The European Union (EU) on Thursday started legal action against the UK after it refused to ditch plans to override sections of the Brexit Withdrawal Agreement.
In a statement, European Commission President Ursula Von der Leyen said the UK had been put on formal notice over the Internal Market Bill, which would override a part of the agreement when it came to goods and allow the country to modify or re-interpret “state aid” rules on subsidies for firms in Northern Ireland, in the event of the two sides not agreeing on a future trade deal.
Von der Leyen added that the bill “by its very nature, breaches the obligation of good faith laid down in Withdrawal Agreement”.
The commission’s decision was not a surprise as it gave Britain an ultimatum last month, threatening to take it to court unless it dropped its plans to backtrack on a deal Prime Minister Boris Johnson struck last year.
On the other hand, the UK said that it would respond “in due course”. A spokesperson for the Johnson government said the bill was a necessary “safety net” to protect trade between different parts of the UK.
The development has resulted in the pound falling by 0.6% against the dollar and 0.7% against the Euro. The Commission’s letter is the first step in a legal process against the U.K.’s Internal Market Bill that could result in a lawsuit at the European Court of Justice.
