To Brexit or not to Brexit
- Christopher Prince
- Jan 27, 2019
- 5 min read
UK voters were misled into Brexit
On 23 June 2016, British voters voted at 52% to leave the EU after a misleading campaign from the ‘Leave’ side claiming that the UK would save 350 million pounds a week they give to the EU budget without looking at all the benefits they get in exchange. In consequence of this vote, the UK government triggered the article 50 of the Treaty on European Union on 29 March 2017, giving it a time frame of two years to negotiate an exit deal for an effective departure on 29 March 2019.
The UK struck a deal with the EU after lengthy negotiations on 14 November 2018, but this deal was rejected by a record margin of 230 MPs in the UK Parliament on 15 January 2019. Now, as the fateful date approaches, the perspective of a ‘no-deal’ becomes more probable while other options are on the table, like the postponement of the Brexit date or even a second referendum. Many businesses and neighbouring countries as France have triggered a ‘no-deal’ plan to try to prevent all the consequences of such an outcome.
A ‘no-deal’ would have dire economic consequences and mean a hard border between Northern Ireland and the Eire
In this situation, many Brexit supporters advocate a ‘no-deal’ but they do not seem to measure the dire consequences of such an event.
The Bank of England has researched and found out that an exit from the EU in a disorderly manner would be more painful for Britons than the 2008 global financial crisis, with a contraction of the UK GDP by 8% in just a year (compared to 6.5% in 2009) and a rise of the unemployment rate to 7.5% (from 4.2% now). As Britain imports 40% of its food from the EU, Britons should expect a rise of 40% of their price due to added taxes. It would be a catastrophe for many businesses, including UK farmers who have enjoyed subsidies from the generous EU agricultural policy for decades.
Besides, there is the problem of the Irish border. The Belfast Agreement signed on Good Friday (10 April) 1998 stated as a condition of the end of hostilities between the IRA and the UK that there would be no border between the Eire and the Northern Ireland area belonging to the UK. A ‘no-deal’ between the UK and the EU would mean that there would have to be a hard border with customs between the EU in Ireland and Northern Ireland, which would undermine the Belfast Agreement and possibly reignite the feud between the two camps in Ireland, a scenario that both the UK and Ireland would like to avoid at all costs.
The most probable scenario is that the Brexit date will be delayed
With less than two months now before the 29 March date and the massive rejection of Theresa May’s deal on 15 January, chances are that no better deal will be struck and accepted by the UK Parliament to be effective on 29 March 2019. Chances also are that the catastrophic ‘no-deal’ scenario will probably be avoided at the last minute because of the economic and logistic chaos it would cause.
However, the postponement of Brexit is not without difficult consequences either. If Britain is still a member of the EU in June 2019, it will have to fulfil all its obligations as a member under the treaties, including its contributions to the EU budget and holding elections to the European Parliament on or before 26 May 2019. It would be a bit ironical that Britain would have an election then to elect European MPs two years after deciding to leave the EU and it will be interesting to see what British voters would then say in this election that could then be viewed as a second ‘Brexit’ referendum.
But the question of a deal will remain
If the Brexit deadline is delayed, the UK will still have to strike a new deal with the EU to implement Brexit at a later date. But the EU has no reason to give in more than it has already agreed on in November 2018 as the EU is not the requester of Brexit and was happy with the former situation with the UK in the EU. In this respect, the 27 remaining members who may have disagreements on many other issues have showed a common front. The UK could bet on a new EU Commission and a new German leader being more accommodating, but it is a dangerous bet as it could also be stiffer, and the EU could become annoyed at the UK demands and hesitations.
If no deal is found, the lockout situation could last forever, but the situation would not be good for either the UK or the EU.
The Swiss and Norwegian models are no options for Britain
Some observers have pointed out that the UK could draw inspiration from Norway and Switzerland to shape its relations with the EU as they are no members of the EU but still enjoy access to its single market. However, Switzerland and Norway must pay a contribution of respectively €115 million and €400 million a year in contribution to the EU budget and have to accept all EU rules without having a say about them, including the free movement of people as they are part of the Schengen area, which Britain has never been part of, even as an EU member. As the UK is not prepared to consider free movement of people after Brexit as they already did not want it before, the Swiss and Norwegian models are no options to be considered.
The UK has put itself into a stalemate
The UK is starting to understand that it actually had a very good deal with the EU before Brexit, enjoying all the rights to the single market and in the decision making, with discounts negotiated by Thatcher in the 1980s and also the right to be outside of the Schengen area and to control its borders. It might lose all that for a deal which can never be as good, with probably the same obligations to have access to the free market but no more say and still contributions to the EU budget.
It looks like the UK has put itself into a stalemate. The issue will probably be decided by the next government as voters will have to have their say again, one way or the other, through national or EU elections or a new referendum, and they seem to favour the ‘remain’ option now according to polls.
