EU mulls legal action against UK over plan to break Brexit deal

The United Kingdom and the European Union held emergency talks on Thursday over Prime Minister Boris Johnson’s plan to undercut parts of the Brexit divorce treaty, with Brussels exploring possible legal action against London.

As the UK pushes ahead with its plan to act outside international law by breaching the divorce treaty, the EU negotiators are trying to gauge how to deal with London.

The EU said the UK must withdraw the planned law dealing with Northern Ireland trade by the end of the month or face a legal fight even before the transition period following Britain’s EU departure ends on December 31.

“By putting forward this bill, the UK has seriously damaged trust between the EU and the UK. It is now up to the UK government to reestablish that trust,” European Commission Vice President Maros Sefcovic said, using language that, by the EU’s diplomatic standards, was furious.

He spoke after meeting Britain’s chief Brexit minister, Michael Gove, at a hastily arranged meeting in London.

Sefcovic said that if Britain didn’t change course by the end of September, the EU would take legal action.

“The Withdrawal Agreement contains a number of mechanisms and legal remedies to address violations of the legal obligations contained in the text – which the European Union will not be shy in using,” Sefcovic said.

EU diplomats and officials had previously said the bloc could use the Withdrawal Agreement to take legal action against the UK, though there would be no resolution before the end-of-year deadline for Britain’s full exit.

The British government says its planned law, put forward on Wednesday, clarifies ambiguities in the Withdrawal Agreement, and its main priority is the 1998 Northern Irish peace deal that ended decades of violence.

Britain says its law is intended to ensure there are no barriers to trade between Northern Ireland and the rest of the UK in the event that there is no deal with the EU. On Thursday, it said it would try to push the bill into law quickly, scheduling it for debate in Parliament starting on Monday. 

“I made it perfectly clear to Vice President Sefcovic that we would not be withdrawing this legislation,” Gove said.

Sefcovic said the EU “does not accept the argument that the aim of the draft Bill is to protect the Good Friday (Belfast) Agreement. In fact, it is of the view that it does the opposite.”

A note distributed by the EU executive to the 27 EU member states said the Withdrawal Agreement gives the bloc up to four years to launch a legal procedure against the UK if it violates EU rules during a transition period this year.

Europe’s leaders have been handed an ultimatum: accept the treaty breach or prepare for a messy divorce. The UK signed the treaty and formally left the EU in January, and leaves the single market when the status quo agreement expires at the end of this year.

Sterling, which tends to fall when Brexit hits a snag, has tumbled in recent days. The currency was flat at $1.2999 on Thursday, but overnight implied volatility, an indicator of investor jitters, rose 13 percent, its highest since March 26.

Talks on a trade deal have been stuck over state aid rules and fishing. Without an agreement, nearly $1 trillion in trade between the EU and the UK could be thrown into confusion at the beginning of 2021, compounding the economic impact of the coronavirus pandemic.

The latest dispute centres on rules for Northern Ireland, which shares a land border with EU member Ireland. Under the 1998 agreement, there must be no hard border in Ireland.

To ensure that, the British-EU divorce pact calls for Northern Ireland to continue to apply some EU rules. But the UK‘s new bill unveiled this week would assert the power to override many of those EU rules, acknowledging that London would be violating international law by doing so.

US House of Representatives Speaker Nancy Pelosi said any move by the UK that undermined the 1998 Irish peace agreement would ensure that a potential United States-UK trade deal would not pass the US Congress.

Former British leaders Theresa May and John Major scolded Johnson for considering an explicit, intentional breach of international law.

“If we lose our reputation for honouring the promises we make, we will have lost something beyond price that may never be regained,” Major said.

European diplomats said the UK was playing a game of Brexit “chicken”, threatening to wreck the process and challenging Brussels to change course. Some fear Johnson may view a no-deal exit as a useful distraction from the pandemic.

“I’m not optimistic at this stage,” Irish Prime Minister Micheal Martin told national broadcaster RTE when asked how confident he was in a trade deal being reached. He said trust in negotiations had been undermined, making it harder to secure a free trade agreement without tariffs and quotas.