THE SHAPE OF POST-BREXIT EUROPE IS BECOMING CLEARER

After four years of marathon negotiations, during which the Brexit was the subject of unprecedented daily media coverage, the European Union and the United Kingdom finally acted on their divorce this year. As of January 1, 2021, European rules ceased to apply on British territory and the hard-fought new agreement finally came into force. All possible efforts have been made to avoid the United Kingdom’s abrupt exit from the EU and to spare bilateral trade agreements. Unsurprisingly, the Brexit is still in the news today, as its effects are still being felt in large parts of the European economy.

brexit

WHAT DOES BREXIT MEAN FOR FREEDOM OF MOVEMENT?

​​​​​​​As a result of the Brexit, passports will become necessary for EU nationals as of October 1, 2021. Thus, visa-free stays are now limited to 90 days within a 180-day period. For a stay exceeding this duration, a long-stay visa will be required for EU nationals wishing to stay in the UK. British nationals traveling in Europe will be subject to the same conditions. Despite the restoration of border controls, both parties have agreed to maintain their road, rail, air and sea connections to preserve the free movement of people and goods.

The majority of EU countries have approved a reciprocity agreement to protect expatriates from both sides. British Expatriates who are already living in the EU will continue to enjoy the same social rights (such as pension, social security and access to employment). But future European expatriates in the UK are now subject to new rules. In order to obtain a work visa, they must meet several criteria, including a promise of employment, a salary of more than 28,500 € (yearly gross income), and skills that are in high demand in the UK. On the principle of reciprocity, British nationals will be subject to the same conditions.

On the other hand, Boris Johnson has decided to withdraw the United Kingdom from Erasmus, the European exchange program for students, because of its high cost. Students wishing to study in the UK must now obtain a student visa and will be subject to higher tuition fees.

 

WHAT ABOUT THE IMPACT OF BREXIT ON THE EUROPEAN ECONOMY?

The UK’s exit from the single market does not impact trade. Goods continue to flow without tariffs or quotas. This decision has spared key exporting sectors such as automotive, aerospace and agri-food from heavy consequences. That said, traders must comply with the new rules on customs control, which means that procedures will become more cumbersome.

As of January 2021, part of the trading of European companies’ shares has been “relocated” to the major European stock exchanges, a major blow to the British financial market. By March 2021, Amsterdam had overtaken the City in European equity trading.

In addition, the UK and the EU reached a post-Brexit memorandum of understanding for cooperation in March 2021 that will allow for regular dialogue on financial services regulation. This agreement allows UK financial firms to locate in the EU and EU firms to market their financial services in the UK. More than 1,500 European financial firms have already applied to set up in London under the equivalence scheme.

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