BEERG Brexit Blog

That #Brexit Winding Road may be a Cul-de-Sac

This post was written on Monday Dec 4th, 2017.

There was a time, before the Internet and social media, when politicians could say very different things to very different audiences and get away with it. Not so today. To coin a phrase, what you say in Brussels is known in Belfast before you finish your sentence.

As I write this, at 18:30 Paris time, reports of what actually happened in Brussels today are still somewhat unclear. But it does appear that all parties thought a deal was done until the UK said no at the last minute. Speaking to Irish radio, the Taoiseach (Irish Prime Minister), Leo Varadkar said:

“The U.K. had agreed a text on the border that met our concerns … I was then contacted by [Juncker and Tusk] and confirmed Ireland agreement to that text… I am surprised and disappointed that the U.K. Govt is not in a position to agree to what was approved today”

Reports suggest that the Democratic Unionist Party (DUP) said it could not support the agreed text as it appeared to split Northern Ireland economically from the rest of the UK as Northern Ireland would, to all extents and purposes, still be in the EU’s single market and customs union while the rest of the UK would not.

As UK Prime Minister, Theresa May, needs the DUP’s 10 votes in the House of Commons to keep her government in office, the “Ulster says No” stance of the DUP left her unable to tell the EU that the “UK says Yes” to the Article 50 deal that was on the table.

But even if the DUP had not blocked the deal, May’s ability to get what was agreed on citizens’ rights and the financial settlement through the Conservative Party would have been problematic, as we argued in our last post: https://beergbrexit.blog/2017/12/03/long-and-winding-brexit-road/.

That is still our view.

One thing is now clear. If the DUP blocked today’s deal then there are no circumstances in which the Irish government will in any way soften the position it has taken in the talks to date.

The UK prime minister may allow herself to be held hostage by the DUP. For an Irish government to do so would be political suicide. Further, before today the Irish government had the solid support of the other 26 EU member states. The UK’s behaviour today will have will convince them that they were right to be so supportive of the Irish.

Other EU member states will be asking themselves this evening just how reliable is the UK government as a negotiating partner? What, if anything, can the government deliver? How does the process now move forward with any credibility?

Because a key currency in negotiations is credibility.

When I tell you it is a done deal, it is a done deal. My word is my bond. When I break my word my credibility is shot. Why would the other side make me an offer if they can’t be sure I can deliver?

So, what happens now?

The UK government has put itself in a position where it cannot meet the expectations of all those involved in the Brexit process. Cut a deal with the EU on the terms offered by the EU and a significant part of the Conservative/Brexiter/DUP coalition will be outraged. Keep the coalition together and there will be no deal with the EU and the UK will exit the EU without any agreement as to future trading arrangements. Business will be outraged.

Choices have to be made within hours, days at the most. No more hiding behind language that could mean all things to all men… and women.

Brexit is a process built on negativity. Brexit is against things: …Against the European Court …Against the European Commission …Against European laws …Against immigration.

There is no coherent answer to what Brexit is for. A Global Britain, free trading with the world? A “drawbridge economy”, keeping jobs in and people out? Close to the EU without being part of it, or pushing the EU as far away as possible?

Since the UK voted to leave the EU the EU has known clearly and precisely what is wants. To preserve its internal legal order and the integrity of the single market. It has gone into the process with defined objectives.

On the other side, the UK has been trying to satisfy dissipate parts of a coalition which want incompatible things. But there are only so many impossible things you can believe before breakfast.

Since we started writing this briefing we have consistently said that business should hope for the best, plan for the worse. Increasingly, we think that business should just plan for the worse.