2 BREXIT: MEMBERSHIP AND EXIT

(A) BREXIT: THE UK REFERENDUM

The UK’s referendum on EU membership took place on 23 June 2016, after Prime Minister David
Cameron promised it in January 2013. Cameron faced growing pressure from Conservative Eurosceptics
and the rise of UKIP, which was gaining political influence. When the Conservative/Liberal Democrat
coalition came to power in 2010, the pro-European Liberal Democrats resisted calls for a referendum.
However, the Conservatives, driven by their Eurosceptic faction, wanted to challenge the UK's EU
membership.

Cameron initially resisted the idea of a referendum but changed his stance in 2013 due to pressure from
Eurosceptic backbenchers and UKIP's success in local and European elections, which threatened
Conservative voter support. In his Bloomberg speech on 23 January 2013, Cameron promised a
referendum, but only after renegotiating the UK's relationship with the EU, assuming the 2015 election
would result in a coalition government where the promise could be delayed or dropped.

Cameron won the 2015 election outright, which increased his power within the Conservative party. This
victory meant he had to follow through with his referendum promise. By November 2015, Cameron
outlined his renegotiation goals in his Chatham House speech, seeking changes in four areas: protection
for non-Eurozone countries, reducing red tape to boost competitiveness, opting out of the EU’s “ever
closer union” commitment for the UK, and addressing immigration issues under the free movement of
people.

In February 2016, the European Council agreed to the UK’s renegotiated deal. But the renegotiation
played a minimal role in the referendum campaign. The Leave camp largely dismissed the deal, claiming
that it achieved very little and did not address the core issues driving Eurosceptic sentiment in the UK.
For those supporting Brexit, the renegotiated terms were seen as insufficient to bring about the kind of
changes they wanted, particularly on topics like full control over immigration and sovereignty.

Key Issues in the Referendum Campaign:

1. Economy: The Remain side argued that leaving the EU would lead to severe economic consequences,
including job losses and a potential recession. However, the Leave camp countered these warnings as
exaggerated "project fear," claiming that the UK would thrive economically outside the EU, free from its
regulations.

2. Migration: Concerns about migration worked in favor of the Leave campaign. Voters were worried
about the high number of migrants and the UK’s inability to fully control its borders due to EU free
movement rules. Although migration’s impacts were unevenly felt across the UK, the Leave campaign
focused on fears about EU migrants coming to claim welfare benefits, even though studies showed that
EU migrants contributed more to the UK economy than they received in benefits.

3. Sovereignty: The Leave campaign successfully argued that leaving the EU would allow the UK to “take
back control” of its laws. They painted a picture of Brussels imposing rules on the UK against its will.
However, this argument was misleading, as the UK had a significant role in shaping EU legislation, with
most laws requiring approval from the UK and other Member States.
4. Anti-establishment Sentiment: A desire to rebel against elites in London and Brussels was a significant
factor, with voters angry about inequality and austerity, even though these issues had little to do with
the EU. The UK’s economic problems stemmed largely from the 2008-2010 financial crisis, not from the
EU’s policies.

Missed Opportunities by the Remain Campaign:

1. Competence Review Findings: In 2012, the UK conducted a thorough review of how EU laws affected
various government areas. The results showed that EU membership was generally beneficial and that
the balance of EU competence was about right. The Remain campaign failed to use these positive
findings effectively, which could have countered the Leave campaign's arguments about EU overreach.

2. Positive Case for Membership: The Remain campaign focused heavily on the potential negative
impacts of Brexit, such as economic downturns. They missed the chance to make a more positive case
for EU membership, including highlighting the benefits of being part of a large, single market and the
advantages of EU cooperation.

3. Addressing Misconceptions: The Remain campaign did not adequately address the misconceptions
and fears promoted by the Leave camp, such as exaggerated claims about the impact of migration or the
notion of lost sovereignty.

Aftermath of the Vote:

The day after the referendum result, on 24 June 2016, Cameron resigned as Prime Minister, despite
some within his party encouraging him to stay and lead negotiations with the EU. He was succeeded by
Theresa May, and the UK entered nearly three years of complex negotiations on the terms of its exit.
The negotiation process was shaped by the legal framework of Article 50 of the Treaty on European
Union (TEU), which governed the withdrawal process.

