Like yesterday, the English language press is preoccupied with a drama that is not likely to drive the outcome of Brexit, and paying less attention to a bigger story. And in keeping, the UK is obsessed with its own politics, and again ignoring clear messages from the EU.
The show today is the last-ditch vote on May’s Withdrawal Agreement. Today is what was to have been Brexit day, so it seems fitting that this will also be the day on which May’s pact either gets approved or dies.
The smart money expects it to die. Some of the ERG is wobbling (more on them shortly) but the DUP is still against it and Labour is also whipping hard in opposition. Via Richard Smith:
Strong and stable. https://t.co/0d5ZKt872B
— Alison Thewliss (@alisonthewliss) March 29, 2019
I’ll skip over bits that were sources of much tooth-gnashing yesterday, such as how the Government decided to get past the John Bercow “No voting twice!” problem by parsing out the Withdrawal Agreement and adding some other bits. It’s not clear that this ruse works under Article 50 and it also pissed MPs off. But May is so low in Parliament’s estimation that she doesn’t appear to have much to lose.
Upddate 8:10 AM EDT: Richard Smith sent this rant in the form of a tweetstorm from Ian Dunt on what the Government is trying to pull off. Epic.
OK, debate begins on May's third-meaningful-vote-it's-not-a-meaningful-vote-but-actually-it-is-she's-a-desperate-liar.
— Ian Dunt (@IanDunt) March 29, 2019
Back to the original post:
One odd but telling part of this contest is the rationalization of supposed do-or-die ERG figures of their switch to support May’s deal. After decrying it as relegating the UK to being a “vassal state,” they’ve now decided that what they’d have before called a Brexit In Name Only is better than none. For instance, from Jonathan Isby, editor of BrexitCentral (and who will soon need to make an honest living):
Leaving without a deal – a clean break from the EU – is what I would prefer to the bad deal that has been presented to us by the Government – a view that I know is shared by many BrexitCentral readers. But I’m afraid I have come to the conclusion that No Deal is simply not an option on offer, given the political reality and parliamentary arithmetic of a House of Commons which two days ago rejected the idea of No Deal by a majority of 240.
Most Naked Capitalism readers can see the flaw in the reasoning. Parliament is not driving the Brexit bus. Parliament said “no” to no deal, but it also said no to everything, and also still has unicorns on its menu of things it thinks it might get. No deal is still the default, even though the EU graciously allowed the UK a bit more time to attempt to sort itself out and settle on something is achievable (in Barnier’s ladder terms). Really really objecting to “no deal” is not sufficient to prevent that from happening.
But the BrexitCentral/Ultra view illustrates how, still, after 1000+ days, most of the UK’s political classes still have not gotten it through their thick heads that the EU always had more leverage, and has even more now. If May’s final push for her agreement fails, as expected, the best the UK can hope for is that it is able to make a coherent enough pitch for an extension before April 12 to win the EU’s approval.
The EU has gone into “no deal” overdrive. Barnier has said for some time that no deal looked like the most likely outcome. The EU is now engaging in intensive preparation, not just to deal with the immediate impact of a crash out, but also how to take advantage of the UK’s stupidity without going into Versailles Treaty territory.
The number and level of the players involved suggests that this is not posturing to send a signal to the UK, but that the EU expects a crash out. They may have had some hope of an Article 50 revocation based on the tremendous response to the online petition calling for it. However, the magnitude of defeat on a revocation motion yesterday, 184 versus 293, put paid to that idea. From the Guardian:
The EU has moved into full crisis mode, with officials now setting the terms the UK will have to meet for Brussels to open talks on avoiding an economic meltdown in the weeks after a no-deal Brexit…
It was agreed among the member states that for there to be any talks after the UK has crashed out, the bloc’s 27 capitals will expect Downing Street to agree to signal by 18 April that it will pay the £39bn Brexit bill despite the failure of the Commons to ratify the withdrawal agreement.
The terms of the Irish backstop, keeping Northern Ireland in large parts of single market legislation and the EU’s customs territory in order to protect the Good Friday agreement, would remain as the bloc’s solution for avoiding a hard border on the island of Ireland.
