Brexit was never an economic proposition

If there is one universal truth about we eurosceptics it is that, aside from hating the EU, we cannot agree on anything. Over the last three years I have had more arguments with Brexiteers than I have remainers – and made more enemies on the Brexit side than remain.

The crucial bone of contention is the mode of leaving the EU. Anything that it not “hard Brexit” is denounced. There are many who believe that Brexit is simple and that there is no cause for delay. I wish that were true. Worse than that, though, are those who know it not to be simple but maintain the pretence that it is. I have no time for intellectual dishonesty.

I am also less enthused by Brexiteers who insist that Brexit is an economic miracle waiting to happen. It isn’t. Trade is a fiendishly complex endeavour and we will doubtlessly have to march double time just to get back to where we are. All of our present trade relations are via the EU and restoring and optimising those links will take time.

Personally I see no reason to make an economic argument for Brexit. It is not an economic proposition – and if there is one thing we can all agree on it is that Brexit is ultimately in the interests of democracy. The economy is entirely secondary.

At one point I might have made the case that Brexit will bring about cheaper food, clothing and much else – but I now have serious doubts about this. Trade in the modern global system is a lot like whack-a-mole and not every thread is one you necessarily want to pull on. There are no sweeping unilateral measures we can take and and every measure we do take will have consequences. Everything we do must be done carefully and with due consideration as to the potential fallout.

If Britain is to make a success of Brexit we will need to seek out sector specific alliances and work through the multilateral system and use collective pressure to bring about the changes we want to see. There is only so much we can do unilaterally.

This is why I believe an Efta EEA Brexit would be the more intelligent path in that Efta with the UK would make the fifth largest bloc in the world and one which could bring to bear considerable pressure on the EU to drop some of its protectionist measures. In some circumstances we are more likely to achieve EU reform from the outside. Failing that, Britain is going to find it difficult going it alone.

There are some who still believe we can pick up where we left off with old allies but the old rule is still the same; twice the distance means half the trade. To an extent the internet and trade in services breaks this rule but New Zealand and Australia are in a different sphere of regulatory influence. We on the, other hand, will still be in the EU’s gravitational pull come what may.

More to the point, any alliances we make must be toward addressing particular problems – and our most pressing being that of the migration crisis where all our efforts must be focussed on those trade measures which best eliminate the push factors in Africa. We are going to have to coordinate our efforts with the EU and we will still need close cooperation in order to make an impact. We may leave the EU but we cannot turn our backs on Europe.

I take the view that Article 50 talks and any subsequent trade talks must not be viewed as a chance to get one over on the the EU. If we play that game we will lose. We have to take a more collaborative approach and for the time being we are in a mode of damage limitation. We should leave the radicalism until we have left the EU. Brexit is radical enough for the moment.

The short of it is that we need to be more honest and realistic about what Brexit will achieve economically. We are certain to take a hit and it is insulting to pretend that we won’t. We all knew Brexit would have economic consequences – and if we are honest, none of us cared. We would have voted to leave regardless.

Primarily our future prosperity depends on fixing our politics here at home. That is what Brexit is about. Our politicians continue to abdicate from their responsibilities, handing to Brussels enormous areas of policy while they tinker on the sidelines. We continue to kick the can down the road on serious economic reform and and we have only really dabbled in “austerity”. Since our politicians have been incapable of making the hard choices, we have forced their hand. Vanity spending will have to be cut, electoral bribes will have to be slashed and white elephants will have to go on the barbecue.

In this we will have a reckoning with the wastrels, posers and charlatans of Westminster. We will have some almighty rows and we will tear the status quo apart. That is primarily what I voted for. I am under no illusions that it will come at great cost, I am as worried as any remainer about what it holds for the immediate future, and I am troubled by the wrong-headed approach to Brexit. All I know for certain is that this is a thing we must do and there can be no turning back.

At heart I am a libertarian. I take the view that every entitlement from government comes as a moral cost – and everything we get from government comes at the expense of certain liberties. There is no greater means of controlling a population than to make them dependent on government.

This is the paradigm we have had ever since World War Two. It has crushed our self-reliance, it has weakened our entrepreneurial flair and it has corroded society in all manner of pernicious ways. It has made Britain a spoiled, selfish and lazy country. It has made us a command and control economy with a cosseted middle class propped up by state spending and our whole economy is a house of cards. A Ponzi scheme. And Ponzi schemes always fail.

