What Does Brexit Mean? A Guide to Brexit Terminology
Brexit is a topic that’s dominated by political and economic jargon, and loaded with more acronyms than you can shake a stick at. What do all these Brexit terms mean? Read on to discover your very own guide to Brexit lingo.
- European Union (EU): The political and economic union that comprises 28 member states, with a total population of around 500 million. That’s including the UK, however — there will be 27 member states when the UK leaves the EU after Brexit takes place. So, when you hear people talk about the EU27, they’re referring to the remaining 27 countries of the EU, excluding the UK. The EU is built upon four key principles, or freedoms: free movement of people, goods, services, and money across all member states.
- Eurozone: Those members of the EU that have adopted the euro currency. Not all EU members are part of the eurozone; the UK, for example, chose not to adopt the euro, while newer EU members like Bulgaria and Romania are working toward adopting the euro.
- Schengen Area: An area of passport- and border-free travel within Europe. It comprises most (not all) EU countries, plus some non-EU countries, such as Switzerland. The UK did not participate in Schengen.brexit
- European Economic Community (EEC): In very simple terms, the precursor to the EU. Created in 1957, it aimed to bring about greater economic integration between member countries in Europe. The UK wasn’t an original member of the EEC, and it didn’t end up joining until the 1970s. When the EU was eventually formed in the 1990s (reflecting the fact that European integration was now about much more than economic cooperation), the EEC was essentially folded into the EU.
- Single market (or common market): The EU’s free trade area. The single market means participating countries can trade freely with each other without trade barriers (like tariffs). For this to happen, all countries in the EU single market generally follow the same rules, regulations, and standards, and accept the free movement of people, goods, services, and money. You cannot be a member of the single market without accepting free movement of people.
- EU customs union: Different from the single market. A customs union means all members agree to charge the same tariffs on imports from outside the union. You can be a member of the customs union (and apply the same agreed-upon tariffs as the EU) but not be part of the single market — Turkey has this arrangement with the EU. Conversely, you can be a member of the single market but not the customs union — Norway has this arrangement with the EU.
- European Economic Area (EEA): An agreement that allows some non-EU countries to participate in the EU single market. The EEA is made up of all the EU countries, plus three extra countries: Norway, Iceland, and Liechtenstein.
- European Free Trade Association (EFTA): A free-trade area comprising four countries: Iceland, Liechtenstein, Norway, and Switzerland. It ensures free trade and economic integration between members, but it also has close ties with the EU. EFTA members participate in the EU single market and Schengen, but are not part of the EU customs union.
- Soft Brexit: The term used for a future relationship in which the UK and EU remain closely aligned, perhaps by the UK remaining in the single market or customs union or both. Supporters of a soft Brexit argue that such a scenario would minimize disruption to businesses.
- Hard Brexit: The term used to signify more of a “clean break” with Europe, that would see the UK out of the EU, the single market, and the customs union — thereby leaving the UK free to negotiate its own trade deals and external tariffs with other countries. As negotiations wore on, hard Brexit also became synonymous with no-deal Brexit.
- Brexit deal: The Brexit withdrawal agreement, which sets out the terms for an orderly departure from the EU, including a transition period.
- No-deal Brexit: The UK leaving the EU without signing off on the withdrawal agreement, thereby ending free movement and participation in the single market and customs union overnight, with no transition period, which many people have argued could cause major disruption to businesses.
- Article 50: The clause in the EU’s constitution that sets out the path for member states to leave the EU. For the UK to formally start the process of leaving the EU (incidentally, the UK is the first independent country ever to decide to leave the EU), it had to trigger Article 50.
- Irish backstop: It’s complicated. But, put very simply, the backstop is an insurance policy in the withdrawal agreement that aims to avoid a hard border between Northern Ireland (which is part of the UK) and the Republic of Ireland (which is part of the EU). The backstop means the UK and the EU would remain in a customs union until a formal trade deal is agreed on by the two parties — something that could take many years.
Navigating Brexit is still a bit of a slippery slope. Ultimately, the true consequences of the Brexit decision will only come to light once the UK has withdrawn from the EU.