Article 50, Brexit, British Government, Theresa May

#Brexit Will Not End Well… or…Brits need to realise: the #EU is just not that into you

This blog was written on June 12th 2018

Lemass DeGaulle
Lemass with De Gaulle in 1962

In the blizzard of policy statements, position papers, press conferences and parliamentary debates it is crucial to keep one fact in mind: the UK is leaving the EU on March 29th, 2019, unless the UK parliament votes to withdraw the Article 50 notice. Given the views expressed by the Conservative government and the opposition Labour Party this seems unlikely to happen. But never say never.

 

As matters stand, on March 29th, 2019, the UK will become a “third country”, outside of the EU institutions and legal framework. That there may be a transition period until the end of December 2020, with the UK de facto following all EU laws but without a voice in the EU governance structures, does not change the fact that on March 30th, 2019, the UK will have left the EU. Everything else is nothing more than dealing with the consequences of that exit. Damage limitation at best.

It is unlikely to end well as it never really began well. Not just Brexit, but the whole relationship between the UK and the European Union or, as it was originally generally known, the Common Market. Two quotes from recently discovered interviews with Sean Lemass, Irish Taoiseach (Prime Minister) 1959 – 1966, a man who knew all the UK and European players, captures it well.

“I do not think they [UK] had any other idea initially in relation to the Common Market, except to destroy it. Even when they recognised they were not going to succeed in breaking it up, their application for membership was probably inspired by the idea that they could slow down its development in some way and perhaps change its character. It is the only in the last few years that the British have realised that they are not going to succeed in these policies. They have come around – if their public declarations are indicative of their attitude – to accepting the whole idea of European economic integration. Yet they still have the imperial frame of mind as shown by their Commonwealth prime ministers’ conferences. Of what real importance is the Commonwealth? I do not think it has any significance whatsoever, but it certainly has prevented the British from thinking of themselves as a completely European country.”

The UK hated the very concept of the European Union right from the beginning. In the 1950, as the idea of European integration was taking shape, first through the European Coal and Steel Community, the European Atomic Energy Community and the Common Market, the UK still thought of itself as an imperial power, even if a declining one. The Commonwealth gave added life to imperial pretentions. At the same time, the UK saw itself as the privileged partner of the US in Europe and regarded the emergence of a united Europe as a threat to that special relationship.

Economically, however, as Europe began to economically power ahead, the UK, under then prime minister, Harold McMillan, reluctantly concluded that it had no choice but to join. But the British always though they could cut special terms for themselves. Again, as Lemass puts it:

I do not think that either MacMillan or any member of the British government ever fully understood that they could not be half in and half out of the EEC. They had to make up their minds whether Britain was to be a part of a united Europe and, if so, they would have to resign themselves to the fact that they could not have a special relationship with the US which would give them rights and privileges against their Common Market partners or try to maintain the Commonwealth preferences. MacMillan did not realise that indication of vacillation on Britain’s part would discredits its application in the eyes of de Gaulle. As a result, I think he was surprised by the de Gaulle veto.”

What is remarkable about these two quotes is that they still hold true today, some sixty years later.

Read the comments of many prominent Brexiteers. They see the future of the UK not as part of a united Europe, but as the leading member of an imagined “Anglosphere”, which appears to be nothing more than the “white” countries of the Commonwealth, along with the US and, if it only came to its senses and saw where its true interests lay, Ireland.

However, as the Irish government has consistently made clear, Ireland knows where its true interest lie, and it is not as part of a post-imperial fantasy.

Brexiters also dream of a revived “special relationship” with the US, pining hopes on the “great, big beautiful”, trade deal, as promised by President Trump. More than likely this is not going to happen and if it does happen it will be on terms so favourable to the US as to leave the UK with just crumbs. Very simply, Trump believes that all negotiations are zero-sum games in which there can only be one winner. And if you are not the winner then you are the one being screwed. For a useful take on Trump’s view of the world see politico.com story

Read the first sentence in the second Lemass quote again. Could it not be read as an accurate summary of UK policy since the Brexit referendum? “I do not think that either [MacMillan] May or any member of the British government ever fully understood that they could not be half in and half out of the [EEC] EU.”

Boris Johnson did not invent “cakism”. It has always been the UK’s preferred policy towards the EU. With his journalistic knack, he just put it in colourful tabloid language.

The truth being told, UK has been remarkably successful at what we might call “cakism from within”. Although a member of the EU it has had opt-outs from two of the EU’s biggest initiatives: The Euro and the Schengen border-free travel area. It has also had opt-out from the areas of justice and foreign policy. As the Luxembourg prime minister put it: The UK “has been in with many opt-outs”.

But “cakism from within” was not good enough for the hard Brexiteers. What they want is “cakism from without”. No matter how you describe it: a “deep and special partnership”, a “jobs first Brexit”, “frictionless trade” is all comes to the same thing. All the benefits of the EU single market and customs union but with none of the obligations and the constraints that come with membership.