The residence rights of citizens and coordination on social security laid out in the withdrawal agreement would also need to be respected….
Ambassadors agreed they would expect the UK to come back to the negotiating table “pretty soon with an ask to ensure the vital lines and procedures needed for the UK economy to survive”.
“The EU is now already discussing what their price is for entering those discussions,” one diplomat said.
The EU denying an extension even if the UK asks for a non-unicorn is higher odds than most pundits think. If one were to summarize what appears to be the non-so-secret views of many, and potentially most, EU diplomats and leaders, Brexit has become a huge energy drain and they do not want the UK to continue to be an albatross around their necks. There appears to be an increasingly hardline view that of all the bad options, a crash out may not be so terrible. It will help businesses who say they’d rather have a no deal than more uncertainty. It would simplify negotiations with the UK. It might also force its pols out of their stupor.
The reason this line of thought might not be as mad as it sound is that the option that now looks like it has the best odds of getting approved by Parliament is a customs union. But as Richard North explained yesterday, that does not solve the Irish border problem and in many respects is barely better than a crash out. And recall that Sir Ivan Rogers said that it would take the UK five to ten years to be able to trade with Europe on a mere free trade agreement basis, which again is roughly where a mere customs agreement would wind up.
So does the EU really want to give the UK a what, one year extension, go through all the brain damage of negotiating a new deal (and even, say a transition period too), only to have what amounts to a crash out at the end of all that because the UK didn’t understand how much runway it needed? While EU officials normally like “kick the can”s approaches, this one comes at a very large cost, would make businesses unhappy and would keep the UK in the European Parliament. So this isn’t at all a “kick the can” approach. It is more like “Pay now and still pay later.”
Reader Mirdif is party to rumors that are consistent with our reading:
Apparently, a discussion has been taking place in Brussels as to if the cost of a long extension is more than no deal. A growing opinion is that no deal is less costly and will unblock the process definitively. I tend to think this is overly confident and quite reckless but it’s the kind of call you can make with more confidence if you’re in the drivers seat so-to-speak. Also, the EU Commission is taking its hardline stance from the EU27 leaders especially Macron, Merkel and surprisingly Mark Rutte and Xavier Bettel. The UK is dealing with people who are sympathetic and yet will act ruthlessly so what of other forces in the world especially where there are axes to grind both of the colonialist variety and having bombs dropped on your head under cover of international law variety.
Reader Ataraxite also pointed out that the prospect of replacing the known-even-though-problematic May with an unknown during an extension is another negative for the EU:
May has thrown a spanner into the extension works with her promise to resign, although she doesn’t realise it. It means the EU will now be even more wary of extending any trust to the UK for a longer extension, as they now realise its ever more likely that they won’t be dealing with the useless-but-sane May, but possible one of the rabid Ultras. A long extension, in addition to the problems in the European Parliament, grants Britain leverage in future negotiations. This has been flagged by them, but the succession of the UK PM puts the risk into far starker relief.
It’s obvious the EU is playing a good cop/bad cop routine – Tusk is the good cop, making noises to remainers, and keeping the path clear for a reasonably rapid (say within 5-10 years) return of the UK to the EU if it does leave. The bad cop will likely be Macron, who represents that significant strand of thinking in the EU27 that the UK is for now, far more trouble than it’s worth.
I don’t think the risk of a new Prime Minister is a big consideration but it strikes me as likely that any decision on an extension will be hard fought, so considerations that would normally be marginal could tip the balance
And remember it only takes one no vote to bar an extension (although in reality, it’s hard to think one county would go it alone; they’d want a little company). Macron is still not happy with the idea of keeping Brexit in play. From The Sun:
EMMANUEL Macron’s top advisor on Europe has said Britain shouldn’t hold a second referendum and signalled France could block a long Brexit delay…
And she warned against the political “chaos” gripping the UK being allowed to infect Europe, insisting the time was right for us to leave the bloc.
She said: “There is chaos, there is confusion. I’m against a new referendum because it would be a denial of democracy. Britain must leave.”
