July 30, 2018
Brexit midsummer madness
Most of the Brexit media coverage - and virtually everything you read on Twitter - falls into the category of agitated noise. The lack of real news amplifies it, as evidence by the absurd discussion about food shortages. The hardline Brexiteers are very upset that they don’t get their hard Brexit. And the hardline Remainers are also very upset because they do not have the votes to stop any of it. Theresa May, meanwhile, steers a course towards a gradual softening in the position - a course we believe will ultimately prevail. The distance between her white paper and the EU’s preferred option of a customs union is still formidable, but not unbridgeable.
The ball is now in the court of the EU, or specifically the European Council. If they reject Theresa May’s plan with the same clarity as Michel Barnier did last week, we are indeed headed for a hard Brexit until, of course, the EU begins to consider the implications a hard Brexit would have for Ireland and the EU’s own customs border.
There are more and more people on the Remain side of the debate in the UK who are urging the EU to tread with caution. After the paper by Pisani-Ferry, Rottgen et al we discussed last week, we noted a strong commentary by Timothy Garton Ash in the Guardian on Friday, who warns against the EU’s temptation to impose a humiliating divorce deal. Garton-Ash draws the comparisons with post-Versailles Germany. He says the image of a Weimar Britain may be exaggerated. There is no Hitler on the horizon, and no likelihood of mass unemployment. But as evidenced by the improbable rise of the far-right parties in Europe, it would be a mistake to take benign outcomes for granted. It will require wisdom on both sides of the Channel to avoid the danger of a Weimar Britain. Garton-Ash says May’s white paper has its faults, but it is a step towards pragmatic realism. Everybody in the UK government knows that the UK will have to make further compromises. But he notes that the other 27 EU leaders did not have a Brexit discussion among each other since the spring of 2017. We agree with Garton-Ash’s observations that the unrelenting support by pro-Europeans in the UK in favour of the EU's position is crumbling.
Wolfgang Munchau and Anand Menon both argue why it is wrong for Remainers to bet on a second referendum. Munchau argues that there are only a few scenarios in which the EU is prepared to extent the Article 50 deadline. If it reaches a withdrawal agreement with May, the baseline scenario, the EU will not extend the deadline, except perhaps for a few weeks if the ratification process were to go on for a little while longer. With prolongation there can be no second referendum. Munchau argues the only sensible second referendum question would be for the electorate to accept or reject the withdrawal deal - there are circumstances under which the government itself would prefer such a referendum. Once you include the EU’s own incentives, and especially the 2019 European elections, there is no space for a second referendum.
Menon makes the point that a second referendum - assuming it is another in-or-out vote - would not fix the fundamental flaw of the first referendum: the future relationship with the EU would not be any clearer. A second referendum would be massively divisive. But, perhaps most important of all, it would not deliver a solution:
"...the irony is that, on this at least, our representatives are indeed representative of the British people. Neither in Westminster nor among the public at large can a majority be found for any one Brexit outcome."