This is why Brexit is a revolution. It is the economic and moral revival we have been unable to secure by other means. We will prosper from Brexit not because of any direct consequence of leaving the EU but by tearing down the ossified structures of yore and rediscovering ourselves.

Shortly before the referendum I was out talking to people about Brexit. I asked a lady why she was voting to leave. I told her that we probably would take an economic hit but her reply was quite simple. “Something has to change”. And that is what gives me confidence.

We were not hoodwinked by the Boris bus, we were not fooled by Russian interference or computer algorithms. We went into this with our eyes wide open. Let us not patronise or pretend. Let us say it out loud that this is not an economic venture. This is purely political and the economy must be subordinate to political concerns – otherwise we might as well go the whole hog and abolish elections.

I did not vote for Brexit to spend £350m on the NHS. I don’t think Brexit is a free trade miracle. I just know that our politics is spent and if our politics is spent then so is our economy. We cannot fix the economy until we fix our politics. Let no man or woman interfere with that. If we do not see this through then we are not deserving of prosperity.

Reflections one year on from the referendum

The morning of 24th June is a day I will never ever forget. By 4AM, I had given up any idea of sleep and was watching the results of the referendum on my computer as they were posted up on the BBC website. I had always believed that we could persuade our countrymen that we would be better off out of the EU, but David Cameron had gone for a quick cut-and-run campaign to minimise our chances of success. However, as soon as I saw the relative totals for leave and remain, my heart leapt. We’re going to pull this off after all! Less than two hours later, the number of leave votes passed the crucial 50% mark. “We’ve done it! We’ve done it, We’ve done it!” I shouted at the top of my voice. It was not yet 6AM and normally I would be much more considerate towards my neighbours, but after sixteen years of campaigning for our country to leave the EU, my overwhelming feelings of joy momentarily got the better of me.

Thankfully, my neighbours have never complained. Perhaps they are sound sleepers. Perhaps the soundproofing of our late Victorian semi is better than I thought. Whatever, I don’t think I will be giving a repeat performance!

I spent much of the rest of the day in a daze. We’re really going to leave! It was hard to take it in. This was the greatest day in our country’s history since the end of the Second World War and I felt a great sense of pride in having played a part, albeit only a very small one, in achieving this memorable result.

One year on from that incredible day, the memories are still fresh in my mind, as I’m sure they are in the minds of many other leave campaigners, but in the meantime, what a roller-coaster we have endured!  There was the court case brought by Gina Miller, the uncertainly about whether Mrs May’s European Union (notification of withdrawal) bill would make it unscathed through both houses of Parliament, the sense of relief when Article 50 was finally triggered in March as the Prime Minister had promised, the reluctance of the economy to tank in spite of the predictions of George Osborne’s “Project Fear” and most recently, the shambolic General Election which was meant to increase the Government’s majority but instead left the Tories turning to the DUP in order to maintain any sort of hold on power.

In spite of the chaos, the Brexit negotiations have started and we are still on course to heave the EU in just over 21 months’ time. Media reporting seems to have plumbed new depths since the election results were announced and it has been hard to distinguish the wood from the trees. Terms like “hard” and “soft” Brexit are bandied around often without any explanation, leading some concerned leave supporters to equate “soft “Brexit” with  not actually leaving the EU at all.

From what I can gather after reading complete articles, including actual quotes, rather than just the headlines, there are very few politicians who actually want to stop Brexit. Many more are concerned about the implications for UK businesses if we don’t end up with a decent trading arrangement. Such concerns are actually quite reasonable and do not in any way imply that they want us to stay in the EU.  Soundings from Parliament after last June’s vote indicated that the overwhelming majority of MPs accepted the result and would not wish to frustrate the will of the people. The General Election has not significantly altered this.

Of course, with David Cameron not having made any preparation for our voting to leave, the government and civil service are on a sharp learning curve and we still await evidence that they have got on top of the brief which the electorate gave them a year ago. Our biggest concern must surely be a chaotic – or more likely sub-standard – Brexit rather than no Brexit at all.

