Brexit and a House of Commons Library Research paper
On 20 April 2020, the House of Commons published a research paper under the title: "Coronavirus: Is it possible to extend the Brexit transition period?"
The paper sets out succinctly what is required to enable the UK and EU to extend the transition period by up to two years beyond its current expiry date, 31 December 2020.
In the UK, any such decision on the part of the UK Government to extend the transition period by agreement with the EU would require an Act of the UK Parliament. It is not, however, clear from the paper whether , on the EU side, unanimity would in practice be required from all EU member states for such an extension since all agreed UK-EU decisions on such matters are made through the Joint Committee set up under the UK-EU Withdrawal Agreement. One should, therefore, assume that such unanimity would in practice be required, although there is no reason to suppose that it would not be forthcoming.
Previously, on 16 April 2020, the Chief UK post-Brexit negotiator, David Frost, had re-iterated that the UK has no intention of requesting an extension to the transition period and on 20 April 2020 the UK and the EU negotiating teams published a full agenda for their second round week of negotiations on a post - Brexit deal .
Meanwhile, unattributed banking sources are quoted in the press as complaining that EU rules (presumably state aid rules) included in the UK's Coronavirus Business Interruption Loans Scheme (CBILS) "which underscore a responsibility to check the viability of borrowers, were restricting the number of companies that lenders can support by adding a layer of red tape " (The Times of 21 April 2020).
This kind of blame game is a normal feature of hard times and is only to be expected in a democratic society such as the UK but the fact is that loan guarantee schemes at the 100 per cent level for small businesses (and not just at the 80 per cent level, which applies in the UK) are reported as operating apparently successfully in Europe - both within EU member states such as Germany and outside in countries such as in Switzerland - and, therefore, one wonders whether EU rules are such a barrier after all to the successful operation of CBILS.
Within the EU itself - and in particular within the Eurozone - there are clear stresses and pressures as to the extent to which EU member states either directly or through the EU should be helping each other financially deal with the Coronavirus emergency. Spain, for instance, is reported by the Times of 21 April 2020 as having proposed a €1.5 trillion Coronavirus recovery fund to be financed "through perpetual European Union debt " and paid out, interest-free as grants, or transfers, to the EU states worst hit by Covid-19. Northern EU member states are said to be unhappy with this proposal, which raises once again differences of approach between wealthier northern EU member states and more challenged southern ones on financial matters.
Meanwhile, in another Times article on 21 April 2020, UK trade credit insurers are reported to have asked the UK government to offer them backstop guarantees against potentially huge losses in their sector. Any such support might require approval under EU state aid rules, although the Times also reports that France, Germany and the Netherlands are already underwriting the financial position of their own trade credit insurers .
It is increasingly apparent that it is the Europe of nation states that is primarily dealing with the Coronavirus challenges in their own countries on the basis of mutual self-interest and it is clearly important that the UK and the EU help each other get through the current crisis and its economic aftermath by using the mechanisms of the UK-EU Withdrawal Agreement as tools for advancement and not regression.
The House of Commons Library research paper is a valuable reference point for those seeking to navigate themselves through the Brexit-related timetable of 2020, despite all the collateral issues that are going on.
