Hard Brexit, No Party

Brexit

A no-deal Brexit would have serious repercussions on Italy

On Sunday evening, during the summit between the European Union and the Arab League in Sharm el-Sheik — Egypt, Prime Minister Giuseppe Conte invited his British counterpart Theresa May to play billiards. The two country leaders were staying in the same hotel and, on Sunday evening, they had a bilateral meeting on their agenda. However, the subsequent pool game appeared to be more successful than the talks themselves.

Indeed, May is in big trouble due to the complicated negotiations on Brexit. Yet Conte too has thorny issues to face, as he was supposed to meet Egypt President Abdel Fattah al-Sisi, whose security services are believed to be involved in the torture and murder of the Italian researcher Giulio Regeni, kidnapped and killed in Egypt three years ago. The assassination of Regeni, said Conte yesterday, “is still an open wound and will remain so until it is solved”.

However, Mr. Conte leads a coalition that frequently makes highly Eurosceptic statements, and he has recently flouted EU policies on budgetary limits. As a result, the former law professor might be seen as a potential ally for Theresa May’s attempts to soften the EU’s position on Brexit, which has remained steadfast during the past two years of negotiations.

Theresa May will hold further meetings with other EU leaders, after admitting she will not get a Brexit deal in time for MPs, to hold a “meaningful vote” this week. The Prime Minister claimed she will submit her deal to the Parliament on March 12 at the latest, just 17 days before the United Kingdom is due to leave the EU. Time is running out fast and March 29, the latest date to reach an agreement on Brexit, is approaching. However, many points, if not all, are yet to be discussed. Starting from the Northern Ireland’s backstop question and from the status of European citizens residing in Britain, to the trade agreements with Europe, it seems too many points are still completely unclear.

Economic setbacks

A no-deal Brexit would have serious repercussions on Italy, especially on the markets and on the huge number of Italian citizens living in the UK. According to Confindustria, Italian businesses are risking a lot with Brexit: at least 12 percent of all Italian exports of wines, drinks, and alcoholic beverages go to the UK, for a total sum of 1,1 billion dollars per year (937 million euros). Indeed, the ‘Made in Italy’ has always been greatly appreciated in Britain. If no agreement on geographical indications is reached, Italian food and beverage exports would lose 1 billion euros, according to a 2018 statement by the Italian national farmers union, Coldiretti.

Furthermore, tariffs and customs tariffs could also increase leading to the devaluation of the pound that, in turn, could affect Italian exports to the United Kingdom, which are worth about 25 billion euros. 5 percent of Italian exports in the world are sent to the United Kingdom only. Thanks to this 5 percent, Britain ranks the fourth place, together with Spain, as destination markets of our exports, after Germany, France and the United States (which together collect more than 35 percent of Italy’s exports).

Moreover, these percentage figures tell a different story if read in terms of value in euros. 5 percent of total exports to the value of 450 billion in 2017 translates into around 23 billion euros. If we consider that our imports from London amount to about 12 billion, we can see a trade surplus of 11 billion. A figure far from being trivial. The impact of a hard Brexit (that is a Brexit without a deal) would be in general quite disastrous for Italian trade.

Italians in the UK

There is still uncertainty also over the conditions of Italian citizens living in the UK. There are around 700 thousand Italians living and working in England right now. In this regard, the British House of Commons unanimously approved the amendment by Alberto Costa, a conservative parliamentary son of Italian parents, requiring the preservation of the rights of Europeans in the United Kingdom (and vice versa) even in the event of no-deal. Nonetheless, Costa resigned, or rather, he was forced to resign by his government, for having presented the above mentioned revision.

Amendment later approved by the House of Commons with a clear majority and with a roar coming from the benches, to the point that the eccentric speaker John Bercow approved it without even letting the MPs vote. The amendment is important because it demands the British government to commit itself to sign along with Brussels a protection pact for the citizens affected by Brexit, even in the case of no-deal, thus even if London abruptly leaves the European Union without agreements with the Commission and with the 27 member countries. This would be another important point to take into account during the discussion of a deal.

Finally, as for the Italian students, today they pay the same tuition British students are paying, namely about 9 thousand pounds a year. With hard Brexit, they may have to pay the same fees charged to non-European students, who can pay up to 35 thousand pounds.

Brits in Italy

The same is true for the status of British citizens living in Italy. There is uncertainty about what registration scheme the Italian government is going to adopt. However, the current system for EU residency might apply. Indeed, a completely new residency permit specifically devised for Brexit could cause confusion in its implementation at the regional level, causing substantial mistakes and further uncertainty.

Additionally, another big question mark concerns those UK citizens in Italy who apply for citizenship by March 29, as these could be treated as third-country nationals rather than EU citizens. Obviously, this has important implications, since EU nationals can apply for citizenship after four years of residency, while the third-country nationals have to wait at least ten years. Many Brits thus envisage applying for Italian citizenship now, to safeguard their European rights.

As is obvious, the hard Brexit scenario is definitely problematic on so many levels. A sudden UK’s withdrawal from Europe could have negative repercussions on Italian citizens and on our already fragile economy, not to mention the wider political and social impact across the continent. The possibility of a second referendum, although so far it has been avoided, no longer seems to be so unlikely.