Brexit already represents a fundamental challenge for the European countries for at least two opposite reasons. Some fear an unprecedented EU integration process, led by France and Germany, once they get rid of UK skepticism. Others are concerned by the need to discourage a “Brexit domino effect” EU-wide and they do not wish for an extremely convenient Brexit deal for the UK. However, everyone is aware that a “no deal” would be unsustainable both politically, as it would discredit the Union, and economically, as it could worsen trade relationships by aggravating uncertainty.
A “no deal” would be bad for the UK as well, as it will not allow for a transition period up to 2020 to smoothly accompany the UK outside the Union with agreements on trade relations and sustainable options for the Irish border issue, intra-EU migration and the financial service market.
Prime Minister Theresa May’s proposal for a softer Brexit, which could provide some access to the Common Market under the EU trade rules, has recently resulted in calls for a referendum on the exit deal, as it could undermine the independence of UK institutions vis-à-vis the EU. Yet, a second referendum might not impact significantly the chance of the UK to remain in the EU. To date, only the Liberal Democrats have a pro-European agenda, while no other political forces in the UK have formally adopted a pro-remain political strategy. Against this backdrop, a second plebiscite could result in the above-mentioned no deal, as it might push citizens to refuse the arrangement proposed and negotiated with the EU, without challenging the idea of leaving the European Union.
In conclusion, while no more cherry-picking of EU benefits will be allowed by the remaining member countries, which are convinced the UK already had the best possible EU membership deal, British government’s attempts to structure a profitable arrangement might result in a zero-sum game, which will satisfy neither the “Brexiters” nor the “Remainers.”
Thomas Sampson is an assistant professor of economists at London School of Economics.
Support for Brexit comes from a coalition of three groups: nation-state traditionalists, who view the EU’s supranational institutions as an undesirable restriction on UK sovereignty; free-market radicals, who want to reshape the UK’s economy along American lines by reducing regulation and cutting support for the welfare state; and voters who blame the EU for their dissatisfaction with the state of modern Britain. These left-behind voters have been encouraged by the anti-EU voices that dominate Britain’s media to view EU membership, and particularly the free movement of workers within the EU, as the cause of their discontent.
In negotiating the terms of the UK’s departure, Theresa May’s government is struggling to reconcile the objectives of these groups with the interests of remain voters and the economic reality that leaving the EU will hurt the UK economy. In 2015 the EU accounted for 44 percent of the UK’s exports and 53 percent of its imports and total UK-EU trade was 3.2 times larger than the UK’s trade with the U.S., its second largest trade partner. Economists estimate that increased trade barriers following Brexit will reduce income per capita in the UK by between 1 percent and 10 percent depending on what form Brexit takes.
There is a trade-off between reclaiming national sovereignty by severing ties with the EU and minimizing the economic costs of Brexit. A “soft Brexit” where the UK remains in the EU’s Single Market and continues to adhere to EU regulations, trade policy and free movement of labor would be the best option for the UK’s economy. But it would also be viewed as a betrayal by most Brexit voters. On the other hand, there is only minority support in the UK for rejecting the European social model in favor of its American counterpart and left-behind voters may reconsider their opposition to European integration as the costs of divorce become apparent.
The heart of the problem is that Brexit has divided the UK, not only between leavers and remainers, but also over what should replace EU membership. There is no option that a majority of the country supports. Theresa May will try to muddle through, forging a compromise that can keep her government in power. But it is hard to envisage any scenario that does not leave the UK poorer and more isolated from its traditional allies than if there had never been a Brexit referendum.
Jonathan Story is emeritus professor of international political economy and author of The Political Economy of Financial Integration in Europe: The Battle of the Systems.
Prime Minister May was a remainer and has remained a remainer. She has ensured that Whitehall leads the negotiation with Brussels. Since Whitehall is part of the Brussels establishment, it is the establishment negotiating with itself about how best to dilute or even negate the referendum result of June 23, 2016. The same people who negotiated between the time of Prime Minister Cameron’s Bloomberg speech in January 2013 and Cameron’s announcement of his proposed deal with the EU in February 2016 have also negotiated the Chequers deal. Cameron’s February 2016 speech was greeted by a Sun headline: “Who do EU think you are kidding.” May’s Chequers proposal has had a similar welcome. Cameron’s February 2016 announcement of the package was greeted by a Sun headline: “Who do EU think you are kidding.” May’s Chequers proposal has had a similar welcome.
Britain could have stayed in the EU prior to June 23, had Cameron revoked the Heath definition of the EU as a supranational institution, to which the UK is subordinate. Neither France, nor Germany, nor Italy recognize such a definition. Remainers do not want to follow the Germans and have a more national definition of the EU. They are campaigning to keep the UK in an EU where the UK remains supranationalist No Uno. Trouble is: it doesn’t sing at home.
It’s for the British government to decide whether they should vote again. Since polls are now completely politicized, it would be unwise of either side to think they would win. In the 1960s, 13 percent of voters were floaters; by the early 2000s, it was 40 percent. It is probably rather higher now. Labour has veered sharply left and is defining itself by identity politics and anti-Semitism. It is being led by a man who thinks that all the sins of the world are caused by Israel and the West. Corbyn is as extreme as the U.S. far right.
If May has her way, the UK will be a vassal state; the pretense will be that the UK is independent. The aim of Whitehall, Brussels, and 10 Downing Street is to either keep the UK semi-attached or to get it back in. But if it goes back in it will pay its full dues and have to join the Euro.
I propose that the UK’s official supranationalism, which gives it allies in Brussels, is a failure. It was bound to be a failure. Merging a mosaic of states and peoples, with different languages, legal traditions, histories, tax systems, and economic structures—not to speak of cultures—into a United States of Europe was, is and will remain a dream. The trouble with utopias is that they fast become dystopias. The EU is presently a dystopia. A truly European response would be to create a European alliance of democratic constitutional states, with Brussels cut down to size, its pretensions scaled back. If that could be achieved—there is no sign of it—Europe could come into its own. It is already the wealthiest region of the world. Less integrated, it would be more united.
Richard G. Whitman is a professor of politics and international relations at the University of Kent and an associate fellow at the Chatman House.
The Brexit process is now entering its most challenging phase. As the March 2019 deadline for the UK’s departure from the EU moves closer, there are still a formidable range of issues to address through negotiations if there is going to be an amicable Brexit. With all of the negotiations so far focusing on the terms for the UK’s departure, no agreement is likely to be reached on the post-Brexit EU-UK relationship.
If the Brexit negotiations look to have been a tough undertaking, they will be nothing compared to those on the future relationship. A weak government has played a weak negotiating hand poorly—and exacerbated deep divisions within the UK’s political class. The UK government’s poor negotiating performance has been it easy for the EU’s remaining 27-member states to maintain a consistently united position.