12 Feb 2016
UK’s EU membership renegotiation and referendum – RBS
Research Team at RBS, suggests that the negotiations are underway between the UK government and the EU.
Key Quotes
“There is growing speculation in the media, Westminster and Brussels that a deal will be reached at the EU Council summit on 18-19 February and that, if a deal is reached, the UK will hold a referendum in late June 2016 (perhaps 23rd or 30th).
If there is no agreement at the February summit then the referendum seems likely to slip into the autumn – the UK government is required to give four months’ notice (to allow sufficient time for a full public debate) and the referendum is unlikely to be held during the school summer holidays.
If a deal can be reached between the UK and the Council then the UK Prime Minister will be in a position to call the date of the referendum. If a deal is reached at the summit in February, then a referendum in late June seems most likely (23rd or 30th June have been noted as the UK tends to hold elections and referenda on a Thursday, though there is no legal requirement for this).
Whilst there is always uncertainty, the widespread agreement that has already been reached, and with some progress/convergence on the in-work benefits issue, suggests that an agreement is increasingly likely at the 18-19 February summit. If that happens, then a summer 2016 referendum would be likely to follow.
It is very hard to say with any certainty. Recent public opinion polls have tended to show a narrow lead in favour of the UK remaining in the EU. However, the polling data are very fluid and the public debate has yet to get into full swing. Opinion polls since the referendum question was announced in September 2015 show a c.4% lead in favour of continued EU membership, while Betting markets currently price a c.70% probability (Betfair) of the UK remaining in the EU. The outcome of the referendum remains too close to call with any confidence.
The EU’s Lisbon Treaty introduced a process for a member state to withdraw from the EU. The Treaty provides for a 2-year exit negotiation (which could be extended only by unanimous agreement). During this two-year period, existing EU laws and regulations would continue to apply to the UK.
NB, the UK referendum itself has no formal legal force – the UK is a parliamentary democracy and legislation passed by Parliament would be required. Of course, uncertainty over the outcome of this exit negotiation might de facto have an impact on the movement of labour and capital between the UK and EU, and on financial market pricing, even if de jure existing arrangements continued to apply.”
Key Quotes
“There is growing speculation in the media, Westminster and Brussels that a deal will be reached at the EU Council summit on 18-19 February and that, if a deal is reached, the UK will hold a referendum in late June 2016 (perhaps 23rd or 30th).
If there is no agreement at the February summit then the referendum seems likely to slip into the autumn – the UK government is required to give four months’ notice (to allow sufficient time for a full public debate) and the referendum is unlikely to be held during the school summer holidays.
If a deal can be reached between the UK and the Council then the UK Prime Minister will be in a position to call the date of the referendum. If a deal is reached at the summit in February, then a referendum in late June seems most likely (23rd or 30th June have been noted as the UK tends to hold elections and referenda on a Thursday, though there is no legal requirement for this).
Whilst there is always uncertainty, the widespread agreement that has already been reached, and with some progress/convergence on the in-work benefits issue, suggests that an agreement is increasingly likely at the 18-19 February summit. If that happens, then a summer 2016 referendum would be likely to follow.
It is very hard to say with any certainty. Recent public opinion polls have tended to show a narrow lead in favour of the UK remaining in the EU. However, the polling data are very fluid and the public debate has yet to get into full swing. Opinion polls since the referendum question was announced in September 2015 show a c.4% lead in favour of continued EU membership, while Betting markets currently price a c.70% probability (Betfair) of the UK remaining in the EU. The outcome of the referendum remains too close to call with any confidence.
The EU’s Lisbon Treaty introduced a process for a member state to withdraw from the EU. The Treaty provides for a 2-year exit negotiation (which could be extended only by unanimous agreement). During this two-year period, existing EU laws and regulations would continue to apply to the UK.
NB, the UK referendum itself has no formal legal force – the UK is a parliamentary democracy and legislation passed by Parliament would be required. Of course, uncertainty over the outcome of this exit negotiation might de facto have an impact on the movement of labour and capital between the UK and EU, and on financial market pricing, even if de jure existing arrangements continued to apply.”