B) ARTICLE 50 TEU: CONCEPTUAL AND NORMATIVE ASSUMPTIONS

Article 50 of the Treaty on European Union (TEU) outlines the process for a member state to withdraw
from the EU, which became crucial during Brexit. The key points of Article 50 are:

1. Voluntary Withdrawal (Article 50(1)): Any member state can decide to leave the EU based on its
constitutional requirements, emphasizing state sovereignty. The state voluntarily exercises its right to
join or leave the EU. This principle was debated in the UK's Miller case, which clarified that the UK Prime
Minister could not notify the EU of withdrawal without Parliament's authorization.

2. Notification and Negotiation (Article 50(2)): The withdrawing state must notify the European Council
of its intention. The EU and the state then negotiate a withdrawal agreement, considering the future
relationship between the state and the EU. This process highlights voluntarism and bilateralism. The
CJEU ruling in the Wightman case confirmed that a state could unilaterally revoke its withdrawal
notification before the withdrawal agreement is in effect.

3. Timing and Procedure (Article 50(3)): The EU treaties cease to apply to the withdrawing state either
on the date of the withdrawal agreement's entry into force or two years after notification, unless an
extension is agreed upon. This creates a temporal constraint on negotiations, stressing the urgency in
Brexit to avoid a no-deal scenario.
4. Member State Exclusion (Article 50(4)): During discussions about its withdrawal, the member state in
question cannot participate in EU Council decisions affecting its exit process.

5. Rejoining (Article 50(5)): A state that has withdrawn can apply to rejoin the EU under the procedure in
Article 49.

The withdrawal process from the EU under Article 50 involves two main themes:

1. Bilateralism and Bifurcation

- Bilateralism refers to the fact that withdrawal negotiations are conducted between the EU and the
withdrawing state directly. The European Council leads these negotiations for the EU, and the terms of
withdrawal are established through this bilateral engagement.

- Bifurcation means that the process is split into two parts: the immediate withdrawal agreement and
the future relationship. The withdrawal agreement primarily deals with the terms of exit, while the
future trade and relationship framework between the EU and the departing state is left separate. This
often results in uncertainty regarding the long-term relationship at the time of exit.

2. Temporal Constraint

- Article 50 imposes a two-year deadline for concluding withdrawal negotiations, starting from the
date the intention to withdraw is formally notified. If no agreement is reached within this period, the
withdrawing state exits without a deal unless an extension is unanimously agreed upon by the European
Council. This deadline creates pressure to complete negotiations in a timely manner to avoid a "no-deal"
exit.

(C) MEMBERSHIP AND WITHDRAWAL: THE NEGOTIATIONS

1. Negotiating Strategy: The Battle Over Parallelism

- Bifurcation in Article 50: The EU wanted to conduct the withdrawal and future relationship
negotiations in phases, while the UK preferred parallel negotiations. This phased approach helped the
EU secure favorable terms in the withdrawal agreement without the UK using future trade deals as
leverage.

- Rejection of Parallelism: The UK’s push for parallel negotiations was rejected by the EU. President
Tusk emphasized a phased approach, insisting that discussions on the future relationship could only
begin once sufficient progress on withdrawal was made. This approach was formally adopted by the
European Council.

2. Institutional Strategy: Testing the Lisbon Leadership Mechanisms

- Impact of Brexit: Brexit tested the EU's decision-making system institutionalized in the Lisbon Treaty.
The process demonstrated the effectiveness of having separate Presidents for the European Council and
the European Commission, as provided for in the Lisbon Treaty.

- Leadership During Negotiations: The European Council, with a long-term President, played a central
role in the Brexit negotiations, providing continuity and authority. Both Presidents of the European
Council and Commission, Donald Tusk and Jean-Claude Juncker, worked together effectively, with Tusk
often taking the lead.

3. Institutional Strategy: Membership and Unity

- Preservation of Unity: The EU emphasized the importance of maintaining unity among the remaining
27 Member States during the negotiations. Despite potential disagreements, the EU aimed to speak with
one voice, avoiding bilateral discussions between the UK and individual EU leaders that could undermine
the official negotiation channels.

4. Substantive Strategy: Membership and Difference

- Ensuring Difference Between Membership and Non-Membership: The EU’s primary objective was to
ensure a clear difference between being an EU member and a non-member. This meant preventing the
UK from cherry-picking the most desirable aspects of EU membership without adhering to its
obligations. The EU rejected the UK's suggestions that might undermine the EU's principles, such as
participation in the single market on a sector-by-sector basis.

