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What next for Britain and the European Union (EU)?

 

Last week Britain voted to leave the EU.  For the UK to actually leave, it must invoke Article 50 of the Lisbon Treaty for the formal legal process to set in.  This will give the the United Kingdom (UK) two years to negotiate it’s withdrawal from the EU.  Until then, the UK must abide by the laws and regulations set by the EU, although it cannot be involved in decision making.

 

Will British citizens need a visa to travel to EU countries?

In short the answer is: Not yet.  As explained above, there is a lengthy process before the UK actually exits from the EU.  Until then, at least, British citizens will not require travel documents to enter EU countries.  Currently there is no prohibition on working or studying in the EU either.

 

What about EU citizens in the UK?

As for British citizens living in EU countries, EU citizens in the UK can continue residing in the UK under the terms of the Treaty, until policies change.  This could take some considerable time and it is difficult to predict what deals may be negotiated on exit for EU citizens.  Currently there should be no change in the way EU citizens are treated in the UK.

 

Is the UK the first country to leave the EU?

No nation has ever left the EU but Greenland, one of Denmark‘s overseas territories, held a referendum in 1982.  Similar to the UK, it voted by 52% to 48% to leave the EU, which it duly did after a period of negotiation.

 

What does the result mean for Scotland and Northern Ireland?

Scotland’s First Minister, Nicola Sturgeon, said it was “democratically unacceptable” that Scotland faces exiting the EU when it voted to remain.  She went on to say that in light of this, there will likely to be another independence referendum in the future.

Deputy First Minister of Norther Ireland, Martin McGuinness said the impact on Northern Ireland would be “very profound”.

 

How will pensions, savings, investments and mortgages be affected?

During the referendum campaign the Prime Minister, David Cameron, said the so-called “triple lock” for state pensions would be threatened if the UK voted to exit the EU.  This refers to the agreement by which pensions increase by at least the level of earnings, inflation or 2.5% every year – whichever is the highest.

If economic performance deteriorates, the Bank of England could decide on a further programme of quantitative easing, as an alternative to cutting interest rates, which would lower bond yields and annuity rates.  Thus, anyone taking out a pension annuity could get less income for their money.

Further, the Bank of England may consider raising interest rates to combat extra pressure on inflation.  That would in turn make mortgages and loans more expensive to repay but would be good news for savers.

During the referendum campaign the Treasury said that UK shares would become less attractive to foreign investors if the UK left the EU, and would thus decline in value.  Large exporters may benefit, at least initially, from the weaker pound.  The value of their shares may rise whilst importers may see profits lowered.

 

Will EHIC cards still be valid?

The EHIC (European Health Insurance Card) entitles travellers to state provided medical help for any condition or injury that requires urgent treatment, in any other country in the EU, as well as many other countries outside of the EU.

The future of the EHIC would depend on result of negotiations between the UK and the EU on exit.

 

Will leaving the EU mean British citizens don’t have to abide by the European Court of Human Rights (ECHR)?

The ECHR is not a European Union institution and as such, the UK will still need to abide by it’s decisions.

However, the EU has it’s own court – the European Court of Justice.  The decisions made by this court are binding on all EU countries and as such, it’s reach may be limited on the UK upon exiting.

 

Will the Brexit decision affect businesses?

Most large businesses tended to be in favour of the UK remaining in the EU, mostly because membership makes it easier to move people, products and money around the world.

Morgan Stanley sources told the BBC business reporter Joe Lynam that it had started the process of moving about 2000 staff based in the UK to either Dublin or Frankfurt.  Following the Brexit result, the investment bank’s President, Colm Kelleher, told Bloomberg that Brexit would be “the most consequential thing that we’ve ever seen since the war”.

 

Will the NHS be affected by the result?

Health Secretary, Jeremy Hunt, warned that leaving the EU would lead to budget cuts and an exodus of European doctors and nurses.  However, the Brexit supporters have countered this by suggesting that the money the UK sends to the EU in it’s millions, would now be spent on domestic services including the NHS.

 

Our advice for EU citizens in the UK and British citizens in EU countries is not to panic.  Should the UK exit the EU, it will be a lengthy procedure which does not kick in immediately.  Further, we are yet to see the result of exit negotiations.

If you are affected by Brexit and need advice, please do not hesitate to contact us.  You can call our immigration lawyers on 0141 283 0190 or email us on info@elm-rose.com

 

 

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