June 28, 2019
Since the very beginning I have said that Brexit will not work.
Today, we can clearly speak of a “Brexit failure”, considering that the 31 October deadline will not help to unblock the situation.
This document aims to examine rapidly the reasons for the failure of Brexit and possible scenarios for the next two years.
1. The reasons for Brexit failure
One of the principal reasons lies with the unpreparedness of the United Kingdom: the poorly-prepared referendum, a poor understanding of the EU system and the inability of May’s government to define a clear negotiating strategy.
Three options were possible: remain in the customs union (thereby excluding the signature of free trade agreements with third countries), sign a free trade agreement with the EU (with the risk of not including financial services), or stay in the internal market (with the obligation to respect free movement of workers, which the UK will not accept). Conservative or Labour, their political leaders are torn between free trade partisans (the Boris Johnson/hard Brexit wing) and defenders of a customs union (Labour/soft Brexit).
It is obvious that the package negotiated with Brussels amounts to a customs union. But it was presented by Theresa May as a “temporary customs union”, creating the impression that it would evolve in the direction of the free trade agreement option (and believing against all reason that it would not be necessary to create a physical border between Northern Ireland and the Republic of Ireland).
This imbroglio is at the origin of the failure, including the failure of negotiations with Labour. To win the support of the Commons during the recent votes, Theresa May should have built a mixed majority of Conservative and Labour MPs favourable to a soft Brexit and customs union – mission impossible, politically speaking.
2. Scenarios for 2019 and 2020
The present situation is very clear. Mrs May having resigned with effect on 7 June, a Prime Minister now has to be appointed. Around 15 Conservative MPs are potential candidates.This vote will take place during the week of 22 July. All signs point towards Boris Johnson succeeding Theresa May as he will have the support of the Conservative “popular base”.
The first decision of the new Prime Minister will be to ask the EU for a re-negotiation of the agreement obtained by Mrs May. The EU’s response will be first be “No, but…” then probably a “Yes, but…” But at that moment, the 31 October deadline will have been reached and a new deadline will have to be requested. This new extension could not be less than 1824 months, given the complexity of the issue – which will bring us to the end of 2021!
In my view, the no-deal option, whereby the UK would leave the EU unilaterally, is ruled out. Tied to the EU by about 15,000 laws and regulations, and to the World Trade Organisation by around 400 multilateral and bilateral trade agreements, the no-deal option is quite simply unforeseeable for the UK, politically as much as economically. Leaving the EU without a deal would be like launching a thermo-nuclear bomb at the EU with London as the point of impact. Unthinkable.
Let us also note – and the history of the second half of the 20th century shows it – that between the extremist positions of an opposition leader and the concrete action of a person who has just become Prime Minister, there is an ocean of difference. The cliff edge no-deal option has been the trademark of Boris Johnson while opposing Theresa May. As candidate for Prime Minister, he will favour renegotiation with the EU. And as Prime Minister – should he get there – he will like all his predecessors opt for realpolitik. Therefore I believe we should expect the United Kingdom to remain a member of the European Union for the next two years, and probably beyond.Daniel Gueguen