UK facing traumatic ‘no deal’ decision soon
IF THE European Union will not take “yes” for an answer on Brexit, this country faces a traumatic decision very soon.
Should the European Council refuse to endorse talks on future ties with Britain next week in Brussels, we may indeed be forced to depart without a deal, on minimalist terms and in acrimony. One loses count of Theresa May’s concessions, all seemingly to no avail. There comes a point in diplomacy when a sovereign nation must stand its ground. This decision cannot be put off for much longer.
“Time decay” is poisonous. It is working remorselessly against British economic interests.
The Bank of England warns that banks and City finance houses will activate their contingency plans and
start to decamp en masse by Christmas unless they know where Brexit is heading. Sir Howard Davies, RBS chairman, said American and Asian banks are all shifting parts of their operations out of London. The question is whether City losses will be in the thousands or the tens of thousands, and the timing is “very tight indeed”.
The German industry federation (BDI) said it is working on the assumption that Brexit talks will break down. Its Brexit “task forces” are taking steps to replace British subcontractors and reorganise their supply chains. Every week that goes by in this purgatory means Britain suffers the irreversible effects of a hard Brexit, yet without being able to negotiate new trade deals. It is dragging out the ordeal. It risks turning into the worst of all worlds: a hard Brexit by default.
The Brexit mandate imposed on EU negotiators by the EU Council is legally dubious. Article 50 does not stipulate that all divorce issues must be settled before there can be any talk about trade ties. It states that the EU should work out the arrangements for withdrawal while “taking account of the framework for its future relationship with the Union”. Britain has gone along with the EU’s sequencing framework nevertheless. It has done so even though the three chapters on Ireland, citizens’ rights, and the alimony bill cannot logically be separated from longer-term trading and security links.
The Prime Minister has largely signed off on citizens’ rights. It is a fudge, of course: a legal mechanism will be found to lock in the privileges of EU nationals in Britain, with UK and EU judges working in concert. “The British have basically given in,” said Charles Grant from the Centre for European Reform. “The Germans are
‘Bluffing the EU is a dangerous gamble. Never try to bluff the EU’
blocking everything until they are offered more money. But they had better be careful because if this leads to the downfall of Theresa May, they will come to rue the consequences.”
Britain faces a corrosive state of affairs. The EU powers are “shaking the tree”, delaying talks even as they plot to snatch British spoils. Lord Owen, the former foreign secretary, says the time has come for a “unilateral declaration” stating how the country will proceed.
Brinkmanship is a part of every EU summit. Germany and France may be playing a tactical game to wring out a few more concessions. By the same token, the British Government is hoping to concentrate the mind by floating contingency plans for “no deal”.
I have no objection to such plans. What bothers me is that this is suddenly coming to the fore just days before the summit seemingly as a negotiating ploy to call Europe’s bluff.
This is a dangerous gamble. Never try to bluff the EU. It is an error to try to play the “no-deal” option as if it were a card, not least because it misreads the European landscape. Two years of ultra-easy money and fiscal loosening have together generated a boom. If we are going to talk about a “no-deal” rupture, we must be willing to see it through. Here we confront the Original Sin of the Brexit “cake and eat it” movement: they never admitted that Brexit means blood, toil, sweat and tears. They never told the British people that there might be a stiff price to pay for restoring the supremacy of Parliament, or that it would be a logistical nightmare to extract ourselves after over 40 years enmeshed in the EU system.
They have no political mandate for the hair shirt sacrifices that a walkout may entail. It is time to tell the British people now what those sacrifices would be.
‘It is time to tell the British people what the sacrifices of “no deal” would be’