Is Britain actually planning to exit?
It’s now unlikely that Britain will quit the European Union.
The divorce negotiations between the two, following the narrow “Leave” victory in a 2016 U.K referendum on continued EU membership, are going badly.
Britain seeks the immense benefits of a continued elaborate EU association, while rejecting cherished EU principles such as the ability of EU nationals to work in Britain, as they are free to do across the union.
Neither side is budging on that labour mobility principle or countless other crucial issues, and there’s little sign they will.
Early in this saga, there was a chance the U.K. could quit the EU while retaining strong ties with the biggest social and economic union on Earth, as nonEU-members Norway and Turkey do.
But that outcome, while still vanishingly possible, is now most unlikely. The hopelessly divided U.K. government doesn’t know what it or Britons are prepared to concede to get a good deal, or even what a “good” deal is.
Given fresh evidence of that British uncertainty every day, the EU is simply waiting out the U.K. The EU’s realistic hope is that with sufficient time, Britons will re-embrace a 43-year-old EU membership that is an underpinning of British prosperity. Indeed, there is now a rising chorus of Britons demanding a second EU referendum to undo the first.
The only certainty Britons have experienced since the Brexit vote is darkening skies.
OLIVE continued on B4
In 2017, the first full year after the Brexit vote, Britain’s economic performance was the worst in the G-7.
A devalued British pound since the Brexit vote has raised Britons’ cost of living. U.K. wage stagnation is described as the worst since the Napoleonic wars. Personal insolvencies have jumped almost 30 per cent since the EU referendum.
Businesses at home and abroad are relocating some or all of their U.K. operations to countries remaining in the EU.
The amicable divorce sought by the U.K. government of Prime Minister Theresa May looks more unlikely by the day. Here’s why: Time is running out. A mere 11 months remain before the March 2019 deadline for a formal U.K.-EU breakup.
The EU is an elaborate construct of hundreds of thousands of rules covering most aspects of life for 512 million EU residents.
Canada’s straightforward trade deals with the EU and with Pacific Rim countries each took more than a decade to negotiate.
The idea that the U.K. could hammer out a favourable separation from the EU in just 22 months was absurd. (The talks began in May 2017.) EU provisions for extending the deadline would simply prolong the U.K.’s economic uncertainty, and give Britons still more time to consider the perils of life outside the EU.
Exodus. Global financial institutions are accelerating their relocation of some or all of their London operations to EU jurisdictions, a process that began soon after the Brexit vote. London is poised to lose its status as one of the world’s two financial capitals, matched with New York. And financial services is London’s principal economic activity.
The business defections are widespread outside of financial services. London-based GlaxoSmithKline PLC, one of the world largest Big Pharma enterprises, says it might not be viable for it to remain domiciled in a non-EU country. And Unilever PLC, the consumerproducts giant (Dove, Sunlight, Axe), said last month it will use Rotterdam as its sole headquarters, abandoning its dual HQ in London.
In a recent survey of about 1,200 non-British EU corporations, Swiss bank UBS AG found almost half of those firms plan to shift operations out of the U.K. to the EU. Other surveys have found companies of every type are moving parts of their supply chains from the U.K. to the EU to avoid whatever new EU trade restrictions result from a Brexit.
“Anything-But-Brexit” talk. Such is the widespread public distaste for a “hard Brexit” (the complete break with the EU sought by the most ardent Brexiteers) that a multitude of alternatives have emerged.
Among these is a “Canadian solution,” or “EU Lite,” which would demote the U.K.’s EU relationship to that of a CETA partner. (The Canada-E.U. Comprehensive Economic and Trade Agreement, referred to above.)
Or, the U.K. could emulate non-EU member Norway, which has much greater access than Canada to the EU market, and in return adheres to basic EU principles including labour mobility. But that would be anathema to Brexiteers motivated by xenophobia.
The oddest alternative, taken seriously by officials on both sides, is for Britain to quit the EU, then quickly apply to rejoin it. That would mean agonized negotiations to achieve what the U.K. already has within the EU, and would prolong uncertainty about Britain’s economic future. But at least U.K. pols could say they acted on the 2016 referendum.
German Chancellor Angela Merkel and French President Emmanuel Macron, the two most powerful EU leaders, are among the EU hardliners who reject such alternatives, which echo René Lévesque’s oxymoronic “sovereignty association.” They demand either a clean break with Britain, or that the U.K. remain a full EU member — no in-between.
So determined is the EU to keep itself intact that it has ignored — at least publicly — the recent turn to state-sanctioned xenophobia in EU members Poland and Hungary. The EU will not accede to an amicable U.K. divorce that could encourage more EU defections.
The short, unhappy tenure of PM Theresa May. Brexit is, of course, illegitimate.
The June 2016 referendum campaign was a disgrace of falsehoods on both sides, the result heavily influenced by voter manipulation by Cambridge Analytica and its more than 80 million purloined Facebook accounts.
The Brexit vote was a nonbinding referendum. As such, it was a mere protest vote in which Britons didn’t so much vote against the EU, but instead expressed their xenophobia or their displeasure with thenPM David Cameron, leader of the “Remain” campaign. Britons knew they could vote without fear of the consequences, since the government was not required to act on the results.
And yet, Theresa May, the accidental PM who replaced a humiliated Cameron, and who evinced no “Leave” sentiments before her ascension to No. 10 Downing St., quickly decided to do so. (“Brexit means Brexit,” she fatefully said). Why May did that would require the powers of historian Barbara Tuchman to explain, since Brexit is a repeat of Britain’s inexplicable march to folly in the years culminating in the First World War.
Theresa May might not be PM by year’s end, if the many freelance Brexit policymakers in her Tory caucus unite to oust her — Margaret Thatcher’s fate in 1990.
Even that would resolve nothing, since Britons, by large majorities, say they are unclear on the muddled Brexit stances of all three major U.K. political parties.
At some point in this overlong psychodrama, it might occur to the U.K.’s leadership class that the only way out of this mess is to call the whole thing off.
And that’s the outcome to bet on.