A ‘No Deal’ Brexit Re-Emerges

As Europe closes down for its summer vacation, increasing concerns—or threats—are being voiced that the terms of the United Kingdom’s departure from the European Union (EU) next March will not be ready on time. The old ogre of a cataclysmic “no deal” Brexit that stalked the negotiations earlier in the talks is resurfacing in a wide range of forms.

The obvious reason is that British Prime Minister Theresa May’s government has wasted such vast amounts of time arguing with itself for more than two years that it has found it impossible to stake out agreed and/or credible options for the future cross-channel relationship—and certainly not ones that the EU would easily consider adopting.

But it is also inevitable that the well-known EU mantra that “time is running out” becomes truer with each repetition. With an important European Council meeting due to advance matters significantly in October, the timetable is severely shrinking, particularly if further legislative steps like ratification, political objections, and parliamentary procedures are to be allowed for.

Recent upheavals in London, like the resignation of former Foreign Secretary Boris Johnson and Brexit Minister David Davis, have created upheavals that are likely to rock the boat with further political upsets, and May’s precarious position is in question. She has failed to rally her troops around the white paper on the complex new ties with the EU (a type of customs union without services or free movement) on which she has placed her government’s flag.

Indeed numerous “rebels” of various kinds in recent days have been popping up with ingenious other options, such as a “Canada-Plus-Plus” trade deal or European Economic Area membership for the United Kingdom like Norway. These helpful suggestions do not help to establish the common position the government seeks as it touts its latest plan around Europe in the weeks ahead.

And so, in recent days, it has suddenly become commonplace for politicians of all stripes to flash the phrase “no deal” at public appearances—even though they are doing so for widely different and sometimes contradictory purposes.

At one end of the spectrum are German industrialists who are genuinely worried about the massive chaos that would ensue if the United Kingdom left without agreeing the necessary regulations for future trade across the North Sea. But there are also German politicians who want to put maximum pressure on the United Kingdom to concede by threatening such dire consequences.

At the other end of the scale are British “hard” Brexit campaigners, who would actually like to see the United Kingdom “crash out” of the EU so that a new relationship could be created from the chaos without preconditions. Parliament would try to prevent such an eventuality—but the risks of miscalculation in the febrile atmosphere of such a crisis would be considerable—and the state of opinion in Parliament is combustible and unpredictable.

On July 23, Jeremy Hunt, the new British foreign secretary, warned that without a “change in approach from the EU negotiators,” there is now a “very real risk of a Brexit no deal by accident.” Hunt said “many” in the EU believed they just had to “wait long enough and Britain will blink” but “that’s not going to happen.”

While Hunt was clearly trying to strengthen the British negotiation position, the “chicken game” risks remain obvious. And it is not just bluff.

Matt Hancock, newly appointed health secretary, told members of Parliament that the government was working with industry to prepare for the potential stockpiling (of medicines) in the event of a no-deal Brexit. And private industry has started contingency planning to allow necessary imported foodstuffs into the country.

Other possible consequences already under study could be the clanging shut of the border between Ireland and Northern Ireland, a reversion of all trade to World Trade Organization rules, with increased duties and customs checks, threats to ports, airports, and exports and a run on the pound.

Talk of such threats may be premature, but there is no point in leaving it all too late. Nobody can safely predict what will happen in British politics in the weeks and months ahead. Rivals are scheming to bring down May, or the government, or both. A general election could be won by the socialist Labour Party leader Jeremy Corbyn, throwing all the cards up in the air again.

Important measures of EU legislation must be passed even before the United Kingdom arrives at the end of its membership, and these will influence what happens after departure day. Anyone who says they know what will happen is just making it up.

May’s tautological slogan, “Brexit means Brexit,” triumphantly trumpeted in summer 2016, has never looked more futile. There are about as many versions of Brexit floating round Westminster and Whitehall as there are experts or members of Parliament. Even May’s latest agreed version, based on the so-called Chequers principles, adopted earlier in July, does not command a majority in Parliament or public opinion.

It should be remembered that vital EU clashes have a habit of continuing up to the very last moment—and then beyond. So one should not expect a neatly sealed package to be delivered on March 29.  But this could easily get ugly. It may prove necessary at the very least to revive the old Brussels tradition of “stopping the clock”—essentially putting time on hold—until decisions can be reached—or not.

Reginald Dale is a senior fellow and director of the Transatlantic Media Network in the Atlantic Council’s Future Europe Initiative. He is a former European editor and US editor of the Financial Times and a syndicated columnist for the Paris-based International Herald Tribune.

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Image: Theresa May speaks to reporters outside the Houses of Parliament in Westminster, central London, on July 11 after being confirmed as the leader of the Conservative Party and the United Kingdom’s next prime minister. (Reuters/Neil Hall)