17 April 2018

Financial Times: Brussels seeks emergency powers to prepare for hard Brexit

The European Commission has drafted 30-40 proposals to amend laws and give special powers to regulators so that the union can deal with a no-deal scenario, either on Brexit day on March 29 2019 or after a transition period.

EU diplomats have been told the measures would cover a wide range of areas, with particular significance for trade quotas, the car industry, transport companies, the bloc’s space programme, financial services and professional qualifications.

The push is intended to reduce uncertainty for business by granting more powers to Brussels and other EU authorities so they are better able to cope with sudden complications.

The initiative also shows the commission’s determination to press on with preparing for a worst-case scenario — even if it involves using the EU legislative process while the UK remains a full member with voting rights.

“This is all inevitable and necessary,” said one EU diplomat working on Brexit. “Most of the work of preparing for Brexit is for governments and the private sector. But there are issues with EU law that we have to sort out.”

EU officials say most of the amendments are legal housekeeping, which would address anomalies that arise from the exclusion of the UK.

However, the proposals would also give the commission and other EU regulators specific “emergency powers”, for a limited period, to handle the fallout from an abrupt UK exit.

The details remain unclear but one EU diplomat suggested that it could include waivers for companies in areas such as financial services. The diplomat said it could also give a grace period for lawyers or professionals based in Europe who rely on UK qualifications.

Such provisions could offer reassurance to some banks and financial services companies, because they would provide more flexibility for regulators in dealing with post-Brexit adjustments. [...]

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