- Key Political Considerations: The EU sought to negotiate a future trade deal with the UK while
ensuring a level playing field regarding competition, state aid, tax, and regulatory measures.

5. Substantive Strategy: Withdrawal, Membership, and the Northern Ireland Backstop

- Northern Ireland Backstop: A major point of contention was the Northern Ireland border. Both
parties agreed to avoid a hard border between Northern Ireland and Ireland to protect the peace
process and ensure the free flow of goods and people. The backstop aimed to safeguard the EU's
customs and regulatory concerns while preventing the return of a hard border. The EU resisted efforts
by the UK to introduce a unilateral trigger to end the backstop or impose a time limit, as this would
compromise the EU's interests.

(D) MEMBERSHIP AND WITHDRAWAL: THE OUTCOME

key components:

1. Common Provisions (Part One)

Core Legal Principles: This section laid the groundwork for the Withdrawal Agreement by defining the
essential legal rules that would govern the relationship between the UK and the EU after Brexit. These
principles ensured clarity and consistency in how the agreement would be applied.

Article 4: This article stated that the provisions of the Withdrawal Agreement would have priority in UK
law. This means that, even after leaving the EU, the rules established in this agreement could be directly
enforced in UK courts, ensuring that they take precedence over conflicting UK laws.

Interpretation of EU Law: The UK was required to interpret key concepts of EU law using the methods
and principles established by the EU and its Court of Justice (CJEU) until the transition period ended. This
obligation ensured that the UK’s understanding and application of EU law remained aligned with EU
standards during this time.
Article 7: This article clarified the UK's status during the transition period. While the UK was still bound
to follow EU law, it did not have any voting rights or decision-making power within EU institutions.
Essentially, the UK had to comply with EU rules but was excluded from influencing those rules.

2. Substantive Issues (Parts Two to Five)

- Part Two - Citizens' Rights: Protected the rights of EU citizens living in the UK and UK citizens living in
the EU, ensuring they could continue their lives with minimal disruption.

- Part Three - Separation: Addressed technical issues like the European Arrest Warrant, jurisdiction of
the CJEU, and recognition of judgments for cases pending at the end of the transition period.

- Part Four - Transition Period: Defined the transition period, which lasted until December 2020, with the
possibility of a one- or two-year extension. During this time, EU law remained applicable in the UK with
some exceptions.

- Part Five - Financial Provisions: Commonly known as the "divorce bill," this part outlined the financial
settlement the UK agreed to pay the EU.

3. Institutional Provisions (Part Six)

- CJEU Jurisdiction: The CJEU retained jurisdiction over preliminary references related to citizens' rights.
This ensured continuity and protection of rights established under the EU.

- Joint Committee: A UK-EU Joint Committee was established to oversee the implementation and
application of the Withdrawal Agreement. If disagreements arose that couldn't be resolved by the
committee, binding arbitration was available.

- Arbitration Panel: If the arbitration involved EU law issues, the panel was required to refer questions to
the CJEU, whose decisions would be binding.

4. Protocols

- Northern Ireland Protocol: One of the most significant and contentious parts of the Withdrawal
Agreement. It was renegotiated by Prime Minister Boris Johnson and aimed to address the complex
issue of the Northern Ireland border. The revised protocol was intended to avoid a hard border on the
island of Ireland while ensuring the integrity of the EU's single market.

3 RULE OF LAW: MEMBERSHIP AND EU VALUES

EU membership comes with certain obligations, notably the requirement to comply with the rule of law.
However, some Member States, particularly Poland and Hungary, have been moving away from these
standards, a trend often referred to as "rule of law backsliding." This issue has created significant
challenges for the EU, as maintaining adherence to core values like democracy and judicial
independence is crucial. Key Treaty provisions address these obligations, underscoring their importance
within the union.

(A) TREATY FRAMEWORK

The European Court of Justice (ECJ) first referenced the rule of law in the *Les Verts* case, asserting that
the European Community was based on this principle. This interpretation allowed for judicial review of
the European Parliament, despite no specific provision in the Treaty at the time. The original Rome
Treaty didn't mention the rule of law, but it was later explicitly included in Article 2 of the Treaty on
European Union (TEU). This article outlines that the Union is founded on values such as human dignity,
freedom, democracy, equality, the rule of law, and human rights, with these values being common
across Member States.

