The European Union will restart legal action against Britain over breaches of the Brexit Withdrawal Agreement, with a looming threat of a trade war if the Government refuses to comply.
Maros Sefcovic, a European Commission vice-president, said that the UK’s move to unilaterally override the Northern Ireland Protocol was “damaging to mutual trust and a formula for uncertainty”.
His warning came after a phone call with Liz Truss, the Foreign Secretary, on Monday morning to discuss Britain’s plans to bring forward the so-called Northern Ireland Protocol Bill.
The EU’s initial response is expected to be muted and will arrive in a statement after the first reading of the legislation in the House of Commons on Monday afternoon.
The European Commission’s lawyers will pore over the text before making a definitive decision on whether to resume “infringement proceedings” against Britain, which were first started after the Internal Market Bill was introduced in Sept 2020.
This decision is likely to arrive on Wednesday, when Mr Sefcovic is due to brief the EU’s 27 national ambassadors on the situation.
Brussels agreed to pause the procedure as part of its Oct 2021 package of concessions on the Protocol to help create a more positive atmosphere for talks with the UK.
These legal proceedings can take up to 35 months, meaning that the case against Britain will likely last into 2024.
Under the terms of the withdrawal treaty, the European Court of Justice or an independent and binding arbitration process can hit Britain with fines, with further sanctions to follow if the Government refuses to pay penalties or comply with rulings to overturn the legislation.
This could lead to the suspension of all or parts of the post-Brexit trade deal brokered with the EU.
The bloc could also move to end financial equivalence for the City of London to European markets, or officially end Britain’s accession to the Horizon research programme.
‘Anglo-Irish relations dragged to new low’
The Republic of Ireland has accused Britain of dragging Anglo-Irish relations to a new low by moving to override the Protocol.
After a 12-minute phone call with Ms Truss, an Irish government spokesman said that Simon Coveney, Ireland’s foreign minister, told the Foreign Secretary that “publishing legislation that would breach the UK’s commitments under international law, the Brexit Withdrawal Agreement and Northern Ireland Protocol is deeply damaging to relationships on these islands and between the UK and EU”.
He added that it “marks a particular low point in the UK’s approach to Brexit, especially as Secretary Truss has not engaged with negotiations with the EU in any meaningful way since February”.
