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What Comes After the EU Referendum?

Jul 24, 2017 5 Min. Read

How will the Brexit negotiations play out? ICF experts detail three possible scenarios.

Mathieu Capdevila
Consulting Director
Consulting Director
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Should I Stay or Should I Go?

Earlier this summer, the world watched British Prime Minister Theresa May sign a letter that would carry the nation into unchartered territory. By invoking Article 50 of the Treaty of Lisbon, the letter formalized Britain’s intent to leave the European Union (EU).

“Today, the government acted on the democratic will of the British people, and it acts too on the clear and convincing position of this house,” May told Parliament. “This is an historic moment from which there can be no turning back.”

“This is an historic moment from which there can be no turning back.” - Theresa May

Experts predict that the ensuing negotiations will take at least two years – a long period of uncertainty for EU citizens. In the short-term, the move represents an immense legislative challenge and a bureaucratic nightmare. In the long term, though, its power to influence a range of sectors — from the labour market to pension regimes to healthcare access — can’t be underestimated.

Before Brexit, Seamless Travel Throughout the EU

Right now, 500 million European Union citizens across 28 nations are free to travel and live in other European member states. Every year, those citizens take about 200 million trips to other member states. Citizens also have the right to live in any member state for up to three months, visa-free, before admission conditions apply. After living for a continuous period of five years in another Member State, EU citizens have “acquired rights” of permanent residence.

But Brexit could change all that.

If, for instance, negotiations establish that EU law no longer applies in the UK or tighten the nation’s immigration rules, as many as three million EU citizens could lose their right to live in the UK.

How Negotiations Could Play Out

With the livelihoods of millions at stake, heads of state are facing immense pressure to nail down the details. Here are three possible ways the negotiations could pan out:

1. Unilateral Guarantees

Britain’s Labour party, headed by Jeremy Corbyn, has called for unilateral guarantees that would grant residence rights to all EU citizens already living in the UK. An unmet unilateral offer — say the UK provides this guarantee, but the EU doesn’t — could create a dangerous imbalance in which some citizens face a stricter residence regime applied by the other party. Citizens on either side of the channel who don't enjoy these guarantees would face the consequences as they would in a no-agreement scenario, described below.

2. Reciprocal Guarantees

Reciprocity would protect the interests of some EU citizens living in the UK and vice versa. The question of the length of stay to agree to permanent residence rights would be crucial in deciding who stays in and who has to leave their host country. Other criteria such as employment, financial standing, or family status will greatly influence the rights of residence.

3. No Agreement

This particular outcome, arguably the most disruptive of the three, could force citizens to return to their country of origin or another EU member state. A large share of current residents, on either side of the channel, may not be granted residence permits. UK nationals living in the EU could face similar challenges.

In January, just a few months prior to her reelection, Prime Minister May earned heat for her stance that “no deal is better than a bad deal.” Conservative party supporters say the stance represents a position of strength during a time of potential instability. For Labour party opponents, no deal is a bad deal, one that threatens the livelihoods and economic prosperity of millions. Some of the conservative backbenchers argue that the stance for a hard Brexit is now untenable. They argue for a negotiated soft Brexit.

Negotiations Are Just the Beginning

If the UK and the EU can’t reach an agreement, EU citizens living in the UK who meet certain eligibility criteria will need to apply for permanent residence, a notoriously cumbersome process. Those who aren’t eligible, but want to stay, would have to apply for a specific immigration status, such as education or employment. And though some EU citizens may have lived in the UK for more than five years, some will not have retained the records necessary to prove their eligibility for permanent residence. Either way, UK immigration services could face a mountain of applications. One thing is clear: the Brexit negotiations are just the tip of the iceberg.

Implementation has the potential to spur disruptive migration patterns and labour challenges. For instance, retired British pensioners living in other parts of the EU may be forced to return to the UK, causing further strain on the demand for health care services and housing.

UK students and researchers may be admitted to an EU Member State under stricter conditions. For instance, UK students may have to pay higher tuition fees and may have fewer employment rights during or after their period of study.

Skilled and low-skilled UK nationals looking for a job in EU Member States would be subject to national immigration rules, quotas and conditions specific to third country nationals.

Highly skilled UK nationals would have to apply for an EU Blue card, or a similar national scheme, to get work. In all cases, UK nationals would be able to apply only for jobs where a suitable EU citizen could not be recruited under the Union or Community preference principle, which gives priority to EU citizens over third-country nationals.

Likewise, active EU citizens leaving the UK will seek jobs on the continent. This could create staffing shortages in specific UK sectors and spark higher unemployment in other EU member states.

Over the next few months, we’ll continue unpacking other consequences of this historic transition, from migration patterns to controversial border issues. Stay up to date on our coverage by subscribing to the ICF Spark newsletter (in the header of this page).

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