The European Commission already specifies in each project call fiche that the financing by British partners will be honoured until the end of the project only in the case an exit agreement is concluded with the United Kingdom. If the United Kingdom withdraws from the EU during the grant period without concluding an agreement with the EU ensuring in particular that British applicants continue to be eligible, British partners will cease to receive EU funding (while continuing, where possible, to participate) or be required to leave the project on the basis of Article 34.3.1(b) of the Grant Agreement.
The different eventualities of Brexit
Without having the pretention to predict an outcome as uncertain as the Brexit one, here are the options which remain:
The “No deal”
In case of hard Brexit, the 29th March 2019: The United Kingdom will no longer have the possibility to continue to use the programs and activities of multiannual financial framework (set until 2020).
- The United Kingdom will no longer have the possibility to participate to remaining H2020 program calls on the last work program 2018-2020.
- For the British participants to ongoing H2020 projects, the European Commission would leave a period of 9 supplementary months beginning at the No deal date before their probable exclusion. The United Kingdom would become a third country to H2020.
If they wish to continue to benefit from European projects, the United Kingdom will have to engage new negotiations in order to conclude an agreement of bilateral participation ad hoc as the one obtained by Switzerland. Indeed, the participation of Helvetic entities to H2020 projects (SME-I, ERC Grants, MCA excluded, no coordination) were directly financed by the Swiss Confederation following the EU sanctions because of the Helvetic referendum (which limited people free circulation). This partial association (excluding the role of coordinator, SME-I and ERC Grants type individual projects, Marie Curie Actions, and with no positive financial return) had nevertheless preserve an access to H2020 for Swiss projects in the expectation of a return to an unrestricted participation, which occurred on January 1, 2017.
- The British Government is already engaged on this approach: On September 2018, the Energy and industrial strategy Department has set an “underwrite guarantee”, which offers a maintain of British partners financing for the ongoing projects and that during their whole duration.
- Likewise, the British Treasury has also engaged on a “Post EU exit guarantee extension”, permitting to selected applicants but notified after the date of the no deal to benefit from a payment guarantee.
- But for the remaining calls of the H2020 programme, a new specific bilateral agreement EU/UK will be necessary in order the British Treasury finances directly British partners. This agreement will allow a partial association with restrictions similar to those applied to Switzerland between 2015 and 2016. On its absence, The United Kingdom as a Third State will no longer be able to apply for these calls.
A deferment
The hypothesis of exit negotiations prolongation has been evoked and holds today the actuality with Theresa May’s last declarations on a prolongation demand of article 50. Nevertheless, Michel Barnier (The EU negotiator for Brexit) was firmly opposed to that solution, as were numerous member States which want the Brexit question to be solved on the 29th March 2019 to avoid that it turned into slow poison during the next years.
A very hypothetical last-minute deal
Despite the tense negotiations with Michel Barnier, Theresa May has obtained a deal with the EU. This deal remains a solid base which knows difficulties essentially concerning the Irish question and the backstop. Perhaps she will succeed to negotiate with the EU on news arrangements, the imminent perspective of a Hard Brexit may also lead some deputies to obtain a new majority to achieve a deal with the EU. The signature of this agreement would permit in all case to UK to participate to H2020 in unchanged conditions as associated State.
The economy realities should earlier or later take back the step on the political issues and permit to United Kingdom to join one way or another European projects. Nevertheless, before coming back to a full and complete participation, a lot of time will have been spent to the detriment of Science and European Research Area.
You want to study the eventualities of Brexit for your company? Our consultant will help you to analyse the situation and find a solution.
Benoit Merland
EU senior Consultant
GIS team leader