The main reason why I remain confident that Brexit will happen in some form or other  lies in the nature of the Conservative Party. The Tories were given a nasty shock two weeks ago. They went into the campaign expecting to flatten Labour. Instead, they only just limped over the finishing line. Most Tory MPs voted to remain last year, but the vast majority of the party’s activists and supporters are strong leavers. The Tories  hoovered up quite a few UKIP votes on a platform of leading us out of the EU. Given these issues, any backtrack on Brexit would precipitate the worst crisis the party has faced since 1846 when it split down the middle over the repeal of the Corn Laws. They dare not go there.

What is more, the party will be keen to renew itself well before the next General Election in 2022. While removing Mrs May now would only add to the sense of  chaos which has prevailed since the General Election, it is hard to imagine she will still be in power in March 2019, perhaps not even in March 2018. If the party is seeking a dynamic new leader to revive its fortunes, given the ultimate say will lie with its predominantly Thatcherite Eurosceptic activists,  Mrs May’ successor is likely to be an MP with proven Brexiteer credentials.  The party faithful will not make the mistake of choosing another Cameron.

This will not make his (or her) task any easier, but still gives me hope that in March 2019, that historic vote which brought us so much joy a year ago will be translated into reality and we will finally achieve that goal for which so many of us have been striving for so long.

Brexit – the Irish angle

Nigel Dodds, the Deputy  leader of the Democratic Unionist Party who leads the party’s MPs in Westminster, responded  to the recent Queen’s Speech by saying, “Let me make it very clear – I believe when people voted in the European Union referendum to leave the European Union that they voted to leave the single market and customs union. And I believe that Northern Ireland must, along with the rest of the United Kingdom, do likewise.” He added, “We must not get into a situation where we have borders erected between the island of Ireland and the rest of the United Kingdom.”

The status of the border between Northern Ireland and the Irish Republic – the only land border between a newly-independent UK and the EU – is  one of three issues which the EU wants to settle before trade talks can begin. Professor Anthony Coughlan, the veteran Irish Anti-EU campaigner, has proposed that the best way of resolving this problem is Irexit – in other words, the Republic of Ireland should leave the EU as well. He argues that is is logically the best thing to do, even though it is “unpalatable” for many in the Republic.  “If one quarter of the Irish people and one fifth of Ireland’s land area are going to leave the EU because they are part of the UK, has the rest of the country any real alternative but to follow, however reluctantly?” he asks.

It is the Republic, not the UK, which will be the big loser from Brexit if it stays in the EU, he argues. “Dublin and London want to maintain the common Anglo-Irish free travel and trade area. But if the Republic opts to stay in the EU when Northern Ireland and Britain leave it, it is the Republic of Ireland, not Britain, that will be putting the common area at risk. London has Dublin over the proverbial barrel on this.  It can bend Dublin to its will if it so wishes.  There is no international law or moral right to a free-movement facility like this between two different sovereign States.”

He also highlights the problems caused by the EU’s desire for closer military integration, a subject which Donald Tusk, the President of the European Council, highlighted as a priority three days ago.  “If the Republic remains in the EU when the UK leaves, it means that it will become part of an EU military bloc under German hegemony.  That can hardly be in the security interests of the UK.

As an aside, it is interesting that Professor Coughlan, looking at our current situation from across the Irish Sea, takes a far more measured approach than some of the ridiculous headlines we have seen in the press recently. “The fundamental point to grasp about the post-UK-general-election situation is that Brexit is going to happen, whether under Theresa May, Jeremy Corbyn or someone else. The UK is going to cease being an EU Member State.  The only issue still open is how long this will take.” Absolutely. What is more, a recent communication from the European Council on the subject of relocating the EU agencies currently based in the UK (the European Medicines Agency (EMA) and the European Banking Authority (EBA)) says the same thing:- “As the United Kingdom has notified the European Council under Article 50 of the Treaty on European Union of its intention to leave the Union, it is necessary to move the two United Kingdom-based Agencies to other locations within the Union’s territory.” Whatever the rhetoric, the EU is gearing up for Brexit.

Yes, we are going to leave, even if the timescale and route of our exit are still uncertain. As far as the impact of Brexit on the Irish Republic is concerned, the next few years will be very interesting. The country has recovered from the Great Recession better than the other so-called “PIIGS” (Portugal, Italy, Ireland, Greece and Spain). Unemployment stood at 6.4% and youth unemployment at 12% in April, compared with more than 20% and 45% respectively for Greece. Furthermore, the Irish housing market, which took a battering in the Recession, has recovered. Nonetheless, the country is one of few in the Eurozone which may return to deflation. Given that the €uro has been the  culprit for all of Ireland’s recent economic woes, the chance to escape its straitjacket may become more appealing as Brexit draws nearer.

