Brexit Breversal?

Theresa May

Paris, July 5, 2016

 

By Axel Krause

Saturday’s enthusiastic, pro-EU demonstrations in London by many thousands for a second referendum on whether or not to leave the EU was only the most recent example of the bewildering issues and contradictory questions still simmering in the wake of the Brexit decision to leave, opposed by some 60% of Londoners, among the 16 million British voters who voted Remain.

 

Given their complexity and Britain’s current political chaos – the Economist magazine on its current cover terms it « anarchy » – we submit thirteen questions and an attempt at answers, based on our reporting and accounts from American, British, German and French media.

 

When will the British government formally announce its triggering decision to leave under Article 50 of the Lisbon Treaty?

 Prime Minister David Cameron pledged the triggering would coincide with the taking over by his successor on September 9, following a vote by the Conservative Party; a month earlier than previously expected. But the timing could be delayed.

 

Who Might He or She Be?

 At this writing, the odds-on-favorite is Theresa May, 59, the skilled, very-conservative, hard-headed and media-shy home secretary in Cameron’s cabinet who quietly supported remaining in the EU, but has indicated she will work for obtaining good terms in any future negotiatons with EU leaders, and opposes a second referendum. There is Michael Gove, 48, justice secretary who led the campaign to leave and remains more determined than his lady colleague; and Stephen Crabb, the younger generation work and pensions-secretary, growing in popularity, among others.

 

Might the new government agree to an agreement with the EU similar to that of non-member Norway?

 Probably not. That agreement commits Norway, in return for access to the EU’s Single Market, to contribute heavily to the bloc in line with other members; abiding by binding obligations, such as free movement of people, including migrants; and accepting accountability with regard to most Brussels’ laws and rules, with no significant rôle in EU decisionmaking. What 17.4 million voters rejected in the June 23 referendum.

 

Are there ways for the next government to get out of their situation, ie exiting from Brexit?

 Yes. As Max Fisher outlined in the International New York Times recently, and raised by former Prime Minister Tony Blair yesterday, the government could proceed with the steps specified in Article 50, aimed at completing the negotiations within two years; and then put the terms of the agreement reached to parliament for a vote, whose members clearly supported the Remain option. France’s President Nicolas Sarkozy did just that successfully in 2005 via the French parliament, after the proposed constitution was rejected in its national referendum. Then there is a supposed obligation by the parliaments of Scotland, Ireland and Wales to approve the final agreemnent; and Scotland, 60% of whose voters voted to remain in the EU, would probably veto any proposed agreement.  Assuming Britain gets a good deal on the Single Market, London could just say – fine, let’s forget the rest – ie formal membership. Or just unilaterally stop the withdrawal process. These options amount to what the Economist described as « an inelegant, humiliating, and yet welcome, Breversal. »

 

How will Angela Merkel play her cards?

Though initially in favor of a tough out-is-out position, she has more recently sounded more conciliatory and flexible regarding negotiatons, the idea being to give the new prime minister and his or her government ample time to examine the options. Clearly she seems most interested in protecting huge German business and financial interests in Britain, and appears to have the support of like-minded EU governments,notably Poland, the Netherlands, Ireland and Denmark, encouraged by a recent, pro-EU online petiton in favor of a second referendeum signed by some four million Brits.

 

Might English be dropped as an official EU language?

That idea has been floated several times as an example of what Britain risks losing in leaving the bloc; along with thousands of jobs in the EU organization, including Britain’s commissioner’s slot to be vacated July 15 with Jonathan Hill’s resignation, who was responsible for the financial services portfolio. And while there are 24 official languages, French, German and English are used for internal communication for reasons of convenience. Dropping English would require a unanimous decision by the Council and given that Ireland and Malta would resist, the chances are slight that it will happen.

 

Are leading UK-based banks and companies still warning that because of Brexit, they may move operatons to other EU countries?

Such talk has diminished in recent days, but not disappeared. Most supported the Remain option, financial institutions fearful of losing « passporting » rights to operate freely within the Single Market. But big busness in Britain, including US firms, seems encouraged by the recent pro-EU demonstrations and Tony Blair’s assessment. As one banker told Politico Europe: « We might end up relocating certain products and teams. Ideally, we would move nobody. »

 

Is France the leading Euro-skeptical nation in the EU?

No longer. A nationwide poll published July 1 showed that 59% of the French now believe that EU membership is a good thing, 31% disagreed, including presumably those who voted for rejection of the proposed constitution in the 2005 referendum. Indeed, in light of developments in London and the prospects of Britain remaining, despite the Brexit vote, far-right National Front leader Marine Le Pen, has stopped cheering and calling for an end to the EU; she had hoped would be a major subject of debate in next year’s presidential election. The similar, populist refrains by rightist leaders in the Netherlands which also voted no in 2005; Austria, Belgium, Denmark, Germany, Hungary, Italy, will, nevertheless, continue.

 

Why was Russia’s Vladimir Putin seemingly pleased with the result of the Brexit vote?

A Kremlin spokesman was quoted as saying Russia expected to now have better relations with the EU with Britain gone. Observers said that this reflected hopes that Britain’s absence would lead to the lifting of economic sanctions following Russia’s military intervention in the Ukraine and Crimea. Strong US support for Britain’s lead on EU sanctions has also been challenged by the Kremlin.

 

Will Washington’s traditional commitments to Britain as the key EU ally diminish?

There is considerable speculation to that effect in European diplomatic circles. President Barack Obama has already expressed concern over possible dangers to economic growth prospects with Britain’s withdrawal, while reaffirming the close, existing ties between London and Washington. In the phone calls to allied leaders in the wake of the Brexit vote, his second, after Cameron, was to Merkel amid speculation that Berlin will now emerge as the main US ally in the EU.

 

What is the status of long-standing discussions about reinforcing EU powers?

 In the runup to the referendum, France’s President Francois Hollande and EU Commission President Jean-Claude Juncker argued that it was time for a « leap » forward for the bloc, to insure « more Europe » in areas such as border controls, budgets,  infrastrcuture investments, the environment, while empowering the 19-nation eurozone group, possibly with its own system of governance. France’s former foreign minister Hubert Vedrine suggests a conference of like-minded EU leaders similar to the 1955 conference in Messina, Italy  that launched the founding Treaty of Rome. But Merkel, among others, including in her own ruling CDU party disagree and has ruled out these projects favoring instead enhanced cooperation. The issues may well be discussed, along with Brexit, at an EU summit be held in Bratislava, Slovakia  in mid-September.

 

What are the job prospects of Cameron?

He has not said, but it’s likely he will seek remaining in the House of Commons with a view to a General Election that may be held later this year or early 2017. He may have said so half-jokingly, but according to Brussel-based colleagues, Juncker proposed that he might be interested in Hill’s slot on the Commission. Cameron reportedly said – no thanks as he did not want to risk a « double rejection, » as the European Parlament would have to approve the choice.

 

What do I think?

Dismayed, but mildly opitimisic following the referendum vote, I believe we are facing a summer of complex, tough and secret exploratory talks between British and EU leaders, termed a time of « political reflection. » by EU officials planning to participate in a fledgling task force. After  muddling through, this should produce agreements, probably in early 2017. That may well allow Britain to remain an EU member. I could be wrong, but does not change my conclusion that Brexit reflected the biggest, worst political miscalculation in the nation’s postwar history that wasn’t necessary.

 

Axel Krause is TransAtlantic’s Paris-based contributing editor, who has covered European affairs for decades as correspondent and editor or Business Week magazine and the International Herald Trubine. He is the author of Inside the New Europe.

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