Brussels (Brussels Morning Newspaper) – The impact of Brexit on the European Union (EU) has been severe. The aftershocks were apparent in the social and economic changes to the Union. A long term political and institutional shifts were also noticed.
The extent of these effects is still speculative because the United Kingdom’s post-Brexit relationship with the EU has become even more clear now. British participation has come to an end in the EU’s policies. The movement of goods, persons, services, and capital, and the European Union Customs Union, have seen a clear impact with consequences for both institutions.
Budget
UK’s contribution to the EU budget after the accounting of its rebate was €19.4 billion. After they had removed about €7 billion the UK has been receiving money in EU subsidies. As a result, the loss to the EU budget comes to about 5% of the total. The budget must be reduced, as Germany which is already the largest net contributor will likely be asked to provide the largest share of the cash. Germany contributes an estimated share of about €2.5 billion. As of March 2020, the debate continues between the members who wish to see the budget limited to more than 1% of members.
Policy changes
The UK was a major player in the EU as served as both an asset to the Union, and a hindrance to those who supported the opposition to the British government. There have been a lot of shifts in policy changes. The UK was an influential player in the European Parliament and has impacted the ideological balance within the EU institutions
Council
In the Council, there were two blocs. Each of them was capable of forming a blocking minority against the other. The protectionist bloc consists mainly of the southern states and the liberal bloc consists of the northern states. As a member of the latter, the UK’s departure will weaken the authority of the liberal bloc. The UK has been sizeable and a fervent proponent of economically liberal Europe.
They have also helped with the larger trade deals that Europe made with the third countries. While weakening the liberal bloc, it could also lead to strengthening Germany’s position in the Council. The loss of a key counterweight could result from changes in the council as well. The states that are anxious about German dominance will be tempted to ally against it.
European Parliament
In the European Parliament, Brexit has led to a lot of changes in group representation. Brexit gave 5 seats to the EPP and 3 seats to the ID. Around 29 seats had been lost by the NI and 11 seats were lost by Renew Europe. 7 more seats were lost by the green, and six seats were lost by the alliance of socialists and democrats.
A majority of the UK’s representatives joined hands with the right-leaning groups. The major parties involved in this movement were the European Conservatives and Reformists and the Europe of Freedom and Direct Democracy. Both of these parties were led by the members of, the British Conservative Party and UKIP. The Progressive Alliance of Socialists and Democrats had also lost several members from the UK’s Labour Party. These parties have been seeking support from the (conservative) European People’s Party. The Parliament might get influenced to make the following decisions:
- They will be more willing to pass extra regulations and rules
- Are likely to have less support for strong copyright protection
- The EU parliament members may pass a smaller budget, and expect an increased member-state contribution
- MEPs will support tax harmonization and the financial transaction tax (taxation with current treaties);
- They will provide less support to nuclear energy and shale gas and will favor the energy sources.
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Trade With The UK
After Brexit, the EU becomes United Kingdom’s biggest trading partner. UK has also become the EU’s third biggest trading partner after big countries like the United States and China. Some member states, notably Belgium, Cyprus, Ireland, Germany, and the Netherlands, will be exposed to the Brexit-induced economic shock. The economy of the Republic of Ireland will be sensitive due to its common border with the United Kingdom.
In October 2019, the UK and EU also made a negotiation related to the Northern Ireland Protocol of the draft Brexit Withdrawal Agreement. The border in Ireland and the other customs border between the island of Ireland and the island of Great Britain was allowed to continue trading activities. The export of raw materials that came from the Ruhr valley could also be impacted greatly.