 

 

Magna Carta and Europe

Although written two years ago to mark the 800th anniversary of Magna Carta, this article remains very topical as our Brexit divorce begins. It is imperative for it to include a complete break with the Napoleonic inquisitorial legal system which dominates the EU if Brexit is truly to mean Brexit.

Magna Carta crossed the oceans. In all the lands where English is spoken, its principles are known and recognised.

But it never crossed the Channel.

In 1215, in England the Barons were confronting King John; in Rome Pope Innocent III was setting up the machinery of the Holy Inquisition.

A major purpose of Magna Carta was to limit the powers of the King – the central State authority.

In contrast, the Inquisition expanded and deepened the power of the authorities over the individual. Not only actions, and words, but even thoughts, were scrutinised and, if “culpable”, punished.

In ancient Rome, an accuser faced a defendant, and the case was decided by a judge, independent from both. Under the Empire, the Emperor’s word became law. The dark ages saw more primitive forms of judgement (trial by ordeal, by combat…)

As analysed by the late, great, Italo Mereu, Professor of the History of Law at Ferrara University, in his painstakingly detailed history of the Inquisitorial system from the origins to the 1970s, “Sospettare e Punire” (“To suspect and to punish”), the Inquisition brought together the functions of prosecutor and investigator with that of the judge, in the new figure of the Inquisitor. The Inquisitor’s job was to identify, seize, and interrogate a suspect, in order to arrive at the “truth”. Or, it might be said, at the desired result.

The arbitrary powers of the inquisitor, and of his superiors, were clearly vast. The machinery of the Law became a tool for the ruler to ensure complete command and control over his subjects.

Clearly Magna Carta constituted a potent obstacle to such arbitrary exercise of power. In fact the Pope was furious when informed about what had happened at Runnymede, and wrote to the English bishops and abbots who had helped set it up telling them they had done something “abominable” and “illicit”.

The specific constraints on the power of the State provided by Magna Carta include the famous and much celebrated clauses 39 “No free man shall be…. punished… save by judgement of his peers and by the law of the land”, and 40 “To no-one shall we deny, delay, or sell justice”. Clause 39 in particular removed from rulers a crucial power of government, the power to decide who should be punished and who not. This power was placed in the hands of a jury of the defendant’s peers, thus laying a foundation stone of democracy, and a bulwark against arbitrary punishments.

For eight hundred years since then, the English and the continental criminal procedures have gone off in different directions.

The Inquisition ravaged the nations of continental Europe for centuries, persecuting and prosecuting witches, heretics, and…. scientists. Initially an ecclesiastical institution, its methods were adopted by secular rulers, as a means of suppressing opposition of any kind.

England alone escaped its grip. We fought off the Spanish Armada, which would have brought the Spanish Inquisition to our shores. Elisabeth I rejected the inquisitional method – “I will not make windows into men’s souls”. A sort of papal “fatwa” promised a fast track to heaven for any Catholic who murdered her. Yet she did not outlaw those who followed the old religion, though subjecting them to some constraints.

The power of Parliament grew and in the mid-seventeenth century prevailed over that of the king in the civil war. Parliamentary supremacy – representing ultimately the will of the people – was then firmly consolidated with the glorious – and bloodless – revolution of 1688-89.

Meanwhile across the channel absolutism held sway. The King of France famously proclaimed “I am the State”.

The French Revolution swept away much of the old order. The “rights of man” were proclaimed. Then soon Napoleon took over the helm of France, and his armies set about invading most of Europe to export his notion of the “rights of man”. His codes of law to this day underlie the legal systems used on the continent.

Some of the original thinkers of the enlightenment, like Voltaire, whose ideas helped spark the French revolution, had drawn inspiration from the very different system of government they had seen in England. But Napoleon did not adopt Magna Carta, nor its principles, in criminal procedure. He adopted and adapted the basic elements of the inquisition, redirecting it to serve not the Church, but the State.

