The voters have spoken and the uncertainty is over. Unless something unexpected happens in the next few weeks, the UK will finally leave the EU on 31 January. There must be quite a feeling of relief in Brussels and across the EU that the naughty kid has finally decided to leave. But the show will go on – far from getting Brexit done, in February the new season of the Brexit show will start, this time negotiating the future relationship between the EU and UK. It will then become clear that Boris Johnson has fooled his voters yet again – after lies about 350m extra for the NHS and about no controls in the Irish Sea. There will be a rather long drawn-out negotiation with the EU on the future trade relationship. Of course, this can be done within three months, if the UK accepts everything (EVERYTHING) the EU proposes (including in such sensitive areas as fishing and the UK following EU rules). And even that would have to imply that there are no contrasting interests among the 27 member countries of the EU in these negotiations – unlike in the withdrawal negotiations, where little conflict could be expected among EU member states on money (more is better), EU citizen rights (as water tight guarantees as possible) and avoiding a border across Ireland. All three objectives are achieved with the withdrawal treaty, but the interests among EU member states might very well diverge when it comes to the new relationship with the UK. And let’s not forget that unlike the withdrawal agreement, a comprehensive free trade agreement between the EU and the UK has to be approved by all national parliaments as well as some regional ones.
So, here is the new Brexit trilemma – there are three objectives for the Johnson government– (i) exit from transition phase by end-2020, (ii) get as good a deal as possible for the UK economy and the Conservative Party, and (iii) avoid another no-deal cliff edge at the end of the transition period - and at most two can be achieved. To achieve (i) and (iii), (ii) has to give, i.e., the UK has to accept everything the EU proposes. To achieve (ii) and (iii), (i) has to give, i.e., at a minimum a two-year extension of the transition period has to be accepted by the UK government. Objectives (i) and (ii) are not compatible from the start.
What will happen? What will Boris Johnson do? He threw the DUP over board when it was convenient in order to get a deal with Brussels that ensures no border in Ireland but a border in the Irish Sea. Will the ultra-Brexiteers among the Tories also just roll over when he defaults on all his promises to them? If he gets the big majority the exit polls predict, he might not care. He can then either agree to an extension of the transition period (more likely) or give in to all of the EU’s proposals (less likely). In any case, I would argue that the new deadline is now 2024, i.e., the Conservatives will aim to get all new relationship with EU defined before the next elevations. It does promise many more seasons of the Brexit soap opera then.
These landslide results also indicate that the opposition has failed. It has failed to successfully make the case for a second referendum. It has failed to combine forces to translate a large voting share into actual seats at parliament. It has failed to stop the populist nationalist English wave. We will see a lot of infighting in the Labour Party over the next year or so and a lot of soul-searching among the Liberal Democrats.
My comments so far have been somewhat removed, without personal touch – it does help that I am in Sydney right now, far away from the Brexit mess. But on a personal level, there is a degree of sadness, somewhat similar to the morning of 24 June 2016, a feeling of loss and finality. It is sad to see a country close itself off the world and embark on a long path to long-term decline. It is scary to see its governing party appeal to people’s lowest instincts of xenophobia and attack the media at every feasible point. If this sounds familiar – yes, there are clear parallels now between the transformation of the Republican party in the US and the Tories in the UK – though there is hope of a post-Trump era for the US and the Republican party, whereas it seems harder to revert the populist trends in the UK. As an economist and observer, the next years promise to be as interesting as the last three, as UK resident, it is dispiriting and sad.
13. Dec, 2019