Mr Macron opposes a long extension and has lobbied other EU leaders hard to keep any delay to Brexit as short as possible.
The UK may be about to create new unicorns. One troublesome element is that the normally astute Michel Barnier seems not to grasp that a mere customs union solves almost nothing; he is reported as having supported Corbyn’s latching onto it and also made hopeful remarks about how that option only lost by eight votes in the round of indicative votes. Richard North revisits the topic today and says that MPs may be about to create a new Frankenstein option:
However, this [second round of indicative votes]could prove distinctly problematical as the top two slots are taken respectively by Kenneth Clarke’s custom union and by a referendum on any plan agreed by MPs.
Just to confuse the situation still further, there is talk of splicing the absurd customs union option with the equally absurd Kinnock/Boles Common Market 2.0 plan, to produce a hybrid option, the like of which no mortal person has ever seen before…
But there is no possible way that a customs union in any shape of form could satisfy the UK’s trading needs or form the basis of a relationship with the EU. Anyone with the remotest idea of the history of the EU, and the progression from the custom union to the Single Market, will understand this to be the case. Even with the EU’s customs union fully in place, by the early 1980s there were still delays averaging 80 minutes for lorries at the EEC’s internal borders.
In any event, the current outline written into the political declaration allows for a tariff and quota-free agreements, while adoption of the EU’s WTO tariff schedules gives us the effect of a common external tariff without the need to commit to a customs union.
Further, tariffs have very little impact on border management as they are largely paid electronically, and even the much-hyped rules of origin are managed beyond the border. Delays at borders are more likely to arise through non-tariff barriers, requiring the adoption of Single Market systems and other measures to ensure frictionless trade.
May could still throw a spanner by accident or design. May has said she’s not necessarily going to be Parliament’s messenger boy. She won’t present proposals she is sure the EU will reject and she’s said she’s not keen about an extension beyond May 22.
Moreover, May being reasonable or faux reasonable could run up against deadlines. We warned that even if Parliament agrees on something, and even if that something is kinda-sorta-maybe something the EU would consider, who firms it up into a real proposal? What if May goes passive aggressive and tells Parliament to flesh it out? What if she delivers an end product that is so sketchy that the odds are high the EU won’t accept it?
Even more so than usual, whether the UK gets an extension (charitably assuming Parliament gets out of its own underwear), is likely to depend on human considerations: how the request is framed and whether the UK looks as if it is attempting to solve its problem or looks to be again dumping its internal conflicts on the EU’s lap. EU officials are tired of Brexit. EU businesses are tired of Brexit. Even if it might be rational for some of them to be patient, the UK has been hugely vexing and shows no willingness or ability to shape up.
However, as much as emotional and even a lot of rational considerations (such as the risk to the EU project of having the UK continue in the the European Parliament), the EU has a curious and large constraint: they need to feel they are being fair. The UK is still a member. The European Union has survived as long as it has, despite the damage done by the bad design features of the Eurozone, because a genuine effort has been made to appear to be evenhanded. Everyone knows that is not completely true; big countries often get breaks that the smaller countries don’t. But not trampling smaller countries, and not being arbitrary and capricious is extremely important. Any decision on an extension will be highly visible and therefore also held to high standards due to its obvious importance.
Thus even though the EU has repeatedly insisted that the UK needs to give a clear reason for seeking an extension, which has meant giving a coherent explanation as to how it will put a process in place to arrive at a different Brexit, that has been an effort to shift the burden off the EU (that it must justify a “no” to an extension) to the UK (to make it justify why the EU should grant a yes).
Logically, the structure of Article 50 means that any extension is a gift that the country who triggered it has no reason to expect. But the EU seems to have needed to convince itself of that. To put it another way, the UK, by asking for an extension, has put the at least some EU members in the position of worrying that they will be seen as throwing the UK out of their house. But even that feeling can lead to resentment as opposed to guilt.
In other words, my sense is that there are sensibilities at play that are important and are unlikely to be articulated explicitly, but will be bundled into arguments and will weigh on the participants. And that means how the UK approaches the EU is likely to have disproportionate impact.