In the traditional English system, the powers of jurisdiction governing the different parts of criminal procedure are attributed to different bodies. Essentially, the police, divided into 43 independent local constabularies, investigate a case; the magistrates (mostly non-lawyers, unpaid volunteers working part-time) sign arrest warrants, and then decide bail and committal to trial in public hearings; a barrister is hired to conduct the prosecution in court, where he or she faces another barrister hired by the defence; the judge presides over the proceedings in court deciding procedural disputes between the parties, and handing down the sentence after a guilty verdict. And crucially, the verdict is entirely in the hands of a jury of 12 ordinary citizens, voters selected by lot from the electoral register, peers of the defendant, just as was establsihed by Magna Carta so long ago.

The distribution of these powers into different hands provides essential checks and balances, not just between the legislative, executive and judicial functions, as famously prescribed by Montesquieu, but within the judicial function itself, on whose delicate balance depends the individual freedom of each and every citizen from arbitrary arrest and wrongful imprisonment. The use of legal violence on people’s bodies, by arrest and imprisonment, is an exclusive prerogative of the sovereign State in any society. Its arbitrary use is a prime tool of tyranny. This is why effective legal safeguards against misuse are so necessary. Here lies the genius of Magna Carta, which 800 years ago in England provided the first legal safeguards against such arbitrary misuse.

Compare and contrast with today’s Napoleonic-inquisitorial systems, where a career judiciary, whose members are State employees, comprises prosecutors and judges, but excludes defenders. The prosecutor is nowadays no longer the selfsame person as the judge, but they are both servants of the State (though they may sometimes be institutionally independent from political control), and they are close colleagues, who can work in tandem together on case after case. The judges may have been prosecutors during the course of their careers, but normally they will never have been defenders.

Under the Napoleonic-inquisitorial dispensation used in continental Europe, all these powers are placed in the collective hands of one brotherhood – the career judiciary.

In Italy, for example, criminal investigations, prosecutions, assessments of evidence, decisions on arrest, bail or remand, the direction of courtroom proceedings, judgements of guilt or innocence and sentencing are all under the exclusive control of members of the career judiciary (“magistratura” – not to be confused with the idea of an English “magistrate” for which there is no equivalent).

After a law degree, young law graduates face three career alternatives: attorney, notary, or the judiciary (“magistrato”). To become a judge, they must pass a stiff State exam (set and marked by existing members of the judiciary), and then they are in. After one year’s “apprenticeship”

(“uditorato”), they are assigned to a judicial office as a prosecutor/investigator or a judge, where they sit, pen in hand, empowered to order criminal investigations, arrests, bail, committals, etc. They are not trained in detective techniques, relying on their book knowledge of the law. But they direct the police (who may have such training) in the conduct of criminal investigations. It is said that this separation between competence and responsibility in criminal investigations explains why numbers of cases are not investigated as fruitfully as might be hoped.

Trial by Jury – that great heritage of Magna Carta – has no place in the Napoleonic-inquisitorial dispensation. Most cases are dealt with by professional judges alone. Very serious cases are heard by what might look like a jury of ordinary citizens chosen by lot. Actually, the verdict and the sentence are decided by a mixed panel of six lay “jury-people” and two professional career judges. They all go into the jury-room together, where the “judge’s summing-up” is delivered in secret. Although the six jury-people can outvote the two professionals, the latter obviously take a leading role in guiding the verdict. They also have other means of ensuring that what they consider a “perverse” verdict can be appealed against. There are no safeguards against double jeopardy – the prosecution are perfectly entitled to appeal against an acquittal, even if no fresh evidence has emerged.

Two other direct legacies of Magna Carta are clause 40 – “to no-one shall we delay justice”, and the not-so-often celebrated clause 38. The latter is worth quoting in the original: “Nullus ballivus ponat de cetero aliquem ad legem simplici loquela sua, sine testibus fidelibus ad hoc aductis” – “No judicial officer shall initiate legal proceedings against anyone on his own mere say-so, without reliable witnesses brought for that purpose”.

These provisions are ensured by Habeas Corpus. Under Habeas Corpus, a suspect if arrested must be brought into open court within hours (or at the very most, a few days), and there charged formally. And the charge must be based on enough hard evidence, already collected, to shew that there is a prima facie case to answer.

