21 July 2016

Paul Goldschmidt: May Time or May…hem?

The first declarations of the new British PM are meant to be reassuring, but her program seems far more appropriate for galvanising a groggy public opinion to face a breakup of the EU as a whole rather than to deal with the difficulties specifically linked to the EU-UK relationship renegotiation.

[...] Brexit negotiations imply “good faith” on both sides. However much the UK may wish that the process would involve direct negotiations with all concerned (like an intergovernmental conference preparing a treaty change) in which it could seek support of alternative majorities of EU Members, this is wishful thinking. This attitude is epitomised by the superficially amicable statement of Boris Johnson advocating a leading role for the UK as part of its continued engagement with its European partners. These affirmations might, however, be interpreted less charitably as reflecting the latest version of the traditional “divide to reign” policies, followed since 1648. When viewed in this light, Liam Fox’s intent to pursue in parallel trade deals with third countries, can (and perhaps is meant to) be construed as a veiled threat, not very conducive to creating the right atmosphere for constructive Brexit talks.
 
The reality is that the UK will be dealing with the EU rather than its individual members whose unanimous support will eventually be required. Failure to reach an agreement will force the U.K. either have to cope with a more cohesive, integrated and intransigent EU, born in reaction to Brexit, or, if contagion sets in, face up, in due course, to a breakup of the EU rendering further negotiations pointless. The former outcome would only reinforce the UK’s isolation while the latter would prove disastrous for the UK, the EU and the world at large, leaving the British with the meagre consolation of being (maybe) slightly less badly off than their erstwhile Eurozone partners.
 
A major problem Theresa May must contend with, in formulating coherent objectives for Brexit, is reconciling the contradictory views held by various strands of opinion among  “leavers” while also considering the views of the large minority of “remainers”. The wild promises and untruths bandied about during the Referendum campaign should be discarded forthwith (some already have been). But the British must be told that, however strong the desire of the EU to build a constructive relationship with the UK may be, it cannot be whittled down to satisfying purely economic and financial interests. The UK should never expect to gain concessions that would provide it with a more favourable treatment than any of the Member States; this implies, for instance, that any flexibility in limiting the freedom of movement of people is subject to amending rules applicable also to all other members. In the same vein, the EU may wish benefit in the future from the considerable British experience in shaping its financial policies, by agreeing to an appropriate “consultation” procedure. However this should be in the form of rights granted the EEA area as a whole rather to the UK in particular and should, in any case, avoid granting non EU members any form of veto over EU legislation.
 
However desirable including such “flexibilities” into the Brexit deal might be, it is highly unlikely to be achieved within the 2 year negotiating period as their implementation would in all probability require the lengthy and uncertain procedure of “treaty change”. It follows that in order to reduce uncertainty, in the interests of all parties concerned, the negotiations surrounding the withdrawal of the UK from the Union should be clearly separated from those pertaining to any future relationship, even if the latter could be initiated in parallel. [...]
 
As the consequences of Brexit unfold, the tensions created may put the stability of the British parliamentary democracy into jeopardy. Not only are the two main political parties deeply split internally but further overlapping lines of fracture exist: diverging interests between the constituent parts of the U.K., between generations as well as between socio-economic categories. Bridging such differences is necessary to reunite the country and ensure its future prosperity outside the EU; it will probably require waiting for the results of the next elections. Their outcome is all the more uncertain that the British “first past the post” electoral system could yield totally unexpected results if the two main parties are unable to present coherent programs, which will define their respective vision of the UK outside the EU.
 
Turning the potential mayhem created by the unexpected Referendum result into an opportunity is possible only if parties come out strengthened from their negotiations. It will prove at least as difficult for the EU 27 as for Britain to overcome their own internal differences. Neither side should compromise their vital interests: reform must be the priority of the EU 27 while reuniting public opinion around a program for a shared future should guide British leaders. Public opinion is ready - and indeed anxiously awaiting - to meet the challenges ahead, including the necessary sacrifices. Nostalgic politicians should retire leaving the younger generation in charge and responsible for its own future.

Full article on Paul Goldschmidt website

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