Summary: the route towards Brexit is much more complicated and fraught than most of the public and much of the media realise. Negotiations are not with the EU but with 27 separate nation states, all with their own views on Brexit and the future of the EU. The political landscape across Europe is changing and the UK will be faced with negotiating with a rapidly changing EU and countries with significant political upheavals internally. The probability is that only a hard-Brexit is possible in the time available. Economic damage caused by the threat of Brexit will become even more obvious to UK citizens as time goes on. Clamours for a second referendum will become irresistible.
The path for the government negotiating Brexit over the next two years or so is fraught with difficulties and uncertainties. We will ignore the fact that the government by all reports simply has no realistic or plausible plan for what it wants to do. There is no shortage of difficulties coming from the other side. The impression given by the Leave campaign is that we deal with a single entity, the European Union, to agree leaving terms. In fact we have to negotiate with each and every one of the 27 other members of the EU. Those negotiations are very complex, covering everything from fisheries, defence, policing, security, financial services, food and agriculture subsidies, scientific research and many other aspects. We do not need 100% agreement of the countries (67% is plenty). However we do need to have the agreement of the European Parliament and in particular the Council with a majority of at least 72% of council members comprising at least 65% of the EU’s population.
Along the way we have parliamentary elections in 2017 for the Czech Republic, France, Luxembourg, Netherlands and Germany. In 2018 we have Austria Bulgaria, Cyprus, Italy, Romania and Sweden. In 2019, before the end of the two-year negotiating period there are further elections in Belgium, Finland and probably Poland. All the evidence is that the popular mood in the EU is evolving. We can be confident that by the end of the negotiations the political views of MEPs and many European governments will have changed quite significantly. Finally, if the Article 50 notification cannot be given before May 2017 as seems increasingly likely, then just before MEPs are asked for their view on the Brexit arrangements this evolution will be visible following European Parliament elections in May 2019. Each of these elections has the potential to produce significant tremors across Europe. Some may be full blown earthquakes, with a number of European political parties already campaigning on an anti-EU ticket.
The consequence for all this will most likely be that no conclusive agreement can be reached. The choice will then be a hard Brexit or not leaving the EU at all. One recent development is the realisation that leaving the EU is something that does not automatically lead to leaving the European Economic Area. The EEA was set up to provide non-EU countries access to the European single market. At present the non-EU members are Iceland, Lichtenstein and Norway. It provides for free movement of goods, capital, services and PEOPLE between member states. Being in the EEA would not allow the UK to block immigration from other EEA states, even if the UK is no longer a member of the EU. It is increasingly clear that leaving the EEA would also require a formal notification (Article 127 of the EEA agreement requiring 12 months notice of quitting the EEA). Leaving the EEA would inevitably be challenged by the Remain side, in the courts and by the Lords, as being something that was not addressed by the referendum.
What do those who want to Remain in the EU, like the author of this piece, do about all this? Probably sit tight and wait for the inevitable unravelling. Within a couple of years the economic effect of threatening to leave the EU will become more apparent in terms of significantly rising prices probably combined with a small drop in employment. We will also see the substantial cuts to benefits and public services already forced on the government to compensate for the costs of leaving. The great majority of the population will feel a marked tightening of the belt and a realisation that things are going pretty badly for most people. It is unlikely the government could go ahead with a hard-Brexit, resorting to WTO trade rules without a general election.
The Leave campaign are adamant that a second referendum should not be held. They realise the lies they told about the EU-free paradise we were heading towards are already unravelling. They are concerned that if another was held they might well lose it. That risk will increase in the future. However, if there is a significant popular opinion against a hard-Brexit that second referendum might become irresistible.
That would be the final major earthquake in this whole sorry business. A major distraction for the UK (and for the EU), for no productive benefit, delaying the return to real growth in the standard of living for the vast majority of citizens here.