It is perhaps taken for granted in English-speaking countries that any proceedings must be based on evidence. Not so however on the continent. In Italy, for example, a person may be arrested on the orders of two members of the judiciary (one acts as “prosecutor-cum-investigator” and the other as “judge of the preliminary investigations”), at the outset, on mere suspicion based on clues (“indizi”). Hence the title of Professor Mereu’s book. The prisoner becomes a “person-under-investigation” (“indagato”), and can be kept in prison during the investigation, which can last months, before the authorities are ready to commit him. There is no right to any public hearing during this time. Within hours of arrest, the prisoner is interrogated by the two judges who ordered his arrest, in a secret hearing. He is assisted by his lawyer (or by a lawyer appointed by his interrogators if he cannot afford his own), and he can try to persuade them that they have got the wrong person, but he cannot see any evidence against him until much later.

All this directly violates clauses 38 and 40 of Magna Carta. Yet this is what happens to British subjects and others who are subjected to the European Arrest Warrant. Under the EAW no British court is allowed to ask to see any evidence of a prima facie case. Presumably the Parliamentarians who voted for this measure must have believed that the foreign judicial authority issuing the EAW would already have the necessary evidence, to be exhibited in a public hearing soon after extradition took place. Yet numbers of innocent Britons can testify that this is not the case. Famously, Andrew Symeou spent 11 months in a Greek prison before his first appearance in an open court hearing, where the case was dropped, owing to lack of any serious evidence.

It is thought that the European Convention of Human Rights offers adequate safeguards for the innocent. It does not. The ECHR makes no provision for Habeas Corpus, let alone Trial by Jury. Article 6 vouchsafes an appearance in a public hearing within a “reasonable” time after arrest, but does not specify what is “reasonable”. For us it is a matter of hours or at most days. In Europe it can be months or even longer.

Our forefathers, in their wisdom, laid down these safeguards for our freedom. Their words have rolled down eight centuries, to protect us. Yet today, we are abandoning them, for an illusion, based on wishful thinking.

This 800th year after Magna Carta is also the 200th anniversary of Waterloo. How ironic if Napoleon should have the last laugh after all.

 

For anyone wishing to study this subject in more detail, this submission to the House of Lords Committee on opting out of various criminal measures in the Lisbon Treaty is worth reading.

Photo by bekra

Can it really be done?

In just over 21 months time, we will hopefully be leaving the EU. With the exception of military matters and the European Arrest Warrant, Mrs May’s objective appears to be for the UK to enjoy a looser relationship with the EU than that of any other European country which is not a member state, apart from countries like Belorus and Russia.

After all, all four EFTA countries (Switzerland, Norway, Iceland and Liechtenstein) are part of the Schengen area while several micro-states including Monaco, San Marino and the Vatican City use the Euro. Turkey is part of the EU’s Customs Union while Norway, Iceland and Liechtenstein are, of course, part of the European Economic Area.

Can we realistically expect to reach a greater degree of detachment than these countries by March 2019? The Government has not gone into any detail about how it proposes to achieve such a radical divorce in a very short space of time, but the Bruges Group published a booklet earlier this year, entitled  What will it look like? How leaving the single market can be made to work for Britain. Two of the authors, Robert Oulds and Dr Lee Rotherham, are CIB Committee members.

The problem with staying in the European Economic Area by rejoining EFTA is that it would not resolve the customs clearance issue. We do need a customs agreement with the EU, as a lack of a deal in this area is the biggest problem which our trade with the EU would face. (Just to reiterate, a customs agreement is totally different from remaining in the customs union which, as we have pointed out, is irrelevant as far as Brexit is concerned.)

By contrast, standards compliance rarely causes delays. Another red herring is the issue of access to the EU’s financial services market. It can be accessed from outside the EEA, as the authors explain.

The key to a successful trade deal lies in identifying the potential problems early on, which the authors seek to do in this publication.

With the terms “Hard” and “Soft” Brexit bandied about without everyone being agreed on what this means, the authors claim that there is no such thing as a truly “Hard” Brexit. but  there are significant obstacles to be overcome. Nonetheless, a trade agreement between the EU and the UK, focused on tariff reduction and clearing customs, could take just 18 months to complete.

The authors explain why UK’s bargaining position is stronger than many commentators believe. Given that David Davis has already had to concede to his EU counterpart’s demands that talks on a trade deal cannot begin until other exit arrangements have been agreed, any strong cards in his hand will, I am sure, be most appreciated.

