Brexit Marathon Has Begun

Listening to BBC radio the morning after the Article 50 letter was delivered to Donald Tusk, I was struck by the naivety and misplaced optimism of some of the Brexit supporters interviewed. One hoped Brexit would lead to “less regulation and lower taxes”, while another said it would not have an impact on his business because he mainly exported to the US.

Business as usual?

Why there should be any reason for Brexit to cause these sudden changes on the one hand or seamless continuation of normal life on the other, was not explained and, disappointingly, neither interviewee was challenged by the reporter to elaborate.

People voted for Brexit for many reasons, but a common thread through all the pro-Brexit arguments seemed to be that life would get better. Brexiteers believed the UK would regain freedom of choice; basically it would be free again to decide the what, wheres and whens of its national life.

Now that the negotiating phase is about to begin, and negotiations about negotiations have already started, the complexity of the process ahead and the difficulty of reaching a deal which suits both sides is becoming even more apparent.

Whether you believe the extreme pessimism of some remainers, which is undoubtedly based on a sizable portion of sour grapes, or the bluff, gung-ho optimism of leavers who say “no deal is better than a bad deal”, it is clear that a swift and smooth transition to business as usual on a new basis is highly unlikely.

Some concerned citizens have a plan B:

Seconds out for round one

Although a serious and civilized process is supposed to be starting there is still a great deal of shadow boxing going on, a sort of sparring round to warm up before the real fight begins. Because a fight there will be at some stage, however it begins or ends.

As far as the EU is concerned the UK must not get a deal which signals to any other discontented member state that life outside can be as good or better than life within, but how hard will the EU want to push Britain to make this point? Will it be prepared to wound itself as it deals a damaging blow to the UK, just to make a point?

Although in theory these discussions involve two partners, meaning the UK and 27 equal partners, in reality some EU member states are more equal than others. And with France and Germany facing elections this year, the two largest remaining members are likely to be distracted at a crucial stage.

Should the Front National win in France, as unlikely as this might seem even in the new age of the unlikely being likely, the whole process could become very interesting. Would a government committed to leaving both the EU and the Euro want to punish the first country to leave? Unlikely.

But even if this doesn’t happen the EU’s superpower Germany faces elections in September, so within a few months the current German government’s focus will not be on Brexit, it will be on re-election.

Storm before the calm before the storm

Even if all the talk is of a sensible discussion and tough but fair negotiations, there is bound to be a temptation to cause some panic in the UK ranks. It would be only human to be angry and want to inflict some pain on people who have ridiculed your values, structure, progress and future, even if the new leader of that country is a formerly lukewarm remainer, now converted to the boss(y) Brexiteer.

And anger there certainly is, even from people who might have been expected to show a little more diplomatic restraint:

So let’s have a look up the sleeves of both partners in this bout and measure their muscles. The UK stands to lose access to the single market and perhaps face a new set of tariffs for everything it wishes to export “to Europe”, in the worst case scenario. Cars, cheddar cheese and marmalade could be more expensive and therefore less attractive to EU customers immediately. In retaliation the UK could set its own tariffs on incoming EU goods, perhaps on a wide range, or perhaps aimed at big industries with big muscles and influence like the German car industry. So far, so silly for all concerned.

Instability and an uncertain future for the UK economy could further damage the pound (Sterling) meaning imports become even more expensive. Equally, losing easy access to one of its largest markets could hit many EU industries and some member states very hard, perhaps damaging the Euro and EU economy. In this scenario both sides keep kicking the shins of the other until they both fall over.

On the other hand a virtual return to business as usual, in which the UK has full control over immigration from the EU, does not accept the jurisdiction of the European Court of Justice, does not accept European standards regarding goods and services, and still has the benefits of tariff free trade seems hard to imagine. The message to potential jumpers would be “yes, you too can have your cake and eat it”.

Compromise, cunning and careful calculation

The most likely way out of this potential mess, funnily enough, would be a true EU-style compromise, in which a convenient truth suiting both sides is created and all concerned can have some sort of victory to sell to both their domestic and wider audiences.

The UK might have to be acknowledged as a special case but only so in the sense that no other state can ever hope to leave and achieve the same arrangements. The incentive for all remaining states to accept this would be stability for the club of 27, bolstered by the fact that this one-off deal should not tempt any other black sheep in the family to also attempt an escape from its warm embrace. Article 50 arrangements could be redrafted to make this certain.

Released “early” as part of a unique deal but not, in theory, having been given special treatment, the UK could leave with an acceptance from the remaining members that it was best for all concerned but the real beneficiary would be the EU, free at last from this thorn in its side.

Even if some sort of deal can be thrashed out in the two-year period which the arrangements for a member state’s departure allow, it seems likely to be at the end of difficult period of negotiations with many ultimatums, stand-offs and shouting matches along the way.

The warm-up crisis over Gibraltar in the last few days illustrates the potential complexity of negotiations to come. 27 individual menus need to be boiled down to something which presents a united front from the EU perspective, and although not all member states have a 300 year old dispute with the UK over a rock on their doorstep on the menu, as Spain does, there may well be other issues which assume new importance. Poland probably has more of its citizens living in the UK than any other EU country. Perhaps it will seek a special deal regarding their future above and beyond that of other member states. And other issues could arise for other member states as the discussions get under way – the Republic of Ireland/Northern Ireland border being just one which springs to mind.

What this new (for the EU) and probably unique end to a long and messy arranged marriage will become is a test of strength but also of cunning, in which both sides have to decide how much a mixture of pragmatism, politics, punishment and damage limitation should influence their positions. It will take almost magical alchemy to achieve the right blend.

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