Britain Has Reached a New Worst-Case Scenario on Brexit
from Greenberg Center for Geoeconomic Studies and Europe Program

Britain Has Reached a New Worst-Case Scenario on Brexit

REUTERS/Peter Nicholls

A second Brexit vote remains the best option in a dizzyingly difficult situation.

Originally published at The Washington Post

November 15, 2018 2:41 pm (EST)

REUTERS/Peter Nicholls
Article
Current political and economic issues succinctly explained.

Two and a half years ago, when Britain voted to leave the European Union, my instant reaction was apocalyptic. I predicted a recession that has not materialized, thanks mostly to a central bank stimulus and a strong world economy. I predicted the destabilization of the Western alliance, but with President Trump as destabilizer in chief, Britain is a rounding error. Yet in some respects my pessimism was, if anything, too mild. As of Thursday afternoon in London, two cabinet members, two junior ministers and four other aides had resigned their government positions. The obstacles to a reasonable exit deal have proved as bad as anything I imagined, and the resulting political chaos is dizzying.

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In 2016, the expectation of chaos was ridiculed by the Brexit gang that won the referendum. To cite four leading Brexiters who later held cabinet positions: Britain would “hold all the cards” in negotiations with the European Union; it could “have our cake and eat it”; a replacement trade deal with the E.U. would yield “the exact same benefits”; and the bargaining would be “the easiest in human history.” Once Britain freed itself from the shackles of the E.U., it would conclude wonderful new trade deals of its own and rapidly emerge as the Singapore of Europe.

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Now the government has published a draft exit treaty. It is as long as a Dickens novel and far more confusing. The most controversial portion concerns the Irish “backstop,” which would kick in at the end of a transition period unless Britain managed to negotiate an unexpectedly deep trade deal with Europe. To avoid a destabilizing hard border between Northern Ireland and the independent Republic of Ireland, the backstop provides that the North would live by Europe’s rules on food products and goods standards, even though the United Kingdom would have lost all influence over those rules’ content.

Meanwhile, to minimize trade barriers between the North and mainland Britain, the mainland would remain within the E.U. Customs Union. This would prevent it from negotiating its own separate free-trade deals; so much for the vision of Britain as Singapore. What’s more, Britain would not be allowed to shake off this restraint without the E.U.’s approval, and the European Court of Justice would adjudicate customs disputes. So much for the Brexiters’ promise of enhanced British sovereignty.

The political whirlwind has come quickly. The very Brexiters who promised a cakewalk are denouncing the result of their own policy. The latest spate of resignations comes on top of the two senior Brexiters who quit in July. Prime Minister Theresa May deliberately installed committed Euroskeptics as Brexit ministers; both her successive choices have now left in disgust at a diplomatic effort they had theoretically been leading. As a Brit living in the United States, I used to marvel at Americans who revered their Constitution yet despaired at the political process that it produced. Now, as a naturalized American living in London, I have watched a political movement passionately advance a radical objective — and then decry the consequences of its own radicalism.

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What happens next is unknown even to the participants. The Brexit purists are threatening to topple the prime minister. But installing a new leader involves a protracted two-stage process: The parliamentary caucus of the ruling Conservative Party must come up with a short list of two candidates, then rank-and-file Conservatives must vote on them. Meanwhile, time is running short. Britain will crash out of the E.U. in March unless it can ratify a divorce treaty before then.     

Whether or not it gets a new leader, the Conservative Party faces four options. The first is to push the prime minister’s deal through Parliament, but for now it seems to lack the votes for that. The second is to try to break the logjam by calling an election, but this would pose a risk that the Labour Party, now firmly rooted on the far left, would take power, so the Conservatives are unlikely to go there. The third option is to leave the E.U. without a deal. But this would risk such chaos — empty shelves in supermarkets, 20-mile traffic jams at new border checks — that most Conservatives won’t want that, either.

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The fourth option is a new referendum. This would be cumbersome to organize and uncertain in its outcome, but at least it might deliver a sense of closure for the nation. The parliamentary process has generated a compromise that is pleasing to no one. If it is implemented, Brexiters will spin a myth that they were betrayed by bureaucrats and Eurocrats and the establishment writ large: Their populism will grow even more poisonous. A second vote would give the Leave camp an opportunity to vote for a cleaner break with the E.U., even if it came at the expense of Ireland. It would also give Remainers a chance to make the argument for solving the whole Brexit problem by staying in the E.U. Then the nightmare would be over.

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