What’s the EU to do after Brexit?

The implications of Boris Johnson for the EU are dawning slowly.  They will probably take some time to work through.

Assume – plausibly – that the EU’s Brexit negotiators represent its bureaucracy and the centralising faction in European politics.  Assume too that their principal objective was – and still is – to make leaving the EU a political failure. The problem then is that they over-achieved. The exit agreement negotiated with former British PM Theresa May was so successful at reducing Britain to subordinate status that it was rejected. (One can’t help being reminded that the EU achieved a similar Pyrrhic success in negotiations over the UK’s status before Britain’s Brexit referendum.)

The rejection of the May deal has made it near-impossible for the EU to negotiate an alternative before Brexit day.  While there are lots of mutually advantageous economic bargains to be struck, it’s hard to see what would bridge the gap between the British need for self-respect and the EU requirement for conspicuous Brexit failure.  Either way looks good for Boris.

If leaving without an agreement on 31 October is the optimal outcome for both parties, what choices does the EU have after that?

  • If you agree that the EU needs to demonstrate the failure of Brexit, then a ‘comprehensive settlement’ – one establishing a close and stable relationship on a live-and-let-live basis – is unlikely.  It would be seen as an emphatic victory for Boris and the leave-the-EU-and-have-your-cake-as-well squad.
  • But an ‘economic blockade’ strategy seems almost as unlikely.  Vindictiveness would have a high cost, both economically and politically, in the EU and in the UK. And it’s far from clear that it would achieve the political objective.  So paradoxically, if you are planning to cross the channel this year, day one of Brexit might well have the shortest queues, the least traffic and slickest transit, to be remembered for years in folk memory (in itself, another fillip for Boris).
  • So the likeliest outcome might be something like ‘pragmatic isolation’. Negotiate on everything, with the political objective first and the economic second. Relentlessly seek an edge. Don’t agree to anything too quickly. Take advantage of any British pragmatism or desire to reach a deal. Settle cases to one’s own economic advantage first and in isolation. The EU does this sort of thing for a living (a bit like North Korea), so it’s good at it.  Over time (say a decade or so), a new narrative develops and more settlements might become possible.

But the thing about pragmatic isolation is that it does not take place in – well – isolation.  Politics will continue inside the EU. The dominant faction – led by France and Germany – may respond to a Brexit stalemate by seeking a European victory.  It would make sense to take advantage of the absence of the UK from EU councils to seek more political centralisation (re-read our earlier piece on the ambitions of new EU president Ursula von der Leyen).

But there are also powerful centrifugal forces at work. You see, the EU is still something of a confederacy – its national states have separate interests and a lot of power, both inside their borders and at the supra-national EU level. While the EU has power over economic regulation and trade rules, the national states are mostly in charge of stuff like immigration, social welfare, justice, border control and execution of most rules on business licensing, regulation and environmental control.

There are reasons for national politicians to argue against further centralisation; to support post-Brexit concessions to the UK; or to cut their own deals: these include economic interests, nationalism and anti-EU federalism. In some cases, like Poland, the large numbers of voters resident in the UK could be relevant.  A no-deal Brexit could be a catalyst.

There are already one or two cracks in the facade of EU unity. You really should take 60 seconds to join the 4.5 million people who have watched the Portuguese tourist board’s ‘Brelcome’ message (enjoy the background music).  While it would be rash to predict how these forces will develop, there is likely to be more visible and more vigorous opposition to the hitherto-dominant EU faction on national grounds from countries like Italy, Portugal, Hungary, Slovakia and Poland, and in time perhaps, the Dutch and Scandinavians.  It also seems likely that all European groups seeking a looser EU structure will gain energy from Brexit – though whether they have the focus to benefit from that is questionable.

The EU’s approach was always based on neutralising the political consequences of Brexit.  It still is.  But it looks like it will require different tactics.

 

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