We use cookies to help improve and maintain our site. More information.

October 25, 2017

How to think about a Brexit baseline scenario

We don’t think we have ever come across a story as noisy as Brexit. There are still plenty of articles trying to explain why Brexit is a bad idea (or a good idea), and how it can still be stopped. Others, like the Telegraph, advocate that the UK governments walks out from the negotiations, and pursues a hard Brexit.

We cannot exclude accidents, but none of this resembles a reasonable baseline scenario - which is that Brexit will happen, followed by a transition and an association and trade agreement. 

In this context we noted a very good contribution by Andrew Duff, who is one of the most reliable commentators on Brexit. He makes two important points. The first is that the outlines of a future association and trade agreement (but not the actual trade deal itself) must be included in the Article 50 deal. This is so because Article 50 says it explicitly. Duff says this will have to include a reference on the extent of single market access, the customs arrangements, and collaboration on internal and external security. It will need to set out the arrangement for the governance of this co-operation. In other words, phase two of the Brexit negotiations will focus on the really important issues. Duff’s list is very similar to that of the German foreign ministry. We expect the two sides to agree on a free trade deal for goods, and on co-ordination of foreign and security policy. We are more pessimistic about single-market access for various services industries.

Duff also makes an important point about the domestic UK debate. Pro-Remain Labour MPs seem to be under the illusion that the UK can remain in the single market after Brexit. This is not so because the EU insists that the transition period must be time-limited, and because the EU will always tie single-market membership to freedom of movement. Duff estimates that the rebellion against the government’s repeal bill - an essential piece of legislation that translate current EU into national law on Brexit - will pass because the pro-Remain rebels in the Labour and Conservative Parties are more than outweighed by the europhobes in the Labour Party.

There is one important amendment, however, where the government might face defeat - on the issue of the "meaningful vote" on the repeal bill. The concept makes no sense, however:

"No Article 50 treaty means no deal. There is certainly no Commons majority for no deal. The EU 27 will not concede that rejection of an Article 50 treaty means an automatic return to the status quo ante referendum, as if nothing had happened. There will be no second offer of Article 50 talks on a more lenient basis and no indefinite extension of the prescribed two-year timetable."

Duff’s political calculation is that the show-down in UK politics will happen after the Brexit treaty is in force. Labour will then try to table a no-confidence vote and trigger a general election. It could then fall to Jeremy Corbyn to negotiate the association agreement.

Show Comments Write a Comment

October 25, 2017

Like the right, the left, too, is divided over Europe

On Monday, we summarised an article by Bill Mitchell and Thomas Fazi who argue a left-wing case against European integration and supranational organisation. We consider that article essential reading for anyone who wants to understand the Corbyn phenomenon in the UK.

Andrew Watt has produced a strong rejoinder. As with the original argument by Mitchell and Fazi, we are not in a position to summarise each point, but we would frame Watt as criticising Mitchell and Fazi for committing a category error - he agrees with some of the authors’ assertion on the failures of supranational structures, but disagrees with the logical leap that the solution is a return to nationalism. Watt’s critique becomes clearest in respect of the current debate on eurozone governance: 

"...the weaknesses of real-world sovereignty pooling in the EU do not constitute an effective argument against the overall pooling-sovereignty argument and strategy, nor one for the alleged superiority of nationalist approaches. The need for EU and EMU reform is disputed by hardly anyone. A reform process is underway with an uncertain outcome. A strong case can be made for progressive forces to engage in that debate. I would argue that it is the persistence of intergovernmentalist structures (the fiscal compact being a case in point) that is holding the EU back and making it a more effective force to channel unwanted repercussions of globalization."

