Brexit: The No Deal Knife’s Edge
Ever since the General Election held in June of 2017, when her Conservatives lost their majority in the face of a surprisingly strong showing from the Labour Party and its own embattled leader Jeremy Corbyn, Theresa May has seemed to adapt the demeanor, attitude and outlook of a dead woman walking, shuffling through the corridors of 10 Downing Street trying in vain to appease both Brexit hardliners and European leaders in the hopes of reaching some of the deal before the formal withdrawal of the United Kingdom from the EU. Such attempts have been miserable and substantive failures, with her “Chequers Plan,” which called for a Soft Brexit in which the UK would effectively remain bound to the same economic and trade regulations imposed on EU members, causing the resignation of her Brexit Secretary David Davis and, Foreign Secretary Boris Johnson. For hardliners like Davis and Johnson, such a deal represents an unacceptable capitulation to Brussels, despite the fact that it would effectively settle two of the most pressing issues at stake in the matter of Brexit: the Northern Irish border and the matter of reaching a post-Brexit trade deal with the EU. While some within the Conservative Party have suggested that Ms. May simply change her tactics, and pursue a free trade agreement modeled on the ones which the EU has with countries like Canada and the United States, if she fails to change tack, it seems increasingly likely that Conservative Members of Parliament would sooner back a Brexit without a deal than accept any part of the Chequers Plan.
For their part, European leaders have also been critical of Ms. May’s proposal, with the French President Emmanuel Macron telling reporters that “we have very clear principles about the integrity of the single market,” and European Council President Donald Tusk telling that same group of reporters “it must be clear that there are some issues where we are not ready to compromise and first of all this is out four fundamental freedoms and the single market.” (The “four freedoms” invoked by President Tusk are the free movement of goods, free movement of capital, the freedom to establish and provide services, and the free movement of persons, all of which are codified in the EU’s founding documents). Such a hard-line position on the part of the EU regarding what a potential deal with Britain must look like means that Ms. May’s ability to reach any deal at all with Europe is severely curtailed. The Brexit vote was, after all, at its core representative of a desire among a large number of Brits to take back control of matters like immigration and trade, all of which are policy areas in which Europe hopes to convince the British government to stick to EU-style policies. Brussels itself is under considerable political pressure in the matter of Brexit; any deal too lenient could encourage other countries, particularly those angry at how they were treated by the EU following the 2008 economic crisis or resentful of how the EU as a political body operates as a puppet institution subject to the will of Germany and France, the only two genuine economic powerhouses in the organization besides the departing UK. Strike a deal with Britain perceived as too favorable, the EU presumably fears, and Greece, Portugal, Spain, or another country who has seen it at its most vindictive and draconian.
Though the EU does have quite a lot at stake in these negotiations, the political entity facing the biggest potential political, economic and social fallout if the negotiations fail and no deal is reached is, of course, Britain itself. A Britain in the common market and subject to the EU’s policies of free movement and free trade isn’t perfect, but the impact of a sudden dissolution of such policies without a practical and detailed framework for post-Brexit relations between Britain and Europe would be devastating. Even now, companies in a diverse number of sectors, including Microsoft, Deutsche Bank, Lloyd’s, Barclays, Goldman Sachs, and Toyota have announced plans to slash jobs and offices in the United Kingdom, with most moving their European headquarters to German cities like Frankfurt. Uncertainty about free movement and whether they will be able to stay in Britain after 2019 may also cause an exodus of EU citizens from the UK, many of whom are instrumental in the operation of Britain’s National Health Service as well as its service industries in general. The NHS, which is already under considerable financial and political strain thanks to privatization efforts and mismanagement by former Health Minister Jeremy Hunt (who managed to fail his way up all the way to becoming Boris Johnson’s successor as Foreign Secretary), could face a historic crisis, as tens of thousands of its nurses, technicians, and other care workers leave Britain in order to avoid immigration limbo if the UK doesn’t preserve free movement post-Brexit. If the UK withdraws without a deal on March 29th of next year, the departure of corporate entities along with skilled workers will likely increase exponentially.
To many in the Conservative Party, however, the risks of a no-deal Brexit are outweighed by those of the Brexit deals proposed by Ms. May and by the European community itself. Ever the provocateur, Boris Johnson referred to the Chequers Plan as a “suicide vest,” with Brussels holding the detonator, in a column published in the Sunday edition of The Daily Mail. While his statement has been condemned by many of Johnson’s fellow Tories, it is representative of the mood among the Eurosceptic faction of the party. To them, the need to remove Britain totally from the bureaucratic institutions of Brussels is an absolute necessity, with any attempts on the part of the UK government or the EU to preserve limited aspects of the single market or other aspects of the EU trading zone representing an unacceptable capitulation to a political body they have despised and denigrated, often rightly, ever since Edward Heath announced the Accession of Britain into the EU’s predecessor, the European Committee, on January 1st, 1973. However, by adapting such a hardline stance, the Eurosceptics have opened up the floodgates to a potentially disastrous economic outcome, with international firms and workers fleeing the UK, causing the value of the pound sterling to drop and the might of the British economy to severely contract. Keeping the UK bound to single market regulations or keeping its borders open may conflict with the nationalistic desire for control expressed by around 52% of the British public during the 2016 Brexit referendum, but in taking such steps, the May ministry might be able to prevent total fallout once the United Kingdom terminates its membership and commitments in Brussels.