Brexit: Is No Deal a Good Deal?
As the Tory party is divided between those that call for Theresa May to leave the talks without a deal, one wonders whether this is a plausible or desirable outcome. Brexiteers are constantly urging May to just walk away and exit without any agreement. But what does this exactly mean?
Having no agreement in place when we leave the European Union means that the Brexit negotiations have broken down and the UK and EU have failed to agree on the terms of the divorce: which includes the much-contested subject of the financial obligations and of course the even bigger issue of the future trade relationship, which might, or might not involve access to the single market and customs union.
The problem is that a “bad-tempered scenario” would be financially disastrous for both the UK and EU. But this is increasingly the case, as a British official described the Brexit negotiations by saying “We hit the wall.” In particular, Germany and France are posing as the biggest enemies of Brexit, with the German chancellor’s attitude towards May, being a little bit “frosty.” The head of the Social Democrats’ Brexit task force, Axel Schäfer, said: “We can’t make any compromises when the EU’s very existence is at stake. The EU is united on this. We have to defend our existence, the existence of the EU.”
In a Financial Times article today, Joachim Lang, the managing director of the German business body, BDI, is quoted saying that German business groups don’t even attempt to urge the UK to settle its financial obligations, because they are aware of the government’s internal issues and debates over Brexit: “You have the impression that the real negotiations are inside the British government, rather than between the UK and EU. And there’s little point in trying to intervene in what is essentially an internal UK debate.”
Germans fear that even if the EU offers any concessions, the situation in the UK won’t change and the Brexiteers would insist on their side of the story. One German official, for example, argued that anti—European tabloids don’t accept the idea of a transition period, because it extends a regime they already want to get rid of, in other words, what’s the point?
The hardest line comes from the former EU commissioner and WTO director-general, Pascal Lamy, who pointed out that the UK is deluded for thinking it has the power to define the Brexit terms. Whether it’s hard to hear such an opinion, it’s nonetheless useful to see the story from another’s point of view: “The fundamental difference between the UK vision of what this is about and the Franco-German view is that the British still think this is a negotiation. It is not a negotiation. It is a process to be managed to minimise harm. It involves adjusting.” He added: “They still seem to believe they can buy something with the money they have to pay. The truth is there is nothing to discuss . . . The only question is how much do you owe.”
The fear on the British side, emanates from the Brexiteers’ belief that unless they are ready for a no deal scenario the EU would force them to accept the worst possible deal.
Brexiteers remain positive
Brexiteer and foreign secretary Boris Johnson has described the situation in a more positive light. He has said the UK will do “very well”, even if it leaves the EU without a deal. After a meeting in London with Mexican foreign minister Luis Videgaray Caso, Johnson said to reporters: “I think that we will get a deal and it will be a great deal and a great Brexit but with any negotiation you’ve got to be prepared to walk away. And we are going to be prepared to do that and, as Luis has said, I think we’ll do fine but we’ll also be able to develop our relations with Mexico and that’s very exciting as well. We have to prepare for every eventuality, and as our esteemed guest Luis Videgaray has said, we will come through it very well whatever happens.”
For others, there is still room for negotiations and quite a “way to go yet.” At the EU summit today, Irish prime minister Leo Varadkar said: We are quite far back from the cliff edge at this stage. But it’s incumbent on the EU prime ministers and presidents to ensure that we don’t sleepwalk towards that cliff and that substantially more progress is made in the next couple of months. We are well away from the cliff.” This is the only possible way forward, reigniting the negotiations and hoping for the best deal possible, because no deal is not a good deal.