Abu Dhabi, UAETuesday 21 May 2019

Britain to retain strong ties with Brussels regardless of Brexit

Come 2019 no longer a member of the EU but links with Europe will not be broken

BRUSSELS, BELGIUM - JUNE 23:  Street art reading "The Future Is Europe" is seen on the side of building near to the European Council headquarters on June 23, 2017 in Brussels, Belgium.  (Photo by Leon Neal/Getty Images)
BRUSSELS, BELGIUM - JUNE 23: Street art reading "The Future Is Europe" is seen on the side of building near to the European Council headquarters on June 23, 2017 in Brussels, Belgium. (Photo by Leon Neal/Getty Images)

As undeclared capital of the European Union and the seat of its executive body, the European Commission, Brussels has for decades symbolised all that supporters of Brexit detest.

The name of the city is synonymous with what the EU’s detractors see as the union’s wasteful, excessively bureaucratic and democratically flawed nature.

But amid all the rhetoric and also the uncertainty about what sort of Brexit will ultimately prevail – “hard” or “soft”, with a fully negotiated deal or without one – what will be the impact on the Belgian capital once Britain completes the process of withdrawal?

The search for convincing answers to all the questions prompted by last year’s British referendum to leave the EU is complicated by the failure of the British prime minister Theresa May’s general election gamble last month.

She called the snap poll in the hope of strengthening her position within her own Conservative party – and thus the United Kingdom's negotiating power over the country's economic future in its dealings with the other 27 member states. She ended up without an absolute majority, forced to hammer out a controversial pact with Northern Ireland’s Democratic Unionists to govern with any majority at all.

The combination of a British vote on June 23, 2016 to leave the union, and the severely weakened position of the Westminster government, is a source of concern for those who trade between Belgium and the UK.

“No business I know of has said it is a good thing that Britain voted to leave,” says Thomas Spiller, the president of the British Chamber of Commerce in Belgium.

“But it happened and we are advising members to plan for the worst as responsible business leaders, in other words that on April 1, 2019 [the day after the official negotiating period is due to be concluded] there is no deal, no trade agreement in place.”

For many observers, especially those who opposed Brexit, failure to find a comprehensive accord within the given timetable is made entirely possible by the sheer complexity and breadth of all the regulations on customs, tariffs and taxation that must be agreed.

“The worst-case scenario of no deal makes contingency planning essential,” Mr Spiller says, urging companies to ensure they have access to expert legal and strategic advice. “I don’t think that is what will happen – but it is how business should approach the situation in the knowledge that any other outcome can only be better.”

The chamber has about 200 members, a third of them British-owned companies. It is encouraging members to give advice to small businesses, with the multinational professional services group PwC also involved in specific training sessions on the preparations needed to cope with future issues.

There is little sign yet of a major influx of companies intent on leaving a post-Brexit Britain into Belgium. The insurance giant Lloyd’s of London says it will move “tens of workers” to a new Brussels subsidiary.

The Australian QBE Insurance Group has also said it will set up a new subsidiary in Brussels to preserve its ability to operate across the EU. Other insurance companies are expected to take similar steps, having concluded that the EU may make it impossible for them to sell their policies unless they have European subsidiaries.

But the pro-Brexit UK newspaper The Daily Telegraph suggests there is a tendency to “grossly exaggerate” such setbacks in City of London circles, dismissing minor job losses as the “cost side” of withdrawal, which it says the pro-Leave camp expects to be swamped in time by benefits.

An estimated 28,000 British citizens live in Belgium and most are dependent directly or indirectly on the EU, Nato and other international institutions for their employment. Many, says Mr Spiller, have investigated the possibility of taking Belgian nationality. However, those working at EU agencies have been assured their right to remain and work in Belgium is not in jeopardy.

Brussels as a city to live in has a certain charm but it lacks the grandeur of other European capitals. It is also expensive and endures its share of terrorist-related attacks and scares, street crime and disruptive strikes and blockades.

However, it does offer an attractive lifestyle to those with good jobs, including easy communications with the rest of continental Europe as well as the UK and expats often find Brussels and its leafier suburbs difficult to leave. It is little wonder that those owing their livelihoods to the EU would prefer to stay even if it means giving up British citizenship.

“These are such uncertain times,” says Anne, an English nurse who has lived in Belgium for almost 30 years. “Hopefully, things will become clearer before too long.”

Again and again, the view of those based in Brussels and trying to make sense of the decision British voters have taken is that the UK has taken a giant stride into the unknown, dragging the EU with it.

Mrs May talks of no deal being better than a bad deal. Her parliamentary fragility suggests that if she survives at all in power, she may need to be a lot more conciliatory. Britain has to trade with Europe, and EU nations, however hostile some leaders may appear to be towards Britain in the opening skirmishes of the negotiation process, will still want to sell their products and services to the UK.

“Let us be clear about this,” says Mr Spiller, “Britain has voted to leave the EU. It has not voted to leave Europe. There are many historic links between Belgium and the UK and these will continue.

“Now it is in the interests of both sides to find agreements on all the issues that come between them to ensure the least disruption possible.”

Updated: July 17, 2017 09:44 AM