Brexit, from the UK perspective.
Oh my, how many words, insults and offended philosophies have been thrown at the subject of Brexit. As I write this, the Brexit bill is with the house of lords and the usual pressure points of constitutional crisis are being bandied about to try and prevent the lords from amending the bill.
We have spent so much time and energy in debating and arguing the exit negotiations from our own internal UK point of view. We have heard from the EU itself, the comments ranging across a spectrum of ‘we must punish the UK for leaving’ to ‘we must respect the UK and offer them a fair deal’.
I find myself thinking about the European position to Brexit. This summer has no major sporting event in it, no Olympics, no World Cup or European football championships, but I believe the potential exists for the new summer blockbuster of entertainment to be the first 3 months after the UK Government trigger article 50.
This might sound a bit odd, but I would like to put it into context. From the UK side, the government will trigger article 50, with a government still in position until 2020, with a decent majority and an economy with steady, if unspectacular, growth. The team to negotiate Brexit will have been in place for 6 months, agenda’s set, outcomes prioritised and much work to be done. So the UK team will be set, positions coached and a positive team win is sought.
My worry is that we are going to be negotiating with an EU that is going to spend a lot of the summer in crisis. If these negotiations are going to be held, they need two sides with the time, skills and resources to negotiate.
I have very real concerns that the EU is not going to be able to hold its own side of the negotiation on track. I would suggest this because of the following reasons, a summer of EU crisis, that may well end in the autumn and the autumn of the European Union itself.
The first major shock to the EU will be March 31st itself. End of the financial year and the UK government will press the button on article 50. Gone are all the hopes, fears and potential last minute reprieves. Tony Blair, the very self-appointed king of global society, the nemesis of Westphalian sovereignty, might well be trying to halt the process, but his is an intervention with little credibility and much too late in the day to reset the UK government. So the first blow to the structure of the EU will be landed, with full force on 31st March. No longer a problem, Brexit becomes a certainty.
So where does the next blow to European union come from? Marie Le Pen was considered a right wing no hoper until this month. A surge of 20 points, helped by the revelations of corruption and elitism by her opponents, has seen her take the outright lead in the race to preside over France. Much like Trump before her, she was written off, and yet has ascended to a potential winning position. If she is the winner in May 2017, the EU will be negotiating with a member aboard that has also promised a referendum on EU membership. The UK was never a true member of the EU, we kept the pound, opted out of Lisbon and Dublin treaties. How would the EU cope with a full member on board who also wants to head for the exit? This is bound to disrupt, France and Le Pen would need courting and coaxing back into the fold, against a backdrop of the UK getting themselves out of the fold. Any potential advantage to the UK in the negotiations around this time would hit the EU hard and tempt Le Pen into an early referendum, after all it must be surely preferable to be second off a sinking ship rather than 27th off? Or might she prefer a smash and grab raid by renegotiating?
The European Central Bank might not be too keen to offer France some sweetheart deal money when it has several members in dire straits. On the subject of the ECB, when does Greece default again? Oh yes the end of June. Greece are currently trying to stave off the IMF and renegotiate their repayments, but that process has stalled. The Snap election threats are out again by the Greek government, and with that going on, they also have to fend off the IMF, which they cannot afford repayment too, so that they can then run into the June ECB deadline. So without ECB support and restructure, Greece may well fall out of the Euro by mid-June. But it will not be too much of a distraction for the EU, to be trying to sweetheart a founding member whilst dealing with the monetary collapse of a poorer member, to continue its negotiation with the UK at the same time.
But that’s okay for the EU, at least the Dutch will help keep the whole onion bag together. Unless the Dutch are aware that they are going from being the third largest net contributor in the EU to Second place with the UK leaving. Would that really push the Dutch into considering anti EU sentiment? By April 2017 we will know if Gert Wilders secured enough proportionally represented seats to become the Dutch leader. That could not possibly happen, because Brexit was never going to happen and Trump would lose. So if Mr wilders is in charge and Ms Le Pen rolls beside him, will the Dutch support or derail the EU. I think we can already answer that question. Yes Mr Wilders wants a referendum on membership of the EU for Holland.
So now the EU will be negotiating with the UK with two of its senior members (all members are equal of course, it is just that some members are historically more Westphalian than others) already looking to hit the exit too. This cannot be a position of strength. There will be times when the EU will not be able to negotiate with the UK because they are too busy firefighting their own members. Greece will default and the Euro may well fold. All this just gets us to the end of June.
From June the EU will have a brief rest, whilst continuing the Brexit negotiations before Germany goes to the polls in September. We can only guess at the mood of the German voters if they have had a summer of Brexit, French revolt, Dutch Westphalian grumblings and a Greek default and departure from the Euro. This must surely take its toll on the mood of the German people, along with another busy summer of refugee influx. Will this leave the German people in the mood to support the EU or in the mood to restructure it? If restructure was to be needed the German banks would need a solution to its over commitment to the Euro Zone. Germany has been repatriating its gold bullion stocks recently. In fact they aimed to bring 10% of its total ( 300 tonnes) bullion stock, back onto German soil by 2020. In completely unrelated news, they managed to complete the repatriation by March 2017.
So the Germans draw 300 tonnes of gold bullion back to home territory one month before the UK trigger article 50, two months before Mr Wilder goes to the Dutch polls, three months before Ms Le Pen goes to the French people and four months before the Greek’s default and six months before its own people go to the polls.
And during this first 6 months with all its potential fails for the European Union, the UK will be trying to negotiate a Brexit. A Brexit which must be finalised within two years, looking at the first 6 months (25% of the total negotiation timetable) I would suggest it will not be a case of hard or soft Brexit, not a case of punishment or appeasement, it will be a case of getting the Brexit done in quick enough time before the whole process breaks down and the EU members all go their separate ways.
At least Junkers, who will be in charge of the whole process, is there. If he had handed his notice in and was sailing away into retirement, that might put even bigger breaks on the process. And in other news, Mr Junkers will not be standing for re-election.
It would appear that the EU is not going to hold itself together long enough for the UK to complete its Brexit negotiations. It might well be that we just got to the head of the queue before everyone else did, but then again we are the UK, queues are our thing, right?
So at the opening of this article I mentioned all the words, insults and offended philosophies that had been thrown at Brexit. So here are my 1648 words on the subject. I am really not sure that Brexit will officially end as a process, because the EU will change so dramatically over the next 6 months that they will not be able to complete the negotiation with the UK under the article 50 terms. The UK will need a structure of institution to negotiate with, but the EU will be shedding its institutions and all of the agreements it holds as its structure right at the fulcrum of the negotiations.
So will it all fall apart?, we will see the other members of the EU revert back to their sovereign states, will Westphalian sovereignty be restored. I think that there is a chance that it happens. The Westphalia treaties were signed back in 1648. Which if you look at the paragraph above about my number of words, means I can be rather too clever for my own good sometimes. It would be good to hear your thoughts, please do leave a comment below.