Brexit, British Government, Brussels, Michel Barnier, Negotiating

#Brexit: Dealing with the EU (Part 2 of a series of 3 blogposts)

This Blogpost was wrtitten on Monday Sept 16th

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As we wrote last week, it seems to us that if the UK was to “make Brexit work” three things were of fundamental importance.

  1. The government needed to develop a consensus in the UK about what Brexit meant, some form of widely-shared vision of what the UK outside the EU should look like.
  2. Resulting from one, negotiate a future deal with the EU that would minimise the impact of withdrawal on the UK economy and provide for a “good neighbour” relationship for the future
  3. Hope that geopolitical developments across the globe would fall favourable for a UK out of the EU, facilitating the conclusion of new trade deals which would open new export markets.

In last week’s BEERG Brexit Briefing we examined the failure of, first, Theresa May, and now Boris Johnson to attempt to build any consensus in the UK around what Brexit should mean in practice and how this lack of consensus was adversely impacting the UK’s discussions with the EU.

Brexit has deep roots, which stretch back to before the original “Common Market” was created and which the UK tried to strangle even before it was born. Like General de Gaulle, who had a “certain image of France”, many Brexiteers have a certain image of the UK, an image which sees it as a global power, better off eschewing European entanglements.

This “certain image” draws heavily on Britain’s imagined role in WWII shaped, to a great extent, by movies and TV shows which describe a plucky Britain, alone against the world but winning through nonetheless. Practically all of those who demand that the UK summon up the “Dunkerque spirit” or talk about how the UK survived the hardships of the war, were born during or after the war and only really experience it through movies and daring-do comics.

When one such devotee of the cult of WWII wrote about how the UK could go back to growing its own vegetables if that became necessary as a result of a no-deal Brexit, he was quickly answered with the retort: yes, but you can’t grow medicines on an allotment. Unless you are an aromatherapist, I suppose, in which case you probably can.

Others are better placed to explore how all of this feeds the Brexit dream. Fintan O’Toole has done so brilliantly in Heroic Failure: Brexit and the Politics of Pain. It is sufficient that we know it was and is hovering in the background. It is never wise to underestimate the power of nostalgia, emotions and imagined history.

More relevant is that in the years before the 2016 referendum, many Brexiteers were convinced that the EU was about to collapse. But then, they always have. As far back as 1994, Paul Johnson, once the editor of the left-wing New Statesman, but by then a convert to Thatcherism, wrote:

There is a feeling throughout Europe that democracy is not working and that the gap between what people want and what they are allowed by their rulers is too wide. That means trouble, and exactly how and where it starts is less important than the speed and intensity with which it will spread. A European conflagration will bring the Channel (as opposed to The Chunnel) back into fashion … as the continent slithers into anarchy – or worse – and we watch the exciting drama from our grandstand seats on the While Cliffs (Wake Up Britain, 1994).

In the build-up to the Brexit referendum in June 2016, many Leavers came to believe more and more strongly that the EU was about to implode. The Greek debt crisis had sent shivers down many a spine. Waves of migration from Africa and the Middle East saw stark divisions between EU member states over how to deal with the crisis. Authoritarian regimes were emerging in Hungary and Poland, openly flouting EU requirements on constitutional order. Many of them thought Marine Le Pen would be the next French president, while Wilders looked like he could take control of the Dutch government.

A vote for Brexit would be the catalyst that would bring the EU crashing down. Other EU countries would quickly follow the UK out of the EU as they saw the “benefits” that the UK would soon reap after it had left, so Brexiteers believed. The mood of the Brexiteers was captured in a 2016 interview with Dr. Liam Fox, an ardent Leaver and by then a UK cabinet member with responsibility for international trade. According to a report in the Express (here)

The International Trade Secretary…gave a scathing prediction for the future of the EU in an interview with The Spectator magazine, saying its “architecture is beginning to peel away… [the EU] is going to sacrifice at least one generation of young Europeans on the altar of the single currency, and you can only rip out the social fabric from so much of Europe before it starts imploding.”

Dr Fox said Brexit has severely weakened the Union’s economic stability and Germany should be quaking in its boots at the prospect of being the concrete that attempts to glue to the EU’s crumbling foundations together.

David Davis, another leading Brexiteer, and in late 2016 Secretary of State for Exiting the European Union, told an audience of bankers in London

…that EU member states such as France had ‘no faith’ in their economic models and ability to compete with an ‘Anglo-Saxon approach’

(It was at this meeting that Davis said he had no interest in a “transition period” but he was prepared to offer the EU one if it needed it to adjust. It was remarks like these that convinced Europeans that the UK political class had no real insight into the dynamics of the process in which they were engaged.)

But what happens if there is no collapse? What happens if, after you hand in your notice to leave, the organisation you are leaving in order to avoid the chaos that will ensue when it collapses, grows stronger?

As we now know, the EU did not implode. Far from it. While it is still grappling with major problems, Brexit has acted as a unifying force. Brexit became an “external enemy” which helped to mask internal differences. Instead, it is the UK that has imploded, politically.

