Walking the tightrope to an agreement


With one year to go until the UK leaves the European Union (EU), the finer details of Brexit are starting to be known. In our latest Brexit Update we look at what can be learned from the process so far and what can we expect of the end game. How should businesses prepare? And is there still a risk that no agreement will be reached after all?


‘Despite our main scenario being a free trade agreement between the EU and the UK’, says Jan Willem Velthuijsen, chief economist of PwC, ‘there are still downside risks that could result in the UK exiting the EU without any agreement on either 29 March 2019 or 31 December 2020. This would mean a fall-back to World Trade Organisation (WTO) terms of trade between the EU and the UK.’


The results till now

Till now the process had the following results:

  • A high level agreement has been reached on the terms for the UK to leave the EU as of 29 March 2019.
  • The conditions for a transitional period until the end of 2020 have been preliminarily agreed. The ambition of both the EU and the UK is to have the details of the new relationship worked out and approved before end of the transitional period, with the new rules being applicable from 1 January 2021.
  • The EU has committed itself to negotiation guidelines on the future relationship between the EU and the UK.

Planning for consequences

Our analysis of the possible scenarios for a future relationship takes into account ‘red lines’ on both sides, and indicates that in either of the two possible scenarios the UK will leave both the internal market and the customs union. Businesses may therefore already start planning for these consequences.

Jan Willem Velthuijsen: ‘In brief, we advise our clients to prepare for a scenario where the UK is no longer part of either the internal market or the customs union, meaning that non-tariff, and potentially also tariff barriers to trade, will come into play post-2020.’

Contact us

Stelios Constantinou

Partner, Assurance, Head of Financial Services , PwC Cyprus

Tel: +357-25555190

Vassilios Vrachimis

Partner, Advisory, In charge of Banking, PwC Cyprus

Tel: +357-22555128

Andreas Yiasemides

Partner, In charge of Fund Services, PwC Cyprus

Tel: +357-22555035

George C Lambrou

Partner, Advisory, In charge of Investment Firms, PwC Cyprus

Tel: +357-22555728

Marios S Andreou

Partner - Head of Tax Advisory, PwC Cyprus

Tel: +357-22555266

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