Brexit: The Final Countdown | The World Weekly
Barring an upset, at some point in the next fortnight a letter from Prime Minister Theresa May will land on the desk of Donald Tusk informing him that Britain would like to leave the EU.
Mr. Tusk, who chairs the European Council, knew as much when a grinning Nigel Farage declared “independence day” in the early hours of June 24 last year. But London and Brussels have been shadow boxing ever since. When he opens the letter, the real bout begins.
The next two years will pose a fiendish test for the UK's world-renowned diplomats. The deals they agree (if they are able to do so) could fundamentally alter the shape of Britain, and of the EU itself.
Here’s what you need to know.
When Britain narrowly voted to leave the EU it did not legally start the divorce proceedings. Back in October, Ms. May promised a Conservative Party conference hungry for Brexit beef that she would trigger Article 50 of the Lisbon Treaty - the EU’s ‘eject’ button - by the end of March. She would like to do so sooner so as not to spoil the Union’s 60th birthday bash in Rome on March 25. Diplomatic niceties matter even when you are wielding a meat cleaver.
Up for the fight
Before the referendum even Boris Johnson, the Leave campaign’s flamboyant front man, admitted that a vote for Brexit might hurt the economy in the short run. And as confidence plummeted straight after the vote it seemed the Remain campaign - dubbed ‘Project Fear’ by its opponents - had not been pessimistic enough.
But the UK quickly regained its stride, growing by 1.8% in 2016 - the second-fastest rate in the G7. Despite signs it may be unsustainable, this economic resilience has given Ms. May the confidence to pursue the clean break Tory eurosceptics have long craved.
So has the fact that public opinion has barely budged since the referendum. John Curtice, a leading pollster at the University of Strathclyde, told The World Weekly there has been “no significant change” in support for the EU and that “optimism about the economic consequences of Brexit is at a post-referendum high”.
Things are looking up on the continent too. After years in intensive care, the eurozone is showing signs of life even as political uncertainty escalates in the Netherlands, France, Italy and Greece. As a result, neither side is suing for peace.
Red, white and blue Brexit
The referendum was a blunt instrument to answer an intricate question, and for months afterwards the government seemed to have little idea about how it would put the result into action. Ms. May’s mantra that “Brexit means Brexit” has disappeared as fast as it became infamous.
Under pressure from the courts and the Commons, Ms. May laid out her vision for Brexit in a landmark speech in January and subsequently in a white paper. The precise form remains vague but we do know the colour scheme.
Britain will quit the single market - which provides for free movement in labour, goods, services and capital - to take control of its borders and laws back from Brussels and Luxembourg. In its place, Ms. May wants an “ambitious free trade agreement” which gives “British companies the maximum freedom to trade with and operate within European markets - and let[s] European business do the same in Britain”.
Ms. May was less clear about the customs union, which centralises European trade policy in Brussels. She wants the UK to renounce “full membership” so it can strike partnerships with fast-growing markets elsewhere, but keep one foot in the door so that trade with the EU itself isn’t hampered by cross-border checks.
“There was nothing surprising in any of this,” says Pieter Cleppe of Open Europe, a think-tank. “Britain was never going to accept free movement or the superiority of EU laws, and was always going to want to reach its own trade deals after it left.”
Yellow and blue Brexit
On June 24, Mr. Farage, Marine Le Pen, Geert Wilders and other europhobes toasted the EU’s imminent demise. But nothing in recent times has perked up the remaining member states and the Brussels institutions more than Britain’s decision to quit.
Michel Barnier, the EU’s chief negotiator, has been tight-lipped. In his first press conference, six months after taking the job, he reiterated what European leaders have said since the referendum: that the UK cannot cherry pick or have a better deal outside the EU than within. Despite this, Mr. Cleppe sees Mr. Barnier as part of a “bureaucratic” clan which recognises that both sides would lose from a bad deal - or no deal at all.
“The main obstacle is time,” says Mr. Cleppe. When Ms. May invokes Article 50 the clock starts ticking, and when it stops two years later the UK must leave regardless of whether a deal has been signed.
London and Brussels are yet to agree on what these talks will actually cover. Mr. Barnier maintains that a free-trade deal can only be broached once the divorce settlement is finalised. David Davis, his British counterpart, wants to hold the conversations in tandem and thinks they can be tied up within two years. He will also seek a transition deal allowing businesses to ease into the new relationship.
