Brexit: No Deal is Real Possibility
David Davis, the UK’s chief Brexit negotiator, said that it is possible that the UK won’t reach a deal with the EU. He added that the government was prepared for a no deal scenario.
Speaking today in Westminster, Davis said: "Reaching a deal with the European Union is not only far and away the most likely outcome, it's also the best outcome for our country. I don't think it would be in the interest for either side for there to be no deal. But as a responsible government it is right that we make every plan for every eventuality."
Although Davis hopes that a deal will be reached with the EU and that is what the government is seeking, he didn’t fail to stress that trade talks falling apart was a real eventuality: "Over the past year every department across Whitehall has been working at pace covering the whole range of scenarios. These plans have been well developed, have been designed to provide the flexibility to respond to a negotiated agreement, as well as preparing us for the chance that we leave without a deal."
The idea of leaving without a deal is closely connected to the department for leaving the EU, which is, as Davis explained, a department for Brexiting and not a department “for getting a deal come what may.” From Davis’ speech is clear that the government is supporting the view that a no deal is better than a bad deal.
However, when it comes to thinking about what kind of deal the UK can strike with the EU, Davis said that Britain needed to be ambitious and come up with a “completely new,” and not a copy-and-paste trade deal. His goals were to move on to trade talks in December, strike a good deal and make sure that Brexit works for everyone.
Brexit deals: Pay Less, Get more
Davis’ comments come amidst Tory whispers and calls from the usual suspects who are urging Theresa May to avoid offering more money to the EU.
Iain Duncan Smith, the Conservative former work and pensions secretary, said that May should take advantage of the German Chancellor Angela Merkel’s weakness to ask for less money and gain advantage in the Brexit talks: “When you look at what is going on in Europe the idea that out of that chaotic situation can come any sort of understanding is clearly not right, so we will have to sit tight.”
Jacob Rees-Mogg also advised to wait and not offer more money to the EU: “Approving a higher divorce bill at this stage would be foolish . . . As for Germany, its domestic political concerns make it less likely that it would want to risk the damage that could be done to its industry from the UK imposing tariffs on its exports.”
Former Brexit minister David Jones, is also arguing that UK has shown enough patience and that the EU needs to act, otherwise Britain has every right to abandon the negotiations: “It is high time the EU stopped its prevarication. If the prime minister does not receive confirmation that the EU will now start talking seriously about the future relationship, we should tell them we are suspending negotiations until they are ready to do so. There is nothing to be gained by continuing to flog a dead horse.
We should also be making serious preparations for life outside the EU by investing in the personnel, infrastructure and IT needed to commence trading with the EU on World Trade Organisation terms. Putting those arrangements in place will have the doubly beneficial effect of providing reassurance to business and signalling to the EU that we are not disposed to be strung along.”
On the other side, however, Christian Schmidt, the German food and agriculture minister, said on the Today programme that Brexiters shouldn’t try to exploit Merkel’s weakness in order to get a better bargain on the financial settlement: “My suggestion is just to think which kind of disaster this [a no deal Brexit] would be for the United Kingdom’s economy. This is not a game, winner and loser. This is a responsibility. We see it in the 27 European member states. I think we see that there is a lot of responsibility also to the UK.”
In a Politico article, it is argued that Merkel’s troubles will make Brexit harder for London, rather than easier as some Brexiters envision. A weakened Angela Merkel won’t make things easier, but worse, despite what Rees-Mogg says: “With manifold domestic troubles not just in Germany, member states need a deal more than we do.” But this is plain psychology. Instead of worrying about our domestic troubles, Brexiters want to divert attention elsewhere, by simply saying, “Oh, look at the German government, they are a bit unstable.”
But Merkel, as the article indicates, is now compromised and won’t be able to shift the position of the EU27 and make bold moves, as she would. Politico writes: “That means London should no longer hope that Merkel will be able to push hard for a verdict of ‘sufficient progress’ by the European Council in December — even if she wanted to do so — without a clear consensus in Brussels that a deal was close at hand on the major divorce terms.” Being the biggest economy and a major trading partner with the UK, Germany is interested in “taking a proactive role in phase 2 of the negotiations.” But as it stands, Brexit is not a priority.
With Angela Merkel calling for another German election in three months, after coalition talks collapsed in Berlin, Brexit and the UK will have to take the back sit and wait.