Brexit in a nutshell

Dr Oliver Hartwich
5 February, 2019

In a world where we can hardly buy anything without a disclaimer stamped on it, it is surprising that articles about Brexit still come without a health warning.

No, Brexit coverage does not contain nuts. But it can make you go nuts.

Since the Withdrawal Agreement was agreed between British Prime Minister Theresa May and her EU colleagues on 25 November last year, it has been a wild ride for British and European politics. And even that is an understatement.

In that short time, May has suffered seven parliamentary defeats on Brexit, including the largest one in modern democratic times by a majority of 230 votes. Nearly every day now, new options are discussed and dismissed. Mutual accusations are shot back and forth across the English Channel and the Irish Sea.

Brexit has become an unsolvable Gordian knot of too many conflicts, none of which can be reconciled.

Let’s begin with the Irish backstop. The Withdrawal Agreement said the United Kingdom would remain in the EU’s customs union until a trade agreement between the two can be reached. This was to prevent a “hard border” between Northern Ireland and the Republic of Ireland.

The problems with this mechanism are manifold. First, it locks the UK into the EU’s trade policy. London cannot sign any other international trade agreements while the backstop is still in place. But being able to do so was one of the main goals of Brexit.

Second, there is no denying that once Brexit happens, the Irish border will be an external border for the EU (unless the Republic of Ireland left the EU as well, the likelihood of which is marginally higher than zero). Therefore, the border must be monitored more than the green border is now.

And third, though technology can help soften a hard border, developing such a system takes time. It is unrealistic to expect designing such a border in the few remaining weeks before Britain’s scheduled departure from the EU.

This brings us to the second big conflict: timing. It is unrealistic to find a comprehensive solution to the multitude of Brexit problems before the night of 29 March when Britain leaves the EU. Both the UK and the EU playing a game of chicken means little progress in coming weeks. And time is running out.

In theory, the deadline could be extended to allow more time for negotiations. And yet, there are severe problems with this, too.

First, if the Withdrawal Agreement experience is anything to go by, the EU will be reluctant to give the UK government any substantial concessions even in the extension period. They know that the Prime Minister agreeing to something in Brussels does not guarantee parliamentary majority for it in Britain.

Second, only an extension of several months, not just a few days or weeks, can be effective. This means Britain would still be a member of the EU when the new European Parliament is elected. Even though the EU needs the Brexit distraction like a hole in the head during the election campaign, it is absurd to let Britain elect members to the European Parliament while preparing to withdraw. Conversely, it would be legally difficult to exclude Britons from the election while Britain is still part of the EU.

This leads to yet another complication: the idea of a second referendum.

The first problem with this proposal, which is favoured by large parts of the UK Labour Party and ex-politicians like Tony Blair, is timing. Parliament would need to legislate for such a referendum, and then prepare it. Realistically, this could take half a year. That is too long to put the Brexit process on hold, and it runs into the same problem with the European Parliament elections as a delayed exit.

The second problem is what question to put to the people. Will it be the Withdrawal Agreement as negotiated by May? This would hardly make sense. To Brexiteers, this Agreement is not Brexit. To Remainers, it does not mean ‘Remain’. In any case, Parliament has already rejected it.

Another “In or Out?” question would be nonsensical, too, with little agreement on what “In” and “Out” actually mean.

The third problem with a second referendum is Parliament. During the past two years, and with the backing of the UK Supreme Court, Parliament has strengthened its position to such a degree that it can thwart any referendum outcome.

The final complication on the British side is party politics. The Prime Minister has obviously lost control of her party. But she is still standing because of three reasons: her unbelievable stamina and sense of duty; none of her colleagues wants to take over right now; and then there is the threat of Labour leader Jeremy Corbyn becoming Prime Minister in a potential snap election.

May is trying to keep her party together at all costs (which could easily split otherwise) even though this limits her options for finding a cross-party deal with the opposition. And it means she is bound to deliver some sort (well, any sort) of orderly Brexit on 29 March. This is unrealistic for all the reasons given above.

Meanwhile, the final complication on the EU side are diverging national interests. The Republic of Ireland fears nothing more than a revival of the Northern Irish conflict. Spain still hopes to use Brexit to gain Gibraltar. France wants to punish Britain for leaving. Germany worries about its car exports across the channel. Poland wants to secure the rights of Poles living in the UK. If there is any agreement among continental European nations, then it is not wishing to negotiate any further with London only to receive an outcome that might turn out to be worthless.

So where to from here? According to the old Irish joke, when a tourist asks a local for directions to Dublin, the Irishman replies, “Well sir, if I were you, I wouldn’t start from here”. And it is true: This situation could have been avoided had May negotiated better so a majority of Parliament had accepted the result. But that is crying over spilt milk.

The only proposition with a majority in the House of Commons is opposition to “no deal”. The only agreement among the other EU members is on not to renegotiate the Withdrawal Agreement. Unless one side caves, Britain exits without a deal on 29 March even though hardly anyone wants this to happen.

Still, this scenario may not be the worst outcome for Britain, as former Conservative Trade Secretary Peter Lilley and General Secretary of Labour Leave Brendan Chilton explain in a fascinating paper. However, a “no deal” exit on WTO rules is also the scenario with the least support in the House of Commons.

There are no easy options, and none that would allow all sides to save face. Britain and the EU have both done their bits to make a tough situation insurmountable. Over the coming weeks, we will see whether they somehow pull back from the brink and cut the Gordian knot. Or will they risk a chaotic stumbling out of the EU, damaging both the British and the European economy? Mind you, the challenges will continue even after Brexit because then the UK and the EU must still negotiate their future trading relationship (good luck with that).

Meanwhile, be warned: Follow the Brexit debate at your own peril.

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