The EU logic for an extension through to the summer of 2020 and implications for the UK

In a nutshell, the 7-year EU Financial Framework runs 2014-2020. More straightforward for the management of the EU budget for the European Commission and a neat end-point. Or is it?

The noise out of number 10 to be un-cooperative to our continental partners may prove to be temporary bellicose “humbug” to use the PM’s own recent rhetoric – not least if the UK’s common interest in avoiding further regional turbulence in the Levant: military, economic – should US President Trump’s threats to destroy the Turkish economy bear fruit, further potential conflagration into an already fragile middle east that could lead to further issues of migrants that Turkey itself has been in effect paid by the EU to keep in situ through the ‘EU-Turkey refugee agreement’ through a €6bn pledge of which half has already been disbursed.

From the EU’s perspective therefore, there is no other major big EU-wide decisions in the offing for another year that Britain could threaten to either derail or upon which to simply do a spoiler akin to Farage’s MEPs turning their backs in the European Parliament. For EU capitals and the new incoming Commission and European Parliament a year offers enough time for the UK to go through the political catharsis: post October 31st “do or die” deadline gone, an election, perhaps a referendum, who knows maybe yet another election still, a possible Scottish referendum..

And who knows the UK may come out of it all, if only as a reluctant but better informed EU Member State. 

A one-year extension also opens the way for continued British transfers into the EU budget into the next 7-year financial framework. Why?

If the UK stays then the UK will, as one of the richer Member States, continue to be a net payer into the EU Budget. 

However, if the UK decides to leave the EU over the year then we will, say in late 2020, most likely be almost at the same point of our journey as we are today. Somewhere between a deal and the start of a transition. 

A transition that will involve continued UK compliance with the EU law, the aquis communautaire for some time while we chart the so-called future arrangements of our relations. And, therefore, continued membership fees into the EU kitty during this time at least.

So, to go back to the rhetorical question in the first paragraph, a year’s extension could easily imply continued British financial engagement well into the 2021-27 EU Financial Framework.

The Brexit dieharders will be frothing at the thought of continued British transfers.

But this outcome also means that the UK should continue to participate in and benefit from the sizeable return of structural and cohesion financing for the less developed regions in the UK. 

It also means I would argue that the UK should – given the continued transfer of British taxes – over the year be seeking greater engagement and representation through the European Parliament, a resumption of British positions within the European Commission that have been gradually guillotined since the Brexit vote in 2016 AND seek British Commissioner be given a place in the new Commission – even if this is without portfolio till 2020.

* With experience across academia, think tanks, central banking, EU Accession and reforms across 40 developing and transition countries, Dr Rupinder Singh works with multilateral organisations and governments as an independent adviser. He is an Executive member of Liberal International (British Group).

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6 Comments

  • nigel hunter 10th Oct '19 - 5:52pm

    These comments from Erdogan about refugees. Has Trump made some ‘deal’ with Trump to cause trouble for the EU and the UK

  • The Trump – Erdogan ‘deal’ is a sign of things to come; a wedge has been successfully driven into the europe project, Turkey with the US’s connivance is ruthlessly exploiting the situation.
    However, it is a timely reminder just what Brexit means, the UK being effectively powerless to do anything in the world, other than be even more the White House’s poodle than it was previously. It is clear the UK now has zero influence over the White House and probably won’t be listened to in any case. Likewise it has zero influence over a European response, it could try raising matters at the UN…
    Welcome to the UK’s new position in the world; passive observer able just wring its hands…

  • Passive observer, I’d say more yapping poddle. We will make much noise but our reward will either be a kick or a pat depending on the mood of the big boys.

  • @frankie – I don’t see Boris making much noise, particularly whilst Trump is in the White House. For all her faults, Mrs T does stand out as being different, even after all this time.
    I wonder what would happen if the Falklands neighbour decided to visit and stay…

  • Rupinder Singh 11th Oct '19 - 3:41pm

    Thank you all for your comments. I do not disagree with the thrust of views and concerns being expressed.

    Most immediately, the contagion risks are very significant for the region, stretching from the immediate theatre on the Turkish-Syrian border but enveloping events in the Red Sea where an Iranian tanker is reported to have been hit by missiles. It also puts at risk the lifeblood of our economies, the flow of oil. The Turkish economy is key to the immediate region – from the caucuses to the east to the likes of Moldova to the immediate west & we’ll have to see how this pans out in terms of external economic shocks – the Turkish lira did drop but it hasn’t been a rout thus far but a massive capital flight coupled with the re-imposition of US sanctions out are alone likely to temper excess.

    The EU response through the EEAS was weak due largely to resistance from the likes of Hungary and shows the continuing need for strong nation states within the EU, in short the two UN sovereigns in the UK and France. If anything it highlights that the rump EU needs the UK as much as the reverse.

    What is worrying is the “unknown unknowns” of US polity where the current incumbent of the presidency is often dictating a personal policy bereft of the conventional anchors of its prevailing system involving its civil service, think tanks and the military – and what appears to be against its advice, which appears to have been the case here.

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