different models of EU–third country cooperation. Our cases include a group of nine Southeast and East European countries (Energy Community), Switzerland (bilateral arrangements), and Norway (European Economic Area). The analysis shows that it is access and structural power which together define the extent to which third countries are able to influence the formulation of EU energy policy and customize its implementation to their domestic needs. We find that while the Energy Community members are followers in EU energy governance, Switzerland and Norway are shapers. Strikingly, the influence of these two non-EU members may occasionally even surpass that of smaller EU member states. This highlights that third countries are not merely downloading EU energy regulation but sometimes also succeed in uploading their own preferences. Our contribution has implications for the post-Brexit EU–UK energy relations and qualifies claims about EU regulatory hegemony in the wider region.

The Twofold Approach to Children’s Freedom of Movement Rights Under European Law: Can ‘Children’s Equilibrium’ Guide the Interpretation of the Post-Brexit Rights of UK Children Residing in the EU?

The United Kingdom’s decision to leave the EU is causing a strong political, legal and, last but not least, social turmoil. Arguably, the impact is even greater for children who are growing up as part of the Union, and belong to families of mixed nationalities, and/or have cross-border relations to different states and educational systems. The interpretation of the post-Brexit EU law rights of children with British nationality should first examine the pre-Brexit children’s rights under the European freedom of movement law to assess the exact scope of the change that the removal of European citizenship will entail. An overview of the case law of the European Court of Justice (“ECJ”) on the freedom of movement rights demonstrates an evolution in the understanding of the rights of children under EU law, a development which observes more and more children’s specific needs, as embodied in children’s fundamental rights provisions. This development came about in a sporadic fashion, shifting between treating children’s rights as ancillary add-ons to their parents’ EU law market rights and acknowledging children’s individual rights. Eventually, the ECJ attempted to reinforce the latter approach by examining children’s Union citizenship and rights under EU law by referencing children’s fundamental rights, enshrined in Article 24 of the Charter of Fundamental Rights of the European Union, for the sake of maintaining “children’s equilibrium”. The referring to the so-called ‘“children’s equilibrium”’ would suggest that a respective child-related approach was adopted in the interpretation of European law via which the stated equilibrium could be achieved. Yet, apart from the inclusion of Article 24 in the legal discussion, the development of a comprehensive child-related approach with a view to the securing of children’s equilibrium requires further judicial engagement in two main directions. Namely, the need for more guidance remains, especially along the lines of elaborating the EU’s uniform children’s rights obligations and making sure that children are seen as individual rights holders. On the basis of these existing criteria, for the purpose of this paper a child-related approach is to indicate the consideration and integration of children’s rights in the legal reasoning, by regarding children as independent rights-bearing individuals. The paper will argue that the upcoming legal uncertainties could be levelled down if the goal of maintaining children’s equilibrium through the child-related approach was applied in the interpretation of the EU law-related rights of children with British nationality. Further, since the proposed approach could also be based on the Convention on the Rights of the Child, it could also serve as a bridge for the application of the “children’s equilibrium” approach in the UK with a view to a time when the Charter is not to be applicable any longer.

An ELF perspective on English in the post‐Brexit EU

An ELF perspective on English in the post‐Brexit EU

Post-Brexit EU revival?

Post-Brexit EU revival?