EU Sets Britain Free

London officially leaves the European Union on Saturday night The Council of the European Union (EU) yesterday completed the formal procedure for concluding an agreement on Britain's withdrawal from this association. This means that the agreement will enter into force at 00:00 CET on February 1. Further, the EU and the UK will have to agree on mutual trade terms that will operate outside the transitional year 2020. The EU decision followed the approving resolution of the European Parliament of January 29 and the signing of the withdrawal agreement between the union and the UK on January 24. “From now on, the United Kingdom will cease to be an EU member state and will be considered as a third country,” the document reads. However, at least until the end of 2020, the UK will remain part of a single market and in the EU customs union within the transition period. EU rules will continue to apply in the country, but London will soon have to conclude new trade agreements with the EU and third countries. Recall, in 2016 the majority of UK citizens voted for the country's exit from the European Union. However, over the course of three years, the parties failed to agree on the final date for Brexit. It was supposed to be completed by March 2019, but negotiations were delayed due to the issue of maintaining freedom of movement across the border with Ireland, as well as because of internal disagreements in the British Parliament. As a result, former prime minister and conservative leader Teresa May, after several attempts to approve an agreement on leaving the EU, resigned, and Boris Johnson took her post. In December, conservatives won 365 of the 650 seats in the House of Commons, which guaranteed approval of the agreement. On January 23, Queen Elizabeth II signed the corresponding law. The Moody's rating agency notes that if a new trade agreement with the EU is not reached this year, it will negatively affect the volume of exports to the UK of several countries of the union, primarily Ireland, Belgium and the Netherlands. Nevertheless, the impact on EU creditworthiness will be insignificant, the agency notes. The UK in terms of contributions to the EU budget (the country in 2014–2018 contributed about 12% of the total) was second only to Germany. In 2020, the country will continue to finance the EU and stop the transfer of contributions in 2021. Agency experts believe that other countries are fully capable of compensating for the shortfall in EU income. As for the withdrawal impact on the UK, it will depend more on the terms of the future agreement, Moody's said - the agency expects that the most likely scenario is the emergence of a free trade zone for goods, rather than a customs union. Such agreements are unlikely to cover the services sector; as a result, British banks will lose their “passport rights” (the ability to work in the EU markets without additional licenses). However, financial institutions have already prepared for the consequences of exit from the EU, the more noticeable will be a gradual deterioration in the macroeconomic indicators of the British economy amid weakening ties with the European Union - even in the absence of tariffs and import quotas, differences in regulation will complicate access to the markets of both sides. In case no agreements are reached (six to seven months are left to reach them, taking into account the ratification process by the parliaments of the parties), the most negative impact of Brexit will be on the British car industry, equipment production, the chemical industry and port activities, Moody's concluded.