Every day comes a new paper from the UK asking for membership or associate membership of one EU program or the other. Last week, we saw another technical note on data protection which, as we have written before, effectively amounts to the UK asking everyone to pretend that the UK had not really left the EU and should be treated for data flow purposes as if were still an EU member. But, of course, without being subject to the jurisdiction of the Court of Justice of the European Union (CJEU).

In reality, the UK wants to leave the EU and then opt back in to practically every EU policy and program bar one: the free movement of people.

Add it all together and what the UK would like is a “mini-me” union consisting of the UK and the EU. Both to be regarded as equal partners and the mini-me union to have its own institutions and dispute resolution procedures. Probably to be called something like the Eastern Atlantic Common Market, anything to avoid the use of the words Europe or European. Everything must change so everything can stay the same, for the UK at any rate. Minus free movement.

But that’s not going to happen. Whatever future relationship the EU offers the UK will be of considerable less benefit to the UK than EU membership by a factor of some.

Damage limitation best describes the process. Normally, in trade and economic negotiations the parties want to get closer to one another, to remove barriers so that the cake will expand, and the parties can share that expanded cake. Brexit is the opposite.

The raison d’etre of Brexit is to allow the UK to put distance between itself and the EU. Such distancing will create costs and barriers where none previously existed. The EU will be determined that the costs fall more on the UK than on itself because the UK was the party that initiated the breakup. You broke it. You own it. You pay for it.

“But we don’t want to put new barriers to trade in place, pleads the UK.” It might be said that for its part, the EU has adopted May’s slogan: “Brexit means Brexit. When you’re out, you’re out. We will make leaving as easy as possible but don’t delude yourself that things will be the same afterwards.”

What allows the EU to function as a frictionless internal market are the rules and supervisory mechanisms, culminating in the authority of the CJEU to settle disputes.

The EU is a complex legal order, a melange of intergovernmentalism, shared sovereignty, and national concerns. It works because over 60 years it has negotiated a set of written rules that allow diverse countries to work together, resolving disputes through the agreed supervisory and legal mechanisms. The rules often resulted from long and arduous negotiations, yielding formulae that all parties know and understand. The EU is not going to tear up those hard-won rules just to suit the whims of a country that has decided to leave.

If the UK wants frictionless, borderless trade with the EU, plus membership of various EU programs, then it must buy into the rules. Those rules include the jurisdiction of the CJEU and free movement. Take it all or leave it. No UK exceptionalism. Despite what the British commentariat might think and wish.

Seen from the UK, Brexit is all absorbing because it began as an attempt to reverse 50 years of deep economic integration between the UK and the EU. Of course, in the run-up to the 2016 referendum very few on either side appreciated just how deep that integration was. Who knew of Euratom? The European Medical Agency? The complex of rules on food and animal hygiene and safety? Galileo?

Only afterwards did the realisation come dawning slow just what leaving the EU would mean in practice both for business and ordinary individuals. Brexit is modern Luddism: stop economic integration, we want to get off.

For the EU27 Brexit is a low priority. The future of the eurozone, the next budget cycle, Trump tariffs, the rule of law and democratic values in Central and Eastern Europe, the Iran deal, migration from the Middle East and Africa, and political issues in Italy and Spain are of more concern than the problems of a country that is leaving. Especially a country that a year and a half after telling the EU that it is leaving is still negotiating with itself over what leaving actually means.

The British need to get over the fact that the “EU is just not that into you”.

The EU’s approach to Brexit has been fairly straightforward, in line with the provisions of Article 50 of the Treaty: negotiate a withdrawal agreement covering the settlement of liabilities and obligation and the framework of a future relationship. Then, when you have left, we can negotiate a substantive agreement covering the details of that future relationship. The complicating factor has been the issue of a border in Ireland, with the complications arising out of the provisions of the Good Friday Agreement which creates a unique set of political and economic interlinks between the two parts of the island, dependent to a great degree of those two parts both being members of the EU’s single market and customs union.

At worse, the “Irish Question” may be a deal breaker. At the very least, it will force the UK government into making uncomfortable decisions.

In summary, Brexit is indeed easy. It is what has to be given up by the UK to secure Brexit that is not easy and what has to be given up will come at a significant economic cost, for both businesses and individuals. You can eat your cake, or you can still have your cake sitting on the plate in front of you. You just can’t have both.

What for its worth, my own long held belief is that the EU will offer the UK a deal that involves a new model: customs union and single market membership, with CJEU oversight and free movement. But no seat at the decision-making table. When it comes to decision making, to borrow a phrase from my own world of labour relations, the best the UK can hope for is to be “informed and consulted, with a view to offering an opinion which the EU will take into consideration before making its final decision.”

That’s where red lines get you.

One thought on “#Brexit Will Not End Well… or…Brits need to realise: the #EU is just not that into you

  1. The pound is setup for a devaluation against the euro, it will help exporters counter the restrictions but lower the standard of living in the UK. People on pensions living in theEU are in for a shock, and would be wise to hedge the currency. The pound has been in a corrective pattern since the 1.05 euro, and now rolling over. My target is par with the euro before any announcement, and a severe devaluation if no deal status.

    Like

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