Brexit is about to get real

Unravelling decade-long ties is bound to be exprensive. The United Kingdom is heading towards vassal status in a strenghtened Eu

Almost three years have gone by since the 2016 referendum on Brexit, and London is still in the EU. The way out remains unclear, while the country is increasingly divided and confused. The British ordeal has already had important effects on other European countries, which might increase depending on London’s next moves.

The Brexit saga has shown other member states that leaving the EU is a dreadfully complicated and expensive undertaking. If a large country with strong institutions like the UK has not been able, in almost three years, to decide how to leave, it is because leaving in itself creates a mass of problems, damage and costs that are very difficult to handle. British politics has been completely absorbed by the issue, and in the meantime the pound has devalued, the economy has slowed down, billions of pounds have been spent to prepare for the possibility of an exit without agreement – the no-deal scenario – and, above all, thousands of businesses, banks and economic operators have begun to leave Britain for countries that remain in the European Single Market.

The Brexit affair has also tipped the balance of power between Britain and the EU in favour of the latter. In 2016, London was aiming to instantly settle its accounts with the EU to its advantage, quickly negotiate a profitable free trade agreement and relaunch its national aspirations on a global scale. The EU countries were expected to split up and seek bilateral arrangements with Great Britain, bypassing the European Commission in the negotiations. However, none of this happened. The 27 EU countries remained united, the Commission maintained its leadership in the negotiations and Brussels imposed the timetable, modality and content of the negotiations. While the conditions of future relations are yet to be defined, the 2017 agreement on the terms of exit certainly turned in the EU’s favour, showing the member states that united within the European framework they can achieve more than on their own.

At the same time, the 30-month post-referendum period has taken its toll on the UK. Early this year, Northern Ireland witnessed the first car bomb attack since the 1998 peace agreements that put an end to decades of low-intensity civil war. The car bombing was linked to unrest over the return of a border between the part of Ireland that belongs to the United Kingdom and the rest of the island, an inevitable outcome in a no-deal scenario and one of the reasons why, for the past two years, it has been impossible to form a new government in Belfast. In the meantime, the Scottish Parliament has warned the Parliament in Westminster against deciding on Brexit without its consent. Theresa May’s executive, already a minority government after the 2017 elections, no longer has a majority in Parliament as of 15 January, when Westminster rejected May’s painstakingly negotiated agreement on the exit from the EU by a margin of 230 votes. This is a clear example of political-institutional fiasco that should give pause for thought to those in Europe who are considering the possibility of leaving the Union, heedless of the chaos that would break out in terms of national and social cohesion – from Catalonia to Trentino Alto Adige, and from brain drain to capital flight.

The Brexit ordeal has also changed the balance of power within the European Union. With Great Britain no longer enforcing its Atlanticist views and opposing deeper political integration within the EU, and in the face of a more eurosceptic Italy, the Franco-German axis – the central engine of European integration – was further strengthened. Atlanticist countries such as the Netherlands, deprived of British support, have shifted towards the Franco-German positions. It is therefore likely that Berlin, Paris and their Nordic allies will be more heavily represented in the next EU summits.

The effects of the Brexit deal will be magnified to varying degrees depending on the outcome emerging on 29 March, the official deadline for the UK’s departure. In a no-deal scenario, Great Britain will experience a socio-economic shock due to the sudden return of customs controls for incoming and outgoing goods, which will slow down the flows and possibly lead to a shortage of consumer goods. Tesco and other supermarket chains have been stockpiling packet and tinned foods since the beginning of 2019, while the Ministry of Defense put 3,500 troops on standby to help ensure the distribution of essential goods throughout the country. The fact that in 2019 the population of a rich and industrialized Western nation should worry about stockpiling food and medicines because of Brexit should have a sobering effect on even the most ardent eurosceptic forces. Moreover, a hardening of the border between Northern Ireland and the Republic of Ireland is likely to spark demonstrations, even violent ones, and possible terrorist acts. The interior minister has already initiated the specialized training of 1,000 English  police officers to be deployed in Northern Ireland in case of disorder arising from this scenario. The no-deal outcome would also ignite a constitutional clash with Scotland and a political crisis in London, both with unpredictable results, most likely contributing to a fall in both the stock exchange and the pound sterling. These developments would clearly demonstrate the costs and problems of a drastic exit from the EU, while at the same time strengthening both the image of the Union and the Franco-German engine within it. 

In the second scenario, London would ask Brussels for an extension of the negotiations and thus for the 29 March deadline to be pushed back, presumably to 2020. But this would only mean postponing the shock, and in Great Britain the debate would rage over what to do: filing a motion of no confidence in May’s government and holding new elections? Calling for a second referendum, and if so, on what alternatives? In the meantime, the EU countries would still be impacted by the process, albeit in a less tangible way than in a no-deal scenario. Indeed, the fact that Britain, more than three years after the referendum, has not been able to find a way out of the EU is in itself a significant case against making such a choice, while the Union, continuing to function more or less as before, would prove strong enough to endure the exit of one of its largest member states.

In the third scenario, faced with the approaching shock of the no deal, the British Parliament would begrudgingly approve the agreement reached last November. If this were the case, a transitional period would be guaranteed until 2020 – a last minute compromise calling for emergency measures. The entire EU regulatory framework would remain in force in Great Britain, along with the free movement of goods, until the conclusion of an agreement on future relations, including a free trade treaty. But it will take years, if not decades, to reach a free trade agreement. During this time Great Britain would remain in a customs union with the EU, applying its rules but no longer having a place at the decision-making table that establishes them. This “vassal state” solution, as conservative MP Boris Johnson dubbed it, would spare the British economy and society the shock of an abrupt exit from the EU, but at the cost of further limiting its national sovereignty over a number of issues, including trade policy. For a referendum won by promising to regain the sovereignty previously shared at EU level it would be a paradoxical outcome, one that should give everyone in Europe pause for thought. 

@Alessandro__Ma

This article is also published in the March/April issue of eastwest.

You can buy the magazine at newsstand or subscribe.