This is a point where we strongly agree with Watts. Once you accept a common currency, you have to pool sovereignty, or you end in an oppressive regime where the large countries dominate the small countries. The eurozone is turning into that form of anti-democratic regime. The position of Mitchell/Fazi is not to advocate an intergovernmental approach to the governance of the eurozone, but to reject the euro given the political impossibility of a workable federation. Thus they avoid the need for supranational economic management. But Watt makes a broader point, which is worth highlighting: 

"Whatever design is envisaged, the fault with this my-country-first strategy ought to be obvious to anyone with even a faint familiarity with economics and history. Many policies that are welfare enhancing at national level that impose costs on neighbouring countries. How can a decentralized system of multilateral relations between sovereign states prevent them externalizing costs in this way? How can the bullying of smaller by larger, more powerful countries be tamed. (Yes this also occurs within the EU, but supranational structures offer a partial corrective.) How long before such conflicts lead to the threat of the use of force and, horror of horrors, war on European soil once more? Are the authors really so blind as to the lessons of history when European countries engage as sovereign nation states without a (partially) supranational framework."

Show Comments Write a Comment

This is the public section of the Eurointelligence Professional Briefing, which focuses on the geopolitical aspects of our news coverage. It appears daily at 2pm CET. The full briefing, which appears at 9am CET, is only available to subscribers. Please click here for a free trial, and here for the Eurointelligence home page.


Recent News

  • April 15, 2017
  • Happy Easter
  • October 19, 2016
  • Walloons stand firm
  • Juppé and Macron - father and son?
  • J’ai vraiment dit ça?
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • January 19, 2018
  • On the futility of discussing the German current account surplus
  • The Brexit revocation madness
  • Varadkar, the enfant terrible in the Brexit negotiations
  • September 14, 2017
  • Bravo Mr Juncker
  • ... what he said about the labour market
  • ... and what his speech means for Brexit
  • May 11, 2017
  • Germany rejects IMF’s policy recommendations before they are issued
  • Why Labour is losing
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • August 26, 2016
  • Will the refugee crisis return?
  • Montebourg en avant
  • Moisi on Sarkozy's chances
  • Binary choices
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • April 23, 2018
  • More bad news for the SPD
  • Will Theresa May accept a customs union? The Times says yes. We think so too.
  • A comeback for Marine Le Pen?
  • April 03, 2018
  • Is the time for Brexit revocation running out?
  • March 14, 2018
  • The geopolitics of trade war
  • A European labour authority
  • On Novichok
  • February 26, 2018
  • Angela Merkel's cabinet
  • February 12, 2018
  • What the euro debate is really about
  • How Brexit can still falter
  • January 29, 2018
  • Where is the opposition in France?
  • Scenarios and risks for Syriza over Macedonia
  • January 17, 2018
  • Labour smashes No Brexit dreams
  • A new political bargain in Portugal?
  • January 05, 2018
  • Catalonia's government by Skype
  • The case for EEA membership
  • December 15, 2017
  • Amendment 9 conundrum
  • The negligible GDP impact of the single market
  • December 06, 2017
  • Ireland in search of its own path in the EU
  • Who owns the eurozone?
  • Gabriel's big speech
  • November 27, 2017
  • Will Northern Ireland scupper a Brexit deal?
  • Last-ditch effort to prevent Irish elections
  • Pressure on Wauquiez
  • November 20, 2017
  • Showdown over Northern Ireland
  • Castaner and his list confirmed
  • Gennimata to lead the new left alliance
  • Brexit‘s ultimate irony
  • November 13, 2017
  • A pro-European list: Wauquiez' nightmare
  • Catalan separatism isn't going away
  • Why oh why does Germany behave the way it does?
  • Why the four freedoms matter
  • November 06, 2017
  • Pressures on EU rise over Catalonia
  • German pre-coalition talks hit glitch
  • If you thought UK politics couldn‘t get worse...
  • November 02, 2017
  • The Impact of Brexit
  • German court of auditors questions diesel tax break
  • On trade and violence
  • October 30, 2017
  • Italy's electoral reform seems to backfire already
  • Bregretometer hits another peak
  • October 27, 2017
  • What exactly happened in Catalonia yesterday?
  • Transactional versus strategic foreign policy
  • October 26, 2017
  • On Germany‘s confused foreign policy
  • On why globalisation is failing