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HomeNewsLiechtenstein Highlights - Brexit, EFTA und EWR

Liechtenstein Highlights - Brexit, EFTA und EWR

During the first in a new series of events entitled “Liechtenstein Highlights” under the patronage of Prince Alois, the University of Liechtenstein hosted a panel discussion with high-calibre guests. Carl Baudenbacher, President of the EFTA Court, Mads Andenæs, University of Oslo, Pamela Buxton, Hogan Lovells International LLP, London, and Heribert Hirte, member of the German Bundestag, University of Hamburg were invited to speak about the topic “Brexit, EFTA and EEA”,

In his welcoming address, rector Jürgen Brücker emphasised that Liechtenstein, as a state in the middle of the DACH region, is the perfect place to reflect on Europe. Although the so-called happiness factor in Liechtenstein is very high, in the face of major challenges such as the movement of refugees and youth unemployment in many parts of Europe, it is necessary to find common solutions with the other European nations. Foreign Minister Aurelia Frick used her welcoming speech to explain how Brexit will also influence Liechtenstein and cause setbacks for Europe. Free access to the single European market has been a successful model for Liechtenstein, but it also involves investing a great deal of effort, in particular regarding the implementation of EU law in Liechtenstein law. Frick noted that Brexit also means an exit from the EEA, and that this would also have budgetary implications for Liechtenstein. After all, Great Britain is Liechtenstein's seventh most important trading partner and is the most important trading partner for EFTA member Norway.


In a series of short reports, the panel presented their individual views on Brexit and its consequences. According to Carl Baudenbacher, the decisive reason for the vote for Brexit was the desire of the British to regain full control over immigration and escape the jurisdiction of the EU Court of Justice. For the future, the British are seeking a far-reaching free-trade agreement with the EU that is merely subject to a court of arbitration. For Baudenbacher, however, it is questionable whether the remaining EU member states are willing to accept this. He described the EFTA Court as efficient and transparent, taking decisions based on facts, and, thanks to its size, with a separate judge for every case.


Pamela Buxton commented that the UK Government has stated it is committed to a departure from the single internal market. This will, however, be accompanied by the loss of “passporting rights”, i.e. the authorisation of UK financial institutions to operate within the EEA countries without any further approval requirements - and vice versa. She assumes that the creation of a new platform and a new trade agreement will be necessary following Brexit. Buxton said that since the Brexit vote in the UK, the Leave voters are optimistic about the UK's future outside the EU, and even EU supporters now generally accept the referendum decision to leave. She expects that there will be a second referendum on whether Scotland should remain in the United Kingdom given the vote in the Scottish Parliament that evening but noted that the position is complex with polls indicating that there is not a majority in favour of it amongst the Scottish people.


Iceland and Norway have the most to lose from Brexit according to Mads Andenæs, because Great Britain will focus on the negotiations with the EU. Norway should be careful not to become siderailed during these negotiations. Andenæs also noted that all the bilateral agreements reached between the EU and the UK will have to be renegotiated at an EEA/EFTA level once Great Britain has left the EU. The EFTA Court has the appropriate structures for a transitional period, Andenæs concluded, despite Great Britain emphasising that under no circumstances does it want to be subject to European jurisdiction.


Heribert Hirte turned his attention to the forthcoming “divorce proceedings” between the EU and Great Britain, and for the most part saw almost irreconcilable positions and little willingness to compromise. Hirte believes there is a great need for discussion about the future status of patents and trademarks in Great Britain, and the position of companies that are subject to English law, but have their headquarters in the EU. In Germany alone, 50,000 companies are affected. The negotiations are made more complicated by the fact that the British will be sitting on both sides of the table during the divorce proceedings. Hirte also pointed out that if the UK wanted to reach a favourable agreement for the future, it will have to meet its financial obligations to the EU and third countries.


In the panel discussion that followed, the participants once again stressed the challenges faced by the EU in the wake of Brexit and the concerns of the EFTA countries. Buxton pointed out that Brexit supporters hope that EU law will be liberalised, but also that a system of equivalence will be necessary to gain access to the internal market for financial products. When asked about Norway's reservations regarding Great Britain joining EFTA, Andenæs explained that Norway’s volume of business is 10 times larger than the EFTA member Iceland, but 10 times smaller than Great Britain. It can therefore be assumed that in the event of a conflict between the EU and the United Kingdom, the interests of its EFTA partners would hardly be taken into account. This could be resolved if the United Kingdom were to recognise a European jurisdiction. And also from the viewpoint of the EU, a dispute of this nature with Great Britain as an EFTA member would be problematic because the EU Court of Justice rejects the notion of a “Supreme Court”, responsible for both the EU and EFTA. Hirte stressed that traditional arbitration would not be enough to regulate relations with Great Britain in the future, and saw the greatest problems in the fact that the United Kingdom is not willing to recognise any jurisdiction over and above British law.


For both Hirte and Baudenbacher it is, however, not yet certain that Brexit will actually happen. Both regard the EU's eastward expansion, the uncontrolled immigration within the EU, the “brain drain” from South to North and the wage pressure in the North as reasons for increasing disenchantment with the EU. All the panellists agreed that the dogma that the free movement of persons is part of the European DNA, must be questioned. After a lively discussion, President Baudenbacher closed the event by saying that his greatest concern for the rest of Europe is that the EU will lose competitiveness due to the lack of influence of Common Law.


The evening was rounded off with lively discussions accompanied by drinks and snacks.