Transition deal soothes aid group fears of 'cliff-edge' Brexit

Leaders from the European Union and United Kingdom have agreed a Brexit transition deal that will see the status quo on aid cooperation extend until at least December 2020. Photo by: freeimage4life / CC0

LONDON — Leaders from the United Kingdom and the European Union met on Thursday in Brussels to formalize a transition or “implementation” period following the U.K.’s exit from the EU in March 2019.

Under the terms of the deal, the U.K. will effectively maintain its current commitments to the EU — while being able to negotiate its own trade deals — until December 2020.

British Member of the European Parliament Linda McAvan said the deal brings both sides one step closer to eliminating the possibility of a “cliff-edge” Brexit, where the trade relationship would default to World Trade Organization rules, with British entities — including aid groups — “crashing” out of the EU.

McAvan, who is also chair of the European Parliament’s international development committee, said the news should offer some reassurance to aid organizations, as it delays the possibility of a “cliff-edge” Brexit by at least one more year.

"We're glad that the U.K. has committed to meet all its development commitments to the EU budget and European Development Fund until at least the end of 2020,” McAvan told Devex. “The deal reached on the transition should ensure that U.K.-based NGOs are still eligible to receive EU funds and bid for contracts until the end of the current programs.” The terms could now reasonably extend further until 2023, she said, as disbursements from current rounds of funding continue.

In December, the European Commission sent a disclaimer to British businesses and aid organizations saying that if the EU and U.K. did not reach a Brexit agreement by October 2018, contracts and grants would be in danger of sudden termination upon the U.K.’s exit from the bloc in March 2019, regardless of whether the agreements had been fully paid out.

Though the delay means more time for U.K. organizations to prepare contingency plans — for example, considering relocating some operations elsewhere in Europe — McAvan admitted that “things are less clear” after the transitional period.

Going forward, members of the Brexit negotiation team representing the Department for International Development have said they anticipate pushing for “as close a working relationship as possible wherever interests converge” after December 2020, Sarah Sanyahumbi, DFID’s head of Europe, said last month at the Bond Conference in London.

Sanyahumbi went on to say: “It’s difficult for me to see where there are specific development areas where the U.K. [and] EU would not naturally converge in our interests.” She added that the U.K. is pushing for the EU to open its aid instruments to allow external contributions, something EU officials will discuss at talks in May.

“The U.K. has suggested openness to ongoing cooperation on development policy,” said McAvan. “So now we need to get down to real negotiations so that warm words are translated into concrete proposals.”

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    Molly Anders

    Molly Anders is a U.K. Correspondent for Devex. Based in London, she reports on development finance trends with a focus on British and European institutions. She is especially interested in evidence-based development and women’s economic empowerment, as well as innovative financing for the protection of migrants and refugees. Molly is a former Fulbright Scholar and studied Arabic in Syria, Jordan, Egypt and Morocco.