This is ambitious. For one thing, trade deals can take up to a decade. The EU’s recent pact with Canada was seven years in the making, and could yet be upset by the regional parliament in Wallonia.
Much will depend on the scope of the free-trade agreement, says Philipp Lamprecht, senior economist at the European Centre for International Political Economy in Brussels. If it is a “basic framework” covering goods and not much else then two years should be enough; but if it covers services, as Ms. May hopes, then it will be much trickier.
Even the withdrawal agreement is immensely complicated. The EU first wants to settle the exit bill, which could be an eye-watering €60 billion ($63 billion), before moving on to anything else. Just as vexed are the rights of British migrants in Europe and Europeans in the UK. What, for example, will happen to their pensions, if they get divorced or if they move on to a third country?
"There will be lots of discussion about the Brexit bill but very little movement on that or other issues other than possibly residence rights... during 2017," Damian Chalmers, professor of European law at the London School of Economics, told TWW. "The reason is that the EU will want the UK to sweat before negotiating (higher inflation, disinvestment, reduced consumer spending are all possible in the next 12 months) and the UK will not pay anything for nothing."
Then there are more esoteric but equally radioactive areas such as nuclear transportation, currently overseen by Euratom. Rupert Cowen, a nuclear expert at London law firm Prospect, recently told Parliament that the UK was “sleepwalking” into a scenario in which power plants have to be shut down and cancer patients cannot receive radiotherapy.
“Everywhere you look you find points of considerable technical difficulty for which there are no easy answers,” says Jolyon Maugham, a barrister who directs the Good Law Project. “The notion that this can all be done in 18 months is bananas.”
The window could be even shorter than that. Serious haggling won’t begin until after Germany’s election in September and Mr. Barnier wants to wrap things up by October 2018 to give the European Parliament enough time to pore over the fine print.
Could it all end in disaster?
If the talks collapse then Britain will leave beset by legal and economic uncertainty. Businesses trading with the continent would face the same tariff barriers as the rest of the world, including 10% on cars. Could this come to pass?
Mr. Johnson, now in charge of British foreign policy, has been typically blasé, arguing that the EU will want to cut a good deal because it sells the UK lots of cars and prosecco. But Mr. Davis, the Brexit secretary, has told cabinet colleagues to prepare for the worst.
“Eventually the UK and EU will sort this out because the stakes are so high,” says Mr. Cleppe.
Charles Grant, director of the Centre for European Reform, is less certain, arguing that the overriding aim in Paris, Berlin and Brussels is to keep the EU together, even if this means some degree of economic self-harm.
“I would say the chance of no deal is about 30%,” he told TWW. “One risk is that arguments about how much money the UK owes will lead to breakdown, and make an Article 50 separation agreement impossible. The other is that, in talks on the transition to the future free trade agreement… the price the EU sets on the transition will be unacceptable to May.”
"Much will depend on mood music," says Professor Chalmers, who is even less sanguine. "I am not optimistic about that. [The] internal politics of both Conservative and Labour [are] likely to be quite fluid during this period, and this could be disruptive."
One unknown is Donald Trump, seen by some eurosceptics as a blessing and others as a curse. In a recent paper Mr. Grant noted that his “questionable commitment to European security” makes the UK’s defence expertise all the more valuable on the continent, but that “the more that British ministers cosy up to Trump, and avoid criticising his worst excesses, the more alien the British appear to other Europeans”.
Scotland and Northern Ireland, which voted to remain, are another headache for Ms. May. She has promised to keep the United Kingdom in one piece, but Scotland’s devolved government is pushing for a second independence referendum in 2018 and Sinn Fein, a pro-EU nationalist party, has just performed strongly in Northern Irish elections. Ministers are searching for ways to leave the customs union without imposing a hard border with the Republic of Ireland, which could imperil the Good Friday peace agreement.
A final wildcard could come at ten minutes to midnight. If public opinion has shifted by 2019, members of Parliament might feel emboldened to strike down Ms. May’s divorce deal. It would then be up to her to go back to Brussels or to lead Britain into a disorderly exit. Then there is the trade agreement, which will have to be ratified by 37 national and regional assemblies – including the plucky Walloons.