 

 

On the EU side, there has been some posturing too

Mrs May and some members of her team have gone on record to say “No deal is better than a bad deal”, but realistically, “no deal” was never an option. The worst scenario would have been an incomplete, partial deal and with neither side wanting a cliff-edge scenario in March 2019, even this would not be anyone’s preferred option. For all the dire warnings of Yanis Varoufakis, Greece’s former Finance Minister, the UK is not Greece.  We would suffer more than EU-27 from a non-deal, but it would not be in the EU’s interests to be obstructive and prevent an agreement being signed.

To prove the point, it is now emerging that some of the tough rhetoric from the EU side which we heard in the immediate post-referendum period has turned out to be little more than posturing. Barely three months ago, it was widely reported that Spain would be given  a right of veto over the final deal with the UK and would have the full support of the other EU member states if it chose to take a tough line over Gibraltar. Recently, however, Alfonso Dastis, Spain’s Foreign Minister,  has stated that his country will not block any Brexit deal and that talks over Gibraltar’s future will be handled on a bilateral basis. “The issue of Gibraltar doesn’t have to be the first, nor the most important point during talks,” he said.

Another example of hot air is the EU’s apparent desire to remove the lucrative €uro clearing business from the City of London to somewhere within the Eurozone.  This would have been a political gesture rather than an economic necessity. After all, most clearing in the Saudi Riyal takes place in London without any heart-searching in Riyadh. Writing in City AM, however, Mark Field, the City of London’s MP claims that “All of the EU politicians and financiers I have spoken to understand that this is a risk not worth taking. They express no desire to prevent euro-denominated trades from being cleared in London and indeed privately rail against the notion that such business might be forcibly moved to Paris.” He also points out that “Most sensible players implicitly understand that if London is undermined, key participants in the financial services industry will move not to Frankfurt, Dublin or Paris but to New York, Singapore or Shanghai.” Absolutely. In or out of the EU, London  will remain Europe’s principal centre for financial services for the foreseeable future.

On the surface, however, it does appear that the EU has turned the corner after its recent problems. Its economy is performing better than at any time since the Great Recession of 2008 and eurosceptic parties in the Netherlands and France failed to make any breakthrough in recent elections. France’s new President, Emmanuel Macron, is a strong supporter of the EU and his triumph is encouraging the Eurozone to consider pressing on with further integration. Even Germany’s ever-cautious Angela Merkel recently indicated that she would “consider a common finance minister, if the circumstances are right,” adding “we could also consider a Eurozone budget if it is clear that we are really strengthening the structure of the economy and doing sensible things”. 

Donald Tusk, the President of the European Council, has also adopted a very upbeat note in his invitation to the EU’s leaders for the next meeting. “It is fair to say that we will meet in a different political context from that of a few months ago, when the anti-EU forces were on the rise. The current developments on the continent seem to indicate that we are slowly turning the corner. In many of our countries, the political parties that have built their strength on anti-EU sentiments are beginning to diminish. We are witnessing the return of the EU rather as a solution, not a problem.”

There is a big “but”, however. A recent survey by Chatham House, a foreign policy think tank, pointed to a wide gap between the opinions of the EU’s “élite” (defined as leading figures from politics, media, business and civil society) and the general public and even the élite is not as optimistic as Mr Tusk’s words would have us believe.  Only 34% of the public feel they have benefitted from the EU, compared with 71% of the élite while a majority of the public (54%) think their country was a better place to live 20 years ago, which in some cases means before their country joined the EU.

The study also finds 48% of the public wants the EU to hand back powers to member states, while only 31% of the élite are keen on this idea. Less than 1 in 4 of the general public support extra powers for the EU and even among the élite, the figure is a mere 37%. What is more, among the élite, almost one in two (46%) thinks that another country will leave the EU within the next decade. The figure for the general public is 58%.

While the groundwork for the survey was undertaken between December 2016 and February 2017 – in other words, before the Dutch and French elections – it still painted a rather fragile picture of the EU, suggesting that Donald Tusk’s comments may be somewhat over-optimistic. To prove the point, less than a week after Macron’s triumph, several members of his cabinet have already quit. If plans for further Eurozone integration do fall foul of public opinion, any revival of enthusiasm for the EU project among the general public may prove short-lived.

None of this reduces the challenges facing the UK government in the Brexit negotiations. Indeed some have argued that a strong EU may be more willing to grant a favourable deal to the UK than one which believes itself to be on the back foot. What we can say is that it is far from certain that the UK’s negotiators will necessarily spend all the next 21 months facing representatives of an organisation which is self-confident or even united.

Photo by D-Stanley