Article 2 TEU also impacts candidate countries, as Article 49 TEU states that any European State that
respects and is committed to promoting these values may apply for EU membership. The rule of law
extends to the EU's international actions, with Article 21(1) TEU specifying that the Union’s international
activities should be guided by principles like democracy and the rule of law.

To handle Member States that violate these values, Article 7 TEU provides a formal mechanism:

1. A reasoned proposal by one-third of Member States, the European Parliament, or the European
Commission can lead to the Council determining a "clear risk" of a serious breach by a Member State.
The Council makes this determination with a four-fifths majority after consulting the European
Parliament, and the Member State in question is given an opportunity to be heard. The Council regularly
checks if the grounds for this determination persist.

2. The European Council, acting unanimously and with the European Parliament's consent, can establish
the existence of a "serious and persistent breach" of Article 2 values by a Member State. The Member
State can present its observations before this determination.

3. If a serious breach is confirmed, the Council can suspend certain rights of the Member State, including
voting rights in the Council. The potential consequences for natural and legal persons' rights and
obligations are considered.

4. The Council can alter or revoke these measures by a qualified majority if the situation changes.

5. Article 354 of the Treaty on the Functioning of the European Union outlines the specific voting
arrangements for applying these provisions.

This mechanism ensures that the EU can uphold the rule of law and other foundational values among its
Member States.

(B) BACKSLIDING: THE RULE OF LAW PROBLEM

The European Union (EU) faces significant challenges regarding the rule of law, particularly related to
the independence of the judiciary in member states like Poland and Hungary. An independent judiciary
is crucial for upholding the rule of law, as it ensures that governmental actions are conducted within the
legal framework. When courts are not independent, they risk becoming tools of the political branch,
potentially misinterpreting or ignoring legal boundaries. This can lead to the legitimization of
governmental actions that should be annulled.

Independence is essential not only for assessing the legality of governmental authority but also for
safeguarding other principles of the rule of law, such as the ability to annul retrospective laws and
protect individual rights. The degree of judicial independence can vary, and systemic issues pose the
greatest threat to these protections, preventing courts from effectively safeguarding citizens' rights
against unclear or harmful laws.

Furthermore, the lack of judicial independence impacts mutual trust among national courts, which is
vital for EU legal frameworks, including the European Arrest Warrant and the broader Area of Freedom,
Security, and Justice (AFSJ). National courts play a critical role in applying EU law and facilitating cases to
the Court of Justice of the European Union (CJEU) through preliminary references. If national courts are
compromised, it undermines both their ability to apply EU law correctly and the flow of cases to the
CJEU, exacerbating the rule of law crisis in the EU.

Overall, the integrity of the judiciary is fundamental to ensuring that governmental powers are checked
and that legal standards are upheld across member states. The interconnectedness of national and EU
law highlights the importance of maintaining an independent judicial system.

C) BACKSLIDING: ADDRESSING THE RULE OF LAW PROBLEM

The EU's rule of law issues primarily concern the independence of the judiciary in member states like
Poland and Hungary, with complex institutional challenges affecting how the EU can respond.

I. Institutional Concerns: Vertical and Horizontal Dynamics

Vertical Dynamics: There is a tension between the EU's responsibility to address rule of law problems
and the limits of its competence. On one hand, many believe the EU should intervene due to its
perceived responsibility for the accession conditions that were not sufficiently scrutinized. Conversely, if
issues stem from deep-rooted socio-political problems within a member state, the EU's ability to effect
change is limited.

Horizontal Dynamics: Tensions also exist between EU institutions, particularly the European Commission
and the Council of the EU, over which body should lead initiatives to address rule of law violations. The
Commission, tasked with upholding EU treaties, sees itself as responsible for addressing these issues,
while the Council, representing member state interests, acknowledges the need to manage problems in
countries like Hungary and Poland due to their broader implications for the EU.

II. Institutional Approach: Overview

The EU has developed a mix of legal, political, and financial measures to combat rule of law violations.
The Commission emphasizes a comprehensive understanding of the rule of law that includes democracy,
fundamental rights, and judicial independence. It stresses that democracy cannot exist without the rule
of law, which must also protect fundamental rights and freedoms.

Since 2012, the EU has significantly expanded its toolbox to address rule of law backsliding. This includes
the introduction of the Justice Scoreboard, the Rule of Law Framework, and proposals for mechanisms
to suspend EU funding in cases of systemic deficiencies.

