28 July 2019

Financial Times: The EU must prepare for a no-deal Brexit

The EU is right not to take the new British prime minister’s provocations at face value. They are designed for a domestic audience. But when the rest of Europe’s economies are slowing down sharply, it must prepare for the shock of a no-deal Brexit.  [...]

An unintended consequence of the campaign for a second referendum was to increase the probability of no-deal further. The campaigners managed to kill off Theresa May’s withdrawal agreement while failing to generate enough momentum to pave the way to revocation — a combination that left the UK in no-deal territory. Unwittingly, they turned themselves into the hard-Brexit campaign’s useful idiots.

Remainers should have taken the deal. It would have ensured a close relationship with the EU while keeping the option of rejoining in the future open. A no-deal Brexit closes it for a generation.

The EU has been complicit in this miscalculation. No one more so than Donald Tusk, the outgoing president of the European Council. He explicitly supported a second referendum and interfered in the European election campaign in the UK by supporting a pro-Remain candidate. His interventions had two simultaneous effects. It gave Remainers in the UK the false hope that the EU would intervene on their behalf, and be successful. And it led Europeans to underestimate the risk of a no-deal Brexit. [...]

I think it would be unwise for the EU to lose sight of Brexit’s uniqueness. The political incentives for Mr Johnson are different from those of non-departing EU leaders. First, the EU might want to reflect on its persistent failure to understand the support for Brexit in the UK, as evidenced by two general elections, one European election, a Brexit referendum, and the emergence of Mr Johnson as prime minister. There is a pattern here.

EU leaders should also reflect on their own mistakes. They should have made it clear from the start that they would not extend the Brexit deadline in March this year. If they had followed this advice, the withdrawal treaty may have had a fighting chance. The tactical error they committed by turning Brexit into a three-way bet was foolish. Each step of the way — the European elections, the Tory leadership contest and the political dynamics that have followed — the UK moved further and further towards a hard Brexit.

Only a fool would try to predict the course of British politics over the next three months. A no-deal Brexit is a possible outcome but not the only one. I expect Mr Johnson to try to unite the pro-Brexit vote, and to pitch himself against a splintered Remain opposition. This would seem to be an intelligent strategy. There is one prediction I am willing to make: if this ends in a no-deal Brexit, much of the EU will not have seen it coming.

Full article on Financial Times (subscription required)

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