Prelims level : International Mains level : General Studies- II: Governance, Constitution, Polity, Social Justice and International relations.
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Why in News?

The U.K. and European Council president Donald Tusk appeared to be nearing a consensus on a further Brexit extension. Prime Minister Theresa May has written to Mr. Tusk, asking for an extension till at least June 30 this year.


What is Brexit all about?

In 2016, Brexit was announced in Britain after the referendum for exiting the European Union.

This decision was taken due to various reasons such as –

  • Limited space for Britain to negotiate trade agreements with non-EU
  • The trade deals with EU are more than the terms that can be made by UK with other countries.
  • After the referendum, the UK and EU provisionally agreed to settle financial, strategic and political issues over a transition period of 21

What does the latest draft contain?

  • Transition period – Britain will formally exit the EU on March 29, 2019, at which point it will cease to be involved at any level in EU decision-making.
  • However, the UK will stay inside the bloc’s single market and remain subject to EU laws and regulations until the end of December 2020 while the two sides attempt to iron out a new trade relationship. During this period, all existing EU “regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures” will continue to apply within the UK, including rulings made in the Court of Justice of the EU.
  • In effect, the transition period provides the two parties with additional time in which to continue negotiations. The transition period can be extended, by joint agreement before July 1, 2020, for an unspecified period of time if the negotiations need to be continued.
  • Irish border – Ireland is an island to the west of Britain and has two major regions (north and south) with distinct demographic features.
  • “Protestant majority Northern Ireland” (a U.K. territory) and “Catholic majority Irish Republic” (an independent country in the south), have had serious ethnic tensions within and between them. Since Irish Republic is an EU member, a porous border with it would mean a porous border with EU, which is not wanted by the pro-leave group in U.K.
  • Thus it is agreed that there will be no hard border between Northern Ireland and the Irish Republic, at least in the short term.
  • Customs union – If the transition period extends beyond 2020, the draft deal commits both parties to a single customs territory between the EU and the United Kingdom.
  • The customs union would remove all tariffs, checks on rules of origin and quotas, and would cover all goods except fishery products. While part of the customs union, the UK will be bound by all EU international trade agreements. This would mean that countries outside the EU, such as the United States and China, would have access to the UK market under conditions set out in the EU’s trade agreements. This provision can only be removed through the agreement of both parties, essentially preventing the UK from exiting the customs union without the approval of the EU.
  • Financial markets – Under the draft agreement, entities established in the United Kingdom shall be treated as entities located outside the Union by the EU after the deal.
  • This will give London’s vast financial centre only a basic level of access to the bloc’s markets after Brexit. Currently, inside the EU, banks and insurers in Britain enjoy unfettered access to customers across the bloc in all financial activities.
  • After Brexit, Britain would get only a similar level of access to the EU as major U.S. and Japanese firms, while tying it to many EU finance rules for years to come.
  • This can potentially jeopardize London’s attractiveness to international financial companies. Freedom of movement – The draft document provides protections for the more than 3 million EU citizens in the UK, and over one million UK nationals in EU countries to continue to live, work or study as they currently do.
  • Crucially, no exit visa, entry visa or equivalent formality shall be required of holders of a valid document issued for EU and UK nationals when crossing national boarders within the bloc.
  • UK divorce bill – The UK will honor all existing joint commitments to EU programs as outlined in the EU budget until 2020. Under this, Britain agrees to cover contributions to staff pensions and commitments to EU programs the U.K. made while a member for the funding period that runs to 2020.

Current News:

  • Ms. May acknowledged that were the U.K. still fail to ratify the agreement and be prepared to leave the EU by May 23, it would be under a legal obligation to hold the European parliamentary elections between May 23 and 26. The government is therefore undertaking the lawful and responsible preparations for this contingency.


  • The European Union is an economical and political organization composed of over 28 diverse nations dedicated to uniting and improving Europe. When the EU was formed in 1993, it was a relatively small pact of nations with little significance throughout Europe, but today, it has grown to nearly match the economic size of the United States of America. Some of the greatest economical effects that the EU has had include cheaper products throughout Europe due to fewer taxes between countries, and a common currency between the majority of countries in the EU. For example, the cost of international telephone calls throughout Europe has decreased by over 80% in the last 30 years. Other positives of the EU include the social and environmental regulations that have led to drastic impacts over the last few years. Some of these benefits include an overall improved air quality, reduced smog, as well as less acid rain.
  • These benefits will be long-term and will continue to benefit the environment of Europe for generations to come. This can potentially influence American culture by showing a successful European Union, which could lead to more support for a similar style of governing with stricter environmental regulations.
  • Currently in America, our political climate is very polarized. A successful Europe could pave the way for our people to come together and vote to improve our political system.
  • The EU countries are: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary,Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal
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