As we have already seen, in planning for the referendum campaign Vote Leave, the main Leave campaign group, took a decision that it would not define what Brexit meant. It had concluded that any attempt to do so could split the Leave coalition because, it realised, Brexit meant different things to different people. Everyone could vote Leave believing it would bring their own version of Brexit.

Yet there were some broad themes to the Leave campaign that created unrealistic expectations about what Brexit could deliver. Brexit would be easy, it would be quick, the UK would hold all the cards and a deal could be done which would see the UK end up with all the benefits of EU membership with none of the costs.

Matthew Elliott, one of the leaders of the Vote Leave campaign, said that the strategy was to win the referendum then to sit down and plan what it meant and how to deliver it. Brexiteers also appeared to think that the UK could ignore the process set out in Article 50 of the Lisbon Treaty, with which readers of this Briefing will be more than familiar.

As the EU interpreted Article 50 it provided for:

  • A two-year notice period.
  • Once the notice was served the departing country had two years in which to conclude a legally-binding “withdrawal agreement”, setting out the terms of its exit. The EU went on to further break down the negotiations on the withdrawal agreement into two stages, with sufficient progress being made on the first stage before talks could move into the second stage.
  • Before it left, it could also negotiate a “framework for its future relationship” with the EU. However, the granular detail of that relationship could only be negotiated after the departing country had actually left. The departing country could be required to leave without any real certainty as to what future relationship it would have with the EU.

The EU insisted that the process had to be conducted sequentially. The withdrawal agreement had to be in place before talks could move onto the future framework.

The time pressure this procedure placed on the departing country played to the EU. Clearly, a departing country would be well advised to know exactly what it wanted before pulling the trigger on the exit process. As we now know, the UK had absolutely no idea what it wanted before it served notice that it was leaving.

Vote Leave thought it had the leverage to bypass this process. During the referendum campaign it said that

“…taking back control is a careful change, not a sudden step – we will negotiate the terms of a new deal before we start any legal process to leave.”

Aware of this, within days of the result of the June 2016 referendum becoming known, the EU made it clear that there could be no negotiations without notification. The UK would have to trigger the Article 50 process before negotiations of any sort, formal or informal, could begin. Straightaway, this blew a hole in the Vote Leave strategy. There would be no precooking of deals.

This was a logical position for the EU to adopt. Until it actually left, the UK would be a full member of the EU, entitled to have MEPs in the European Parliament, a European Commissioner, a judge on the Court of Justice of the European Union (CJEU) and a seat on all Council of Ministers decision making bodies. The UK could easily use its position within the EU’s decision-making structures to apply pressure to secure favourable terms. The longer “pre-negotiations” continued before the UK initiated the Article 50 process the more opportunities it would have to disrupt EU business to its own ends.

Vote Leave also underestimated the pressure there would be from victorious Brexiteers on the UK government to “just get on with it” and get Brexit done. After all, had Vote Leave not told the electorate that it would be easy and that the UK held all the cards. What then was the problem, why the delay?

In the end, the pressure proved too much and the UK government formally triggered the Article 50 process on March 29th, 2017. The UK was now scheduled to leave the EU on March 29th, 2019. And it still did not know what it wanted.

Vote Leave leaders were also under the impression that the exit negotiations would be conducted at a political level, with the British prime minister talking to his or her counterparts across Europe. Divide and conquer would be the order of the day. National political leaders would be under pressure to cut the UK a good deal from businesses which traded heavily with the UK.

As David Davis put it in May, 2016, a month before the referendum:

Indeed the first calling point of the UK’s negotiator in the time immediately after Brexit will not be Brussels, it will be Berlin, to strike the deal: absolute access for German cars and industrial goods, in exchange for a sensible deal on everything else.

Similar deals would be reached with other key EU nations.

France would want to protect the £3bn of food and wine it exports to the UK. We have seen the sort of political pressure French farmers are willing to bring to bear when their livelihoods are threatened, and France will also be holding a general election in 2017.

Italy will deal to protect its billion-pound fashion exports. And Poland its multi-billion pound manufacturing and electronics exports.

With these remarks, Davis showed that he did not understand that the UK would have to negotiate with the EU as a bloc. Individual countries did not do trade deals. The EU drew its strength from negotiating as a bloc. Indeed, this approach insulated national leaders from the type of pressure David was relying on.

The European Commission immediately took the initiative and announced that the highly respected centre-right French politician, Michael Barnier, a former government minister and twice a European Commissioner, would lead the negotiations on behalf of the European Union. The Commission initiative was quickly endorsed by European heads of government.

So, from the beginning, the European Union established the negotiating rules of the game. If the UK wanted to play, it had to play by these rules. Time and again the UK tried to find ways around the rules and to go directly to nation leaders, such as Angela Merkel. Time and again these national leaders pointed the UK back to Barnier and his team.

Within days of the referendum result the Vote Leave strategy of waiting to define Brexit until after it had won the referendum, then pre-negotiating the future deal before the Article 50 process was even triggered, was in tatters.

The plan to bypass the “Brussels bureaucracy” and deal directly with national leaders imploded on first contact with reality. Brussels was in charge, not London.

London was always on the backfoot.

It still is.

(We had intended this analysis to be a two-part article. It turns out to be a three-part series. Next week, we will examine the wider geopolitical context in which Brexit is taking place.)