Brexit: Love story to cherry-picking

Dunya Executive - - REPORT - Murat BASBOGA

It’s always more like a tugof-war instead of a lovehate relationship between the European Union and the UK. Hegemonic bureaucracy in Brussels and policymaking with lip service in Westminster will probably stay forever. But in the period we’re living, we will face more difficulties than ever between these powerhouses of Europe.

A quick search on Google may result in more than 696,000 results about former British Foreign Secretary Boris Johnson’s famous quote from 2016: Our policy is having our cake and eating it. It may be boring a bit, but to refresh your mind, I have a few lines on upcoming events. The House of Commons will vote on PM Theresa May’s plan on Brexit. Cracks in the Tory government and Conservatives may result in a defeat for the PM, which will be followed by a no-confidence vote by Labour. Writing in the Sunday Express, Mrs. May pleaded with MPs to back her Brexit deal in January 15’s crunch Commons vote. Not doing so risks the UK leaving the EU with no deal or Brexit not happening at all, she said. The PM is widely expected to lose the vote on the withdrawal agreement she reached with the European Union, something some ministers have said will lead to Brexit “paralysis”.

The UK is due to leave the EU on March 29 automatically, whether MPs pass the deal or not.

As all market watchers agree, an unmanaged hard Brexit is the most significant near-term tailrisk for the UK and the broader European Economy. Without a new partnership deal agreed in time for exit day, or at a minimum some policies to smooth the transition to WTO rules for UK-EU trade, the adjustment for the UK to its new reality could be wrenching. The UK would be at serious risk of recession, as markets suggest. If the parliament is still at an impasse over how to handle Brexit by early February, the UK will not have to wait until the end of March before currency markets begin to make some of the necessary adjustments already. In the end, it may take a major crisis where markets, businesses and households panic about an impending hard Brexit crisis for parliament to act in the national interest.

If Prime Minister May cannot get her deal passed, but parliament (including government) needs more time to process an alternative option to avoid a hard Brexit then the EU may agree to a short extension to the Article 50 twoyear negotiation window. However, the upcoming elections in Europe in May limit the length of such an extension to probably not more than two months. The new European Parliament will begin its duty on July 2.

Newspapers in Turkish

Newspapers from Turkey

© PressReader. All rights reserved.