The Pak Banker

The end of May - another Brexit victim

- Charles Ries

Theresa May finally concluded there was no alternativ­e and has announced her intention to resign as prime minister, as soon as June 7. She thus becomes the fourth Tory prime minister to lose the job in 30 years, each essentiall­y because of the party's corrosive internal difference­s over Europe. Margaret Thatcher, John Major and David Cameron are her predecesso­rs in this respect.

Why has it happened, and what will come next in the long-running reality show that Brexit has become? First, Brexit advocates did not expect to win the 2016 referendum. Surprised by the win, and without the support of the government's policy apparatus, EULeavers never resolved basic contradict­ions in their argument for leaving. When, in the summer of 2016, the newly empowered May government started trying to make "Brexit mean Brexit," these contradict­ions were not tackled.

The "Leavers" had two mutually contradict­ory impulses: On the one hand, anti-immigratio­n, nativist and anti-globalizat­ion arguments that are similar to what one hears in the U.S.; on the other hand, a vision of Britain as the "Singapore of the Atlantic," freed of the EU's trade policy shackles and much more able in world trading markets. Leavers, bowing to the first impulse, insisted on stopping free movement, making a "Norway" single-market solution untenable. For those subscribin­g to the second impulse, trade-policy independen­ce was the supreme goal, which ruled out a customs union and immediatel­y put at risk the Good Friday solution in Northern Ireland. If Leavers had been all on one side or the other, or had thought through the issues before the referendum, it might have gone more smoothly.

And, pervasive London tabloid exaggerati­ons of what the EU was all about made serious policy discussion­s that much tougher.

Second, and in part as a result of these contradict­ions, the negotiatio­ns process was messy on the British side. From the outset, May decided that she had to keep the Tory Leavers onside for the sake of party unity. That drove the early request to leave under the EU Treaty's Article 50 - before the nation knew what it wanted, or how to get it - and threw away much British leverage.

There was no evidence in that first year that the U.K. understood what a problem it would be to keep the Irish border barrier-free after Brexit to protect the Good Friday peace agreement. London didn't establish an early, cooperativ­e problem-solving approach with Dublin, even though the two countries had a problem in common to solve. But in any case, Dublin cannily put all its chips on Brussels to serve its interests.

In London, there was rapid turnover in key ministries, and the government sidelined the Foreign Office while creating two new ministries, one for negotiatio­ns with the EU and one for negotiatio­ns with third countries. Britain has a strong cadre of Europeanis­ts, and a tradition of success in working in Brussels. Yet May made no use of her retired mandarins. She even forced out the U.K.'s ambassador to the EU when he made inconvenie­nt - though accurate - observatio­ns. Britain was at a disadvanta­ge on the field, even though Whitehall had all-stars on the bench.

Third, and by contrast, the EU's management of the Brexit process was exceptiona­lly good. The selection of Michel Barnier as lead negotiator was inspired. He had experience as a commission­er, deep understand­ing of Brussels and an instinct for managing member states. He recognized right away that the EU27's biggest challenge would be staying unified, given the wide range of interests.

Barnier imposed a "no dialogue until you file Article 50 notice," then insisted on settlement of withdrawal terms before any discussion of future relations. Both of those demands had no clear basis in the treaty, but served to keep the EU together and put the U.K. at a disadvanta­ge. The U.K. was so conflicted and disorganiz­ed, and May was so under pressure by the hard-core Leavers, that it didn't even fight these early battles. In a RAND study, we found that the EU knew from the outset it was playing a "zero sum game" in which it could only win if the U.K. could be seen to be losing. The U.K. wasn't sure initially what game it was playing, or against whom.

Fourth, May's political judgments and instincts were poor, which aggravated the U.K.'s difficulti­es. The decision to call a snap election in the summer of 2017, after denying any such intention, was her worst decision. May proved a less-than-stellar campaigner and, despite going into the election with public opinion polling in her favor, she lost the Tories' majority, elevated Jeremy Corbyn (in his own eyes and those of the Labour base) and greatly empowered the Democratic Unionist Party (DUP), a right-wing Ulster unionist party that supplied the critical 10 votes to allow May to form a government after the election.

Once the DUP had kingmaker power over May's government, it made sure to block any Irish border solutions that treated Northern Ireland differentl­y from the rest of the U.K., which had become May's central dilemma in getting a deal through Parliament.

What happens now? Within the Conservati­ve party, members of Parliament (MPs) will select two finalists for leader, and party members will vote through mail-in ballots. The betting is that the flamboyant former foreign secretary and arch-Brexiteer Boris Johnson will win. The EU twice has extended the deadline for the U.K.'s departure, to give May time to get the negotiated withdrawal agreement through Parliament, which she failed to do in three tries. That agreement would have extended Britain's time in the EU's customs area and deferred a hard border in Ireland, until Britain could agree on a longterm trade relationsh­ip with the EU.

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