III. Institutional Approach: Key Initiatives

A. Commission Justice Scoreboard: Launched in 2013, this initiative links the functioning of an
independent judiciary to economic stability and investor confidence. It uses various indicators to assess
justice systems across member states.
B. Rule of Law Framework (2014): This framework aims to address systemic breaches of the rule of law,
focusing on three rationales: safeguarding fundamental EU values, upholding rights derived from EU
treaties, and maintaining mutual trust essential for EU cooperation. The framework outlines a three-
stage process of assessment, recommendation, and follow-up, allowing the Commission to engage with
member states on rule of law concerns.

C. Article 7 TEU Mechanism: The Commission identified the limitations of existing mechanisms like
Article 7 TEU, which requires a "clear risk of a serious breach" to intervene. It proposed using its new
framework to address systemic issues before resorting to Article 7.

The first use of this framework was against Poland for failing to comply with Constitutional Tribunal
rulings. Despite formal recommendations, Poland continued to undermine judicial independence,
prompting the Commission to initiate Article 7 proceedings.

IV. Institutional Approach: Council’s Annual Rule of Law Dialogue

In 2014, the Council established its Annual Rule of Law Dialogue to promote the rule of law while
respecting member states' sovereignty. However, the outcomes tend to be vague and less specific
compared to the Commission's initiatives.

V. Institutional Approach: Preliminary Rulings and Infringement Proceedings

Infringement proceedings under Article 258 TFEU serve as a tool against rule of law violations. Such
actions can address systemic breaches of fundamental rights, linking national rules that restrict
freedoms to broader EU norms. The Court of Justice of the EU (CJEU) has played a role in protecting
judicial independence through preliminary rulings and infringement actions.

(vii) Invocation of Article 7 TEU

Cautious Approach

The European Commission has historically been hesitant to invoke Article 7 TEU, primarily due to the
complexities involved in addressing issues with Member States like Poland and Hungary. The 2014
strategy was intended to address rule of law concerns, but it proved insufficient for dealing with
uncooperative Member States.

Procedure Overview

The Article 7 procedure involves several stages:

1. Stage One: A reasoned proposal must be submitted by one of the entities listed in Article 7(1) when
there is a clear risk of a serious breach of EU values (Article 2). The implicated Member State has the
right to present its case before the Council, which must regularly verify the ongoing applicability of the
breach grounds and may issue recommendations.

2. Stage Two: The European Council can determine, with unanimity, the existence of a serious and
persistent breach after receiving a proposal from one-third of Member States or the Commission, and
with the European Parliament's consent. This stage can lead to the suspension of certain rights of the
Member State, including voting rights in the Council. Importantly, these measures can be lifted if the
situation improves.

Voting Challenges

A significant issue with Article 7's application arises from the voting rules in Article 354 TFEU, which
prevent the investigated Member State from voting. This creates a problem if multiple Member States
are under scrutiny simultaneously, as one problematic Member State may veto actions against another,
complicating the unanimity requirement for stage two.

(viii) The Rule of Law Cycle

Introduction of the Rule of Law Review Cycle (RLRC)

Supported by the European Parliament and initiated by the Commission in 2019, the RLRC aims to
enhance the EU's role in monitoring and addressing rule of law issues within Member States. While the
primary responsibility for upholding the rule of law rests with the Member States, the EU seeks to
support national efforts and intervene early when negative developments arise.

Scope of the RLRC

The RLRC encompasses various aspects of the rule of law, including:

- Corruption
- Separation of powers
- Effective judicial protection
- Independent courts
- Free elections
- Media freedom

The review process will vary in intensity based on identified risks or weaknesses in specific Member
States, culminating in an annual report that summarizes the rule of law situation across the EU and
facilitates dialogue.

(ix) Monetary Incentives for Compliance

Regulatory Strategies and Compliance Incentives

Effective regulatory design often involves creating optimal incentives for compliance. In addressing rule
of law issues, linking compliance with economic benefits presents a viable strategy.

Proposed Mechanism for EU Funding Suspension

The Commission has introduced a mechanism that allows for the suspension of EU funding when there
is a widespread deficiency regarding the rule of law in a Member State. The Council will make decisions
based on Commission proposals, which will be automatically adopted unless a qualified majority rejects
them within one month.

Involvement of the European Parliament

The European Parliament is expected to be engaged throughout the decision-making process. The
central premise of this approach is that sound financial management is contingent on Member States
adhering to the rule of law, which includes maintaining effective judicial review and independent courts.