Brian Keegan: Time to start looking ahead again after five years of Brexit circus
The UK government changed during the negotiations following a general election but so too did the composition of the European Commission which reached the end of its term in 2019
The fifth anniversary of the Brexit referendum last month not only marks the departure of the UK from the EU, but also offers some salutary lessons on how EU institutions respond in a crisis.
First and foremost the EU likes its agreements to be cut and dried.
The current toing and froing on the Northern Ireland protocol, the arrangement which prevents the need for a hard customs border on the island of Ireland, is not solely down to the lack of British preparation or understanding of the issues, but also in part a product of EU institutional culture.
The EU is also consistent. Unlike the UK, at no stage did the EU institutions change their approach to Brexit.
The UK government changed during the negotiations following a general election but so too did the composition of the European Commission which reached the end of its term in 2019.
Ursula von der Leyen replaced Jean-Claude Juncker as Commission president; Charles Michel replaced Donald Tusk as Council president.
If the EU is consistent when there is regime change, it is also consistent in its tendency to work in silos, with one branch of the Commission being apparently unaware or unconcerned with the activities of another.
Despite the economic policy challenges which Brexit was presenting to Ireland, the Commission continued along its merry way with the Apple state aid case against our tax system.
Tax policy in Ireland not only funds government but is also the cornerstone of industrial policy. The Brexit process also was a reminder that the EU treaties are not uniform.
The greatest strength of the EU single market is the control of the trade in goods.
Its greatest weakness is its lack of control over trade in services, although with the major exception of financial services.
The UK’s trading surplus with the EU derives from services, not goods.
The current points of friction in the movement of goods across borders are small compared to the friction which is already emerging in the one area of services where EU single market membership most matters to the UK, namely financial services.
Without prejudice (either to the work of the previous Irish commissioner, Phil Hogan, or the current Irish commissioner, Mairead McGuinness, and recognising that commissioners are expected to think independently) exchanging a commissioner for trade with a commissioner for financial services last year was a fair swap in terms of strategic influence.
In summary, Brexit has confirmed that international agreements are hard to unravel, and new international agreements are difficult to establish.
It has also illustrated that there won’t be a disconnect on EU policy as the Commission line-up changes every five years, but there is little joined-up thinking between commissioners with different responsibilities.
In the future, countries need to think more about the single market in terms of trade in services (financial, IT, leisure and entertainment) rather than just in terms of goods.
Critically, how bad would things need to get within the EU before any other country would contemplate leaving?
Too much time and energy is being expended, on all sides, looking to re-establish pre-Brexit trading freedoms.
Five years on from the UK referendum it is time to start looking ahead again.
- Brian Keegan is Chartered Accountants Ireland director of public policy
